Regulatory Compliance & Standards Flashcards
7 cards from real CIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance & Standards flashcards as text
Under the National Flood Insurance Program (NFIP), which agency administers flood insurance and sets compliance standards for participating communities?
Answer: The Federal Emergency Management Agency (FEMA)
FEMA administers the NFIP, which provides flood insurance and requires participating communities to adopt and enforce floodplain management regulations.
Which standard governs how appraisers must handle assignment conditions that could be perceived as a conflict of interest?
Answer: USPAP Ethics Rule — Conduct Section
The Conduct Section of the USPAP Ethics Rule prohibits appraisers from accepting assignments with conflicts of interest unless properly disclosed and consented to.
A state insurance department conducts a market conduct examination on an insurer. What is the primary purpose of such an examination?
Answer: To verify compliance with state insurance laws and fair treatment of policyholders
Market conduct examinations evaluate whether insurers are treating policyholders fairly and complying with applicable state statutes and regulations.
What is the primary consequence for an insurance appraiser who violates the competency requirements set forth under USPAP?
Answer: The appraisal may be deemed not credible and the appraiser subject to disciplinary action
Violating USPAP's Competency Rule can render an appraisal uncredible, and the appraiser may face professional sanctions, civil liability, or license revocation.
An insurance appraiser in Texas is hired to value a property in Louisiana but has no prior experience with Louisiana's market. According to USPAP, what must the appraiser do?
Answer: Accept the assignment but disclose the lack of geographic competency in the report
USPAP's Competency Rule requires appraisers to disclose lack of knowledge or experience and take steps to acquire the necessary competency before completing the assignment.
Which regulation requires lenders to use certified or licensed appraisers for federally related real estate transactions above a certain threshold?
Answer: Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
Title XI of FIRREA mandated state licensing and certification of appraisers for federally related transactions to protect financial institutions and the public.
A certified insurance appraiser is preparing a report and realizes their client wants them to reach a predetermined value conclusion. What should the appraiser do?
Answer: Withdraw from the assignment to preserve independence and integrity
USPAP's Ethics Rule prohibits appraisers from accepting assignments contingent on a predetermined value, and the appraiser must withdraw to protect their integrity.