P&C State-Specific Laws and Rules 2

Question 1

When a property and casualty insurance policy is non-renewed by the insurer at expiration, state law generally requires the insurer to provide the insured with advance written notice of at least:

Accepted Answer

30–60 days (varies by state and line of coverage)

Answer

5 days

Answer

10 days

Answer

180 days

Question 2

State insurance regulators have the authority to conduct 'market conduct examinations' of insurers to:

Accepted Answer

Review an insurer's sales, underwriting, rating, claims handling, and policyholder service practices for compliance with state laws

Answer

Set binding premium rates for all insurers in the market

Answer

Force insurers to expand their coverage offerings

Answer

Determine the investment strategies of domestic insurers

Question 3

Under state insurance law, a 'free-look' period for property and casualty policies is most commonly:

Accepted Answer

Not universally required for P&C policies in the same way as life/health, but some states mandate a short review period

Answer

Mandated by federal law at exactly 30 days for all policies

Answer

Required only for personal lines auto policies

Answer

Required only for commercial lines policies

Question 4

State 'file and use' rate regulation for property and casualty insurance means:

Accepted Answer

Insurers may begin using new rates immediately upon filing with the state, without waiting for prior approval

Answer

Insurers must obtain state approval before using any new rate

Answer

Insurers may use rates without any filing requirement

Answer

Only admitted insurers may file rates; surplus lines rates are unregulated

Question 5

Under state insurance codes, the 'grace period' for late premium payment on a property and casualty policy typically:

Accepted Answer

Provides 30–31 days of continued coverage after the due date, after which coverage lapses if premium is not paid

Answer

Does not exist — coverage lapses immediately if premium is not paid on time

Answer

Is automatically 1 year for all P&C policies

Answer

Applies only to commercial lines policies

Question 6

Which state regulatory action is taken when an insurer is found to be financially impaired and unable to meet its obligations to policyholders?

Accepted Answer

The state places the insurer into receivership or liquidation, with the commissioner acting as receiver

Answer

The state revokes the insurer's producer licenses

Answer

The state reduces the insurer's approved rates to save costs

Answer

The NAIC directly assumes control of the insurer's operations