1. An insurance company is normally responsible to its appointed agents for all of the following EXCEPT
A. Paying commissions to the agents
B. Communicating market practices guidelines
C. Providing advertising materials
D. Absorbing all of the agents' liability Correct
Explanation
Insurance companies typically pay commissions to their appointed agents as compensation for selling policies, communicate market practices and guidelines to ensure compliance, and provide approved advertising materials for agents to use. However, insurers do not absorb all liability arising from the agents' actions. Agents are personally responsible for their own errors, omissions, or negligent acts, and they usually carry their own Errors and Omissions (E&O) insurance for protection. The insurer is not obligated to cover every liability the agent might incur.
2. An individual or business entity conducting business under an assumed or fictitious name must notify the Bureau of Insurance either at the time the license application is filed or
A. Within 30 calendar days from the date the name is adopted Correct
B. Within 60 calendar days from when the first policy is sold under the assumed name
C. At the time of license renewal
D. 30 days before the assumed name is no longer being used
Explanation
Virginia insurance law requires notification of an assumed or fictitious name either when the license application is submitted or within 30 calendar days after adopting the name. This ensures timely regulatory oversight. Waiting until the first policy is sold (60 days) or until renewal is too late and does not comply. Notifying 30 days before discontinuing the name is not the requirement for adoption.
3. When a commercial automobile policy is cancelled for any reason other than premium nonpayment, the required minimum number of days for notice is
A. 10 days
B. 15 days
C. 30 days Correct
D. 45 days
Explanation
For cancellations of commercial auto policies in Virginia (except for nonpayment of premium), insurers must provide at least 30 days advance written notice. This gives the insured sufficient time to secure replacement coverage. Shorter periods like 10 or 15 days apply to other situations (e.g., nonpayment), while 45 days is typically required for nonrenewals or certain other notices.
4. In the Farm Property Coverage form, Coverage A - Dwellings includes
A. Structures physically attached to the covered dwelling Correct
B. Land where the covered dwelling is located
C. Water sources used to service the covered dwelling
D. Outdoor equipment scheduled as farm personal property
Explanation
Coverage A in the Farm Property form covers the dwelling and any structures physically attached to it, such as attached garages or porches. Land itself is never covered under property insurance forms. Water sources like wells may have limited coverage elsewhere but not under Coverage A. Outdoor equipment is typically scheduled separately as farm personal property, not included automatically under the dwelling coverage.
5. Which policy provision limits coverage to defined geographical areas
A. Loss assessment
B. Policy period
C. Limit of liability
D. Policy territory Correct
Explanation
The policy territory provision specifies the geographic areas where coverage applies, such as the United States, its territories, and Canada in many policies. Loss assessment deals with charges from associations. Policy period defines the time frame of coverage. Limit of liability sets the maximum payout amounts, not geographic restrictions.