Insurance Regulation & Federal Law
13%of exam
General Insurance & P&C Basics
25%of exam
Personal Property & Auto
24%of exam
Dwelling FormsHomeowners FormsOregon EndorsementsPersonal AutoPIPUM UIM
Commercial Lines Coverage
28%of exam
Commercial AutoCGLCommercial PropertyBOP
Workers Comp & Other Coverage
10%of exam
SAIF Workers CompUmbrella LiabilityResidual MarketsSurety Bonds
Quick Facts
- Exam
- PSI Series 12-04
- Questions
- 150 scored
- Time
- 2 hr 40 min
- Pass
- 70%
- Fee
- $55 combined P&C
- Prelicense
- 40 hrs (20+20)
- Fingerprint
- $61.25 after passing
- Administrator
- PSI / Oregon DFR
Admitted vs Non-Admitted
Admitted
- Licensed in Oregon
- OIGA protected
Non-admitted
- Surplus lines insurer
- No guaranty protection
Licensed vs surplus lines
DFR & Licensing
- DFR
- Primary state regulator
- Producer
- Sells and solicits
- Nonresident
- Home-state reciprocity license
- CE renewal
- 24 hrs every 2 yrs
Unfair Trade Practices
- Misrepresentation
- False policy statement
- False advertising
- Deceptive insurance marketing
- Rebating
- Illegal premium inducement
- Unfair discrimination
- Improper rate distinction
- Illegal inducement
- Extra non-contract benefit
Producer Duties & Discipline
- Fiduciary duty
- Trust account premiums
- Appointment
- Insurer authorizes producer
- Cease and desist
- Stops ongoing violation
- NFIP training
- 3-hr flood course
Contract Elements
Offer plus Acceptance plus Consideration equals valid contract
Offer: applicant appliesAcceptance: insurer approvesConsideration: premium paid
ACV vs Replacement Cost
ACV
- Depreciation subtracted
- Lower payout
Replacement cost
- No depreciation
- New for old
Old value vs new
Loss Valuation Picker
- Standard HO-3 loss→Replacement cost(No depreciation deducted)
- DP-1-style basic policy→ACV(Replacement minus depreciation)
- Older home rebuild→Functional RC(Equivalent, not identical)
- Scheduled valuable item→Agreed value(Preset amount pays)
Risk & Hazard Types
- Pure risk
- Loss or no-loss
- Speculative risk
- Gain or loss
- Moral hazard
- Dishonest intent increases loss
- Morale hazard
- Careless indifference to loss
Policy DICE
Declarations, Insuring agreement, Conditions, Exclusions
D: who, what, limitsI: the core promiseC: insured's dutiesE: what's excluded
Named vs Open Perils
Named
- Only listed causes
- Insured proves peril
Open
- All except exclusions
- Insurer proves exclusion
Listed vs excluded
Negligence & Liability Types
- Negligence
- Breach of duty
- Absolute liability
- No fault required
- Strict liability
- Inherently dangerous activity
- Vicarious liability
- Liable for another's act
- Named peril
- Only listed causes covered
Loss Valuation Methods
- ACV
- Replacement minus depreciation
- Replacement cost
- New for old
- Functional RC
- Equivalent, not identical
- Agreed value
- Preset amount both agree
Policy Structure
- Declarations
- Who, what, limits
- Insuring agreement
- Core coverage promise
- Exclusions
- What is not covered
- Endorsement
- Modifies the base policy
Coinsurance & Limits
- Coinsurance
- Insurance-to-value requirement
- Coinsurance penalty
- Underinsured pays a share
- Per occurrence
- Cap per event
- Aggregate
- Cap per policy period
- CSL
- One combined liability limit
Oregon Auto Minimums
25 per person, 50 per accident, 20 property
25k bodily injury, one person50k bodily injury, per accident20k property damage
HO-3 vs HO-5
HO-3
- Open dwelling perils
- Named perils contents
HO-5
- Open perils, both
- Broader contents coverage
Contents basis differs
Home Form Picker
- Owner-occupied standard home→HO-3(Open dwelling perils)
- Tenant rents a unit→HO-4(Broad named perils)
- Condo unit owner→HO-6(Walls-in coverage)
- Non-owner rental dwelling→DP-3(Special perils form)
- High-value home contents→HO-5(Open perils, contents too)
- Older home, ACV basis→HO-8(Modified coverage form)
Dwelling (DP) Forms
- DP Basic (OR)
- Named perils only
- DP Broad
- More named perils
- DP Special
- Open perils dwelling
- Coverage D
- Fair rental value
Oregon PIP Numbers
$15k medical, 14-day wait, 70% wage, $3k cap
$15,000 medical minimum14 days before wage loss70% wage replacement$3,000 monthly cap
UM vs UIM
UM
- At-fault driver uninsured
- Mandatory coverage
UIM
- At-fault limits too low
- Must be offered
Uninsured vs underinsured
Auto Coverage Picker
- Any injury, any fault→PIP($15k no-fault medical)
- At-fault driver uninsured→UM(Mandatory in Oregon)
- At-fault limits too low→UIM(Insurer must offer)
- Vehicle hits an object→Collision(Impact or upset)
- Vehicle stolen or vandalized→Comprehensive(Other-than-collision peril)
Homeowners (HO) Forms
- HO-2
- Broad named perils
- HO-3
- Special open perils dwelling
- HO-4
- Tenants broad form
- HO-5
- Open perils, contents too
- HO-6
- Condo unit owners
- HO-8
- Modified older-home coverage
- Section II
- Liability plus medical payments
HO Forms Ladder
HO-2 Broad, HO-3 Special, HO-5 Open
HO-2: named perils onlyHO-3: open dwelling perilsHO-5: open contents too
PIP vs Liability
PIP
- No-fault, own injuries
- $15k medical minimum
Liability
- Fault-based, others' injuries
- 25/50/20 minimums
No-fault vs at-fault
Oregon HO Endorsements
- Earthquake
- Must be offered, disclosed
- Business pursuits
- Adds work-related liability
- Watercraft
- Extends boat liability limits
- Home day care
- Oregon-specific liability endorsement
- Ordinance or law
- Code-upgrade rebuild cost
Personal Auto — Oregon Law
- 25/50/20
- BI/BI/PD minimum limits
- PIP medical
- $15,000 no-fault minimum
- PIP wage loss
- 70% after 14 days
- UM coverage
- Mandatory, matches BI limits
- UIM coverage
- Must be offered, rejectable
- Collision
- Upset or impact damage
- Comprehensive
- Other-than-collision perils
- Aftermarket crash parts
- Must disclose non-OEM use
Occurrence vs Claims-Made
Occurrence
- Triggers at injury date
- No retro date
Claims-made
- Triggers at report date
- Retro date matters
Event date vs claim date
Commercial Policy Picker
- Small Main Street business→BOP(Bundled property + liability)
- Larger custom commercial risk→CPP(Modular coverage parts)
- Injury during operations→CGL occurrence(Standard trigger)
- Employees injured on job→Workers comp(Statutory Part One)
- Liability limits exhausted→Umbrella(Excess above underlying)
Commercial Auto Policy
- Hired autos
- Rented or leased vehicles
- Non-owned autos
- Employee vehicles used at work
- Lessor endorsement
- Adds lessor as insured
- Employees as insureds
- Covers driving employees too
CGL Coverage
- Coverage A
- Bodily injury, property damage
- Coverage B
- Personal and advertising injury
- Coverage C
- Medical payments, no fault
- Occurrence
- Triggers when injury happens
- Claims-made
- Triggers when claim reported
- Retroactive date
- Earliest covered incident date
Commercial Property & BOP
- CPP
- Modular commercial package policy
- BPP
- Building and business property
- Business income
- Lost earnings after loss
- Extra expense
- Cost to keep operating
- Basic cause of loss
- Named perils form
- BOP
- Bundled small-business package
FAIR Plan vs JUA
FAIR Plan
- Residual property market
- Last-resort dwelling coverage
JUA
- Residual liability market
- Commercial liability pool
Property vs liability residual
Oregon Residual Market Picker
- Property declined by market→FAIR Plan(Residual last resort)
- Admitted insurers decline risk→Surplus lines(Non-admitted market)
- Commercial liability unavailable→JUA(Joint underwriting pool)
- Insurer becomes insolvent→OIGA(Pays covered claims)
Oregon Workers Compensation
- ORS 656
- Oregon workers comp law
- Exclusive remedy
- Bars employee lawsuit
- SAIF
- State-chartered competing insurer
- Three-way system
- SAIF, private, self-insured
- Part One
- Statutory WC benefits
Residual Markets & Surety
- FAIR Plan
- Residual property market
- JUA
- Commercial liability residual pool
- Surplus lines
- Non-admitted market access
- OIGA
- Pays claims if insurer insolvent
- Surety principal
- Party who performs obligation
- Binder
- Valid up to 90 days
Common Traps
ACV vs Replacement Cost
ACV subtracts depreciation ≠ RC pays full replacement
Named vs Open Perils
Named lists covered causes ≠ Open lists exclusions only
UM vs UIM
UM: at-fault has none ≠ UIM: at-fault too low
PIP vs Liability
PIP is no-fault ≠ Liability requires fault
Occurrence vs Claims-Made
Occurrence triggers at injury ≠ Claims-made triggers at report
Admitted vs Surplus Lines
Admitted has OIGA protection ≠ Surplus lines does not
FAIR Plan vs JUA
FAIR Plan is property ≠ JUA is liability
Rebating vs Illegal Inducement
Rebating shares the commission ≠ Inducement offers extra value
Last Minute
- 1.150 questions in 2h40m
- 2.70% passing score
- 3.Weights: 13/25/24/28/10
- 4.$55 fee for combined exam
- 5.Fingerprint fee $61.25 after passing
- 6.40 prelicense hours total
- 7.Auto minimums 25/50/20
- 8.PIP: $15k medical, no-fault
- 9.UM mandatory, UIM must offer
- 10.Binder valid up to 90 days
- 11.CE: 24 hrs per 2 years
- 12.OIGA pays if insurer insolvent
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