Insurance Regulation
20%of exam
General Concepts
8%of exam
RiskInsurersContractsAuthorityAgency
P&C Basics
14%of exam
Dwelling
4%of exam
DP FormsPerilsCoveragesEndorsements
Homeowners
7%of exam
HO FormsPropertyLiabilityMortgageVacancy
Personal Auto
10%of exam
15/30/5Tort ElectionFirst PartyUM/UIMAssigned Risk
Commercial Auto
5%of exam
BAPSymbolsMCS-90Physical Damage
Commercial Property
7%of exam
CPPBPPCausesIncomeInland Marine
Commercial Liability
7%of exam
Commercial Crime
2%of exam
Crime FormsEmployee TheftForgerySafe Depository
Businessowners
3%of exam
BOPPropertyLiabilitySafeguards
Workers' Compensation
5%of exam
Mandatory CoverageSWIFBenefitsDisabilityExclusive Remedy
Other P&C
8%of exam
UmbrellaSuretyFloodFAIR PlanSpecialty
Quick Facts
- Exam
- Series 16-06
- Questions
- 150 items
- Time
- 170 min
- Pass
- 70%
- Vendor
- PSI
- Regulator
- PA Insurance Dept
- Application
- Sircon or NIPR
- Resident fee
- $55
- Fingerprinting
- After application
- CE cycle
- 24 hours
Licensing Sequence
Exam, apply, then fingerprint
PSISircon/NIPRIdentoGO
Solicit vs Negotiate
Solicit
- Ask to apply
- Seek insurance sale
Negotiate
- Confer on terms
- Discuss coverage changes
Lead vs terms
License Path Picker
- Need P&C license→Pass 16-06
- Exam passed→Apply online
- Resident applicant→Fingerprint after application
- Nonresident reciprocal→Fingerprint exempt
- Need license print→PA online portal
- Renew active license→Complete CE
Exam Logistics
- 16-06
- Combined P&C
- 150 items
- PSI scored outline
- 170 minutes
- Testing time
- 70%
- Passing score
- Retake
- 24-hour wait
- Delivery
- Center or remote
- ID
- Photo plus signature
- Languages
- English Spanish Chinese
Rebating vs Discount
Rebating
- Unfiled inducement
- Illegal advantage
Discount
- Filed rate factor
- Allowed by insurer
Side deal fails
Licensing
- PID
- State regulator
- Producer
- Sell solicit negotiate
- Resident fee
- $55
- Nonresident fee
- $110
- Apply
- Sircon or NIPR
- Fingerprint
- After license application
- Service code
- 1KGBGJ
- CE
- 24 hours biennial
Producer Duties
- Trust funds
- Fiduciary money
- Books
- Department examination
- Address change
- Report promptly
- Admin action
- Report discipline
- Criminal action
- Report charges
- Appointments
- Insurer authority
- Termination
- Insurer notice
- Fees
- Disclose separately
Unfair Practices
- Misrepresentation
- False policy facts
- Twisting
- Induce replacement
- Rebating
- Illegal inducement
- Defamation
- False harmful statement
- Boycott
- Coercive market pressure
- Discrimination
- Unfair rate difference
- Commingling
- Mixed premium funds
- Fraud
- Intentional insurance deception
Risk Methods
A-R-R-S-T handles risk
AvoidRetainReduceShareTransfer
Risk + Contracts
- Avoidance
- Eliminate exposure
- Retention
- Self-fund loss
- Transfer
- Shift to insurer
- Hazard
- Increases chance
- Peril
- Cause of loss
- Consideration
- Premium plus promise
- Offer
- Application submitted
- Acceptance
- Policy issued
Policy Parts
DICE: declarations, insuring, conditions, exclusions
DeclarationsInsuringConditionsExclusions
ACV vs RC
ACV
- Depreciation deducted
- Lower settlement
RC
- No depreciation first
- Repair/replace basis
Old value vs new
Policy Structure
- Declarations
- Who what when
- Definitions
- Policy vocabulary
- Insuring agreement
- Coverage promise
- Conditions
- Duties and rules
- Exclusions
- No coverage
- Endorsements
- Policy changes
- Deductible
- Insured share
- Limit
- Maximum payment
Negligence
Duty breach causation damages
DutyBreachCausationDamages
Valuation + Limits
- ACV
- Replacement minus depreciation
- RC
- New-for-old
- Agreed value
- Scheduled amount
- Market value
- Real estate price
- Split limit
- Separate caps
- CSL
- One total cap
- Aggregate
- Policy-period cap
- Coinsurance
- Underinsurance penalty
Liability Basics
- Negligence
- Breach causes damages
- Duty
- Legal obligation
- Breach
- Duty violated
- Causation
- Breach caused loss
- Damages
- Actual injury
- Strict
- No fault needed
- Vicarious
- Liability through another
- Punitive
- Punishment damages
PA Required Provisions
- PPCIGA
- Insolvent insurer safety-net
- PPCIGA limit
- $300,000 usually
- WC claims
- Statutory benefits
- Surplus lines
- Not PPCIGA covered
- Standard fire
- PA statutory form
- Binder
- Temporary coverage
- Cancellation
- Statutory notice
- Nonrenewal
- Statutory notice
Dwelling Forms
- DP-1
- Basic named perils
- DP-2
- Broad named perils
- DP-3
- Open peril dwelling
- Coverage A
- Dwelling
- Coverage B
- Other structures
- Coverage C
- Personal property
- Coverage D
- Fair rental value
- Coverage E
- Additional living expense
Property Form Picker
- Basic dwelling perils→DP-1
- Broad dwelling perils→DP-2
- Open dwelling perils→DP-3
- Owner-occupied home→HO-3
- Renter contents→HO-4
- Condo unit owner→HO-6
- Older replacement issue→HO-8
Homeowners Forms
- HO-2
- Broad form
- HO-3
- Special form
- HO-4
- Renters contents
- HO-5
- Comprehensive form
- HO-6
- Condo unit
- HO-8
- Modified coverage
- Coverage E
- Personal liability
- Coverage F
- Medical payments
Auto Minimums
PA auto: 15/30/5 plus 5 medical
15 person30 accident5 property5 medical
Limited vs Full Tort
Limited tort
- Lower premium
- Serious injury threshold
Full tort
- Higher premium
- Broader lawsuit rights
Savings trade rights
Auto Coverage Picker
- Injure others→BI liability
- Damage property→PD liability
- Own medical bills→Medical benefits
- Uninsured at-fault driver→UM
- Low-limit at-fault driver→UIM
- Own car collision→Physical damage
- Rejected voluntary market→Assigned Risk
PA Auto Minimums
- BI person
- $15,000
- BI accident
- $30,000
- PD
- $5,000
- Medical
- $5,000
- Financial responsibility
- Coverage required
- Lapse
- Registration suspension risk
- Proof
- Required after lapse
- CSL option
- $35,000 minimum
UM vs UIM
UM
- No insurance
- Hit-run driver
UIM
- Not enough limits
- Underinsured driver
None vs not enough
PA Auto Coverages
- Full tort
- Unrestricted pain suits
- Limited tort
- Serious injury threshold
- First party
- No-fault benefits
- UM
- Uninsured driver
- UIM
- Underinsured driver
- Stacking
- Combine limits
- Assigned risk
- Residual auto market
- Physical damage
- Own auto damage
Commercial Auto
- BAP
- Business auto policy
- Covered symbols
- Auto eligibility
- Symbol 1
- Any auto
- Symbol 7
- Scheduled autos
- Hired auto
- Leased rented borrowed
- Nonowned auto
- Employee-owned use
- MCS-90
- Motor carrier endorsement
- Drive other car
- Personal-like coverage
Commercial Picker
- Building and contents→BPP
- Construction project→Builders risk
- Lost business income→BI coverage
- Movable equipment→Inland marine
- Boiler machinery loss→Equipment breakdown
- Small package account→BOP
Commercial Property
- CPP
- Package policy
- BPP
- Building personal property
- Builders risk
- Construction property
- Business income
- Lost earnings
- Extra expense
- Continue operations
- Legal liability
- Tenant damage
- Inland marine
- Movable property
- Equipment breakdown
- Pressure mechanical electrical
Occurrence vs Claims-Made
Occurrence
- Loss during period
- Claim may be later
Claims-made
- Claim during period
- Watch retro date
Loss date vs claim date
CGL
- Coverage A
- BI and PD
- Coverage B
- Personal advertising injury
- Coverage C
- Medical payments
- Occurrence
- Accident during period
- Claims-made
- Claim during period
- Retro date
- Prior-acts cutoff
- ERP
- Report after expiration
- Premises ops
- Location operations exposure
Crime + BOP
- Employee theft
- Employee dishonesty
- Forgery
- Altered instruments
- Computer fraud
- Computer-caused loss
- Safe depository
- Depository liability
- BOP
- Small business package
- BP property
- Section I
- BP liability
- Section II
- Protective safeguards
- Required protections
WC vs Employers Liability
WC
- Statutory benefits
- No fault
Employers liability
- Employer negligence suits
- Part two
Benefits vs lawsuits
Workers' Compensation
- Mandatory
- At least one employee
- SWIF
- State WC insurer
- Self-insurance
- DLI approval needed
- Medical
- Work injury care
- Wage loss
- Lost earnings benefit
- Death
- Survivor benefits
- Rehab
- Recovery support
- Exclusive remedy
- Bars tort suits
Umbrella vs Excess
Umbrella
- May broaden coverage
- Self-insured retention
Excess
- Follows underlying
- Higher limits
Broader vs higher
Other P&C
- FAIR Plan
- Basic property access
- FAIR eligibility
- Cannot obtain voluntary
- Flood
- NFIP or private
- Umbrella
- Extra liability
- Excess
- Higher limits only
- Surety
- Three-party bond
- D&O
- Management liability
- E&O
- Professional mistakes
Common Traps
Fingerprint Timing
Before exam ≠ After license application
Guaranty Advertising
Sales feature ≠ Prohibited selling point
Limited Tort
No lawsuits ever ≠ Serious injury exception
UM Meaning
Low limits ≠ No insurance
UIM Meaning
No insurance ≠ Insufficient limits
Workers' Comp
Optional for employers ≠ Generally mandatory
FAIR Plan
Cheaper market ≠ Residual property access
Claims-Made Trigger
Occurrence date only ≠ Claim date controls
Last Minute
- 1.16-06: 150 items, 170 minutes
- 2.Regulation is 20%
- 3.Apply before fingerprinting
- 4.Resident producer fee is $55
- 5.CE: 24 hours biennial
- 6.Auto minimums: 15/30/5
- 7.Medical benefits: $5,000 minimum
- 8.Limited tort restricts pain suits
- 9.UM means uninsured driver
- 10.UIM means low limits
- 11.PPCIGA usually caps $300,000
- 12.Surplus lines skip PPCIGA
- 13.WC mandatory with employees
- 14.FAIR Plan is residual property
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