Oklahoma P&C Exam Flashcards

Q: Which Oklahoma Property & Casualty exam does this set cover?

It covers the combined Oklahoma Property & Casualty producer examination listed by OID and PSI. It is not the narrower Property & Casualty–Personal Lines Only exam, either separate Property or Casualty producer exam, or the Property & Casualty adjuster exam. Candidates should confirm the producer exam name and code on their PSI registration and score report.

Q: How many questions and how much time are on the exam?

The exam-specific PSI outline states 150 scored questions plus 5 unscored questions in 150 minutes. The general candidate bulletin says examinations may contain 5 to 10 experimental items, but the current exam-specific Property & Casualty producer outline identifies 5 for this exam. Unscored questions are not identified to the candidate, so every item should be answered.

Q: What are the official scored domains?

The 150 scored items are allocated as follows: Licensing 7; State Insurance Statutes, Rules, and Regulations 16; State Automobile Insurance Laws 10; State Workers' Compensation 5; Personal Policies 8; Commercial Property Policies 15; Property Terms and Related Concepts 20; Property Policy Provisions and Contract Law 15; Personal Casualty Policies and Related Terms 10; Commercial Casualty Policies, Bonds, and Related Terms 20; Casualty Terms and Related Concepts 15; and Casualty Policy Provisions and Contract Law 9.

Q: How are the 50 cards allocated to the official outline?

The cards use a largest-remainder proportional allocation of 2/5/3/2/3/5/7/5/3/7/5/3 across the 12 domains in official-outline order. This closely represents each domain's share of the 150 scored questions while preserving exactly 50 study cards.

Q: What score is required, and what is the pass rate?

The current OID/PSI bulletin requires 70% correct to pass. The Oklahoma Insurance Department and PSI do not publish a current pass-rate percentage for this examination, so commercial estimates should not be presented as official statistics.

Q: What happens after a failed attempt?

OID/PSI describes open eligibility and unlimited attempts until passing. There is no mandated day-based waiting interval and no special delay after three failures, so both numeric retake fields are 0. A new appointment cannot be made on the same day as the failed exam because results must process; the bulletin's example says a Wednesday failure may be booked Thursday for a Friday retest if space is available.

Q: Who administers the exam, and how is it delivered?

The Oklahoma Insurance Department contracts with PSI. Candidates register through the current Oklahoma insurance PSI portal and choose either a test center or remote-proctored format, subject to availability and technical requirements. Legal name and other identifying data must be entered accurately because the exam result must match the later license application.

Q: Does passing the exam immediately create a producer license?

No. Passing is only one licensing step. PSI reports results to OID, and OID directs successful candidates to wait three business days before applying through the Oklahoma licensing/NIPR process. A candidate may not sell, solicit, or negotiate insurance until OID has issued the active license; acting for an insurer can also require an insurer appointment.

Question 1

How do a producer license and an insurer appointment differ?

Accepted Answer

A license grants authority from the state to act within approved lines of insurance. An appointment records an insurer's authorization for the producer to act as its agent. Oklahoma requires the appointment before a producer acts as an agent of that insurer.

Question 2

What continuing responsibilities can affect an Oklahoma producer license?

Accepted Answer

Maintain required continuing education and renewal, report address or other required changes, handle premiums and commissions lawfully, and avoid conduct that supports suspension, revocation, denial, or penalties. Passing the exam is not permanent permission to ignore ongoing duties.

Question 3

What do domestic, foreign, and alien mean when classifying an insurer?

Accepted Answer

Domestic means formed under Oklahoma law; foreign means formed under another U.S. jurisdiction's law; alien means formed under another country's law. These labels describe domicile, not whether the insurer is authorized to transact insurance in Oklahoma.

Question 4

How do rebating, twisting, and defamation differ as unfair practices?

Accepted Answer

Rebating offers an unapproved value or premium inducement to obtain business; twisting uses misleading comparisons to cause a policy change; defamation circulates false, maliciously critical statements about an insurer or insurance professional.

Question 5

What conduct can make claim settlement unfair?

Accepted Answer

Examples include misrepresenting policy provisions, failing to investigate or communicate reasonably, denying without a reasonable basis, or compelling litigation by offering substantially less than is reasonably due. A producer should never promise a claim result outside policy terms and authorized authority.

Question 6

When an admitted P&C member insurer becomes insolvent, what protection may state law provide—and what are its limits?

Accepted Answer

A statutory guaranty association may handle certain eligible claims against an insolvent member. Coverage, claimant, and payment restrictions apply, so the mechanism is neither a substitute for insurer solvency nor a guarantee that every obligation will be paid in full.

Question 7

When does surplus-lines insurance enter a placement?

Accepted Answer

It can provide coverage for an eligible risk that cannot be procured from the admitted market after required diligence. The placement must use authorized surplus-lines procedures and disclosures; the nonadmitted insurer does not receive the same state guaranty-association protection as an admitted insurer.

Question 8

What do Oklahoma's 25/50/25 automobile liability limits represent?

Accepted Answer

$25,000 is the bodily-injury limit for one person, $50,000 is the bodily-injury limit for two or more people in one accident, and $25,000 is the property-damage limit. They are statutory minimums, not a promise that losses cannot exceed them.

Question 9

What UM/UIM choice must an Oklahoma automobile applicant receive?

Accepted Answer

Insurers must offer UM/UIM coverage, but the applicant may select available limits or reject it in writing. It principally responds to covered bodily injury caused by an uninsured, underinsured, or hit-and-run motorist; it does not replace collision coverage for damage to the insured vehicle.

Question 10

Where may an eligible Oklahoma driver turn after being unable to obtain voluntary-market auto coverage?

Accepted Answer

It is a residual-market mechanism for eligible drivers who cannot obtain coverage through the voluntary market. It helps provide access to required automobile insurance; it is not a low-price guarantee or automatic coverage without eligibility and premium payment.

Question 11

Why can a covered injured employee receive statutory benefits without first proving employer negligence?

Accepted Answer

Covered employees receive statutory benefits for qualifying work-related injury or disease without proving employer negligence. In exchange, workers' compensation is generally the exclusive remedy against the employer for covered injuries, subject to statutory exceptions.

Question 12

How do Workers' Compensation policy Parts One, Two, and Other States coverage differ?

Accepted Answer

Part One pays benefits required by the named workers' compensation law. Part Two covers specified employer-liability suits outside those statutory benefits. Other States coverage can extend Part One to listed or qualifying states when operations expand, but it does not automatically solve every monopolistic-state or known-operation issue.

Question 13

How do dwelling policies and homeowners policies differ?

Accepted Answer

Dwelling forms primarily insure dwelling property and can add personal property, loss-of-use, and liability coverages. Homeowners forms package property and personal liability for eligible owner-occupants or tenants, with coverage varying by the selected HO form.

Question 14

Why might a client need a personal floater or another specialized personal policy?

Accepted Answer

Standard home coverage may limit or exclude high-value movable property, watercraft, mobile homes, or other specialized exposures. A scheduled floater, inland-marine form, endorsement, or separate policy can tailor valuation, perils, territory, and limits to the exposure.

Question 15

Why should flood and earth movement be reviewed separately from ordinary home coverage?

Accepted Answer

Standard homeowners and dwelling forms generally exclude flood and earth movement. Coverage usually requires a separate policy or endorsement where available. A producer should identify the exposure and explain the coverage path without implying every water or ground-loss cause is treated alike.

Question 16

What property can the commercial Building and Personal Property Coverage Form insure?

Accepted Answer

Its main categories are the described building, the insured's business personal property, and personal property of others in the insured's care, custody, or control. Coverage still depends on location, limits, covered cause of loss, valuation, and exclusions.

Question 17

How do Basic, Broad, and Special commercial Causes of Loss forms differ?

Accepted Answer

Basic and Broad forms cover listed causes of loss, with Broad adding specified perils. Special uses an open-perils approach: direct physical loss is covered unless excluded or limited. Open-perils does not mean every loss is covered.

Question 18

How do business income and extra expense cover different consequences of property loss?

Accepted Answer

Business income replaces covered net income and continuing normal operating expenses during the restoration period. Extra expense pays necessary added costs to avoid or minimize suspension. Both generally require the triggering direct physical loss specified by the form.

Question 19

How do a Commercial Package Policy and a Businessowners Policy differ?

Accepted Answer

A CPP combines selected commercial coverage parts and common conditions with substantial flexibility. A BOP packages property and liability in a standardized form for eligible smaller or lower-hazard businesses; eligibility and built-in coverages are more restricted.

Question 20

Which commercial forms address breakdown, movable property, and dishonest acts?

Accepted Answer

Equipment breakdown addresses specified accidental mechanical, electrical, or pressure-system breakdown. Inland marine covers many movable or transportation-related property exposures. Commercial crime can address theft or fraud perils, while fidelity bonds commonly protect an employer from covered employee dishonesty.

Question 21

How do risk, peril, hazard, and loss relate?

Accepted Answer

Risk is uncertainty about loss; a peril is the cause of loss; a hazard increases the chance or severity of loss; and loss is the unintended reduction in value. Physical, moral, and morale hazards affect risk in different ways.

Question 22

How do direct loss, indirect loss, and proximate cause connect?

Accepted Answer

Direct loss is immediate physical damage from a covered cause. Indirect or consequential loss follows from that damage, such as lost income. Proximate cause is the dominant unbroken cause used to connect an event with the resulting loss when several events contribute.

Question 23

Why are indemnity and insurable interest fundamental to property insurance?

Accepted Answer

Indemnity aims to restore the insured financially without allowing profit from loss. Insurable interest is a lawful financial stake in preserving the property and generally must exist when the property loss occurs.

Question 24

Which property valuation method subtracts depreciation, and which begins with new replacement?

Accepted Answer

Replacement cost begins with the expense of substituting new property of comparable kind and quality. Actual cash value commonly reduces that amount for depreciation. Payment under either method remains constrained by applicable conditions, deductibles, and limits.

Question 25

What does a coinsurance condition encourage, and how is its penalty found?

Accepted Answer

It encourages insurance close to a stated percentage of property value. If insurance carried is below insurance required, the covered loss is multiplied by carried divided by required, then the deductible and policy limits apply according to the form.

Question 26

How do a deductible and a limit of insurance affect a property claim?

Accepted Answer

The deductible is the portion of a covered loss borne by the insured before the policy responds as specified. The limit is the maximum the insurer will pay for the applicable coverage, occurrence, item, or location, subject to all policy terms.

Question 27

How do burglary, robbery, theft, and mysterious disappearance differ?

Accepted Answer

Burglary involves unlawful entry or exit with visible evidence as defined by the form; robbery involves taking by force or threat; theft is the broader unlawful taking; mysterious disappearance is unexplained absence without proof of what happened. Coverage depends on the policy's definitions.

Question 28

What functions do declarations, insuring agreements, exclusions, and conditions serve?

Accepted Answer

Declarations identify the parties, property, limits, premium, and policy period. The insuring agreement states the coverage promise. Exclusions remove or restrict coverage, and conditions establish duties and rules that govern performance and recovery.

Question 29

What duties commonly follow a property loss?

Accepted Answer

Give prompt notice, protect property from further damage, separate and inventory damaged property, preserve evidence, cooperate with investigation, and submit a signed proof of loss when required. Duties do not authorize unsafe action or destruction of evidence.

Question 30

Why can a mortgagee retain protection after an insured's act would defeat the insured's recovery?

Accepted Answer

A standard mortgage clause creates separate protection for the named mortgagee, subject to its own duties such as notifying the insurer of known risk changes and paying premium when required. The insurer can acquire the mortgagee's recovery rights after payment.

Question 31

What dispute does property appraisal decide?

Accepted Answer

Appraisal generally decides the amount of loss when the insurer and insured disagree on value or damage. It does not ordinarily decide whether the policy affords coverage. Arbitration is a broader contractual dispute process when the applicable agreement provides for it.

Question 32

How do binders, endorsements, assignment, and subrogation change policy relationships?

Accepted Answer

A binder supplies temporary coverage pending the policy; an endorsement adds, removes, or modifies terms; assignment transfers rights only as policy and law permit; subrogation lets the insurer pursue a responsible third party after paying a covered loss.

Question 33

How do personal auto liability and medical payments coverages differ?

Accepted Answer

Liability pays covered damages the insured is legally responsible for causing to others and provides a defense subject to the policy. Medical payments covers reasonable covered medical expenses for insured persons without requiring proof of fault, subject to its definitions and limits.

Question 34

How do collision and other-than-collision physical damage differ?

Accepted Answer

Collision covers upset or impact with another vehicle or object. Other-than-collision addresses specified noncollision causes such as theft, fire, hail, flood, glass breakage, or contact with an animal, subject to policy language and deductibles.

Question 35

How do owned, temporary-substitute, and non-owned autos affect personal auto coverage?

Accepted Answer

An owned auto is listed or qualifies under the policy; a temporary substitute replaces a covered auto withdrawn from normal use for a stated reason; a non-owned auto is used but not owned or regularly available to the insured. Coverage varies by person, vehicle, use, and coverage part.

Question 36

What do CGL Coverages A, B, and C address?

Accepted Answer

Coverage A addresses covered bodily injury and property damage liability; Coverage B addresses defined personal and advertising injury offenses; Coverage C provides limited medical payments without requiring legal liability. Each has distinct triggers and exclusions.

Question 37

How do premises-and-operations and products-completed-operations exposures differ?

Accepted Answer

Premises-and-operations losses arise from the location or ongoing work. Products-completed-operations losses arise after a product leaves the insured's control or work is completed away from the premises, subject to policy definitions and exclusions.

Question 38

Why do commercial auto policies distinguish owned, hired, and non-owned autos?

Accepted Answer

Owned autos belong to the business; hired autos are leased, rented, hired, or borrowed as defined; non-owned autos are used in the business but owned by others, often employees. Coverage symbols determine which categories apply to each coverage.

Question 39

How does garagekeepers coverage differ from garage liability?

Accepted Answer

Garagekeepers addresses covered physical loss to customers' autos left in the insured's care, custody, or control. Garage liability addresses covered liability arising from garage operations. One does not automatically replace the other.

Question 40

Which liability coverage is designed around professional errors, omissions, or other wrongful acts?

Accepted Answer

Professional liability responds to covered claims arising from professional errors, omissions, or wrongful acts rather than ordinary bodily injury or property damage hazards. E&O and D&O forms use specialized definitions, exclusions, limits, and often claims-made triggers.

Question 41

What roles do the principal, obligee, and surety have in a surety bond?

Accepted Answer

The principal promises performance, the obligee requires and receives the bond's protection, and the surety guarantees the principal's obligation. If the surety pays a valid loss, it generally expects reimbursement from the principal under indemnity rights.

Question 42

How do umbrella and excess liability policies extend underlying insurance?

Accepted Answer

Both provide limits above scheduled underlying coverage after the applicable retention is satisfied. An umbrella may provide broader coverage for some claims subject to a self-insured retention; a pure excess form generally follows the underlying coverage more closely.

Question 43

What four elements generally establish negligence?

Accepted Answer

The claimant must establish a duty owed, breach of that duty, causation connecting the breach to harm, and legally recognized damages. The absence of any required element defeats the negligence claim.

Question 44

How do accident and occurrence differ in liability coverage?

Accepted Answer

An accident is generally an unintended event; occurrence commonly includes an accident and may include repeated exposure to substantially the same harmful conditions. The policy definition controls how related injuries are grouped and which limit applies.

Question 45

How do bodily injury, property damage, and personal and advertising injury differ?

Accepted Answer

Bodily injury concerns physical injury, sickness, disease, or resulting death as defined. Property damage concerns physical injury to tangible property or covered loss of use. Personal and advertising injury arises from enumerated offenses rather than bodily impact.

Question 46

How do per-person, per-occurrence, and aggregate liability limits interact?

Accepted Answer

A per-person limit caps recovery for one injured person, a per-occurrence limit caps all covered damages from one occurrence, and an aggregate caps specified payments during the policy period. A combined single limit does not split bodily injury and property damage into separate sublimits.

Question 47

What does a certificate of insurance prove—and not prove?

Accepted Answer

It is evidence summarizing coverage in force on the issue date. It does not amend the policy, create coverage, guarantee future continuation, or automatically make the certificate holder an additional insured; an endorsement or policy term must grant such status.

Question 48

What post-loss duties commonly appear in a casualty policy?

Accepted Answer

Give prompt notice, send legal papers, cooperate with investigation and defense, authorize access to relevant information, and avoid voluntary payments or obligations outside permitted first aid. Compliance protects the insurer's ability to investigate and defend.

Question 49

What dates control whether a claims-made liability policy responds?

Accepted Answer

The wrongful act must fall on or after any retroactive date, the claim must first be made during the policy or applicable extended reporting period, and reporting must satisfy the form. Occurrence policies instead focus chiefly on when injury or damage occurred.

Question 50

How do other-insurance and subrogation provisions prevent duplicate recovery?

Accepted Answer

Other-insurance provisions coordinate primary, excess, or shared obligations when policies cover the same loss. Subrogation transfers the insured's recovery rights to the paying insurer to pursue a responsible party. Together they support indemnity rather than profit from loss.

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