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Free Arizona Examination for Casualty Insurance Producer Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Arizona Examination for Casualty Insurance Producer practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1An Arizona resident applies for an individual casualty producer license. What is the minimum age the director must verify before approving the application?

    1. A. 18 years
    2. B. 19 years
    3. C. 21 years
    4. D. 25 years

    Answer: A

    Explanation: A.R.S. § 20-285(B)(1) requires that the applicant "is at least eighteen years of age." Therefore, 18 is the controlling minimum.

    Reference: 20-285 - Application for license — A.R.S. § 20-285(B)(1)

  2. 2An Arizona insurance solicitor initiates an outbound sales text to a number listed on the national do-not-call registry, and no statutory or federal exception applies. What is the rule?

    1. A. The text is allowed because the rule reaches only voice calls
    2. B. The text is allowed if sent during business hours
    3. C. The text is prohibited
    4. D. The text is allowed if it contains an opt-out link

    Answer: C

    Explanation: A.R.S. § 44-1282(A) states that a seller or solicitor "shall not initiate an outbound telephone solicitation call or text message to any telephone number" entered in the national do-not-call registry, absent an applicable exception.

    Reference: 44-1282 - National do-not-call registry; prohibitions; enforcement; civil penalty; definition — A.R.S. § 44-1282(A)

  3. 3A shop owner could suffer a fire loss but would not profit from the fire. What kind of risk does this exposure represent?

    1. A. Speculative risk, with both loss and gain possible
    2. B. Pure risk, with loss but no economic gain possible
    3. C. Market risk, based on changes in selling prices
    4. D. Investment risk, based on uncertain capital returns

    Answer: B

    Explanation: "Pure risk involves no chance of economic gain and uncertainty about" The fire exposure has uncertainty about loss without a chance of economic gain, matching pure risk rather than a gain-or-loss speculation.

    Reference: NAIC, A Regulator's Introduction to the Insurance Industry — NAIC, Insurance Industry Guide, discussion of risk

  4. 4A court awards an injured customer money for medical bills and separately awards money to deter the business's egregious conduct. How should the second award be classified?

    1. A. As general damages for intangible personal harm
    2. B. As special damages for documented medical costs
    3. C. As compensatory damages for the customer's losses
    4. D. As punitive damages intended to deter misconduct

    Answer: D

    Explanation: "and charges assessed against you or your business to deter future bad behavior." "Compensatory damages, financial losses" The deterrent award is punitive; compensation for economic or other claimant loss serves a different purpose.

    Reference: NAIC, Small Business Insurance — NAIC, Small Business Insurance, damages discussion

  5. 5An insured driver causes a crash that injures another motorist and is legally responsible for the injury. Which personal-auto coverage addresses the other motorist's bodily injury?

    1. A. Collision coverage on the insured's automobile
    2. B. Medical payments coverage for the insured's occupants
    3. C. Bodily-injury liability coverage for the injured motorist
    4. D. Comprehensive coverage on the insured's automobile

    Answer: C

    Explanation: "Bodily injury coverage pays for bodily injury to others for which you become legally responsible due to an auto accident in which you were involved." Bodily-injury liability pays for bodily injury to others for which the insured becomes legally responsible. First-party physical damage and medical payments address different losses.

    Reference: Arizona DIFI, Vehicle Insurance Consumer Information — Arizona DIFI, Automobile Insurance, bodily injury coverage

  6. 6A corporation owns a van used for its deliveries. When arranging commercial-auto insurance for that van, whose name should appear as the principal insured?

    1. A. The corporation that owns and uses the van
    2. B. The president who signs the insurance application
    3. C. The employee assigned to drive the van
    4. D. The lender that financed the van purchase

    Answer: A

    Explanation: "If your business owns or leases a vehicle, make sure its name is listed on the policy as the principal insured." Because the business owns the vehicle, its name belongs on the policy as principal insured. Officers, drivers, and lenders may have other interests but do not replace that business identity.

    Reference: NAIC, Small Business Insurance — NAIC, Small Business Insurance, Commercial Auto Insurance

  7. 7A business chooses a commercial package policy combining property and liability coverage. Which document arrangement should the producer expect?

    1. A. Common declarations and conditions with separate coverage parts
    2. B. A monoline CGL form combined with a separate umbrella policy
    3. C. A property form combined with a separate commercial auto policy
    4. D. A businessowners policy combining its standard bundled coverages

    Answer: A

    Explanation: "The typical commercial package policy contains a common policy declarations page, a common policy conditions page and two or more coverage parts." The commercial package itself uses common declarations and conditions with distinct coverage parts. The other options describe different policy arrangements.

    Reference: NAIC, A Regulator's Introduction to the Insurance Industry — NAIC, A Regulator's Introduction to the Insurance Industry, commercial package policy

  8. 8An architect wants liability protection for a client's financial loss allegedly caused by an error in professional design services. Which specialty policy most directly fits?

    1. A. Directors and officers liability
    2. B. Employment practices liability
    3. C. Employee benefits liability
    4. D. Professional errors and omissions liability

    Answer: D

    Explanation: "insurance, coverage for wrongful practices by professional service" "Director and officer (D&O) liability insurance protects directors and officers who prudently" "employee-related claims must be covered by employment practices liability coverage." "Employee Benefit Liability - liability protection for an employer for claims arising from provisions in an employee benefit insurance plan" The alleged error concerns professional services, the E&O exposure. The other named specialty policies address board decisions, employment claims, or benefit-plan administration.

    Reference: NAIC, Small Business Insurance — NAIC, Small Business Insurance, professional liability

  9. 9An Arizona employer has hired its first employee and must secure workers' compensation. Which arrangement satisfies the statutory method of securing compensation?

    1. A. Purchase coverage from an authorized carrier or obtain approved self-insurance.
    2. B. Buy commercial general liability coverage or post a private indemnity letter.
    3. C. Rely on the employee's health policy or the employer's umbrella policy.
    4. D. Wait for a work injury and then reimburse the employee directly.

    Answer: A

    Explanation: "Employers shall secure workers' compensation to their employees in one of the following ways:" "By insuring and keeping insured the payment of such compensation with an insurance carrier authorized" "By furnishing to the commission satisfactory proof of financial ability to pay the compensation directly" Arizona permits an authorized workers' compensation carrier or proof of financial ability accepted by the commission for self-insurance. Other liability or health policies do not substitute.

    Reference: Arizona Revised Statutes § 23-961 — A.R.S. § 23-961(A)(1)-(2)

  10. 10Before approving an Arizona resident producer for a requested line of authority, which line-specific qualification must the director find?

    1. A. Appointment by two admitted insurers
    2. B. Completion of forty hours of prelicensing instruction
    3. C. Successful passage of the examination for that line
    4. D. Two years of supervised producer experience

    Answer: C

    Explanation: A.R.S. § 20-285(B)(4) requires that the individual "has successfully passed the examinations for the lines of authority for which the individual has applied." The statute does not substitute appointment, course hours, or work experience for that finding.

    Reference: 20-285 - Application for license — A.R.S. § 20-285(B)(4)

Topics in this practice bank

These topics describe the available practice for Arizona Examination for Casualty Insurance Producer. Review the examination outline and its sources for scope and allocation details.

  • Insurance Regulation
    • Licensing
    • Licensing / License application requirements (20-285)
    • Licensing / Number of exam attempts 20-284(H)
    • Licensing / Licensing eligibility/lawful presence (41-1080)
    • Licensing / Types of licensees
    • Licensing / Types of licensees / Producers (20-281(5), 286)
    • Licensing / Types of licensees / Nonresidents (20-281(11))
    • Licensing / Types of licensees / Adjusters (20-321)
    • Licensing / Types of licensees / Business entities (20-281(1), 285(D, E), 290(B))
    • Licensing / Types of licensees / Surplus lines brokers (20-407, 411)
    • Licensing / Types of licensees / Temporary (20-294)
    • Licensing / Types of licensees / Vending machines (20-293)
    • Licensing / Lines of producer license authority (20-286, (A), 321, 331, 332, 411, 411.01, 1580, 1693.01, 2662)
    • Licensing / Fingerprinting requirements (20-142(E), 285(E), 286(C), 289(D))
    • Licensing / Assumed business name (20-297)
    • Licensing / Maintenance and duration
    • Licensing / Maintenance and duration / Expiration, surrender and renewal (20-289)
    • Licensing / Maintenance and duration / Inactive license status during military service (20-289.01)
    • Licensing / Maintenance and duration / Change of personal contact information (20-286(C))
    • Licensing / Maintenance and duration / Change of business information (20-286)(C))
    • Licensing / Maintenance and duration / Report of actions (20-301)
    • Licensing / Maintenance and duration / Continuing education (20-2902, 2903)
    • Licensing / Disciplinary actions
    • Licensing / Disciplinary actions / Denial, suspension, revocation or refusal to renew; civil penalties (20-295, 296)
    • Licensing / Disciplinary actions / Cease and desist order (20-292)
    • State regulation
    • State regulation / Acts constituting insurance transaction (20-106, 282, 401.01)
    • State regulation / Acts constituting insurance transaction (20-106, 282, 401.01) / Negotiate (20-281(10))
    • State regulation / Acts constituting insurance transaction (20-106, 282, 401.01) / Sell (20-281(14))
    • State regulation / Acts constituting insurance transaction (20-106, 282, 401.01) / Solicit (20-281(15))
    • State regulation / Payment of premiums (20-191)
    • State regulation / Certificate of authority (20-217(A))
    • State regulation / Identification of Producer (20-229)
    • State regulation / Producer regulation
    • State regulation / Producer regulation / Sharing commissions (20-298)
    • State regulation / Producer regulation / Place of business and records (20-157, 290; AZ Const Art 14 s 16)
    • State regulation / Unfair practices and frauds
    • State regulation / Unfair practices and frauds / Unfair trade practices (20-442)
    • State regulation / Unfair practices and frauds / Misrepresentation (20-443, 443.01, 447; Rule R20-6-801(D))
    • State regulation / Unfair practices and frauds / False or deceptive advertising (20-444)
    • State regulation / Unfair practices and frauds / Defamation of insurer (20-445)
    • State regulation / Unfair practices and frauds / Boycott, coercion or intimidation (20-446)
    • State regulation / Unfair practices and frauds / False financial statements (20-447)
    • State regulation / Unfair practices and frauds / Unfair discrimination (20-448)
    • State regulation / Unfair practices and frauds / Gender discrimination (Rule R20-6-207)
    • State regulation / Unfair practices and frauds / Rebating (20-451)
    • State regulation / Unfair practices and frauds / Prohibited inducements (20-452)
    • State regulation / Unfair practices and frauds / Fees (20-465)
    • State regulation / Unfair practices and frauds / Unfair claims settlement practices (20-461; Rule R20-6-801)
    • State regulation / Unfair practices and frauds / Claims payment (20-462)
    • State regulation / Unfair practices and frauds / Insurance fraud (20-463, 466–466.04)
    • Insurance information and privacy protection (20-2101–2122)
  • Federal Laws and Regulations
    • Fair Credit Reporting Act (15 USC 1681–1681d)
    • Gramm-Leach-Bliley Act (20-2121; Public Law 106-102)
    • Prohibited Persons in Insurance (18 United States Code (USC) Sections 1033 and 1034) waiver
    • CAN-SPAM Act of 2003 (15 USC 7701; 18 USC 1037)
    • Telemarketing Sales Rule (16 CFR 310; 15 USC 6101–6108; A.R.S. 44-1282)
  • General Insurance Concepts
    • Risk
    • Risk / Methods of Handling Risk (e.g., Avoidance, Retention, Sharing, Reduction, Transfer)
    • Risk / Elements of Insurable Risks
    • Risk / Definitions (e.g., Risk, Hazard, Peril, Loss)
    • Classifications of Insurers
    • Classifications of Insurers / Mutual, Stock
    • Classifications of Insurers / Admitted, Non-Admitted
    • Classifications of Insurers / Foreign, Domestic, Alien
    • Elements of a Contract
    • Elements of a Contract / Consideration
    • Elements of a Contract / Competent Parties
    • Elements of a Contract / Legal Purpose
    • Elements of a Contract / Offer
    • Elements of a Contract / Acceptance
    • Authority and Powers of Producers - Definitions
    • Authority and Powers of Producers - Definitions / Express
    • Authority and Powers of Producers - Definitions / Implied
    • Authority and Powers of Producers - Definitions / Apparent
    • Authority and Powers of Producers - Definitions / The Law of Agency
    • Legal Interpretations Affecting Contracts
    • Legal Interpretations Affecting Contracts / Reasonable Expectations
    • Legal Interpretations Affecting Contracts / Reasonable Expectations / Indemnity
    • Legal Interpretations Affecting Contracts / Reasonable Expectations / Good Faith
    • Legal Interpretations Affecting Contracts / Reasonable Expectations / Fraud
    • Legal Interpretations Affecting Contracts / Reasonable Expectations / Warranties, Representations, Misrepresentations, and Concealment
  • Casualty Insurance Basics
    • Damages
    • Damages / Compensatory versus Punitive
    • Damages / General versus Special
    • Liability
    • Liability / Absolute
    • Liability / Strict
    • Liability / Vicarious
    • Underwriting (Purpose, Process, Results)
    • Types of Hazards
    • Types of Hazards / Moral
    • Types of Hazards / Morale
    • Types of Hazards / Physical
    • Negligence
    • Negligence / Torts
    • Negligence / Elements of a Negligent Act
    • Negligence / Defense Against Negligence
    • Accident versus Occurrence
    • Policy Structure
    • Policy Structure / Declarations
    • Policy Structure / Definitions
    • Policy Structure / Insuring Agreement
    • Policy Structure / Additional/Supplementary Coverage
    • Policy Structure / Conditions
    • Policy Structure / Exclusions
    • Policy Structure / Endorsements
    • Policy Clauses
    • Policy Clauses / Insureds
    • Policy Clauses / Policy Period
    • Policy Clauses / Policy Territory
    • Policy Clauses / Cancellation and Non-Renewal
    • Policy Clauses / Deductibles/Self-Insured Retention
    • Policy Clauses / Other Insurance
    • Policy Clauses / Other Insurance / Nonconcurrency
    • Policy Clauses / Other Insurance / Primary and Excess
    • Policy Clauses / Other Insurance / Pro Rata
    • Policy Clauses / Other Insurance / Contribution by Equal Shares
    • Limits of Liability
    • Limits of Liability / Per Accident
    • Limits of Liability / Per Occurrence
    • Limits of Liability / Per Person
    • Limits of Liability / Aggregate
    • Limits of Liability / Split limits
    • Limits of Liability / Combined Single Limit
    • Named Insured Provisions
    • Named Insured Provisions / First Named Insured versus Other Insureds
    • Named Insured Provisions / Duties After Loss
    • Named Insured Provisions / Assignment
    • Named Insured Provisions / Waiver of Rights
    • Insurer Provisions
    • Insurer Provisions / Liberalization
    • Insurer Provisions / Subrogation
    • Insurer Provisions / Claim Settlement Options
    • Insurer Provisions / Duty to Defend
    • Insurer Provisions / Arbitration
  • Personal Automobile Policy
    • Definitions
    • Personal Injury Protection Definitions
    • Liability Coverage
    • Liability Coverage / Bodily Injury and Property Damage
    • Liability Coverage / Supplementary Payments
    • Liability Coverage / Exclusions
    • Liability Coverage / Liability Extension to Towed Vehicle
    • Medical Payments Coverage
    • Uninsured and Underinsured Motorists Coverage
    • Uninsured and Underinsured Motorists Coverage / Definitions
    • Uninsured and Underinsured Motorists Coverage / Bodily Injury
    • Uninsured and Underinsured Motorists Coverage / UM and UIM Rejection
    • Coverage for Damage to your Automobile
    • Coverage for Damage to your Automobile / Collision
    • Coverage for Damage to your Automobile / Other than Collision (Comprehensive)
    • Coverage for Damage to your Automobile / Deductibles
    • Coverage for Damage to your Automobile / Exclusions
    • Duties after an Accident or Loss
    • General Provisions
    • Endorsements
    • Endorsements / Towing and Labor Costs
    • Endorsements / Extended Non-Owned Coverage - Vehicles Furnished or Available for Regular Use
    • Endorsements / Joint Ownership Coverage
    • Endorsements / Rental Vehicle Coverage
  • Commercial Automobile Policy
    • Commercial Automobile Coverage Forms
    • Covered Automobiles
    • Covered Automobiles / Hired Automobiles
    • Covered Automobiles / Non-owned Automobiles
    • Liability
    • Physical Damage
    • Exclusions
    • Conditions
    • Definitions
    • Selected Endorsements
    • Selected Endorsements / Lessor - Additional Insured and Loss Payee
    • Selected Endorsements / Mobile Equipment
    • Selected Endorsements / Property Protection Coverage
    • Selected Endorsements / Broad Form Products
    • Selected Endorsements / Employees as Insureds
  • Commercial General Liability
    • Commercial Policy Components
    • Commercial Policy Components / Declarations
    • Commercial Policy Components / Conditions
    • Commercial Policy Components / Interline Endorsements
    • Commercial General Liability Coverages
    • Commercial General Liability Coverages / Bodily Injury and Property Damage
    • Commercial General Liability Coverages / Personal and Advertising Injury
    • Commercial General Liability Coverages / Medical Payments
    • Commercial General Liability Coverages / Conditions
    • Commercial General Liability Coverages / Definitions
    • Commercial General Liability Coverages / Exclusions
    • Occurrence versus Claims-made
    • Occurrence versus Claims-made / Trigger
    • Occurrence versus Claims-made / Retroactive Date
    • Commercial General Liability Exposures
    • Commercial General Liability Exposures / Premises and Operations
    • Commercial General Liability Exposures / Products and Completed Operations
    • Commercial General Liability Exposures / Contractual Liability
  • Other Types of Casualty Insurance
    • Specialty Liability Insurance
    • Specialty Liability Insurance / Directors and Officers
    • Specialty Liability Insurance / Professional and Errors and Omissions
    • Specialty Liability Insurance / Employment Practices
    • Specialty Liability Insurance / Employee Benefits
    • Specialty Liability Insurance / Cyber Liability and Network Protection
    • Personal Umbrella, Commercial Umbrella, and Excess Policies
    • Personal Umbrella, Commercial Umbrella, and Excess Policies / Underlying Limits
    • Personal Umbrella, Commercial Umbrella, and Excess Policies / Self-Insured Retention
    • Surety Contracts
    • Surety Contracts / Differences between Surety and Insurance
    • Surety Contracts / Obligation of the Surety
    • Surety Contracts / Parties to the Surety Bond
    • Surety Contracts / Parties to the Surety Bond / Principal
    • Surety Contracts / Parties to the Surety Bond / Obligee
    • Surety Contracts / Parties to the Surety Bond / Surety
  • Workers' Compensation Laws
    • Workers' Compensation Coverages and Benefits
    • Rating and Job Classification
    • Workers' Compensation Definitions
    • Workers' Compensation Definitions / Occupational Accident versus Occupational Disease and Illness
    • Workers' Compensation Definitions / Levels of Disability
    • Federal Laws

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These are independent study questions, not actual examination items. For examination requirements and official information, view Arizona Examination for Casualty Insurance Producer details.