New Hampshire Property & Casualty Insurance Practice Exam Free - 2026

• A. Decision within 15 days; payment within 30 days of agreement
• B. Decision within 10 working days; payment within 15 days of agreement
• C. Decision within 60 days; payment within 10 working days of agreement
• D. Decision within 30 days of the notice of claim (or a delay letter with specific reasons); payment within 5 working days of the agreement

Correct answer: D. Decision within 30 days of the notice of claim (or a delay letter with specific reasons); payment within 5 working days of the agreement

Explanation: Ins 1002.05(c) requires a property and casualty insurer, within 30 days from receipt of the notice of claim, to make a complete decision regarding coverage, acceptance, denial or payment and communicate it, or else send a delay letter stating the specific factual or legal reasons, repeated every 30 days; paragraph (d) then requires payment of all or part of the claim within 5 working days from the date of agreement with the insured or claimant or of receipt of requested documentation. The same rule requires investigation to commence within 5 working days and acknowledgment within 10 working days, so B confuses the acknowledgment period with the decision deadline, and 15 or 60-day decision periods do not appear. See N.H. Code Admin. R. Ins 1002.05.

• A. She is an employer once she employs one or more persons and must insure with a licensed carrier or qualify as a self-insurer
• B. Coverage is required only once she has 3 or more employees
• C. Coverage is required only once she has 5 or more employees
• D. Coverage is optional for all private employers in New Hampshire

Correct answer: A. She is an employer once she employs one or more persons and must insure with a licensed carrier or qualify as a self-insurer

Explanation: RSA 281-A:2, VIII(a) defines a private employer as any person, partnership, association or corporation who employs one or more persons, in one or more trades or locations, and RSA 281-A:5 requires every employer subject to the chapter to secure compensation either by insuring with a company licensed to write workers' compensation in New Hampshire and filing evidence of coverage with the labor commissioner, or by furnishing satisfactory proof of financial ability to pay compensation directly (self-insurance). New Hampshire has no 3- or 5-employee threshold, and coverage is mandatory rather than elective for employers under the chapter. See RSA 281-A:2.

• A. 66 2/3 percent of his wage ($667); the first 7 days are never paid
• B. 60 percent of his average weekly wage ($600), subject to the 150 percent-of-state-average-weekly-wage cap; the first 3 days are paid because the disability lasted 14 days or longer
• C. 100 percent of his wage for the first 3 days, then 50 percent
• D. 80 percent of his wage; the first 5 days are excluded

Correct answer: B. 60 percent of his average weekly wage ($600), subject to the 150 percent-of-state-average-weekly-wage cap; the first 3 days are paid because the disability lasted 14 days or longer

Explanation: RSA 281-A:28 requires the employer or its carrier to pay temporary total disability compensation, but not for the first 3 days of disability unless the disability continues for 14 days or longer; for an employee whose average weekly wage exceeds 30 percent of the state's average weekly wage, the benefit is 60 percent of the employee's average weekly wage (or 30 percent of the state average, whichever is greater), capped at 150 percent of the state average weekly wage and at 100 percent of after-tax earnings. Because this disability lasted 20 days, the 3-day waiting period is paid. The 66 2/3 percent, 80 percent and 100 percent formulas and 5 or 7-day waiting periods belong to other states. See RSA 281-A:28.

• A. Up to $500,000 on each claim
• B. Up to $100,000 on each claim
• C. Not more than $300,000 on Amir's claim, but the full amount of the covered workers' compensation claim; both must be filed within 36 months of the liquidation order or by the court's bar date, whichever is earlier
• D. Nothing until Amir first sues the insolvent insurer

Correct answer: C. Not more than $300,000 on Amir's claim, but the full amount of the covered workers' compensation claim; both must be filed within 36 months of the liquidation order or by the court's bar date, whichever is earlier

Explanation: RSA 404-H:8, I(a) obligates the association to pay covered claims existing before or arising within 30 days after the order of liquidation by paying the full amount of a covered claim for benefits under workers' compensation coverage and an amount not exceeding $300,000 for other covered claims, never more than the insolvent insurer's own obligation; a covered claim (other than workers' compensation) does not include one filed after the earlier of 36 months after the liquidation order or the court's final filing date. RSA 404-H:5 requires the claimant or insured to be a New Hampshire resident or the property to be permanently in the state and excludes punitive damages. No $100,000 or $500,000 limit and no prerequisite lawsuit exists. See RSA 404-H:8.

• A. Prudent portfolio rebalancing
• B. Rebating
• C. Misappropriation of premium
• D. Churning

Correct answer: D. Churning

Explanation: Churning is using the values of an existing policy to purchase replacement coverage with the same insurer primarily to generate new commissions rather than to benefit the client. Twisting is the closely related abuse involving replacement with a different insurer through misrepresentation. No premium was stolen and nothing of value was returned to the client, so misappropriation and rebating do not fit.

• A. Rebating, an unfair trade practice in most jurisdictions unless specifically permitted
• B. A lawful discount available to any producer
• C. Twisting
• D. A fiduciary distribution

Correct answer: A. Rebating, an unfair trade practice in most jurisdictions unless specifically permitted

Explanation: Rebating is returning part of the premium or commission, or giving anything else of significant value, as an inducement to purchase insurance. It is treated as an unfair trade practice under the NAIC model framework because it discriminates among buyers and distorts the sale. Twisting involves misrepresentation to induce replacement, which is not what happened here.

• A. None, provided the insurer eventually receives the full premium
• B. His fiduciary duty, because collected premiums are trust funds that belong to others and must not be commingled or used as his own
• C. Only an internal accounting guideline with no regulatory significance
• D. The rule against rebating

Correct answer: B. His fiduciary duty, because collected premiums are trust funds that belong to others and must not be commingled or used as his own

Explanation: Producers hold collected premiums and return premiums in a fiduciary capacity, as trustees rather than owners of the funds. Using premium money for personal or business expenses, or mixing it with personal funds, is a breach of that duty regardless of any intent to repay later. Rebating concerns giving value back to the buyer as a sales inducement, which is a different violation. See the NAIC summary of producers' fiduciary responsibilities for premiums.

• A. The producer's own commercial general liability policy
• B. The insurer's errors are always absorbed by the insurer, so no producer coverage is needed
• C. Errors and omissions insurance, which covers financial harm caused by the producer's negligent professional mistakes
• D. A fidelity bond

Correct answer: C. Errors and omissions insurance, which covers financial harm caused by the producer's negligent professional mistakes

Explanation: Errors and omissions insurance is professional liability coverage that responds when a client suffers loss because of the producer's negligent act, error, or omission - such as failing to procure requested coverage. A CGL policy addresses bodily injury and property damage liability, not purely financial harm from professional mistakes, and a fidelity bond covers employee dishonesty, not negligence. See the NAIC glossary entry for errors and omissions liability.

• A. The loss must be accidental
• B. The premium must be economically feasible
• C. The loss must be definite as to time and place
• D. The loss must not be catastrophic to the insurer, meaning exposure units should not all suffer loss at the same time

Correct answer: D. The loss must not be catastrophic to the insurer, meaning exposure units should not all suffer loss at the same time

Explanation: An ideally insurable risk requires that losses not be catastrophic - exposure units should be independent so one event cannot damage a large share of them simultaneously. Flood violates this because losses are geographically concentrated, with the added problem that mainly high-risk owners want the coverage. Flood losses are accidental and definite, so those elements are not the obstacle.

• A. The law of large numbers - as the number of similar exposure units grows, actual results approach expected results
• B. The principle of indemnity
• C. Adverse selection
• D. The principle of subrogation

Correct answer: A. The law of large numbers - as the number of similar exposure units grows, actual results approach expected results

Explanation: The law of large numbers holds that the larger the number of independent, similar exposure units, the more closely actual loss experience will track expected loss experience, which is what makes credible pricing possible. Indemnity concerns restoring the insured without profit, and subrogation concerns recovery from responsible third parties - neither explains predictive accuracy.

• A. Retention
• B. Avoidance - eliminating the activity that creates the loss exposure
• C. Transfer
• D. Reduction

Correct answer: B. Avoidance - eliminating the activity that creates the loss exposure

Explanation: Avoidance eliminates a loss exposure entirely by not engaging in the activity that creates it, which is what shutting down the attraction accomplishes. Reduction would be keeping the attraction while adding padding, supervision, or other safeguards; transfer would be shifting the risk through insurance or contract; and retention means knowingly bearing the risk, as with a deductible or self-insurance.

• A. A soft market
• B. A residual market
• C. A hard market, marked by rising rates, restricted terms, and reduced capacity
• D. A run-off market

Correct answer: C. A hard market, marked by rising rates, restricted terms, and reduced capacity

Explanation: A hard market is the upswing of the underwriting cycle: premiums increase, coverage terms are restricted, and capacity shrinks as insurers become selective. A soft market is the opposite condition, when losses are low, capacity is plentiful, and pricing is highly competitive. The residual market is a mechanism for risks that cannot find voluntary coverage, not a phase of the cycle.