18 Free Pennsylvania Insurance Regulation Practice Questions (2026)

Question 1 (Chapter 7)

Sarah, a 25-year-old Pennsylvania resident, wishes to become a licensed Life, Accident and Health insurance producer. She has a clean criminal record and can read and write English proficiently. She asks her mentor about the required pre-licensing education course. Based on current Pennsylvania law, what should her mentor tell her?

• A) Sarah must complete a 24-credit-hour pre-licensing course before taking the exam.
• B) Sarah is exempt from the pre-licensing course requirement because she is under 30 years old.
• C) Effective April 29, 2025, the pre-licensing course requirement has been removed, so Sarah can proceed directly to the exam after meeting other requirements.
• D) Sarah must complete a 12-credit-hour ethics course as part of her pre-licensing education.

Question 2 (Chapter 7)

After successfully passing the Pennsylvania Life, Accident and Health exam, a new producer, Emily, applies for her license. She is 22 years old, resides in Philadelphia, and has provided her fingerprints. Which additional requirement must Emily meet to be issued a resident producer license in Pennsylvania?

• A) She must secure an appointment with at least one insurer before her license can be issued.
• B) She must complete a 24-hour pre-licensing education course.
• C) She must have a college degree in a related field.
• D) She must demonstrate professional competence, general fitness, and integrity of character.

Question 3 (Chapter 7)

An applicant for a Pennsylvania insurance producer license has a criminal history involving a felony conviction related to dishonesty. Which of the following is true regarding their application?

• A) The Department will automatically grant the license because the exam was passed.
• B) The applicant is exempt from the fingerprinting requirement due to prior background checks.
• C) The Department may deny the license based on the applicant's lack of integrity of character.
• D) The applicant can only be denied if the crime occurred within the last 12 months.

Question 4 (Chapter 7)

A Pennsylvania resident, John, wants to obtain a nonresident Life, Accident and Health producer license in a neighboring state. That state has a law stating it will waive its exam requirement for Pennsylvania residents if Pennsylvania offers the same waiver. What principle allows John to potentially bypass the exam in the neighboring state?

• A) Grandfathering
• B) Comity
• C) Equitable estoppel
• D) Reciprocity

Question 5 (Chapter 7)

A producer in Pennsylvania is appointed by an insurer to sell life insurance. Under Pennsylvania law, which of the following best describes the producer's fiduciary duty regarding premiums collected from a client?

• A) The producer must deposit premiums into a separate interest-bearing account for their own benefit.
• B) The producer may hold premiums in a personal account as long as they are forwarded to the insurer within 30 days.
• C) The producer is only considered a fiduciary if the premium amount exceeds $5,000.
• D) The producer must hold all premiums in a fiduciary capacity and must not commingle them with personal funds.

Question 6 (Chapter 7)

A producer is required to be 'appointed' by an insurer. Who is responsible for notifying the Department of this appointment?

• A) The producer.
• B) The Department of State.
• C) The insurer.
• D) The client.

Question 7 (Chapter 7)

A Pennsylvania producer, David, receives a premium payment from a client for a new health insurance policy. Instead of forwarding the payment to the insurer, David uses a portion of the funds to cover his personal expenses, intending to repay it later. Which specific prohibited act has David committed?

• A) Twisting
• B) Rebating
• C) Unfair discrimination
• D) Misappropriation of funds

Question 8 (Chapter 7)

A producer is found guilty of commingling client premiums with personal funds. Under 40 P.S. § 310.96, what is the primary purpose of the fiduciary responsibility rule regarding these funds?

• A) To ensure the producer earns interest on the premiums.
• B) To ensure that premiums are held in trust and protected from the producer's personal creditors.
• C) To protect the insurer from the producer's bankruptcy.
• D) To allow the producer to use the funds for business operating expenses.

Question 9 (Chapter 7)

A producer offers to pay for a client's first month of premiums if the client buys a policy from them. What prohibited practice is this?

• A) Twisting.
• B) Defamation.
• C) Coercion.
• D) Rebating.

Question 10 (Chapter 7)

An insurance company operating in Pennsylvania has been found to be making statements in its advertisements that misrepresent the benefits, advantages, conditions, and terms of its policies. Which specific unfair insurance practice is the company committing?

• A) Twisting
• B) Defamation
• C) Coercion
• D) False advertising

Question 11 (Chapter 7)

A producer is accused of 'twisting.' What activity has the producer engaged in?

• A) Making false statements about a competitor's financial condition.
• B) Charging a client a fee without disclosing it in writing.
• C) Inducing a policyholder to lapse or surrender a policy through misrepresentation to sell a new one.
• D) Refusing to accept a claim based on a pre-existing condition.

Question 12 (Chapter 7)

A producer is accused of 'boycott, coercion, or intimidation' under the Unfair Insurance Practices Act. Which of the following actions would constitute this violation?

• A) Refusing to sell a policy to someone with a poor credit score.
• B) Offering a discount on premiums to a client who buys multiple policies.
• C) Telling a client that their mortgage will be foreclosed if they do not purchase a life insurance policy from that specific producer.
• D) Suggesting that a client switch from a high-cost policy to a lower-cost policy.

Question 13 (Chapter 7)

A Pennsylvania licensed producer, Mark, is contacted by a client who wants to purchase a new life insurance policy. Mark realizes that to fund the new policy, the client intends to surrender an existing life insurance policy with another insurer. What specific regulatory action is Mark required to take in this scenario?

• A) Mark must advise the client that replacement is illegal in Pennsylvania.
• B) Mark must obtain a written statement from the client confirming they understand the implications but is not required to notify the replacing insurer.
• C) Mark must only notify the existing insurer of the client's intent to replace the policy.
• D) Mark must provide the client with a 'Notice Regarding Replacement of Life Insurance or Annuity' and submit a copy to the replacing insurer.

Question 14 (Chapter 7)

A producer is helping a client replace an existing life insurance policy. The producer fails to provide the required 'Notice Regarding Replacement' form. This is a violation of which regulation?

• A) The Replacement Regulation (40 P.S. § 625 and 31 Pa. Code Ch. 81).
• B) The Unfair Insurance Practices Act (Twisting).
• C) The Fair Credit Reporting Act.
• D) The Gramm-Leach-Bliley Privacy Act.

Question 15 (Chapter 7)

Under the Gramm-Leach-Bliley Act, what must an insurer provide to a consumer regarding their personal information?

• A) A privacy notice explaining the company's information-sharing practices.
• B) A copy of their credit report every year.
• C) A list of all other customers' contact information.
• D) A guarantee that no information will ever be shared.

Question 16 (Chapter 7)

A consumer requests a copy of their investigative consumer report under the Fair Credit Reporting Act. What is the insurer's requirement?

• A) The insurer must provide the report within 3 days of the request.
• B) The insurer must provide the report within 5 days of the request.
• C) The insurer is not required to disclose the report to the consumer under any circumstances.
• D) The insurer must disclose the nature and scope of the investigation upon request.

Question 17 (Chapter 7)

Under the Fair Credit Reporting Act (FCRA), if an applicant for a life insurance policy is denied coverage due to information found in a consumer report, what right does the applicant have?

• A) The right to a free copy of the report and to dispute inaccurate information.
• B) The right to sue the insurer for discrimination.
• C) The right to demand the insurer issue a policy regardless of the report.
• D) The right to have the report permanently removed from all databases.

Question 18 (Chapter 7)

A producer is convicted of a felony involving dishonesty or breach of trust. Under 18 U.S.C. § 1033, what is the consequence for this individual in the insurance industry?

• A) They are prohibited from engaging in the business of insurance without written consent from the Commissioner.
• B) They must pay a fine of $500.
• C) They must complete an additional 24 hours of ethics training.
• D) They are automatically barred for exactly five years.