Arkansas Adjuster Practice Test

Correct answer: B. Only Leo, because salaried insurer employees are excluded

Arkansas defines an adjuster as a person who, as an independent contractor (or its employee) or for a fee or commission, investigates and negotiates claim settlements on behalf of an insurer. A salaried employee of an insurer is expressly not an adjuster, so Dana needs no license. Leo does: Ark. Code Ann. 23-64-201 bars anyone from adjusting claims as an adjuster without a license, and working for a licensed insurer does not exempt him.

Reference: Ark. Code Ann. 23-64-102 (definition of adjuster); 23-64-201(c)

Correct answer: D. A self-employed adjuster paid per claim by several insurers

The statute excludes licensed Arkansas attorneys, salaried employees of an insurer, a managing general agent or an insurer-owned adjustment bureau, and an appointed agent who adjusts losses under policies issued by the insurer he represents. A self-employed adjuster paid by the claim to negotiate settlements for insurers is the core of the definition, an independent contractor working for a fee, so he must hold an Arkansas adjuster license.

Reference: Ark. Code Ann. 23-64-102 (definition of adjuster and exclusions)

Correct answer: A. Property, casualty or workers' compensation, or any combination

Section 23-64-209(a) lets the Commissioner issue the adjuster license for property insurance, casualty insurance, workers' compensation insurance or any combination. PSI mirrors this with separate Property, Casualty and Workers' Compensation adjuster exams alongside a General Adjuster exam, and NIPR lists the same three lines of authority. Crop adjusters hold a separate license class that requires no exam. Arkansas has no all-lines adjuster license that includes life or health.

Reference: Ark. Code Ann. 23-64-209(a); NIPR Arkansas adjuster lines of authority

Correct answer: C. She needs no Arkansas exam, and Texas CE satisfies Arkansas

A resident of another state may hold an Arkansas nonresident adjuster license if licensed as an adjuster in another state (Ark. Code Ann. 23-64-209(b)(2)). NIPR's Arkansas rules require the exam when an applicant designates Arkansas as the home state, which Marisol does not. Rule 50 exempts nonresident adjusters whose home state has comparable CE, and section 23-64-209(b)(5) says a nonresident adjuster need not keep an office in Arkansas.

Reference: Ark. Code Ann. 23-64-209(b); AID Rule 50 (23 CAR pt 18), Section 3; NIPR Arkansas nonresident adjuster requirements

Correct answer: B. Arkansas exam and background check, then Arkansas CE each cycle

NIPR's Arkansas requirements say an applicant who designates Arkansas as the home state for the adjuster license must pass the Arkansas exam and complete the online criminal background check before the license is issued. Rule 50 then treats nonresidents who qualified by taking the Arkansas adjuster exam like residents: 24 hours of CE every two years, including 3 hours of ethics. Arkansas does offer a DHS license, so no Texas or Florida license is needed.

Reference: NIPR Arkansas adjuster DHS rules; AID Rule 50 (23 CAR pt 18), Section 4(B)(2)(d)

Correct answer: A. At least 20 hours, finished within two years before testing

Rule 31 implements Ark. Code Ann. 23-64-202(b)(2) as amended by Act 397 of 2021 and applies to all applicants for an adjuster license. The property adjuster course is at least 20 hours, including 5 hours of state law, 2 hours of unfair claims and trade practices and 1 hour of ethics, and it must be completed no more than two years before the licensing exam. The older statute exempted adjusters; 24 hours with 3 of ethics is the CE requirement.

Reference: AID Rule 31 (23 CAR pt 14), Sections 1, 3(a)(2)(A), 5(a)(6) and 10

Correct answer: D. 14 hours

The casualty adjuster course normally requires 20 hours. Rule 31, Section 5(b) exempts an applicant for an additional line from the 5-hour State Insurance Laws and Rules portion and from the 1-hour ethics portion if those portions were completed within two years of the new application. Hiro's were completed eight months earlier, so 20 - 5 - 1 = 14 hours. Answering 15 forgets the ethics exemption, and 19 forgets the state law exemption.

Reference: AID Rule 31 (23 CAR pt 14), Section 5(a)(7) and 5(b)(1)-(2)

Correct answer: C. He is exempt from the Rule 31 prelicensing course

Rule 31, Section 3(b)(4) exempts adjuster applicants who hold a current certification issued by a national or state claims association that is a Commissioner-approved continuing education provider. Section 3(b)(3) also exempts adjusters licensed in good standing in another state who move to Arkansas and apply for a resident license. The exemption covers the course only; the written exam requirement in Ark. Code Ann. 23-64-209 is separate.

Reference: AID Rule 31 (23 CAR pt 14), Section 3(b)(3) and (4)

Correct answer: A. 24 hours every two years, including 3 hours of ethics

Rule 50, Section 4(A)(2) requires anyone holding an adjuster license to complete at least 24 hours of Commissioner-approved CE, including 3 hours of ethics, in each two-year renewal cycle, matching section 23-64-209(e). Excess hours carry forward only to the next two-year period, and extra ethics hours carry over as general hours. Twelve hours with 2 of ethics was a one-time transition amount when Arkansas moved to two-year licenses in 2011 and 2012.

Reference: AID Rule 50 (23 CAR pt 18), Sections 4(A)(2), 4(B) and 8(C); Ark. Code Ann. 23-64-209(e)

Correct answer: B. None, because company-employed adjusters are exempt

Rule 50, Section 3(A) lists who is exempt, and it includes company-employed adjusters and limited adjusters under Rule 68. Holding the license voluntarily does not remove the exemption. Other exemptions cover nonresident adjusters whose home state has comparable CE and adjusters on active military duty. Rule 50 has no reduced-hour or ethics-only track for staff adjusters; non-exempt adjusters owe the full 24 hours with 3 of ethics.

Reference: AID Rule 50 (23 CAR pt 18), Section 3(A)(2), (7) and (9)

Correct answer: C. She has 90 days to stop adjusting or get an Arkansas license

Section 23-64-209(d) lets an adjuster whom an insurer sends into Arkansas after a catastrophe work without an Arkansas license if the adjuster notifies the Commissioner in writing within 10 business days of entering the state. The adjuster must then stop adjusting in Arkansas within 90 days of that notice or obtain an Arkansas license, and the Commissioner may grant 90 more days on application. AID takes these registrations through its catastrophe adjuster portal; no bond is required.

Reference: Ark. Code Ann. 23-64-209(d)(1) and (2); AID Bulletin 13-2017 (Act 283 of 2017, Section 10); AID Licensing Division (catastrophe adjusters)

Correct answer: D. A $240 penalty, and no new written exam is required

A licensee who lets the license lapse may reinstate it within 12 months after the continuation fee due date without passing a written examination. However, a continuation fee received after the due date carries a penalty of double the unpaid fee: 2 x $120 = $240. Five months is inside the 12-month window, so no retest is needed. Waiting beyond 12 months loses this reinstatement route.

Reference: Ark. Code Ann. 23-64-215(b)

Correct answer: B. Using notes while taking an insurance licensing exam

For adjusters, section 23-64-216(a)(2) lists grounds such as false information on the application, misappropriating money, a felony conviction, fraudulent or dishonest practices, discipline in another state and improperly using notes or other reference material to complete an examination for an insurance license. After notice and a hearing the Commissioner may suspend for up to 36 months, revoke, refuse to continue or impose probation. Fair compromise settlements and multistate licensing are normal practice.

Reference: Ark. Code Ann. 23-64-216(a)(2)(K)

Correct answer: A. $5,000

Section 23-64-216(d) allows an administrative penalty of up to $1,000 per violation, or up to $5,000 per violation when the Commissioner finds willful misconduct or a willful violation. The penalty may be increased by any commissions earned on the transaction, and the Commissioner may also order restitution of actual losses. A penalty can be imposed instead of, or alongside, suspension or revocation of the license.

Reference: Ark. Code Ann. 23-64-216(d)

Correct answer: C. Notify the Commissioner in writing within 30 days of the charge

Section 23-64-201(e) requires every licensee or applicant to notify the Commissioner in writing within 30 days of the filing of any criminal charge, any conviction or plea, or any bankruptcy filing by or against them. Failure to notify may lead to immediate suspension. Waiting for a conviction is the tempting mistake: the duty starts when the charge is filed, and a later felony conviction is itself a ground for discipline under section 23-64-216.

Reference: Ark. Code Ann. 23-64-201(e)

Correct answer: D. It is optional and valid only while she works for the sponsor

Section 23-64-102 lets the Commissioner issue limited adjusters' licenses to employees sponsored by self-insured entities, valid only while employed by a self-insured sponsor. Rule 68 states the license is optional, not required, and is available, for example, to employees who need it to qualify for licenses elsewhere. Holders pass an exam but owe no CE under Rule 50. The license covers only the sponsor's own claims, not claims for insurers.

Reference: Ark. Code Ann. 23-64-102 (limited adjusters); AID Rule 68 (23 CAR pt 28), Sections 1 and 4

Correct answer: A. As unlicensed public adjusting, which is illegal

Arkansas licenses adjusters only to act on behalf of insurers, and the Department states that public adjusters are prohibited from adjusting claims in the state. Its storm bulletins, including Bulletin 06-2025, repeat that unlicensed public adjusting is illegal and ask that anyone who is not a licensed attorney and seeks pay from an insured for adjusting services be reported. Catastrophe registration is only for adjusters an insurer sends in, and no fee cap legalizes the arrangement.

Reference: AID Licensing Division page (public adjusters prohibited); AID Bulletin 06-2025 (Public adjusting prohibited); Ark. Code Ann. 23-64-102

Correct answer: C. On Friday, when his agent received the report

Rule 43, Section 7(a) requires an insurer to acknowledge a claim within 15 working days of notification unless it pays within that time, and it states that notification given to an agent of the insurer is notification to the insurer. The clock therefore started when the agent received Kenji's report on Friday. An acknowledgment made other than in writing must be noted and dated in the claim file.

Reference: AID Rule 43 (23 CAR pt 15), Section 7(a)

Correct answer: B. The insurer waived proof of loss and cannot now require it

Section 23-79-126 requires an insurer to furnish proof of loss forms within 20 days after a loss is reported. Failing to do so waives the proof of loss requirement, and the insurer may not later require one. March 1 to April 2 is 32 days, so the requirement is waived. Rule 43, Section 7(a) repeats this rule and adds that insurers may not make claimants calculate depreciation on proof of loss forms. The section does not apply to health, accident or life insurers.

Reference: Ark. Code Ann. 23-79-126; AID Rule 43 (23 CAR pt 15), Section 7(a)

Correct answer: D. Completing the investigation of a newly reported claim

Rule 43 uses 15 working days for acknowledging notice of a claim (Section 7(a)), answering a Department inquiry (Section 7(b)), replying to other claimant communications that expect a response (Section 7(c)) and accepting or denying a first-party claim after a properly executed proof of loss (Section 9(a)). Completing the investigation has a different limit: 45 calendar days after notification, or a notice to the claimant explaining why more time is needed (Section 8).

Reference: AID Rule 43 (23 CAR pt 15), Sections 7, 8 and 9(a)

Correct answer: C. Notice that more time is needed, giving the specific reasons

Section 8 requires insurers to complete an investigation within 45 calendar days after notification unless it cannot reasonably be done, and then to notify the claimant that more time is needed with the reasons. Bulletin 20-2024 says the rule applies to first- and third-party claimants alike, and that a letter saying only "still investigating" is not specific enough; the Commissioner treats it as failing to send the notice. A placeholder denial would itself be an unfair practice.

Reference: AID Rule 43 (23 CAR pt 15), Section 8; AID Bulletin 20-2024

Correct answer: A. Write within 15 working days giving the reasons, then every 45 days

Section 9(a)(1) gives the insurer 15 working days after a properly executed proof of loss to accept or deny. If it needs more time, Section 9(a)(2) requires written notice within those 15 working days stating why. If the investigation is still incomplete, it must send a letter with the reasons within 45 calendar days of the initial notification and at least every 45 calendar days after that. A phone call does not meet the written notice requirement.

Reference: AID Rule 43 (23 CAR pt 15), Section 9(a)(1) and (2); AID Bulletin 20-2024

Correct answer: D. In writing, citing the exclusion, sent by mail

Rule 43 requires a claim denial to be in writing, to reference the specific policy provision, condition or exclusion relied on, and to be copied to the claim file. Bulletin 9-2023 lets property and casualty insurers deliver policies and most notices electronically with the insured's consent, but it requires claim denials, nonrenewal notices and cancellation notices to continue to be physically mailed. Her e-delivery consent therefore does not cover the denial.

Reference: AID Rule 43 (23 CAR pt 15), Section 9(a)(1); AID Bulletin 9-2023

Correct answer: B. At least 60 calendar days before the time limit may expire

An insurer may not keep negotiating with a claimant who is neither an attorney nor represented by one until a statute of limitations or policy time limit affects the claimant's rights without written notice that the limit may be expiring. The notice is due at least 60 calendar days ahead for third-party claimants and at least 30 working days ahead for first-party claimants. These notice provisions were added in the 2015 amendments, effective December 1, 2015.

Reference: AID Rule 43 (23 CAR pt 15), Sections 4 and 9(d)

Correct answer: A. Within 10 working days

Section 9(f) requires claim checks or drafts to be mailed or delivered within 10 working days after the claim is processed, the investigation is complete and the file is closed and ready for payment. Bulletin 9-2023 adds that electronic funds transfers and direct deposits to insureds are valid claim payments under this section. Fifteen working days is the separate deadline for accepting or denying a first-party claim after proof of loss.

Reference: AID Rule 43 (23 CAR pt 15), Section 9(f); AID Bulletin 9-2023