Montana Multi-Line Adjuster Practice Test

Correct answer: B. None, because salaried insurer employees are excluded from the definition

MCA 33-17-102(1)(a) defines an adjuster as a person who acts for the insurer as an independent contractor (or an independent contractor's employee) or for a fee or commission, and subsection (1)(b)(ii) excludes a salaried employee of an insurer or managing general agent. Because 33-17-301 requires a license only to act as an adjuster, Elena needs none. A public adjuster license is for people who represent insureds, not insurers.

Reference: MCA 33-17-102(1); MCA 33-17-301(1)

Correct answer: D. An independent contractor paid a fee by an insurer to settle claims

Section 33-17-102(1)(a) covers a person who, on behalf of the insurer, investigates and negotiates claims for compensation as an independent contractor (or an employee of one) or for a fee or commission. Subsection (1)(b) excludes licensed attorneys, salaried employees of an insurer or managing general agent, licensed producers adjusting losses under policies the insurer issued, licensed third-party administrators and workers' compensation claims examiners.

Reference: MCA 33-17-102(1)(a) and (b)

Correct answer: A. A public-access home office is allowed; keep records there at least 5 years

Section 33-17-301(2)(f) requires an adjuster to maintain an office in Montana accessible to the public and to keep the usual and customary records of transactions under the license there for not less than 5 years. The statute expressly allows the office to be in the licensee's home. Nothing requires commercial space or a yearly filing of records, although the commissioner may examine an adjuster's records under 33-1-402.

Reference: MCA 33-17-301(2)(f); MCA 33-1-402(1)

Correct answer: C. Nothing, since his current home-state license exempts him from both

Under 33-17-301(4), a nonresident applicant previously licensed in another state is not required to complete prelicensing education or examination, as long as the applicant is currently licensed there or applies within 90 days after that license was cancelled and the other state shows good standing at cancellation. Jamal's active Florida license qualifies him. Montana has no separate law-only exam or 40-hour course for this situation.

Reference: MCA 33-17-301(4)(a) and (b)

Correct answer: B. By designating another home state and qualifying there as if a resident

Section 33-17-301(2)(b)(ii) lets a nonresident whose principal state of residence or business does not offer adjuster licensure designate a home state where the adjuster does not live or do business, provided the adjuster qualifies for that state's license as if a resident. Rosa can hold a designated home state license from a state that offers one and use it to apply in Montana. A producer license is not an adjuster license, and no Montana residency period is required.

Reference: MCA 33-17-301(2)(b)(ii)

Correct answer: D. No Montana license, since the insurer sent him for catastrophe losses

Section 33-17-301(5) states that an adjuster license or qualifications are not required for an adjuster sent into Montana by and on behalf of an insurer or adjusting business entity to adjust a particular loss, or a series of losses resulting from a catastrophe common to all of them. The statute creates no emergency license, supervision rule or 10-day deadline. The exemption depends on being sent by an insurer or adjusting firm.

Reference: MCA 33-17-301(5)

Correct answer: A. $50 to apply and $100 for each biennial renewal

Section 33-2-708(1)(b)(iv) sets the adjuster license application fee, including issuance of the license, at $50 and the biennial renewal fee at $100. The $100 application and $50 renewal pattern belongs to the nonresident producer license in the same section, which makes it a common mix-up. Montana adjuster licenses renew every two years, not annually, and a separate fee applies to reinstate a lapsed license.

Reference: MCA 33-2-708(1)(b)(iv)

Correct answer: C. 24 hours, including 3 hours of ethics and 1 hour of Montana law changes

Section 33-17-1203(1)(a) requires producers, adjusters, public adjusters and consultants (other than certain limited-line producers, such as bail bond licensees) to complete at least 24 credit hours of approved continuing education in each 24-month period, including at least 3 hours of ethics and at least 1 hour on changes in Montana insurance statutes and rules. The commissioner may grant up to a 1-year extension for good cause.

Reference: MCA 33-17-1203(1)(a) and (2)

Correct answer: D. Pay the reinstatement fee and certify her CE within 1 year of lapse

Under 33-17-1205(2), failing to file the biennial CE certification makes the license lapse, and a person with a lapsed license may not do business under another person's license, including a business entity license. Section 33-17-1002(2) lets the commissioner reissue a lapsed license if the licensee pays the lapsed license reinstatement fee and files certification of the preceding biennium's CE within 1 year of the lapse. The 1-year wait applies to revoked licenses.

Reference: MCA 33-17-1002(2); MCA 33-17-1205(1) and (2)

Correct answer: B. A person whose license has been revoked twice is never again eligible

Section 33-17-1002(3) bars reissuing a license to a person whose license was revoked until at least 1 year has passed and the person qualifies again, and it lets the commissioner refuse a license for up to 5 years after a revocation. A person whose license has been revoked twice is not again eligible for any license under the insurance code. After 1 year, reissuance is possible but never mandatory.

Reference: MCA 33-17-1002(3)

Correct answer: A. $5,000

Section 33-1-317 lets the commissioner, after a hearing under 33-1-701, fine a person up to $25,000 for violating the insurance code or a rule, except that a fine imposed on an insurance producer or adjuster may not exceed $5,000 per violation. The fine is in addition to other penalties, and the adjuster may appeal it under 33-1-711. The higher $25,000 cap applies to other persons, such as insurers.

Reference: MCA 33-1-317; MCA 33-1-701

Correct answer: C. An attestation that the public adjuster is fully bonded

Section 33-17-302(1) requires a written contract, filed with the commissioner, that includes the adjuster's name, address and license number, the title "public adjuster contract", a description of the loss and services, both signatures and dates, the full fee, and attestation language stating that the public adjuster is fully bonded. A term that keeps the insured from pursuing civil remedies is prohibited by 33-17-302(2)(d).

Reference: MCA 33-17-302(1)(a) to (k) and (2)(d)

Correct answer: B. It is prohibited; the fee must be a percentage of each payment

Section 33-17-302(2)(a) bars a public adjuster contract term that lets the adjuster collect the entire fee from the first payment issued by the insurer rather than as a percentage of each payment, or collect the percentage fee when money is due but not yet paid. Initials, filing the contract or a modest percentage do not cure a prohibited term. The same subsection also bans late fees, collection costs and payee-only payment clauses.

Reference: MCA 33-17-302(2)(a) to (d)

Correct answer: D. No commission based on a percentage of the amount paid

Under 33-17-302(3), if the insurer pays or commits in writing to pay the policy limits within 72 hours after the loss is reported, the public adjuster may not receive a commission consisting of a percentage of the total amount the insurer pays to resolve the claim. Signing the contract first does not change this, and the statute provides no reduced percentage. The rule keeps insureds from paying a percentage for a recovery the insurer offered almost at once.

Reference: MCA 33-17-302(3)

Correct answer: A. Prohibited, as solicitation during a loss-producing occurrence

Section 33-17-303(2) bars a public adjuster from soliciting or attempting to solicit an insured during the progress of a loss-producing occurrence, as defined in the insured's insurance contract. Filing contracts and disclosing financial interests are separate duties under 33-17-302 and do not make the solicitation acceptable. The same section requires loyalty to the insured alone and bars acquiring an interest in salvage without the insured's written permission.

Reference: MCA 33-17-303(1), (2) and (4)

Correct answer: C. A public adjuster may adjust first-party physical damage claims only

ARM 6.6.1613 limits public adjusters to first-party physical damage claims, so representing injured third parties is outside the license. ARM 6.6.1605 requires separate licenses and bars holding independent adjuster and public adjuster licenses at the same time, and ARM 6.6.1611 requires a $5,000 surety bond, not $10,000, filed before the license is issued. The surety may cancel the bond on 30 days' written notice to the commissioner.

Reference: ARM 6.6.1605; ARM 6.6.1611; ARM 6.6.1613

Correct answer: D. With such frequency as to indicate a general business practice

Section 33-18-201 prohibits its listed acts when committed with such frequency as to indicate a general business practice; that is the regulatory standard. By contrast, an insured or third-party claimant suing under 33-18-242 for violations of 33-18-201(1), (4), (5), (6), (9) or (13) need not prove a general business practice. The statute sets no fixed count, no intent-to-defraud element and no complaint requirement.

Reference: MCA 33-18-201; MCA 33-18-242(2)

Correct answer: B. An unfair practice of delaying claims through duplicate submissions

Section 33-18-201(12) lists delaying the investigation or payment of claims by requiring an insured, claimant or physician to submit a preliminary claim report and then a formal proof of loss form when both contain substantially the same information. A proof of loss may be requested, but not as a duplicate that only adds delay. Meeting the payment deadlines in 33-18-232 does not make the practice acceptable.

Reference: MCA 33-18-201(12)

Correct answer: A. Within 60 days after it received the proof of loss

Section 33-18-232(1) requires an insurer to pay or deny a claim within 30 days after receiving proof of loss. If it makes a reasonable request for more information or documents, the deadline becomes 60 days from receipt of the proof of loss, unless the insurer has notified the claimant of its reasons for not paying in full or has reported suspected fraud to the commissioner. The clock runs from the proof of loss, not from receipt of the invoices.

Reference: MCA 33-18-232(1)

Correct answer: C. $240.00

Section 33-18-232(2) adds 10% annual interest from the date the claim was due, and with no information request the claim is due 30 days after receipt of the proof of loss, here July 1. July 1 to September 12 is 73 days: $12,000 x 10% x 73/365 = $240. Counting from June 1 (103 days) gives $338.63, which wrongly starts at receipt. Interest goes to the person who receives the claim payment.

Reference: MCA 33-18-232(2)

Correct answer: B. $0, since interest under $5 is not payable

Interest under 33-18-232(2) runs at 10% a year from the due date: $900 x 10% x 15/365 = $3.70. However, the statute says interest is payable only if the amount of interest due on a claim exceeds $5, so the insurer owes no interest here. There is no $5 minimum payment, and a full year of interest is never charged when payment is only days late.

Reference: MCA 33-18-232(2)

Correct answer: D. 90% of the dollars within 20 working days and all within 30 working days

Section 33-18-233(1) lets the commissioner, after a hearing, fine an insurer under 33-1-317 if as a general business practice it fails to use due diligence, pay claims on time, give proper notice or pay interest under 33-18-232. Subsection (2) exempts an insurer that consistently paid 90% of the total dollar amount outstanding to each claimant within 20 working days and all of it within 30 working days during the 6 months before the hearing.

Reference: MCA 33-18-233(1) and (2)

Correct answer: A. After her claim is settled or reaches judgment, within 1 year

Section 33-18-242(1) gives an insured or a third-party claimant an independent cause of action for violations of 33-18-201(1), (4), (5), (6), (9) or (13), including failing to attempt in good faith to settle when liability is reasonably clear. Under subsections (7)(b) and (8)(b), a third-party claimant may not file until the underlying claim is settled or judgment is entered, and must sue within 1 year after that. The 2-year period applies to insureds.

Reference: MCA 33-18-242(1), (7)(b) and (8)

Correct answer: C. Within 30 working days of receiving the proof of loss

Section 33-18-245 requires an insurer to offer to pay or pay approved motor vehicle claims that solely involve property damage of $2,500 or less within 30 working days after receiving a correctly completed proof of loss. The deadline does not apply if the insurer has notified the insured or assignee of its reasons for not paying in full or has made a reasonable request for more information or documents. Luis's $1,800 claim falls within the rule.

Reference: MCA 33-18-245(1) and (2)

Correct answer: D. Be sent by certified mail and stay open for at least 60 days

Section 33-18-251(1) requires a time-limited demand to reference the statute, be in writing and labeled "time sensitive" at the top of the first page, be sent by certified mail, return receipt requested, to the insurer, and stay open for at least 60 days. The period starts when the insurer actually receives it. A demand that does not strictly comply is not treated as a reasonable opportunity to settle in a later extracontractual damages suit.

Reference: MCA 33-18-251(1), (2) and (7)