North Carolina Adjuster Practice Test

Correct answer: C. An attorney who adjusts a loss now and then as part of a law practice

G.S. 58-33-10(2) defines an adjuster as any individual who, for salary, fee, commission or other compensation, investigates or reports to a principal on claims under insurance contracts other than life or annuity. That covers staff and independent adjusters alike. The definition excludes an attorney who adjusts losses from time to time incidental to a law practice, and an adjuster of marine losses.

Reference: N.C.G.S. 58-33-10(2) (definition of adjuster)

Correct answer: B. He may investigate and report on the claim without an adjuster license

G.S. 58-33-70(b) lets an appointed insurance producer or limited representative act as an adjuster from time to time, on behalf of and at the request of the appointing insurer, without an adjuster license. The same subsection forbids a producer from adjusting any loss when the producer's pay for selling insurance depends in any way on how that loss is adjusted, so the third option describes a prohibited situation.

Reference: N.C.G.S. 58-33-70(b)

Correct answer: A. 90 days, and only one permit in a lifetime

G.S. 58-33-70(c) lets the Commissioner issue a learner's permit for a 90-day learning period after the applicant files the adjuster application, pays the exam fee in advance and files an employer certificate. Not more than one learner's permit may ever be issued to one individual. The employer certifies good character, employment, supervision by a licensed adjuster and responsibility for the learner's adjustments.

Reference: N.C.G.S. 58-33-70(c)

Correct answer: C. She is submitted to NCDOI and completes its catastrophe certification course

G.S. 58-33-70(e) lets the Commissioner allow experienced adjusters licensed in another state to do emergency work, for a period the Commissioner sets, only for insurers authorized in North Carolina, with written notice from the employer. NCDOI requires each emergency adjuster to be submitted on its list and to pass its Catastrophe Adjuster Certification Course with 70% or higher. A fixed 30-day limit applies only to emergency motor vehicle damage appraisers.

Reference: N.C.G.S. 58-33-70(e), (f); NCDOI, NC Catastrophe Adjuster Certification

Correct answer: D. Every year by April 1, $109

G.S. 58-33-26(m) requires adjuster, limited representative and motor vehicle damage appraiser licenses to be renewed on April 1 each year. NCDOI lists the adjuster renewal as a $75 license fee plus a $34 processing fee, $109 in total. The $169 figure is the initial license cost ($50 registration, $75 license, $44 processing). Continuing education, not renewal, runs on a two-year cycle tied to birth month.

Reference: N.C.G.S. 58-33-26(m), 58-33-125; NCDOI, Registration fees for adjusters

Correct answer: D. It lapses automatically 30 days after his home state license is lost

Under G.S. 58-33-30(h)(2)a1, when a nonresident's home state license is no longer in good standing for any reason, the North Carolina nonresident license automatically lapses 30 days after the home state license is lost. It can be reinstated within 30 days after the lapse if he proves the home state license was reinstated or reissued; otherwise he must submit a new application.

Reference: N.C.G.S. 58-33-30(h)(2)a1

Correct answer: A. Cancel the Florida license within 90 days of her North Carolina application date

The North Carolina candidate handbook exempts adjusters who move from a state that licenses adjusters by examination if the former home state license is canceled within 90 days of the application date for the resident license; the licensing office checks the Producer Database. If the record shows a cancellation more than 90 days from the application date, she must test. A North Carolina resident license is void if she keeps another resident license.

Reference: Pearson VUE, North Carolina Insurance Licensing Candidate Handbook, Non-resident Adjusters Who Move to North Carolina; N.C.G.S. 58-33-30(h)(1)

Correct answer: C. Unlawful and a cause for revocation of his license

G.S. 58-33-70(a) makes it unlawful, and a cause for revocation of the license, for a licensed adjuster to engage in the practice of law. Drafting a lawsuit for a claimant is legal practice, and no waiver or disclosure cures it. Separately, 11 NCAC 04 .0423 bars adjusters from advising claimants about whether to hire counsel or recommending any lawyer.

Reference: N.C.G.S. 58-33-70(a)

Correct answer: A. Within 10 days after the date of the conviction

G.S. 58-2-69(c) requires a licensee convicted of any crime other than a motor vehicle infraction to notify the Commissioner in writing within 10 days after the conviction, and a guilty plea or a plea of nolo contendere counts as a conviction. The same section requires notice of a new residential or email address within 10 business days; missing that deadline costs a $50 administrative fee.

Reference: N.C.G.S. 58-2-69(b), (c)

Correct answer: D. $4,000

G.S. 58-2-70(d) sets each civil penalty at not less than $100 nor more than $1,000, and subsection (c) says each day during which a violation occurs is a separate violation. Four days times $1,000 equals $4,000. The Commissioner may order the penalty in addition to or instead of suspension or revocation, and may also petition Wake County Superior Court for restitution to people harmed.

Reference: N.C.G.S. 58-2-70(c), (d)

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

11 NCAC 06A .0802(a) requires each person holding an adjuster license to earn 24 continuing education credits (ICECs) every biennial compliance period and to complete 3 credits of ethics every period. G.S. 58-33-130(d) caps the biennial requirement at 24 credit hours. Adjusters also owe 3 hours of flood training, but only in alternating compliance periods.

Reference: 11 NCAC 06A .0802(a); N.C.G.S. 58-33-130(d)

Correct answer: C. Resident CE: 24 hours with ethics, plus flood in alternating periods

Under 11 NCAC 06A .0802(h), a nonresident who qualified by passing the North Carolina adjuster exam must meet the same CE as a resident adjuster, including mandatory ethics and flood courses: 24 hours each biennial period with 3 hours of ethics, and 3 hours of flood in the first compliance period and every other period after that. Nonresidents licensed through another state's exam need only good standing there.

Reference: 11 NCAC 06A .0802(b), (h); Prometric, NC Insurance Continuing Education Licensee Handbook

Correct answer: D. October 31 of each even-numbered year

Rule .0802(m) ties the compliance year to birth year: an even birth year means CE is due in even-numbered years, an odd birth year in odd-numbered years. Credits must be completed by the last day of the birth month, not by the birthday itself. Born in October 1990, Jamal must finish by October 31 of each even-numbered compliance year.

Reference: 11 NCAC 06A .0802(m)

Correct answer: B. The listed acts violate the statute when done often enough to show a general business practice

G.S. 58-63-15(11) prohibits the listed claim practices when committed with such frequency as to indicate a general business practice, and it states that a violation of the subdivision does not by itself create a cause of action for anyone other than the Commissioner. G.S. 58-63-5 defines person for Article 63 to include adjusters, and subdivision (11) reaches claims under property and casualty policies as well as life and health.

Reference: N.C.G.S. 58-63-5(2), 58-63-15(11)

Correct answer: A. Failing to promptly provide a reasonable explanation of the policy basis for a denial

G.S. 58-63-15(11)n lists failing to promptly provide a reasonable explanation of the basis in the insurance policy, in relation to the facts or applicable law, for denying a claim or offering a compromise settlement. A bare "not covered" letter cites no policy provision and no facts. The other options are also listed practices, but they concern payment statements, altered applications and arbitration appeals.

Reference: N.C.G.S. 58-63-15(11)n

Correct answer: C. An unfair practice: withholding one coverage to influence another

G.S. 58-63-15(11)m lists failing to promptly settle claims where liability has become reasonably clear under one portion of the policy coverage in order to influence settlements under other portions. Holding the clear property damage payment hostage to a bodily injury release fits that description, regardless of the size of the bodily injury offer or whether a lawyer is involved.

Reference: N.C.G.S. 58-63-15(11)m

Correct answer: B. She complies by sending her own written proof within the policy's time limit

G.S. 58-3-40 requires an insurer that wants a written proof of loss to furnish the blank form after receiving notice. If it does not do so within 15 days, the claimant is deemed to have complied by submitting, within the time the policy allows, written proof covering the occurrence, character and extent of the loss. The statute does not waive proof altogether or require automatic payment.

Reference: N.C.G.S. 58-3-40

Correct answer: D. The adjuster's National Producer Number and NCDOI's website and phone number

Rule .0423(a) requires every agent, adjuster, appraiser or other insurer representative dealing with the public to identify himself or herself and his or her occupation. When asked for proof of licensure by a claimant, a repairer during a claim, a Department representative or anyone else contacted on insurance business, the adjuster must give the National Producer Number plus the Department's website address and phone number for verification.

Reference: 11 NCAC 04 .0423(a)

Correct answer: D. Decline to advise on hiring counsel or to recommend any lawyer

Rule .0423(b)(3) says no adjuster shall advise a claimant of the advisability of seeking legal counsel or recommend any legal counsel. It also forbids intimidating a claimant by withdrawing or reducing an offer, or threatening to, because the claimant seeks legal advice. Telling her a lawyer is unnecessary is itself advice about counsel, so Priya should stay neutral and keep working the claim.

Reference: 11 NCAC 04 .0423(b)(3)

Correct answer: B. An insurer pays a discounted labor rate that the shop agreed to give it

G.S. 58-33-76 bars insurers, producers, adjusters and appraisers from accepting any gratuity from a repair service for recommending it and from recommending a repair source without telling the claimant there is no obligation to use it, but it states that discounts agreed to by repair services do not violate the section. Rule .0423(b)(4) also forbids delaying a property damage settlement because of the claimant's choice of repair shop.

Reference: N.C.G.S. 58-33-76; 11 NCAC 04 .0423(b)(1), (b)(4)

Correct answer: C. May not purchase salvage from a claimant at all

Rule .0423(b)(2) flatly prohibits claims management personnel, agents, adjusters, appraisers and other insurer representatives from purchasing salvage from a claimant. The rule has no exception for a fair price, employer approval or timing, because the adjuster's influence over the valuation creates an obvious conflict of interest. The same rule bars accepting gratuities from service providers for recommending them to claimants.

Reference: 11 NCAC 04 .0423(b)(1), (b)(2)

Correct answer: A. Notify the Commissioner with a complete statement of the relevant facts

G.S. 58-2-163 requires insurers, their employees and representatives, and other licensees who know or have reasonable cause to believe someone violated G.S. 58-2-161 (false statements to obtain insurance benefits) to notify the Commissioner with a complete statement of the facts. The report is a privileged communication and, absent actual malice, creates no liability. A licensee who willfully fails to report can lose the license.

Reference: N.C.G.S. 58-2-161, 58-2-163

Correct answer: B. Declare it a total loss, because $10,800 is at least 75% of $14,000

Rule .0418(c) requires a total loss designation when damage, counting original and supplemental claims, equals or exceeds 75% of pre-accident actual cash value. Here 75% of $14,000 is $10,500, and $9,800 plus $1,000 is $10,800, so the insurer must pay pre-accident value and take the salvage title. Rule .0418(j) forbids agreements to keep repair costs under the 75% line.

Reference: 11 NCAC 04 .0418(c), (j)

Correct answer: A. Applicable sales tax and vehicle registration fees

Rule .0418(f) requires applicable sales tax and vehicle registration fees to be included in the actual cash value settlement of a total loss, except when the claimant keeps the salvage. The value itself rests on substantially similar vehicles, adjusted for condition, options, equipment and mileage, not on a new vehicle or the loan payoff. Rental or loss of use is a separate coverage question.

Reference: 11 NCAC 04 .0418(d), (e), (f)

Correct answer: D. Within 10 business days; the insurer pays for estimates beyond two

Rule .0419(c) requires a physical or digital inspection within 10 business days of receiving the claim, with an explanation to the claimant and a file note if that cannot happen. If the insurer requires more than two estimates, it pays for the additional ones. A licensed motor vehicle damage appraiser may perform the inspection, and the insurer may not refuse a claimant's request for a physical inspection.

Reference: 11 NCAC 04 .0419(c)