South Carolina Property, Casualty, Surety and Marine Adjuster Practice Test

Correct answer: D. Both staff and independent adjusters, unless a specific exemption applies

Section 38-47-10(A) requires every individual adjusting losses for an insurer licensed in South Carolina to be licensed, with no carve-out for salaried company staff. The statutory exemptions are narrow: licensed producers and supervised portable electronics claims staff, plus the food spoilage rule in Section 38-47-55. Nonresidents need a South Carolina nonresident license unless an emergency procedure applies.

Reference: S.C. Code 38-47-10(A) and (B)

Correct answer: A. None, because producers licensed under Chapter 43 are exempt

Section 38-47-10(B)(1) states that a producer licensed under Chapter 43 is not required to comply with the adjuster licensing section, so Tomás may adjust the loss for the insurer under his producer license. A public adjuster license would be wrong in any case, because public adjusters represent insureds rather than insurers, and emergency permits apply only after a declared catastrophe.

Reference: S.C. Code 38-47-10(B)(1)

Correct answer: D. Yes, insurer claims employees may adjust food spoilage claims limited to $500 or less

Section 38-47-55 lets an insurer's executive officer, claims employee, designated attorney, or a producer acting for a reciprocal insurer adjust residential food spoilage claims without an adjuster license when coverage for that loss is contractually limited to $500 or less. If such a person engages in improper claims practices, the Director may suspend or revoke the insurer's certificate of authority.

Reference: S.C. Code 38-47-55

Correct answer: B. $150

The base adjuster license fee is $80, fully earned when received and not refundable, transferable or proratable. When another state charges South Carolina adjusters more than South Carolina charges nonresidents, that state's residents pay the same amount, so Wei pays $150. The two fees are not added together, which is why $230 is wrong. The SCDOI applies an $80 minimum.

Reference: S.C. Code 38-47-30; SCDOI Adjuster licensing page

Correct answer: C. $160

An adjuster license has an indefinite term only while the biennial fee is paid; if the fee is not received when due, the license must be canceled. To reinstate, Renee files an original application and pays a reinstatement fee equal to the unpaid biennial fee ($80) plus the regular biennial license fee ($80), a total of $160. Paying $80 covers only one of the two charges.

Reference: S.C. Code 38-47-40; S.C. Code 38-47-30

Correct answer: B. 30 days

Section 38-47-15 requires an adjuster to give the Department business, email and residential addresses when applying and to report any change in these addresses within thirty days. Waiting until renewal is too late, because the duty runs from the change itself. Public adjusters follow the same 30-day rule under Section 38-48-30.

Reference: S.C. Code 38-47-15

Correct answer: A. Submit his Texas exam certificate, since he is licensed there and passed its exam

The SCDOI says that if a nonresident's home state does not require an adjuster examination, the applicant can use a certificate from another state where he is licensed and passed an adjuster exam; only if that is not possible must he pass the South Carolina exam. Section 38-47-10 also bars licensing nonresidents who live in states that refuse to license South Carolina adjusters.

Reference: SCDOI Adjuster licensing page (Non-Resident Adjusters); S.C. Code 38-47-10(A), 38-47-20

Correct answer: D. Residents must pass an exam, but fingerprints and continuing education are not required

The SCDOI explains that a designated home state requires an exam, fingerprints and continuing education. South Carolina requires resident adjusters to pass the state exam and file a SLED criminal history report, but it does not require fingerprints or CE, so it should never be selected as a DHS on NIPR. Adjuster licenses renew in August of odd-numbered years; the 24-hour CE rule applies to producers.

Reference: SCDOI Adjuster licensing page

Correct answer: A. He may handle catastrophe claims without a SC license if he shows his Georgia license and stays only as needed

Regulation 69-1 allows nonresident adjusters to enter South Carolina after a catastrophe without a South Carolina license if they exhibit an adjuster license from their home state and remain only for the period needed to assist with the adjustments. The Department determines and announces when the catastrophe begins and ends. Under current SCDOI procedures, the insurer must also appoint the adjuster and issue a permit.

Reference: S.C. Code of Regulations 69-1, paragraphs 2 to 4

Correct answer: D. Insurers issue permits after fully using licensed adjusters; initial appointments last up to 120 days

The SCDOI says only insurers can appoint emergency adjusters and print their permits through the Department's online system; unlicensed individuals and firms cannot obtain permits directly. Before appointing emergency adjusters, insurers must use licensed resident and nonresident South Carolina adjusters to the fullest extent. An initial appointment may not exceed 120 days, and extensions can be granted.

Reference: SCDOI Emergency Adjuster and Re-Entry Permitting page

Correct answer: A. Yes, because the insured is a nonresident transient who had an accident in South Carolina

Section 38-47-60 makes it a misdemeanor, punishable by up to two years in prison, to adjust claims for an insurer not licensed in South Carolina. Regulation 69-1 carves out two unusual circumstances: a nonresident transient who has an accident in South Carolina, and a new resident whose unexpired policy from an unlicensed company was bought before moving. Hannah's claim fits the first.

Reference: S.C. Code 38-47-60; S.C. Code of Regulations 69-1, paragraph 1

Correct answer: B. $5,000

For a licensee other than an insurer, Section 38-2-10(A)(2) allows a fine of up to $2,500 per violation, suspension or revocation of the license, or both; if the violation is wilful, the fine can reach $5,000. The $15,000 and $30,000 limits apply to insurers. These administrative penalties are in addition to any criminal penalties or other remedies.

Reference: S.C. Code 38-2-10(A)(2); S.C. Code 38-47-70

Correct answer: C. Reporting criminal violations of insurance laws to the Attorney General or other law enforcement

Section 38-3-110 directs the Director to supervise and regulate insurers' rates and service, see that insurance laws are faithfully executed and make regulations, report criminal violations to the Attorney General or other appropriate officials, and institute civil actions. Insolvent insurers' claims are handled by the guaranty association, and public adjuster fees are set by the written contract under Chapter 48.

Reference: S.C. Code 38-3-110

Correct answer: D. At least 30 days; the subject of the inquiry and any specific charges

Section 38-3-170 requires written notice to the person cited at least thirty days before the hearing date, stating the subject of the inquiry and any specific charges. Notice may be delivered in person or mailed by registered mail, return receipt requested, to the person's last known address. Separately, Section 38-47-70 lets the Director impose Section 38-2-10 penalties on an adjuster after an investigation and ten days' notice.

Reference: S.C. Code 38-3-170

Correct answer: A. A misdemeanor, with a fine of up to $10,000, up to two years in prison, or both

Section 38-2-30 makes performing any act without a license required by Title 38 a misdemeanor punishable by a fine of up to $10,000 or imprisonment for two years, or both. The $2,500 figure is the administrative fine for licensees under Section 38-2-10, and the $100,000 figure belongs to the most serious insurance fraud felonies under Section 38-55-540.

Reference: S.C. Code 38-2-30

Correct answer: B. The act must lack just cause and be frequent enough to indicate a general business practice

Section 38-59-20 lists eight improper claim practices for insurers writing accident and health, property, casualty, surety, marine or title insurance, but an act counts only if committed without just cause and with such frequency as to indicate a general business practice. One slow acknowledgment, standing alone, does not meet that test, although it may still be poor claim handling.

Reference: S.C. Code 38-59-20

Correct answer: C. Offering less than is reasonably due because the claimant would need to pay attorneys' fees

Section 38-59-20(6) names offering to settle for less than the amount reasonably due based on the possibility that the claimant would have to incur attorneys' fees to recover it. The claim here was fully documented, so investigation standards are not the issue, and no policy defense was threatened. Repeated as a general business practice, the conduct can lead to a cease and desist order and penalties.

Reference: S.C. Code 38-59-20(6)

Correct answer: D. Requiring a written proof of loss within the time the policy allows

Requiring proof of loss within the policy's time limit is a normal policy condition, and Section 38-59-10 even governs how insurers furnish proof of loss forms. The other three choices appear in Section 38-59-20: bad faith threats to rescind or invoke defenses (item 7), lowball offers that force suits (item 5) and knowing misrepresentation of facts or policy provisions (item 1).

Reference: S.C. Code 38-59-20(1), (5), (7); S.C. Code 38-59-10

Correct answer: A. She complies by submitting her own written proof of the loss within the policy's time limit

When an insurer requires written proof of loss, it must furnish a blank form. If the form is not furnished within twenty days after notice, the claimant complies by submitting, within the time fixed in the policy, written proof covering the occurrence, character and extent of the loss. The claim does not become automatically payable in full, and the policy deadline still runs.

Reference: S.C. Code 38-59-10

Correct answer: C. $15,000

Section 38-59-40 lets the insured recover reasonable attorneys' fees when the insurer refuses to pay within ninety days after demand and the trial judge finds the refusal was without reasonable cause or in bad faith. The judge sets the amount and adds it to the judgment, but it may not exceed one-third of the judgment: $45,000 / 3 = $15,000. Half the judgment, $22,500, overstates the cap.

Reference: S.C. Code 38-59-40(1)

Correct answer: B. A cease and desist order, plus any 38-2-10 penalty, which cannot count as a cost in setting rates

Under Section 38-59-30 the Director must order the insurer to cease and desist from the practice and may impose a penalty under Section 38-2-10, which for insurers allows fines up to $15,000 per violation, or $30,000 if wilful, and suspension or revocation. Any penalty imposed may not be treated as a cost of the insurer when deciding whether its rates warrant adjustment.

Reference: S.C. Code 38-59-30; S.C. Code 38-2-10(A)(1)

Correct answer: C. Close of business the next Monday, in writing delivered to the adjuster's address on the contract

The insured has until the close of business on the fifth business day after signing to rescind. Counting Tuesday through Friday and then Monday, Aaliyah's deadline is the next Monday. Rescission must be in writing and delivered to the public adjuster at the address on the agreement. A written waiver is allowed only when the property is neither a primary residence nor used mainly for personal, family or household purposes.

Reference: S.C. Code 38-48-110

Correct answer: D. By the insured from sums recovered, and not by the insurer

Section 38-48-80(b) requires the contract to state in bold, conspicuous language that the fee is paid by the insured from sums the public adjuster helps recover, not by the insurer. The contract must also disclose that hiring a public adjuster is not necessary, that the insured may communicate directly with the insurer, and that the public adjuster is not the insurer's agent or employee.

Reference: S.C. Code 38-48-80(b), (e)

Correct answer: A. Damage to the insured's car from a falling tree

Public adjusting means investigating, appraising or evaluating, and reporting to an insured on a first-party claim under a policy insuring the insured's real or personal property. The definition expressly excludes claims for damages to or arising out of the operation of a motor vehicle, so a public adjuster cannot handle the car claim even though it is first-party property damage.

Reference: S.C. Code 38-48-10(2)

Correct answer: B. A felony punishable by a fine and up to two years in prison

Section 38-48-130(d) makes it unlawful to act as both a contractor and a public adjuster in the adjustment of a claim, and a violation is a felony punishable by a fine in the court's discretion, imprisonment up to two years, or both. Section 38-48-70 also bars a public adjuster from soliciting repair work on property he is adjusting or steering the insured to firms in which he has a financial interest.

Reference: S.C. Code 38-48-130(d); S.C. Code 38-48-70(c), (g)