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Free Personal Lines Producer - Series 107 Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Personal Lines Producer - Series 107 practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A Louisiana resident applies for an individual Personal Lines producer license. What is the minimum statutory age?

    1. A. 18
    2. B. 19
    3. C. 21
    4. D. 25

    Answer: A

    Explanation: R.S. 22:1546(A)(1) states that the commissioner must find the applicant "Is at least eighteen years of age." The applicant therefore must be at least 18.

    Reference: Louisiana Laws - Louisiana State Legislature — R.S. 22:1546(A)(1)

  2. 2A personal auto insurer charges an applicant more because of driving history and, to a lesser degree, information in a consumer report. Which notice does the FCRA require because the report influenced the rate?

    1. A. An initial privacy notice about information sharing
    2. B. An adverse-action notice about the rate decision
    3. C. An annual privacy notice for an existing customer
    4. D. An opt-out notice before nonaffiliated disclosure

    Answer: B

    Explanation: "When an adverse action is taken — for example, when insurance is denied, rates are increased or a policy is terminated — and the decision  is based partly or completely on information in a consumer report, Section 615(a) of the FCRA requires you to provide a notice of the adverse action to the consumer." Even partial reliance on a consumer report in charging more triggers the adverse-action notice. Privacy and opt-out notices address different information practices.

    Reference: FTC, Consumer Reports: What Insurers Need to Know — FTC guidance, Adverse Action Notice, paragraph 1

  3. 3A home has old, frayed wiring that makes fire more likely. In property insurance terminology, how is the frayed wiring classified?

    1. A. A peril
    2. B. A hazard
    3. C. A loss
    4. D. An exposure

    Answer: B

    Explanation: "Hazard - circumstance which tends to increase the probability or severity of a loss." The wiring increases the chance or severity of fire, so it is a hazard. Fire is the peril; a loss is damage already sustained.

    Reference: NAIC Glossary of Insurance Terms — NAIC Glossary, Hazard

  4. 4An insurer values an insured Louisiana building and uses that value to determine the fire policy premium. If a covered total loss occurs, what value generally controls payment?

    1. A. Actual cash value at the time of loss
    2. B. The valuation used to determine the premium
    3. C. Replacement cost at the time of loss
    4. D. Market value immediately before the loss

    Answer: B

    Explanation: R.S. 22:1318(A) requires that, in a total loss, "the insurer shall compute and indemnify or compensate any covered loss of, or damage to, such property which occurs during the term of the policy at such valuation." The controlling valuation is the one the insurer used to set the premium, unless the policy states a different statutory method.

    Reference: Rs 22 1318 — R.S. 22:1318(A)

  5. 5A landlord seeks a dwelling policy form that covers the dwelling and attached structures against direct physical perils unless the form excludes them. Which form fits that peril approach?

    1. A. DP-1 Basic Form
    2. B. DP-2 Broad Form
    3. C. DP-3 Special Form
    4. D. HO-4 Renters Form

    Answer: C

    Explanation: "DP-3 (Special Form) – Offers “all-risks” coverage for the dwelling and attached structures." DP-3 uses an open-perils approach for the dwelling; DP-1 and DP-2 name perils, while HO-4 is a renters form.

    Reference: NAIC 2025 Homeowners Market Data Call Definitions — NAIC 2025 Definitions, Dwelling Fire Policy Forms

  6. 6A tenant wants coverage for belongings in a rented home and does not own the building. Which homeowners policy form fits that interest?

    1. A. HO-2 Broad Form
    2. B. HO-3 Special Form
    3. C. HO-4 Renters Form
    4. D. HO-6 Unit-Owners Form

    Answer: C

    Explanation: "HO-4 (Renter’s Form) – Covers unscheduled personal property on a broad named perils basis" HO-4 is the renters form for personal property. HO-2 and HO-3 are homeowners forms, and HO-6 is for unit owners.

    Reference: NAIC 2025 Homeowners Market Data Call Definitions — NAIC 2025 Definitions, Homeowners Policy Forms

  7. 7A Louisiana auto policy lists different limits for the same liability coverage. To what lower amount may the policy restrict recovery for a covered named insured?

    1. A. The statutory minimum despite the policy
    2. B. One-half of the highest policy limit
    3. C. No amount below the highest policy limit
    4. D. Any amount chosen after the accident

    Answer: C

    Explanation: R.S. 22:1282 prohibits restriction "to any amount less than the highest policy limit provided in the policy for the respective coverage or potential recovery."

    Reference: Rs 22 1282 — R.S. 22:1282

  8. 8For whom does Louisiana Citizens provide essential property insurance through its residual plans?

    1. A. Applicants holding voluntary-market coverage
    2. B. Only owners of state property
    3. C. Only commercial-property applicants
    4. D. Good-faith applicants unable to obtain voluntary coverage

    Answer: D

    Explanation: R.S. 22:2291 limits the plans "solely for applicants who are in good faith entitled, but are unable, to procure insurance through the voluntary market."

    Reference: Louisiana Laws - Louisiana State Legislature — R.S. 22:2291

  9. 9Which application must an individual use when seeking a Louisiana resident insurance producer license?

    1. A. Uniform Business Entity Application
    2. B. Uniform Application
    3. C. Certificate of Authority Application
    4. D. Surplus Lines Broker Application

    Answer: B

    Explanation: R.S. 22:1546(A) says an applicant "shall make application to the commissioner of insurance on the Uniform Application." That is the required individual form.

    Reference: Louisiana Laws - Louisiana State Legislature — R.S. 22:1546(A)

  10. 10An applicant with a felony involving dishonesty seeks to participate in interstate insurance business. Which consent permits participation under 18 U.S.C. §1033(e)?

    1. A. Written consent from the applicant's prospective insurer's board
    2. B. Written consent from an insurance regulator authorized over the insurer
    3. C. Written consent from the sentencing court that imposed the conviction
    4. D. Written consent from a resident producer appointed by the insurer

    Answer: B

    Explanation: "A person described in paragraph (1)(A) may engage in the business of insurance or participate in such business if such person has the written consent of any insurance regulatory official authorized to regulate the insurer, which consent specifically refers to this subsection." The written consent must come from the authorized insurance regulator and refer to this subsection; insurer, court, or producer approval does not qualify.

    Reference: 18 U.S.C. § 1033, 2024 Edition — 18 U.S.C. §1033(e)(1)-(2)

Topics in this practice bank

These topics describe the available practice for Personal Lines Producer - Series 107. Review the examination outline and its sources for scope and allocation details.

  • Louisiana Insurance Regulation
    • Licensing
    • Fingerprinting requirements (22:1694)
    • Background check (22:1694)
    • Application (22:1694)
    • Pre-licensing requirements (22:1571)
    • Types of licenses (22:1547, 1962(F))
    • Individual producer (22:1542(6), 1546(A))
    • Business entity (22:1542(2), 1546(B))
    • Resident versus nonresident (22:1546, 1548, 1560)
    • Temporary (22:1553)
    • Maintenance and duration
    • Refusal, suspension, revocation (22:1547; 22:1554)
    • Renewal/nonrenewal (22:1547(C); 22:1142; 22:887)
    • Reinstatement (22.1142)
    • Change of name, address, telephone number (22:1547(G))
    • Assumed names (22:1552)
    • Reporting of actions (22:1563)
    • Continuing education requirements including exemptions and penalties (37:XI:10.703, .705 & Rule 10.711)
    • Inactivity due to extenuating circumstances
    • Inactivity due to military service
    • Disciplinary actions
    • Hearings (22:1968, 2191, 2193-2195, 2197, 2198, 2204-2208)
    • Cease and desist order (22:1969)
    • Civil/criminal (22:1554)
    • Penalties/fines (22:16; 22:1457; 22:1969-1970)
    • State regulation
    • Commissioner's general duties and powers (22:2, 1967)
    • Acts constituting insurance transaction (22:23; 22:1542(6)
    • Negotiate (22:23; 22:1542(6)
    • Sell (22:23; 22:1542(6)
    • Solicit (22:23; 22:1542(6)
    • Company regulation
    • Certificate of authority (22:65, 66)
    • Solvency (22:571)
    • Financial requirements (22:571)
    • Records maintenance (22:68)
    • Policy forms/rates/exceptions (22:864)
    • State of domicile
    • Producer regulation
    • Controlled business (22:1544(C))
    • Policy and application signatures (R.S. 9:2605)
    • Premium payment (H.B.-1032 (13); 22:855)
    • Producer representation
    • Commissions/compensations/fees ((22:1542 (3); 22:1557)
    • Fiduciary responsibility
    • Records maintenance (22:68)
    • Claims reporting (22:523)
    • Prohibited or unfair trade practices (22:1964)
    • Misrepresentation (22:1964(1, 18))
    • False or deceptive advertising (22:1964(2))
    • Defamation (22:1964(3))
    • Boycott, coercion and intimidation (22:1964(4))
    • False financial statements (22:1964(5))
    • Unfair discrimination (22:1964(7); 22:34)
    • Rebating and twisting (22:1964(8); 37:XIII.575 (B)(1)
    • Prohibited fees/premium/extra charges (22:1964)
    • Discrimination (22:34; 22:1964 (7)
    • Larceny, acting without a license (22:1964)
    • Claims settlement (22:1964)
    • Misappropriation of funds (22:1964)
    • Testimonials and comparisons (22:1964)
    • Non-disclosure of fees or charges (22:1964)
    • Examination of books and records (22:1967, 1981, 1990)
    • Privacy of Consumer Financial Information (37:XIII.9903– .9953)
    • Federal regulation
    • Other federal regulations (e.g.Do Not Call List) (https://www.donotcall.gov)
  • Licensing and Regulation
    • Federal Regulation
    • Fair Credit Reporting Act
    • Fraud and False Statements (18 USC Sections 1033 and 1034)
    • Privacy (Gramm Leach Bliley)
    • National Flood Insurance Program
  • General Insurance Concepts
    • Risk
    • Methods of Handling Risk (e.g., Avoidance, Retention, Sharing, Reduction, Transfer)
    • Elements of Insurable Risks
    • Definitions (e.g., Risk, Hazard, Peril, Loss)
    • Classifications of Insurers
    • Mutual, Stock
    • Admitted, Non-Admitted
    • Foreign, Domestic, Alien
    • Elements of a Contract
    • Consideration
    • Competent Parties
    • Legal Purpose
    • Offer
    • Acceptance
    • Authority and Powers of Producers
    • Express
    • Implied
    • Apparent
    • The Law of Agency
    • Legal Interpretations Affecting Contracts
    • Reasonable Expectations
    • Indemnity
    • Good Faith
    • Fraud
    • Warranties, Representations, Misrepresentations, and Concealment
  • Property and Casualty Insurance Basics
    • Insurable Interest
    • Liability
    • Absolute
    • Strict
    • Vicarious
    • Underwriting
    • Purpose
    • Process
    • Rate Development
    • Types
    • Components
    • Types of Hazards
    • Types of Perils
    • Named
    • Special
    • Types of Loss
    • Direct
    • Indirect
    • Loss Valuation
    • Actual Cash Value
    • Replacement Cost
    • Functional Replacement Cost
    • Market Value
    • Agreed Value
    • Valued Policy
    • Basic Types of Construction
    • Negligence
    • Torts
    • Elements of a Negligent Act
    • Defense Against Negligence
    • Accident versus Occurrence
    • Policy Structure
    • Declarations
    • Definitions
    • Insuring Agreement
    • Supplementary Coverage
    • Conditions
    • Exclusions
    • Endorsements
    • Policy Conditions
    • Insureds
    • Policy Period
    • Policy Territory
    • Cancellation and Non-Renewal
    • Deductibles
    • Other insurance (e.g. Primary and Excess, Pro Rata, Nonconcurrency, Contribution by Equal Shares)
    • Limits of Liability
    • Per Accident
    • Per Occurrence
    • Per Person
    • Aggregate
    • Split
    • Combined Single Limit
    • Coinsurance
    • Purpose
    • Definition
    • Calculation
    • Penalties
    • Total versus Partial Loss
    • Specific, Scheduled, and Blanket Insurance
    • Vacant versus Unoccupied
    • Named Insured Provisions
    • First Named Insured versus Other Insureds
    • Duties After Loss
    • Assignment
    • Waiver of Rights
    • Insurer Provisions
    • Liberalization
    • Subrogation
    • Claim Settlement Options
    • Duty to Defend
    • Third-Party Provisions
    • Standard Mortgage Clause
    • Loss Payable Clause
    • No Benefit to the Bailee
    • Louisiana laws, regulations and required provisions
    • Louisiana Valued Policy Law (22:1318)
    • Louisiana Insurance Guaranty Association (22:2051–2070)
    • Louisiana standard fire insurance policy (22:1311)
    • Wind and Hail Associations
    • Assigned risk/JUA
    • Cancellation and nonrenewal (22:887)
    • Homeowners (22:1265, 1333, 1335, 1336)
    • Binders (22:870, 1555)
    • Loss payment (22:1892)
    • Arbitration (R.S. 9:4201-4206)
    • Certificates of insurance (22:890 1&2)
    • Federal Terrorism Insurance Program 15 USC 6701; Public Law 107-297, 109-144, 110-160)
  • Dwelling Policy Concepts
    • Dwelling Policy
    • Characteristics
    • Eligibility
    • Purpose
    • Policy Definitions
    • Coverage Forms Specifying Perils Insured Against
    • DP-1 Basic
    • DP-2 Broad
    • DP-3 Special
    • Property Coverages
    • Dwelling
    • Other Structures
    • Personal Property
    • Fair Rental Value
    • Additional Living Expense
    • Dwelling Policy Exclusions
    • Dwelling Policy Conditions
    • Dwelling Policy Endorsements
    • Automatic Increase in Insurance
    • Dwelling Under Construction
    • Theft Coverage
    • Personal Liability Supplement
  • Homeowners Policy Concepts
    • Homeowners Policy
    • Characteristics
    • Eligibility
    • Purpose
    • Policy Definitions
    • Perils Insured Against
    • Basic
    • Broad
    • Special
    • Homeowners Policy Coverage Forms
    • Broad (HO-2)
    • Special (HO-3)
    • Contents Broad (HO-4)
    • Unit-Owners (HO-6)
    • Modified Coverages (HO-8)
    • Property Coverages
    • Dwelling
    • Other Structures
    • Personal Property
    • Loss of Use
    • Additional Coverages
    • Liability Coverages
    • Personal Liability
    • Medical Payments to Others
    • Homeowners Policy Exclusions
    • Homeowners Policy Conditions
    • Homeowners Policy Endorsements
    • Business Pursuits
    • Earthquake
    • Home Day Care
    • Personal Injury
    • Personal Property Replacement Cost
    • Watercraft
    • Identity Theft
    • Scheduled Personal Property/Personal Articles Floater
  • Personal Automobile Policy
    • Personal Automobile Policy
    • Definitions
    • General Provisions
    • Conditions
    • Duties After an Accident
    • Endorsements
    • Amendment of Policy Provisions — Louisiana (PP 01 95) 02/12
    • Extended Non-Owned Coverage (PP 03 06) 01/05
    • Miscellaneous Type Vehicle (PP 03 23) 01/05
    • Joint Ownership Coverage (PP 03 34) 01/05
    • Named Driver Exclusion — Louisiana (PP 13 43) 09/06
    • Personal Automobile Policy Liability
    • Bodily Injury and Property Damage
    • Supplemental Payments
    • Persons Insured
    • Exclusions
    • Expenses for Medical Services
    • Uninsured/Underinsured Motorist Coverage
    • Physical Damage
  • Other Types of Property Insurance
    • Personal Umbrella and Excess Policies
    • Mobile Home Policy
    • Purpose of Difference in Conditions
    • Flood and Earthquake Insurance Coverages
    • Louisiana Citizens Property Insurance Corporation (LRS 22:2291–2314)
    • FAIR and Coastal Plans (LRS 22:2321)

How to use these free practice questions

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These are independent study questions, not actual examination items. For examination requirements and official information, view Personal Lines Producer - Series 107 details.