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1. A California homeowner buys a new admitted-carrier homeowners policy and is silent about the earthquake offer that accompanies the application. Under the Mandatory Earthquake Insurance Offer Law, what is the result?

Under Insurance Code §10081 and §10086, the insurer must make a written offer of earthquake coverage at issuance and at every renewal of a residential property policy. The applicant may accept or decline in writing, and silence is treated as a decline. There is no automatic add-on, no verbal-acceptance requirement, and no personal liability shifted to the producer when the insured does not respond.

2. Which statement best describes the California Earthquake Authority (CEA)?

The CEA, created by statute in 1996, is publicly managed but funded by participating private insurers. Most admitted residential property carriers in California satisfy the mandatory earthquake offer by issuing CEA policies rather than writing the risk on their own paper. It is not federal, not a commercial-only reinsurer, and not a surplus-lines market.

3. A homeowner in a brush-exposed canyon has been declined by three admitted carriers because of wildfire risk. Which California program is designed to serve as the insurer of last resort for this property?

The California FAIR Plan, created at Insurance Code §10090 and following, is the basic-form property insurer of last resort. It is a syndicate of all admitted property insurers and provides narrow fire coverage to applicants who cannot obtain coverage in the voluntary market. The CEA handles earthquake, the Low Cost Auto Program covers liability for qualifying low-income drivers, and DMHC regulates HMOs.

4. A wildfire prompts the Governor to declare a state of emergency in two counties. Insurance Code §675.1 then bars a property insurer from doing what, and for how long?

Senate Bill 824, codified at §675.1, imposes a one-year moratorium on non-renewal or cancellation of residential property policies solely because the property is located in a ZIP code within or adjacent to the wildfire emergency area. The statute does not freeze rates, does not bar new sales, and does not delay paying claims; it only blocks location-based non-renewal.

5. Proposition 103 reshaped California rate regulation. Which statement about the resulting framework is correct?

Proposition 103, codified principally at §1861.05, established prior approval: an insurer must file a new rate and obtain the Commissioner's approval before using it on personal auto, homeowners, and most personal-lines policies. It is not a use-and-file system, the Commissioner does not unilaterally set rates, and the measure applies broadly to personal lines.

6. Under §1861.02, in what priority order must a California auto insurer apply the three mandatory rating factors?

Section 1861.02 lists the three mandatory factors in priority order: (1) the insured's driving safety record, (2) the number of miles driven annually, and (3) the number of years of driving experience. Optional factors such as territory or vehicle type may be used only with Commissioner approval and never ahead of the three mandatory factors; credit-based insurance scoring is not allowed on California personal auto policies.

7. An insurer chooses not to renew a personal homeowners policy at its natural expiration. How many days before expiration must it mail written notice to the named insured under California law?

Insurance Code §678 requires that a notice of non-renewal of a personal-lines residential property policy be mailed to the named insured at least 75 days before the expiration date and state the specific reason. The shorter periods listed are timeframes that apply to other actions (such as a mid-term cancellation of an auto policy for non-payment) but do not satisfy §678 for property non-renewal.

8. For a personal auto policy, how much advance written notice of non-renewal must a California insurer provide?

Under Insurance Code §663.5, an insurer must give at least 60 days' written notice of non-renewal of a personal auto policy and must state the specific reason. Non-renewal grounds are limited to those listed in §661, such as fraud, certain driving convictions, or a substantial increase in the hazard insured against. The 75-day rule belongs to residential property non-renewal under §678.

9. Under the Fair Claims Settlement Practices Regulations, which set of deadlines is correct?

10 CCR §2695.5(e)(1) requires acknowledgment of a claim within 15 calendar days; §2695.7(b) requires acceptance or denial within 40 calendar days of receiving proof of claim; and §2695.7(h) requires tender of payment within 30 calendar days of agreement on the amount due. Memorize 15/40/30 — these California-specific deadlines are tested repeatedly.

10. An insurer unreasonably withholds an agreed, undisputed claim payment for several months. Beyond regulatory penalties, what statutory interest may attach to the wrongfully delayed sum under California law?

California Civil Code §3287 entitles a person to prejudgment interest at the legal rate on any liquidated sum wrongfully withheld. The legal rate is 10 percent per year, computed simple interest from the date the sum became due. Bad-faith damages are separate; statutory interest under §3287 attaches automatically without a tort suit.

11. Under the California Auto Body Bill of Rights, which statement is correct?

Insurance Code §758 and §758.5, with the implementing rules at 10 CCR §2695.8(g) and §2695.85, give the claimant the right to choose the repair facility. The insurer may suggest a direct-repair shop and may explain advantages, but it cannot require its use. The claimant's choice controls; the lender does not select the shop in a first-party physical-damage claim.

12. Which combination of facts about the California Low Cost Automobile Insurance Program is correct?

Insurance Code §11629.7 and following limit the Low Cost Auto Program to qualifying low-income drivers. The income ceiling is 250 percent of the federal poverty level, the applicant must be at least 16 with a valid license and three years of continuous licensing and insurance, and program coverage is set at $10,000 per person and $20,000 per accident bodily injury with $3,000 property damage — the 10/20/3 limits, below the 15/30/5 financial-responsibility minimums.

13. A California personal auto applicant tells the producer over the phone that she does not want uninsured-motorist (UM) coverage. The producer issues the policy without UM. Under §11580.2, what is the legal effect?

Insurance Code §11580.2 requires that any rejection of UM, or any selection of UM limits below the bodily-injury liability limits (up to 30/60), be made in a signed writing meeting statutory form requirements. An oral rejection is ineffective. UM therefore remains in force at the default limits, and the insurer remains on the risk until a compliant written waiver is on file.

14. AB 451 (2018) addressed language access to the California licensing exam. The personal-lines broker-agent qualifying exam must now be offered in which set of languages?

Assembly Bill 451, enacted in 2018, amended Insurance Code §1677 to require that the personal-lines broker-agent qualifying examination be made available in English, Spanish, Vietnamese, Chinese, and Korean. The other combinations include languages that are not part of the AB 451 mandate.