Pennsylvania Property & Casualty: Pennsylvania Insurance Regulation & Producer Law

Correct

The answer is B: Apply for a Pennsylvania non-resident license, because the producer's principal residence and business are now in Florida.

A resident producer license is for an applicant whose principal place of residence or business is in Pennsylvania; an applicant whose principal residence or business is outside Pennsylvania applies for a nonresident license (40 P.S. § 310.5(a)). After 18 months of living and working in Florida, the producer's home state is Florida. To keep selling to Pennsylvania clients, the producer needs a Pennsylvania non-resident license under 40 P.S. § 310.10, which the Department issues on proof of a current resident license in the home state. Applying for a non-resident license in Florida is backwards, because Florida would issue a resident license to someone who lives and works there. An affidavit cannot change where the producer actually lives and works, and no Pennsylvania rule keeps resident status alive through an annual return visit.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is D: The producer's action is unfair discrimination if the score is unrelated to the risk and similar applicants are treated differently.

The Unfair Insurance Practices Act bars unfair discrimination between individuals of the same class and of essentially the same hazard in premiums, rates, benefits and the terms and conditions of a contract, and "in any other manner whatever" (40 P.S. § 1171.5(a)(7)(ii)). Paragraph (a)(7) also reaches underwriting standards and practices, and the Act's definition of a person includes agents and brokers. The test is whether the factor reflects the risk being insured: if a credit score has no relationship to that risk, refusing coverage because of it treats applicants of essentially the same hazard differently, which is unfair discrimination. No underwriting factor is automatically safe, using a score alongside claims history does not cure a factor unrelated to the risk, and the Act is not limited to rates.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is B: After notice and a hearing, the Department may suspend or revoke the license and impose a civil penalty of up to $5,000 per violation.

Under 40 P.S. § 310.91, the Department must give notice of the alleged violation and hold a hearing at least 10 days later. After the hearing, the Commissioner may impose any combination of license denial, suspension, refusal to renew or revocation, a civil penalty of up to $5,000 for each action in violation, a cease-and-desist order and other conditions. Knowingly submitting a false claim is an insurance fraud offense under 18 Pa.C.S. § 4117(a)(2), a felony of the third degree, and committing a felony is itself a ground for action under 40 P.S. § 310.11(14). But nothing in § 310.91 makes revocation mandatory, allows it without notice and a hearing, sets a one-year minimum suspension, or requires a $10,000 fine with probation.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is D: 40 P.S. § 1171.5(a)(8)

Rebates and inducements are prohibited by 40 P.S. § 1171.5(a)(8) of the Unfair Insurance Practices Act, which forbids paying or offering, as an inducement to buy insurance, a rebate or anything of value that is not specified in the contract. Since January 11, 2025, 40 Pa.C.S. Ch. 51 (Act 62 of 2024) restates the ban and allows only limited exceptions, such as noncash gifts of up to $125 per customer per year that are not contingent on buying or keeping insurance. A $100 gift card offered in exchange for purchasing a homeowners policy is tied to the purchase, so it is a prohibited inducement. Paragraph (a)(1) covers misrepresentation and (a)(2) covers false advertising, and twisting is a separate Insurance Company Law rule (40 P.S. § 473), not a paragraph of the Act.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is C: The producer committed misrepresentation under 40 P.S. § 1171.5(a)(1) and (2) by knowingly making false statements.

The producer's knowing misstatement that the policy includes roadside assistance misrepresents its benefits and terms, which 40 P.S. § 1171.5(a)(1) prohibits, and is an untrue statement about the business of insurance under (a)(2). Misrepresenting the terms of a policy is also a third-degree misdemeanor under 40 P.S. § 310.47. The misstatement is itself prohibited even though the written policy controls the coverage. Twisting requires inducing a policy replacement, not just misrepresenting terms, and 40 P.S. § 310.96 makes a producer a fiduciary for funds received; it does not create a general best-interest duty.

Reviewed in our October 2026 Pennsylvania fact-check.