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New York Insurance Regulation and Producer Licensing: Practice Questions

20 free practice questions with explanations. Pick an answer for each, then check your score.

Exam weight: Insurance Regulation section (7%) of the 17-55 outline on the New York Life, Accident and Health agent exam (17-55). Updated 2026-11-04.

Quick study guide

Who needs a license

An insurance producer is anyone required to be licensed to sell, solicit or negotiate insurance (Ins. Law 2101(k)). To sell is to exchange a policy for money on an insurer's behalf, to solicit is to try to sell or urge someone to apply to a particular insurer, and to negotiate is to advise a buyer on the substantive terms of a particular contract (2101(m)–(o)). An individual agent must be at least 18 and pass the state exam after an approved prelicensing course (2103(d), (f)). A consultant charges fees for advice, under a written memorandum signed by the client (2107, 2119).

Keeping the license

An individual license expires on the holder's birthday, in odd-numbered years if born in an odd year and even-numbered years if born in an even year, and renews for 24 months (2103(j)(2)). File at least 60 days early or pay a $10 late fee; a renewal filed before expiry keeps the license in force until the department acts (2103(j)(7), (10)). Each full two-year period needs 15 CE credit hours, with no carryover (2132). Use only your legal name or a name the superintendent approved, (2102(f)).

Deadline	Rule
15 days	Insurer files notice of appointment after the agency contract or first application (2112(b))
30 days	Report a change of address (2134); report an administrative action elsewhere after final disposition (2110(i)); insurer files a termination-for-cause statement (2112(d))
10 days	Minimum time between notice and a license revocation hearing (2110(b))
15 business days	Insurer acknowledges a notice of claim (11 NYCRR 216.4)
5 business days	Compensation details requested within 30 days after issue (11 NYCRR 30.3(c))

Discipline and penalties

The superintendent of financial services, appointed by the governor with the Senate's consent, supervises insurers and producers (Financial Services Law 201, 202). After notice and a hearing the superintendent may suspend, revoke or refuse to renew a license (2110(a)); a revoked licensee waits one year for any new license (2110(e)). Instead, the superintendent may impose up to $500 per offense, $2,500 in total in one proceeding (2127). A non-felony violation of the Insurance Law is a misdemeanor (109).

Prohibited practices and premium money

Rebating is giving any inducement not stated in the policy; items worth up to $25 are allowed (2324; for life and health policies, 4224(c)). Commissions on new life or health business go only to licensed agents or brokers (2114). Premiums are held as a fiduciary, never mixed with your own money without the principal's express consent, and go into a premium account unless remitted immediately (2120; 11 NYCRR 20.3). Each office displays its supervising person's license (11 NYCRR 34.5), and producers describe their role and pay at or before application (11 NYCRR 30.3).

Practice questions

Under New York Insurance Law section 2101, which activity is the definition of "negotiate"?
1. A.Bargaining with an insurer over the commission rate the producer will be paid for new business
2. B.Exchanging a contract of insurance for money on behalf of a licensed insurer
3. C.Attempting to sell, or urging a person to apply for a particular insurer's coverage
4. D.Conferring with or advising a buyer on the substantive terms of a particular contract
Show answer
Answer: D. Section 2101(m) defines negotiate as conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract about its substantive benefits, terms or conditions, by a person who sells insurance or obtains it for purchasers. Exchanging a contract for money on an insurer's behalf is the definition of sell in 2101(n), and attempting to sell or urging someone to apply is solicit in 2101(o). Haggling over one's own commission is not part of any of the three definitions.
Source: NY 17-55 outline: Insurance Regulation, licensing definitions (2101(m)-(o)); N.Y. Ins. Law 2101
A New York life and health agent completed 22 approved continuing education credit hours during her current two-year licensing period. What happens to the extra 7 hours?
1. A.They carry forward only if at least 3 of them were in ethics courses
2. B.They carry forward and count toward her next two-year licensing period
3. C.They do not carry forward; the 15-hour requirement starts fresh each period
4. D.They can be converted into a credit against her renewal license fee
Show answer
Answer: C. Section 2132(c)(1) requires 15 credit hours of approved instruction during each full biennial licensing period, and 2132(c)(3) says excess credit hours accumulated in a period do not carry forward to the next period for the same class of license. The statute gives no fee credit for extra hours, and carryover is not allowed for any type of course.
Source: NY 17-55 outline: Insurance Regulation, continuing education (2132); N.Y. Ins. Law 2132
A New York life agent was born on 14 May 1993. Under Insurance Law section 2103(j), when does her individual agent license expire?
1. A.Exactly one year after the date it was issued
2. B.On 14 May of each odd-numbered year
3. C.On 30 June of each odd-numbered year
4. D.On 31 December of each even-numbered year
Show answer
Answer: B. Section 2103(j)(2) says an individual's license expires on the individual's birthday in each odd-numbered year if the person was born in an odd-numbered year, or in each even-numbered year if born in an even year, and may be renewed for the following 24 months. Because 1993 is odd, her license expires on 14 May in odd years. 30 June of odd years is the expiration date for business entity licenses, and licenses are not annual.
Source: NY 17-55 outline: Insurance Regulation, renewal (2103(j)); N.Y. Ins. Law 2103
A licensed New York life insurance consultant agrees to review a client's existing policies for a fee. Which requirement applies to that fee?
1. A.It may be agreed orally, as long as the consultant gives the client a receipt afterward
2. B.It must be paid by the insurer that issued the policies, never by the client
3. C.It is capped at $25 per policy reviewed, under the same limit that applies to gifts
4. D.It needs a written memo signed by the client stating the amount, kept three years
Show answer
Answer: D. Section 2119(a) bars a licensed agent, broker or consultant from receiving any fee for examining, reviewing or evaluating a policy or giving advice about it unless the fee is based on a written memorandum signed by the party to be charged, specifying or clearly defining the amount. A copy must be kept for not less than three years after the services are fully performed. Consultants are licensed under section 2107, and nothing caps the fee at $25; that figure comes from the rebating rules.
Source: NY 17-55 outline: Insurance Regulation, consultants (2107) and compensation (2119); N.Y. Ins. Law 2119; N.Y. Ins. Law 2107
A licensed New York accident and health insurance agent dies, and his executor obtains a temporary license under Insurance Law section 2109. What does that license allow?
1. A.Renewing the agent's existing business and collecting premiums, in 90-day terms up to 15 months in total
2. B.Acting as a fully licensed agent for one year, after which the executor must pass the written exam
3. C.Transferring the agent's book of business to another agent, with no authority to renew or collect premiums
4. D.Selling new policies for any insurer for up to 15 months while the executor prepares for the exam
Show answer
Answer: A. Section 2109 lets the superintendent issue a temporary license, without a written exam, to the executor or administrator of a deceased licensee. It authorizes renewing the deceased agent's business, collecting premiums due and acts incidental to continuing that business, but 2109(e)(4) bars soliciting, negotiating or selling new insurance. Under 2109(e)(1) the license runs up to 90 days from the death and may be renewed in 90-day terms not exceeding 15 months in total.
Source: NY 17-55 outline: Insurance Regulation, temporary licenses (2109; 11 NYCRR 20.1); N.Y. Ins. Law 2109
A New York licensed agent moves her residence and business to a new address in the same state. Under Insurance Law section 2134, what must she do?
1. A.Report the new address on her next renewal application
2. B.Notify only the insurers that have appointed her, which pass it on
3. C.Inform the superintendent of the change within 30 days of the move
4. D.Apply for a new license and pay a new license fee within 10 days
Show answer
Answer: C. Section 2134(a) requires a licensee to inform the superintendent, by a means the superintendent accepts, of a change of address within thirty days of the change. No new license is needed, and waiting until renewal or relying on insurers to pass the news along does not meet the deadline. A producer who changes home state must also send certification from the new home state within 30 days, with no fee or application required (2134(b)).
Source: NY 17-55 outline: Insurance Regulation, change of address (2134); N.Y. Ins. Law 2134
A New York resident agent also holds a nonresident license in New Jersey. New Jersey's regulator issues a final consent order fining her. What does New York Insurance Law section 2110 require?
1. A.Disclosure of the fine on her next renewal application, within two years
2. B.A report to the superintendent within 10 days of the date New Jersey first opened its investigation
3. C.Nothing, because only actions taken by the New York department must be reported
4. D.A report to the superintendent within 30 days of final disposition, with a copy of the order
Show answer
Answer: D. Section 2110(i) requires a licensee to report to the superintendent any administrative action taken in another jurisdiction, or by another governmental agency in New York, within thirty days of the final disposition, including a copy of the order or consent order. The clock runs from final disposition, not from when an investigation opens, and waiting for renewal is too late. Criminal prosecutions are reported separately, within 30 days of the initial pretrial hearing date (2110(j)).
Source: NY 17-55 outline: Insurance Regulation, reporting of actions (2110(i)); N.Y. Ins. Law 2110
The New York superintendent believes a resident agent misappropriated premiums and wants to revoke his license under Insurance Law section 2110. What must happen first?
1. A.The superintendent may revoke at once and offer a hearing within one year
2. B.The agent must first be convicted of a crime in a New York court
3. C.The appointing insurer must first terminate the agent's appointment for cause
4. D.The superintendent must give notice and hold a hearing at least 10 days after the notice
Show answer
Answer: D. Misappropriating money received in the course of business is a ground for revocation under 2110(a)(5), and 2110(a) allows action only after notice and hearing. Section 2110(b) requires the superintendent to give notice to the licensee and hold a hearing not less than ten days after the notice. No criminal conviction or insurer termination is needed first; summary revocation without that hearing is limited to certain nonresident licenses whose home state already acted (2110(f)).
Source: NY 17-55 outline: Insurance Regulation, hearings and suspension or revocation (2405, 2406, 2110); N.Y. Ins. Law 2110; N.Y. Ins. Law 2405
Instead of suspending a producer's license for several violations, the New York superintendent orders a monetary penalty under Insurance Law section 2127. What is the most that can be ordered in that one proceeding?
1. A.$5,000 for each offense and $25,000 in total for all offenses
2. B.$500 for each offense and $2,500 in total for all offenses
3. C.$25 for each offense, the same as the gift limit
4. D.$1,000 for each offense, with no overall limit
Show answer
Answer: B. Section 2127(a) lets the superintendent, in lieu of revoking or suspending a license, order a penalty of up to five hundred dollars for each offense and up to twenty-five hundred dollars in the aggregate for all offenses in any one proceeding. If the licensee fails to pay within twenty days after the order is mailed, the superintendent may revoke or suspend the license (2127(b)). The $1,000-per-offense figure is the general penalty in section 109 for willful violations where no other monetary penalty is provided.
Source: NY 17-55 outline: Insurance Regulation, penalties (2127, 109); N.Y. Ins. Law 2127; N.Y. Ins. Law 109
An out-of-state company with no New York license begins issuing life policies to New York residents. Under Insurance Law section 1102(a), what does it forfeit to the people of the state, on top of other penalties?
1. A.$10,000 for each day it continues doing business
2. B.$1,000 for the first violation and $2,500 for each later violation
3. C.All premiums collected, but no fixed dollar amount
4. D.$500 for each policy, up to $2,500 in total
Show answer
Answer: B. Section 1102(a) says no one may do an insurance business in New York unless authorized by a license in force (or exempted), and a company that does so forfeits one thousand dollars for the first violation and two thousand five hundred dollars for each subsequent violation, in addition to any other penalty. The $500 and $2,500 figures belong to the producer penalty in section 2127. The superintendent issues the license, which states the kinds of insurance the insurer may write (1102(d)).
Source: NY 17-55 outline: Insurance Regulation, certificate of authority (1102(a-b)); N.Y. Ins. Law 1102
A beneficiary phones the insurer's local agent to report the insured's death and a claim under a life policy. Under New York's Regulation 64, what follows?
1. A.The insurer has 30 calendar days to acknowledge, because life claims are exempt from Regulation 64
2. B.Nothing is due until the beneficiary mails a written claim to the insurer's home office
3. C.The call counts as notice to the insurer, which must acknowledge it within 15 business days
4. D.The agent must decide whether the claim is payable within 5 business days of the call
Show answer
Answer: C. 11 NYCRR 216.4(a) requires an insurer to acknowledge receipt of a notice of claim within 15 business days, and notice given to an agent of the insurer is notice to the insurer unless the agent says he is not authorized to receive claim notices. Notice of claim may be written or otherwise (216.1(e)). Life insurance is not exempt: 216.2(b) excludes only subdivisions (a) and (b) of 216.6 for life policies, and the claim decision belongs to the insurer, not the agent. Regulation 64 sets minimum standards under section 2601, which bans unfair claim settlement practices.
Source: NY 17-55 outline: Insurance Regulation, unfair claim settlement practices (2601; Reg 64, 216.3-216.6); 11 NYCRR 216.4 (Regulation 64); 11 NYCRR 216.2; N.Y. Ins. Law 2601
A New York life insurer signs an agency contract with a newly licensed agent. Under Insurance Law section 2112(b), when must the insurer file its notice of appointment?
1. A.Within 15 days of the contract being signed or the first application
2. B.Within 30 days after the policy on the agent's first application is issued
3. C.Within 90 days, at the end of the agent's probationary period
4. D.Only when the agent's license next comes up for its renewal
Show answer
Answer: A. Section 2112(b) requires the appointing insurer to file a notice of appointment within fifteen days from the date the agency contract is executed or the first insurance application is submitted. The appointment then stays valid until the insurer terminates it, the license is suspended or revoked, or the license expires without renewal (2112(c)). The 30-day figure in 2112(d) is the deadline for filing a statement after a termination for cause.
Source: NY 17-55 outline: Insurance Regulation, appointment of agent (2112(a-c)); N.Y. Ins. Law 2112
A New York agent sells an accident and health policy by misrepresenting its benefits and earns a $900 commission. Besides other penalties, what civil liability does Insurance Law section 2123 create?
1. A.A fixed $25 penalty per policy, paid to the insurer that issued the policy
2. B.A penalty equal to the $900 commission, recoverable by the misled buyer
3. C.A penalty of three times the annual premium, paid to the state
4. D.None, because section 2123 can be enforced only by the superintendent
Show answer
Answer: B. Section 2123(a)(1) bars circulating any statement or illustration that misrepresents the terms, benefits or advantages of a life, accident or health policy or annuity. Under 2123(d), a violator who knowingly receives a commission on a sale induced by the violation is liable for a civil penalty in the amount received, which the person induced to buy may sue for and keep. The violator is also liable to any agent who lost a commission because of the violation.
Source: NY 17-55 outline: Insurance Regulation, misrepresentation (2123; Reg 64, 216.3); N.Y. Ins. Law 2123
To win a sale, an agent tells a prospect that a competing insurer is about to become insolvent. The agent knows this is untrue. Which New York Insurance Law provision does this violate?
1. A.Section 2324, on rebating and discrimination
2. B.Section 2604, on false statements as to insurers
3. C.Section 2603, on issuing false literature
4. D.Section 2601, on unfair claim settlement practices
Show answer
Answer: B. Section 2604 bars any person from wilfully making or circulating a statement, written, printed or by word of mouth, that is untrue and derogatory to the financial condition, solvency or financial standing of an insurer doing business in New York, or from inducing others to spread one. Section 2603 covers material suggesting an insurer may transact business beyond its certificate of authority. Rebating involves inducements, and section 2601 governs how insurers handle claims.
Source: NY 17-55 outline: Insurance Regulation, defamation of insurer (2604); N.Y. Ins. Law 2604; N.Y. Ins. Law 2603
An applicant's records show she was a victim of domestic violence. Under New York Insurance Law section 2612, what may an insurer NOT do solely for that reason?
1. A.Refuse to issue the policy or charge her a higher premium
2. B.Rate her using the same underwriting classes as other applicants
3. C.Pay her agent the same commission it pays on other policies
4. D.Ask the standard application questions it asks every applicant
Show answer
Answer: A. Section 2612(a) bars an insurer, solely because a person is or has been a victim of domestic violence, from refusing to issue or renew, denying or cancelling a policy, demanding a greater premium, designating domestic violence as a preexisting condition, or discriminating in agents' fees or commissions. Treating her like every other applicant is what the law requires. Related sections bar discrimination based on race, creed, national origin or disability (2606), sex or marital status (2607) and past mental health treatment (2608).
Source: NY 17-55 outline: Insurance Regulation, unfair discrimination (2606-2608, 2612); N.Y. Ins. Law 2612; N.Y. Ins. Law 2607
Which of the following may a New York life agent give a prospect without violating the state's rebating rules?
1. A.A $100 gift card if the prospect signs the application this week
2. B.A refund of part of the agent's first-year commission once the policy is issued
3. C.A desk calendar and pen set worth about $20, not tied to any policy term
4. D.Shares of stock in the agent's agency corporation, issued as a thank-you
Show answer
Answer: C. For life and accident and health policies, section 4224(c) bars any inducement not specified in the policy, including securities, but allows valuable consideration such as merchandise not exceeding twenty-five dollars in value. Section 2324 has the same $25 exception for other lines and expressly covers sharing a commission with the insured. Returning part of the commission is a premium rebate, and a $100 gift card exceeds the limit.
Source: NY 17-55 outline: Insurance Regulation, rebating (2324); N.Y. Ins. Law 4224; N.Y. Ins. Law 2324
Most of a New York agent's commissions come from insuring his spouse and a company the couple owns 80% of. Under Insurance Law section 2103(i), when may the superintendent refuse, suspend or revoke his license on this ground?
1. A.Only when the insurer files a termination for cause about the arrangement
2. B.Never, because insuring family members and one's own business is unrestricted
3. C.When over 10% of his net commissions for the prior or next 12 months come from such risks
4. D.When more than 50% of his commissions in a calendar year came from a single client
Show answer
Answer: C. This is the controlled business rule. Section 2103(i) lets the superintendent refuse to issue, suspend or revoke a license if more than ten percent of the aggregate net commissions received in the preceding twelve months, or to be received in the next twelve, came from insurance on the property and risks of the applicant's spouse, of corporations more than fifty percent owned by the applicant or spouse, and of similar related parties. The 50% figure in the rule defines ownership of a related corporation, not the commission limit.
Source: NY 17-55 outline: Insurance Regulation, controlled business (2103(i)); N.Y. Ins. Law 2103
A licensed New York life agent wants to give half her commission on a new whole life policy to an unlicensed friend who explained the policy's terms to the buyer. What does the Insurance Law say?
1. A.Not allowed: new life commissions go only to licensed life agents of the insurer
2. B.It is allowed if the buyer agrees in writing before the policy is issued
3. C.It is allowed as long as the friend's share stays under $25 per policy
4. D.It is allowed if the insurer approves and pays the friend directly
Show answer
Answer: A. Section 2114(a)(2) bars an agent from paying any commission for obtaining a new life insurance or annuity contract except to a licensed life insurance agent of the insurer, and 2114(a)(1) bars the insurer from paying anyone but licensed agents or qualifying brokers. Section 2102(e)(1) also forbids an unlicensed person from accepting a commission for selling, soliciting or negotiating. Explaining policy terms to the buyer goes beyond a mere referral, so the referral exception in 2114(a)(4) does not apply.
Source: NY 17-55 outline: Insurance Regulation, sharing commissions (2114-2116, 2121); N.Y. Ins. Law 2114; N.Y. Ins. Law 2102
A New York agent collects premiums from clients but does not send them to insurers right away. Under Insurance Law section 2120 and Regulation 29 (11 NYCRR 20.3), how must she hold the money?
1. A.In a separate bank account for each insurer she represents, with no exceptions
2. B.In any investment account, as long as the interest earned is credited to the clients
3. C.In her personal checking account, as long as she keeps a list of what each insurer is owed
4. D.As a fiduciary, in an identified premium account at a bank authorized to do business in New York
Show answer
Answer: D. Section 2120(a) makes an agent responsible in a fiduciary capacity for funds received and bars mixing them with her own funds without the principal's express consent. 11 NYCRR 20.3(b) requires an agent who does not remit immediately to deposit the funds in an appropriately identified premium account in a bank authorized to do business in New York, with withdrawals limited to purposes such as paying premiums and taking commissions. Section 2120(c) says one account can serve several principals if each one's funds can be traced in the records.
Source: NY 17-55 outline: Insurance Regulation, fiduciary responsibility (2120; Regs 9, 18, 29, 20.3-20.4); N.Y. Ins. Law 2120; 11 NYCRR 20.3 (Regulation 29)
Two weeks after a policy is issued, the buyer asks the New York producer who sold it for details of the compensation she received. Under Regulation 194 (11 NYCRR 30.3), what must the producer do?
1. A.Nothing, because the duty to disclose compensation ends when the policy is issued
2. B.Disclose only the total premium, since commission amounts are confidential
3. C.Tell the buyer to request the information from the insurer
4. D.Give the details in a prominent writing within five business days
Show answer
Answer: D. Under 11 NYCRR 30.3(c), if the purchaser asks for more information about the producer's compensation after issuance but less than 30 days after it, the producer must give the details listed in 30.3(b), such as the nature, amount and source of compensation, in a prominent writing within five business days. At or before application, the producer must already have described her role, whether she is paid by the insurer, and the buyer's right to ask (30.3(a)). Written disclosures are kept for at least three years (30.4).
Source: NY 17-55 outline: Insurance Regulation, producer compensation transparency (Reg 194, 30.1-30.5); 11 NYCRR 30.3 (Regulation 194); 11 NYCRR 30.4

Where these questions come from: New York Life, Accident and Health agent exam outline (series 17-55, PSI candidate information bulletin updated 28 Apr 2023), section: Insurance Regulation (7%). See how we write questions.