Pennsylvania Insurance Regulation & Producer Law

Correct

The answer is B: This is insurance fraud under 18 Pa.C.S. § 4117 because it solicits a false claim statement.

Advising a client to misstate where an injury happened, to obtain workers' compensation benefits, is soliciting a false statement in support of a claim made to an insurer. That is insurance fraud under 18 Pa.C.S. § 4117(a)(3), a felony of the third degree, and for a licensee it is also a fraudulent or dishonest practice under 40 P.S. § 310.11(7). Article XI of the Insurance Department Act (40 P.S. §§ 325.1-.62) creates the Insurance Fraud Prevention Authority and defines insurance fraud by reference to § 4117, but § 4117 is the offense itself. The conduct is not a permissible negotiating tactic under the Unfair Insurance Practices Act, a belief that the client deserves benefits is no defense, and it is not limited to the Workers' Compensation Act.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is A: The producer can add the casualty line by passing the casualty exam; no pre-licensing course is required.

Act 142 of 2024 eliminated the pre-licensing education requirement effective April 29, 2025, so a producer adds a line by passing the examination for it and applying. The casualty line is tested by the Casualty and Allied Lines exam, Series 16-05. A pre-licensing course is the old rule. Lines of authority are added to an existing license rather than replacing it, and the licensing statute ties a new line to passing its exam and applying, not to the renewal date.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is B: The producer is acting without a valid license, which is unlicensed activity and violates the suspension order.

A suspension takes away the producer's authority to sell, solicit or negotiate insurance in Pennsylvania while it lasts. Continuing to do so is unlicensed activity, a third-degree felony under 40 P.S. § 310.41, and violates the Commissioner's suspension order, a prohibited act under 40 P.S. § 310.11(2); the Department can discipline the producer again under § 310.91. The suspension is of the license, not of one line, telling clients does not restore authority, and an insurer's appointment depends on a valid license and cannot supply one.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is D: The producer misappropriated fiduciary funds by spending premium money on the agency's own rent and utilities.

Premium a producer receives is held in a fiduciary capacity (40 P.S. § 310.96). Putting it in the agency's own operating account without the insurer's express consent is commingling, and spending it on the agency's rent and utilities goes further: it is withholding or converting money received in the business, a prohibited act under § 310.11(4) and theft under § 310.42. The statute does not require a separate trust account for each insurer so long as each insurer's funds are reasonably ascertainable from the books, so a missing trust account is not the only problem. Good records do not permit spending the premium, and a legitimate expense does not make the insurer's money the producer's to spend.

Reviewed in our October 2026 Pennsylvania fact-check.