AD Banker DC Life and Health Ch 8

B. 24 (with at least 6 in each line and 2 hours in ethics) A producer must complete 24 credit hours of continuing education every renewal period with at least 6 in each line and 2 hours in ethics.

How many credit hours of continuing education must a producer complete every renewal period? A 24 (with at least 2 in each line and 6 hours in ethics) B 24 (with at least 6 in each line and 2 hours in ethics) C 12 (with 2 hours in ethics) D 18 (with at least 6 in each line and 2 hours in ethics)

D. 61 days The grace period for a flexible premium contract must be at least 61 days. The grace period for scheduled premium contract is 31 days.

The grace period for a flexible premium contract must be at least: A 31 days B 30 days C 60 days D 61 days

A. 3 years The reinstatement period for individual life insurance policies is 3 years.

The reinstatement period for individual life insurance policies is: A 3 years B 1 year C 180 days D 6 months

C. Within 30 days after the date a hearing is demanded Hearings are held within 30 days after the date a hearing is demanded.

When demanded, Hearings are held: A Within 10 days after the date a hearing is demanded B Within 5 days after the date a hearing is demanded C Within 30 days after the date a hearing is demanded D Within 60 days after the date a hearing is demanded

D. Appointed by the Mayor The NAIC does not appoint any insurance commissioners. The Commissioner is not elected in D.C., but is appointed by the Mayor and not the Governor.

The Insurance Commissioner is: A Appointed by the President of the NAIC B Elected every 4 years through public nominations C Appointed by the Governor D Appointed by the Mayor

B. A temporary license may be issued to the surviving spouse of a disabled or deceased producer The duration may be for up to 180 days without an examination, and a temporary license may be issued to an employee of a business entity.

Which of the following is correct regarding a temporary license? A The duration of a temporary license may not exceed 80 days B A temporary license may be issued to the surviving spouse of a disabled or deceased producer C A temporary license may be issued for up to 180 days after successfully completing the licensing examination D A temporary license may not be issued to an employee of a business entity

D. A producer may not recommend that an applicant obtain a variable life policy unless the suitability standards have been met A variable life policy must determine any change in variable death benefits at least annually. A variable life policy must determine the cash value at least monthly. The insurer assumes the insurance risk.

Which of the following is correct with regard to variable life insurance? A A variable life policy must determine any change in variable death benefits at least semi-annually B The insured assumes the insurance risk C A variable life policy must determine the cash value at least annually D A producer may not recommend that an applicant obtain a variable life policy unless the suitability standards have been met

A. The contract may be reinstated within 5 years of policy lapse, if contract conditions have been met and the cash surrender value has not been paid The contract may be reinstated within 2 years of policy lapse, if contract conditions have been met and the cash surrender value has not been paid.

Which of the following is false with regard to required contract provisions? A The contract may be reinstated within 5 years of policy lapse, if contract conditions have been met and the cash surrender value has not been paid B The contract must provide a nonforfeiture provision C The contract is incontestable after 2 years from issue D The contract must provide for a free look provision of 45 days of the application or within 10 days of receipt, whichever is later

C. An insurer may not pay a commission to anyone other than a currently licensed and appointed producer, but may pay a commission to an agency that is not licensed

Which of the following is incorrect with regard to commissions and compensation? A Renewal commissions may be paid to a person for selling or negotiating insurance in the District if the person was required to be licensed at the time of the sale, or negotiation and was licensed at that time B An insurer or producer may not pay a commission to a person for selling, soliciting, or negotiating insurance in the District if that person is required to be licensed and is not licensed C An insurer may not pay a commission to anyone other than a currently licensed and appointed producer, but may pay a commission to an agency that is not licensed D An insurer or producer may pay commissions to a duly licensed producer for negotiating, soliciting, or effecting insurance contracts

D. Credit accident and health insurance may not be issued as individual policies Credit accident and health insurance is commonly sold as a group plan, but may be issued as individual policies.

Which of the following statements concerning credit accident and health insurance is false? A Credit accident and health insurance may not exceed the total amount of the debt or the amount of the monthly payment B Credit accident and health insurance covers a debtor, with the creditor receiving the benefits to pay the debt C Credit accident and health insurance is commonly sold as a group plan D Credit accident and health insurance may not be issued as individual policies

C. A producer appointment is effective until the producer fails to produce the amount of sales required by the insurer Failure to meet sales quotas in and of itself is not a reason for which a producer appointment would no longer be effective.

Which of the following statements is NOT correct concerning producer appointments? A A producer appointment is effective until the Commissioner revokes the producer's license B A producer appointment is effective until the insurer terminates the appointment and notifies the Commissioner C A producer appointment is effective until the producer fails to produce the amount of sales required by the insurer D A producer appointment is effective until the producer fails to renew his/her license

B. A producer appointment is effective until the producer fails to produce the amount of sales required by the insurer Failure to meet sales quotas in and of itself is not a reason for which a producer appointment would no longer be effective.

Which of the following statements is NOT correct concerning producer appointments? A A producer appointment is effective until the producer fails to renew his/her license B A producer appointment is effective until the producer fails to produce the amount of sales required by the insurer C A producer appointment is effective until the insurer terminates the appointment and notifies the Commissioner D A producer appointment is effective until the Commissioner revokes the producer's license

B. The group policy may limit the amount of an individual policy to the lesser of the insured's terminated group coverage (minus the amount of any group insurance he/she becomes eligible for within 31 days of the termination) or $2,000 There must be a provision allowing anyone who has been covered under the group policy for at least 5 years to convert to an individual policy upon termination of the group policy. There must be a provision that if an insured dies during the conversion period, the amount that he/she would have been entitled to convert is payable as a claim under the group policy. When insurance is terminated for the spouse of an insured, such spouse is entitled to conversion.

Which of the following statements is correct concerning conversion provisions in group life insurance policies? A There is no conversion privilege available to the spouse of an insured when insurance is terminated for such spouse B The group policy may limit the amount of an individual policy to the lesser of the insured's terminated group coverage (minus the amount of any group insurance he/she becomes eligible for within 31 days of the termination) or $2,000 C There must be a provision allowing anyone who has been covered under the group policy for at least one year to convert to an individual policy upon termination of the group policy D There must be a provision that if an insured dies during the conversion period, no benefit is payable under the group policy

D. An insurer must file a notice of appointment within 30 days after the contract is executed or the first application for insurance is submitted The appointing insurer must file a notice of appointment with the Commissioner within 30 days from the date that the agency contract is executed or the first insurance application is submitted.

Which of the following statements is correct regarding time periods in conjunction with agent appointments? A An insurer must mail a copy of the notification of termination to the agent within 30 days after notifying the Commissioner B An insurer must file a notice of appointment within 15 days after the contract is executed or the first application for insurance is submitted C An insurer who terminates an appointment, employment or other relationship of an agent must notify the Commissioner within 10 days after the effective date of the termination D An insurer must file a notice of appointment within 30 days after the contract is executed or the first application for insurance is submitted

D. Individuals applying for a limited lines license are exempt from the fingerprint and background check requirement A producer may present insurance products offered by insurers through which the producer has not been appointed, but may place any risks with an insurer unless licensed as a broker. A producer is solely responsible for errors committed by any unlicensed employee.

Which of the following statements is correct? A A producer may not present insurance products offered by insurers through which the producer has not been appointed B A producer shares responsibility for errors committed by any unlicensed employee C A producer may not place risks with an insurer unless licensed as an agent D Individuals applying for a limited lines license are exempt from the fingerprint and background check requirement

D. Suicide may be excluded within the first 2 years Suicide may be excluded within the first 2 years and for 2 years after the date of any increase.

Which of the following statements is true regarding suicide exclusions? A Suicide may be excluded within the first year only B Suicide may not be excluded C Suicide may not be excluded if the insured requested an increase in death benefits D Suicide may be excluded within the first 2 years

A. A life insurance policy that develops, or has the potential to develop a cash value that does not contain the nonforfeiture options, cannot be delivered or issued for delivery The insurer may defer the payment of any cash surrender value up to 6 months after the demand with surrender of the policy. The Standard Nonforfeiture Law does not apply to reinsurance, group insurance or term insurance.

Which of the following statements is true regarding the Standard Nonforfeiture Law? A A life insurance policy that develops, or has the potential to develop a cash value that does not contain the nonforfeiture options, cannot be delivered or issued for delivery B The insurer may not defer the payment of any cash surrender value after the demand with surrender of the policy C The Standard Nonforfeiture Law applies to reinsurance D The Standard Nonforfeiture Law applies to group insurance

A. An agent who will be transacting business in the District under an assumed name must notify the Commissioner prior to using the assumed name An agent who will be transacting business in the District under an assumed name must notify the Commissioner prior to using the assumed name.

Which of the following statements is true with respect to assumed names? A An agent who will be transacting business in the District under an assumed name must notify the Commissioner prior to using the assumed name B An agent who will be transacting business in the District under an assumed name must notify the Commissioner upon the first renewal of his/her agent license C An agent who will be transacting business in the District under an assumed name must notify the Commissioner within 30 days after using the assumed name D An agent may not transact business in the District under an assumed name

C. A person may not sell insurance in the District unless the person is licensed for that line of authority A person may not negotiate, solicit or sell any line of insurance in the District unless the person is licensed for that line of authority. A producer may not represent an insurer just by the virtue of being licensed as a producer.

Which of the following statements is true? A A producer may represent an insurer after he/she obtains the appropriate license B A person may sell limited lines insurance in the District without being licensed C A person may not sell insurance in the District unless the person is licensed for that line of authority D A person may negotiate insurance in the District without being licensed for that line of authority

D. Unearned premiums that are the insured's, may be commingled with a producer's personal funds under certain conditions All premiums that are the insurer's, or unearned premiums that are the insured's, may not be commingled with a producer's personal funds under any circumstances.

With regard to a producer's fiduciary capacity, all of the following are true, except: A A producer who fails to pay a collected premium to an insurer upon written request may be charged with theft B All premiums that are the insurer's, or unearned premiums that are the insured's, may not be commingled with a producer's personal funds C All premiums received, including commissions, must be remitted to the insurer on or before the policy due date D Unearned premiums that are the insured's, may be commingled with a producer's personal funds under certain conditions

D. A producer's appointment is terminated 30 days after the date the producer's license expires A producer's appointment is terminated on the date the producer's license expires.

With regard to termination and renewal of a license, which of the following is false? A A business entity producer's license expires on the May 31 that falls not less than 18 months and not more than 29 months after the effective date of the license B A producer's license expires on the last day of the birth month of the producer that falls not less than 18 months and not more than 29 months after the effective date of the license C A renewal of an existing license is for a 2-year term D A producer's appointment is terminated 30 days after the date the producer's license expires

A. An insurer must mail an annual report to each policyholder within 30 days of the anniversary of the policy An insurer must mail an annual report to each policyholder within 30 days of the anniversary of the policy.

With respect to reports to policyholders, which of the following is true? A An insurer must mail an annual report to each policyholder within 30 days of the anniversary of the policy B An insurer must mail a monthly report to each policyholder C An insurer must mail an annual report to each policyholder on the anniversary date of the policy D An insurer must mail a quarterly report to each policyholder within 30 days of the end of each quarter

B. As of the date the license expired An insurance producer applying for reinstatement within 30 days after his/her license expires, will have his/her license effectively reinstated retroactively as of the date the license expired.

An insurance producer applying for reinstatement within 30 days after his/her license expires, will have his/her license effectively reinstated: A As of the date of reinstatement B As of the date the license expired C 30 days after of the date the license expired D One year after of the date the license expired

A. Up to $1,000 per offense, imprisonment for up to one year, or both Any producer violating any licensing provisions may be subject to a penalty of up to $1,000 per offense, imprisonment for up to one year, or both. Only property and casualty producers may be subject to civil penalties instead of a fine and imprisonment.

Any producer violating any licensing provisions may be subject to a penalty of: A Up to $1,000 per offense, imprisonment for up to one year, or both B Up to $5,000 per offense, imprisonment for up to one year, or both C Up to $1,000 per offense or imprisonment for up to one year, but not both D Up to $1,000 per offense or imprisonment for up to one year, or civil penalties instead

D. Backdating Backdating the age of an insured by no more than 6 months to save age is not an example of a prohibited practice.

Which of the following is NOT an example of a prohibited practice? A Twisting B Rebating C Defamation D Backdating

D. If a producer's license lapses he/she may apply for reinstatement for up to 60 days If a producer's license lapses he/she may apply for reinstatement for up 30 days.

Which of the following statements is false concerning reinstatement? A A licensee who does not apply for reinstatement within one year of expiration must meet the application requirements for an initial license B A producer applying for reinstatement must provide proof of completion of continuing education requirements C The Commissioner may require additional education and training for reinstatement D If a producer's license lapses he/she may apply for reinstatement for up to 60 days

D. A producer's appointment is terminated 30 days after the date the producer's license expires A producer's appointment is terminated on the date the producer's license expires.

With regard to termination and renewal of a license, which of the following is false? A A producer's license expires on the last day of the birth month of the producer that falls not less than 18 months and not more than 29 months after the effective date of the license B A business entity producer's license expires on the May 31 that falls not less than 18 months and not more than 29 months after the effective date of the license C A renewal of an existing license is for a 2-year term D A producer's appointment is terminated 30 days after the date the producer's license expires

A. Be at least 21 years of age An individual must be at least 18 years of age.

The following qualifications are required for a producer license, except: A Be at least 21 years of age B Have not committed any act, which is ground for denial, suspension or revocation of license C Pass a licensing examination D Pay the license fee

A. April 30 of each odd-numbered year A producer licenses expires April 30 of each odd-numbered year.

When do producer licenses expire? A April 30 of each odd-numbered year B April 30 every 2 years C April 30 of each year D April 30 of each even-numbered year

A. A nonresident licensee may be authorized for any line of insurance for which the licensee is not authorized in his/her home state A nonresident licensee may only be authorized for the line(s) of insurance for which the licensee is authorized in his/her home state.

All of the following are true regarding a nonresident license, except: A A nonresident licensee may be authorized for any line of insurance for which the licensee is not authorized in his/her home state B A person residing in another state may be licensed as a nonresident producer if the person is currently licensed in his/her home state C A person residing in another state may be licensed as a nonresident producer if the person's home state issues nonresident producer licenses to District residents on a reciprocal basis D A person residing in another state must be in good standing in addition to being currently licensed in his/her home state

C. A nonresident licensee may be authorized for any line of insurance for which the licensee is not authorized in his/her home state A nonresident licensee may only be authorized for the line(s) of insurance for which the licensee is authorized in his/her home state.

All of the following are true regarding a nonresident license, except: A A person residing in another state must be in good standing in addition to being currently licensed in his/her home state B A person residing in another state may be licensed as a nonresident producer if the person is currently licensed in his/her home state C A nonresident licensee may be authorized for any line of insurance for which the licensee is not authorized in his/her home state D A person residing in another state may be licensed as a nonresident producer if the person's home state issues nonresident producer licenses to District residents on a reciprocal basis

C. Issued insufficient coverage to a customer through apparent authority If a licensee issues insufficient coverage to an individual through apparent authority, this is not grounds for license suspension, non-renewal or revocation.

The Commissioner may revoke, suspend, or refuse to renew a license for all the following, except: A Mishandling funds B Cheated on an insurance examination C Issued insufficient coverage to a customer through apparent authority D Being in arrears in paying child support

C. That taxes are not charged Taxes are charged against separate accounts and the disclosure must state the taxes or reserves for taxes.

The disclosure of charges against separate accounts must set forth all of the following, except: A Mortality and expense guarantee charges B Charges for administrative and investment management expenses C That taxes are not charged D Charges for incidental insurance benefits

C. An insurer has the option of becoming a member of the Association Insurers transacting insurance in the District are required to be members of the Association.

Which of the following are false regarding the Life and Disability Insurance Guaranty Association? A The Association is not liable for more than $300,000 in benefits for life insurance and $100,000 for health insurance B Other member insurers are assessed to provide money for the claims of an insolvent insurer C An insurer has the option of becoming a member of the Association D It prevents financial loss to policyholders when an insurer becomes insolvent Nice try! The correct answer was C.

C. The insurer has reinsured some of its risks in another company without the Commissioner's prior approval An insurer may reinsure some of its risks in another company without the Commissioner's prior approval, but not all of its risks.

Which of the following would NOT be cause for the suspension or revocation of an insurer's Certificate of Authority? A The insurer has an officer who refuses to be examined under regarding the insurer's affairs B The insurer becomes impaired in capital or surplus C The insurer has reinsured some of its risks in another company without the Commissioner's prior approval D The insurer has failed to pay a valid judgment within 30 days after the judgment becomes final

C. Loans must be withdrawn from, and repaid to, the separate account Indebtedness may be deducted from either death benefits or cash value. The policy may require a minimum loan amount. At least 75% of the cash surrender value may be borrowed.

With regard to policy loan provisions, which of the following statements is correct? A At least 50% of the cash surrender value may be borrowed B Indebtedness must be deducted from cash value C Loans must be withdrawn from, and repaid to, the separate account D The policy is prohibited from requiring a minimum loan amount

B. An insurer issuing variable life policies has the option to establish a separate account Insurers issuing variable contracts must establish one or more separate accounts.

Which of the following statements is NOT correct regarding separate accounts? A Investments must be valued at their market value B An insurer issuing variable life policies has the option to establish a separate account C Separate accounts must have a surety bond for 1/4 the value of accessible assets D Any change in investment policy must be filed with the Commissioner

A. An insurer must file a notice of appointment within 30 days after the contract is executed or the first application for insurance is submitted An insurer who terminates an appointment, employment or other relationship of an agent must notify the Commissioner within 15 days after the effective date of the termination.

The appointing insurer must file a notice of appointment with the Commissioner within 30 days from the date that the agency contract is executed or the first insurance application is submitted. A An insurer must file a notice of appointment within 30 days after the contract is executed or the first application for insurance is submitted B An insurer must mail a copy of the notification of termination to the agent within 30 days after notifying the Commissioner C An insurer must file a notice of appointment within 15 days after the contract is executed or the first application for insurance is submitted D An insurer who terminates an appointment, employment or other relationship of an agent must notify the Commissioner within 10 days after the effective date of the termination

A. Misleading and convincing an insured to surrender, lapse, or exchange an existing policy for a different one, to the insured's detriment Twisting is the misrepresentation of a policy for the purpose of inducing a person to lapse, forfeit, or surrender existing insurance, including Federal Employees Group Life Insurance (FEGLI), to replace it with another policy.

Which of the following correctly describes the practice of Twisting? A Misleading and convincing an insured to surrender, lapse, or exchange an existing policy for a different one, to the insured's detriment B Representing to the applicant that a specific coverage or product is required by law in conjunction with the purchase of insurance when such coverage or product is not required C Entering into any agreement to commit an act of boycott, coercion, or intimidation resulting in an unreasonable restraint of the business of insurance D Offering anything of value to a client that is not already a part of the policy, as an incentive to purchase insurance

D. The prospectus must include a statement that projections are based on actual experience The prospectus must include a statement that projections are hypothetical only.

Which of the following is NOT correct concerning information that is required to be in the prospectus? A The prospectus must include a statement of investment policy of the separate account B The prospectus must include a summary of the main features of the policy C The prospectus must include a summary of asset calculation methods and applicable federal income tax aspects D The prospectus must include a statement that projections are based on actual experience

B. A business entity is not required to be licensed A business entity must obtain the appropriate license.

Which of the following statements is false regarding the licensing of a business entity? A A business entity must designate a licensed insurance producer living within 10 miles of the District as the entity's representative B A business entity is not required to be licensed C The designated producer must give his/her name and business address to the DISB D A business entity must obtain the appropriate license