Chapter 10: Florida Statutes, Rules, and Regulations Common to All Lines

Continuing education requirements must be met every

2 years

How often must domestic insurance companies be examined by the Chief Financial Officer in Florida

At least every 5 years

A producer who fails to separate premium monies from his own personal funds is guilty of

Commingling

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of

False advertising

Circulating deceptive sales material to the public is what type of Unfair Trade Practice

False advertising

Which of the following insurers are owned by stockholders

Stock

Which of the following entities is responsible for agent licensing and administrative supervision

The Office of Insurance Regulation

What is the minimum age that a person can obtain a life insurance license

18

An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance

30 days

In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total given in a year

50%

What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws?

Absolute

Which of the following is true regarding branch ageny licensing

Agent in charge must be licensed

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien insurer

What is a foreign insurer

An insurer with a home office in another state

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

To legally transact insurance in this state, an insurer must obtain which of the following

Certificate of Authority

What term best describes the act of withholding material information that would be crucial to an underwriting decision

Concealment

An insurance producer just sold an insurance policy to his sister. What kind of business is this

Controlled

Applications to an insurer must include all of the following information, EXCEPT

Credit history report

Which of the following will NOT be considered unfair discrimination by insurers

Discriminating in benefits and coverages based on the insured's habits and lifestyle

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charge him a higher rate for his insurance. This practice is considered

Discrimination

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer

Which of the following is NOT a responsibility of the Office of Insurance Regulation

Enacting new insurance laws

An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as

Excess

Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in

Expiration of the license

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility

No insurance policy form can be issued, delivered or used in this state unless it has been

Filed with and approved by the Office of Insurance Regulation

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming

Foreign

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer

Foreign

Which of the following activities would be sufficient violation to warrant rejection, rejection, revocation, or suspension of an insurance agent's license

Forgery

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity

All of the following are the general qualifications for an agent's license EXCEPT

Have a high school diploma

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. The insurer is hoping that this advertising will help to eliminate the competition and therefore create a monopoly. Which of the following best describes this act

Illegal

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment

Insurance Guaranty Association

Insurance contracts are agreements between which two parties

Insurer and policyowner

The Office of Insurance Regulation is responsible for all of the following insurer activities EXCEPT

Issue of securities

Which of the following best describes the unfair trade practice of defamation

Making derogatory oral statements about another insurer's financial condition

All of the following would be considered an insurance transaction EXCEPT

Obtaining an insurance license

What is the major difference between a stock company and a mutual company

Ownership

Who might receive dividends from a mutual insurer

Policyholders

Pertaining to insurance, what is the definition of a fiduciary responsibility

Promptly forwarding premiums to the insurance company

When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT

Provide a 30-day advance notice to the Commissioner

In what way can an agent demonstrate a high standard of ethics?

Putting the client's best interests before their own

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

What method do insurers use to protect themselves against catastrophic losses

Reinsurance

An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action

Send a written notification to the department of insurance

Which of the following may NOT be included in an insurance company's advertisement

That its policies are covered by a state Guaranty Association

Who examines the books and records of insurance companies in Florida

The Chief Financial Officer

What are the 2 offices of the Financial Services Commission

The Office of Financial Regulation and the Office of Insurance Regulation

If an agent is in the military, which of the following is true

The agent cannot sell a policy to another active military person who is of a lower rank

If a person accumulates more continuing education hours than is necessary to fulfill the requirements for a 2-year period, which of the following will occur

The extra hours may be continued into the next period

Which of the following is an example of a producer's fiduciary duty

The trust that a client places in the producer in regard to handling premiums

Under what circumstances can an agent's appointment be transferred to another person

Under no circumstances

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation

Which of the following statements is INCORRECT

Replacing insurance policies for the purpose of making commissions is legal

In accordance with the Code of Ethics, agents must provide a completed application to

The prospective insured and the insurer

If a license changes his or her residence address, within how many days must the department be notified

30

If an agent does not notify the insurer of an address change, what is the maximum penalty that can be imposed for a one-time offense

$250

All of the following actions can be described as twisting EXCEPT

Explaining to client the advantages of a permanent insurance over term and suggesting changing policies

Which of the following would be an example of an unfair claims settlement practice

Failing to acknowledge a claim within 30 days

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer

In which of the following situations is it legal to limit coverage based on marital status

It is never legal to limit coverage based on marital status

A participating insurance policy may do which of the following

Pay dividends to the policyowner

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen

The policy will not be affected

A licensed agent must complete how many hours of continuing education specific to ethics and regulatory updates

5

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization

Fraternal benefit society

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies