Chapter 11 - Laws and Rules

a foreign insurance company is defined as one that is

formed under the laws of a state other than Maryland

Under a small group health plan an insurer is required to provide a newly married employee at least ____ days to add the new spouse to the plan.

60 days enrollment period

in order to operate as a domestic insurer and insurance company must have a certificate of authority issued by the

commissioner

a temporary producer license issued by the commissioner without examination is valid for a period of no longer than

15 months

A life insurance policy becomes incontestable after it has been in force for - 30 days - 6 months - 2 years - 3 years

2 years

Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss.

20

According to the affordable care act, any plan in existence prior to which date is considered a grandfathered plan? march 23, ___ 2010 2011 2012 2013

2010

The Commissioner must examine the financial affairs of each admitted insurer operating in Maryland at least once every how many years?

5

under a small group health plan an insurer is required to provide a newly married employee at least ---- days to add the new spounse to the plan

60

Which of the following is NOT a qualification to be licensed as a producer or adjuster?

A high school diploma

Which of the following is NOT a requirement for soliciting insurance in Maryland? 1.Pass insurance examination 2.At least 21 years old 3. Good character 4.Appointed by an insurer

At least 21 years old, age requirement is 18

Which of the following basics is a producer's fiduciary responsibility?

Collecting premiums and paying them to the insurance company

Proceeds of the viatical settlement contract could be subject to the claims of Creditors Children Spouse Beneficiary

Creditors

Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Louisiana? Life Insurance Producer License Long Term Care Insurance Producer License Casualty Insurance Producer License Health Insurance Producer License

Health Insurance Producer License

When an insurance appointment with a producer is terminated, the party that must notify the producer of the termination is the - Insurer - Local agency - Commissioner - National Association of Insurance Commissioners (NAIC)

Insurer

An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of

Misrepresentation - also known as oral statements

what is the renewal date of a resident insurance producers license?

On or before the last day of the licensee's birth month

All of the following occurrences may result in license revocation except Producing an inadequate amount of new premium having been convicted of a felony forgining another's name to an application for insurance failing to meet court-ordered child support obligations

Producing an inadequate amount of new premium

A cease and desist order issued against a producer Suspends the producer's certificate or broker's license Prevents the producer from receiving commissions Prohibits a specific practice listed in the order Terminates the producer's appointment with the insurer

Prohibits a specific practice listed in the order

the branch of dentistry which deals with the replacement of missing parts is called

Prosthodontics

A producer's fiduciary responsibility includes which of the following activities? - Recording the receipt and distribution of premiums due to an insurer - Properly remunerating persons who furnish leads on prospects - Providing needed insurance to prospective insureds through any sources that are available - Guaranteeing payment to insureds for losses covered by policies that the producer sold

Recording the receipt and distribution of premiums due to an insurer

all of the following may be an unfair claims practice except

Refusing to pay persons bringing false or fraudulent claims

Crimes that involve the business of insurance and affect interstate commerce fall under US Code 1033. Any violations would be prosecuted by - The US Attorney General - The Commissioner of Insurance - The Insurance Department - The FBI

The US Attorney General

Under the Affordable Care Act, how would a grandfathered health plan lose its grandfathered status?

The insurer significantly raises co-insurance charges, deductibles, or co-payment charges

an insurance producer who replaces an existing policy by making false written or oral statements is committing the act of

Twisting

which of the following is required to be licensed as an insurance producer?

a business entity soliciting insurance

A person who, for a fee, gives advice or recommendations on benefits provided by an insurance contract is called 1.a broker 2.a producer 3.an advisor 4.a navigator

an advisor

An example of an alien insurer would be

an insurer formed according to the legal requirements of another country

All of these types of benefits can be covered by a nonprofit health service plan except dental disability income vision hospital expense

disability income

the commissioner is empowered to

enforce state laws relating to insurance

The renewability provision for an individual long-term care insurance policy must be located on the policy form's

first page

producer commissions may not be paid to

licensed producer not appointed by an insurer

A producer who is licensed in Maryland but resident in another state is called a 1. nonresident producer 2. foreign producer 3. reciprocal producer 4. limited lines producer

nonresident producer

Upon surrender of a whole life policy, which has been in force for AT LEAST 3 full years, and within 60 days after the date the premium payment is due and unpaid, the insurer will

pay a cash surrender value

an insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a

rebate - which is illegal

which of the following refers to a situation in which an insurer transfer a part of their risk to another insurer?

reinsurance

john the insurance producer has an insurance license that expires in 6 months. if he files an application for renewal before the expiration date, his license will

remain in effect until a new one is issued

as of january 1 2014 small group health insurance can be rated on the basis of

tobacco use

The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as 1. twisting 2. subrogation 3. a life settlement 4.coercion

twisting

The commissioner MUST give a minimum of how many days' notice of a disciplinary hearing?

10 days

The free look period provided in a life insurance policy is usually

10 days

Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a

Unfair claim settlement practice

Proceeds payable under a life insurance contract to a policyowner in anticipation of death or upon the occurrence of specified life-threatening conditions as defined by the policy are best described as accelerated benefits expedited benefits cash surrender benefits

accelerated benefits

Viatical Settlement

allow policyholder to sell their policy for a percentage of the face amount for a cash payment

Which of the following is not considered to be an act of fraud

collecting a charge for insurance that is less than the charge applicable to that insurance

A Maryland insurance producer solicits an insurance policy. In the event of a controversy between the insured and the company, the producer is considered to represent the 1. insured 2. beneficiary 3. company 4. policyholder

company

The maryland insurance commissioner

consels and advises the governor on all matters assigned to the MD insurance adminstration

when collecting insurance premiums from a client a producer must

forward premiums to the insurer on a timely basis

what kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting order than an acute care unit of a hospital? long-term care disability income limited care special risk

long-term care

what must the company do prior to conducting an HIV related test?

obtain a written authorization from the proposed insured

The food and drug administration approves prescription drugs for treatment as stated on the drugs labeling. the prescription of a drug for treatment other than what's labeld is known as _____ use 1. illegal 2. trial 3. generic 4. off-label

off-label

under the maryland health insurance plan, comprehensive health benefits are provided to

medically uninsurable residents

the life and health guaranty corporation provide funds to carry out its powers and duties by assessing

member insurers

Any advertisement that mentions a dollar amount, period of time for which any benefit is payable, cost of policy, policy benefit, or the loss for which the benefit is payable MUST disclose 1.the date in which the advertisement was approved 2. the exceptions, reductions, and limitations affecting the basic provisions of the policy 3. how much the advertisement cost to publish 4. the person who wrote the advertisement

the exceptions, reductions, and limitations affecting the basic provisions of the policy

under the affordable care act a large employer that does not provide health insurance and owes an employer mandate penalty must pay an annual penalty, hwich is calculated by multiplying $2,000 by

the number of full time employees minus 30

Making any false statement maliciously critical of, or derogatory to, any insurer's financial condition with the intent to injure someone in the insurance business

Defamation

the commissioner must give a minimum of how many days' notice of a disciplinary hearing

10 days

an employer may qualify for health care tax credit through shop marketplace if that employer has fewar than hoe many employees?

25

A licensee who is required to take continuing education must include how many ethics coursework hours?

3

A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that These policy premiums will vanish The policy guarantees payment of these premiums The policyowner forfeits the option of paying these premiums from other sources The policyowner may need to resume premium payments depending on actual results

The policyowner may need to resume premium payments depending on actual results

an existing health benefit plan offered by a small employer may be replaced by SHOP exchange navigator only if the small employer

is eligible for a federal tax credit through the SHOP exchange

who regulates the quality of care provided by a health maintenance organization (hmo)

secretary of the Department of health and Mental Hygiene

An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of

Misrepresentation - this was a oral statements made by the producer

Lapsed life insurance policies can be reinstated at any time within

3 years

When a life insurance or annuity replacement policy is sold, the policyowner has a right to return the policy for a full refund of premium within

30 days

which of the following life events would allow an uninsured employee to qualify for special enrollment in a small employer health benefit plan

Adoption of a child

An insurance producer is BEST defined as1. a person appointed by more than one insurance company to issue policies 2. a person who has a contract with an insurance company to represent it 3. a person who places insurance with nonadmitted companies 4. an employee of an insurance company who has the authority to underwrite insurance

a person who has a contract with an insurance company to represent it

A producer may begin to solicit insurance ONLY when 1.registered for the state insurance examination 2. licensed by the state 3. appointed by an insurer 4. none of these

appointed by an insurer

the identity of the ____ must be made clear in every health insurance advertisement Governor insured insurer commissioner

insurer

An example of endodontric treatment is a

root canal

Providing incorrect, misleading, incomplete, or materially untrue information in the license application is

misrepresentation

A policy illustration given at time of sale does NOT typically include the: cash value of the policy names of the beneficiary effective interest rate for policy loans 10th and 20th year cost surrender value

names of the beneficiary

How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?

3 years

under the affordable care act which of these plans are designed to provide coverage that is actuarially equivalent to 80% of the full actuarual value of the benefits provided under the plan? Gold platinum silver bronze

Gold

ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful Insurance practice known as

Illegal inducement

Any of the following may be an unfair claims practice EXCEPT 1) Refusing to pay claims without a reasonable investigation 2) Refusing to pay persons bringing false or fraudulent claims 3) Failing to promptly provide reasonable explanation of any claim denials 4) Offering low amounts to force insureds to institute litigation

Refusing to pay persons bringing false or fraudulent claims

Which of the following is NOT a reason for the Commissioner to deny or refuse a producer license application? 1.Recently convicted of a felony 2.Engaged in fraudulent insurance practices 3.Unintentionally misrepresented a material fact on the application 4.Intentionally violated state insurance laws

Unintentionally misrepresented a material fact on the application

All of the following actions are considered rebating EXCEPT 1. sharing commissions with other licensed and appointed agents 2.refunding part of the premium as an inducement for purchase 3.offering special dividends 4. offering anything of value not specified in the policy

sharing commissions with other licensed and appointed agents

when can a life policy no longer be cancelled for nonfraudulent misstatements

2 years - the contestable policy for a life policy in maryland is 2 years

when an insurance licensee changes his or her address, they must notified?

the commissioner

In Maryland, an insurance producer cannot sell, solicit, or negotiate policies for an insurer unless there is an agreement in place between the producer and insurer. This agreement is called a(n) 1. appointment 2. license 3. binder 4. designation

appointment

In maryland, full time employee of a small employer must work an average of at least ___ per week.

30 hours

purpose of advertising regulations is to

assure full and truthfull disclosures to the public

if a producer has been engaged in an administrative action by any givernmental agency, within how many days following the final deposition must the producer report the action to the commissioner?

30 days

At minimum, a carrier is required to offer which of the following health benefit plans to small employers?

The standard plan

An insurer may pay a commission in which of the following scenarios? - To a licensed non-appointed producer who has sold, solicited, or negotiated a policy of insurance on behalf of the insurer - To an unlicensed person who has sold, solicited, or negotiated a policy of insurance on behalf of the insurer - To a licensed producer who is appointed with the insurer - When a policy is cancelled back to inception

To a licensed producer who is appointed with the insurer