Chapter 15 Practice Questions
What must a producer do when replacing a life insurance policy in Arizona? A. Collect a $100 replacement fee B. Read the Notice of Replacement aloud to the applicant C. Sell a term insurance policy D. Mail a copy of the replacement policy to the Department
A. Collect a $100 replacement fee *B. Read the Notice of Replacement aloud to the applicant* C. Sell a term insurance policy D. Mail a copy of the replacement policy to the Department
What must a producer do when replacing a life insurance policy in AZ? A. Collect a $100 replacement fee B. Sell a term insurance policy C. Read the Notice of Replacement aloud to the applicant D. Mail a copy of the replacement policy to the Department
A. Collect a $100 replacement fee B. Sell a term insurance policy *C. Read the Notice of Replacement aloud to the applicant* D. Mail a copy of the replacement policy to the Department
All of the following are considered cost-sharing in a qualified health plan, except: A. Deductibles B. Premiums C. Coinsurance D. Copayment
A. Deductibles *B. Premiums* C. Coinsurance D. Copayment
How long is a LTC policy's free look period? A. 10 days B. 14 days C. 30 days D. 21 days
A. 10 days B. 14 days *C. 30 days* D. 21 days
AZ law permits pre-existing conditions exclusions for up to 18 months for what individuals? A. Newborns B. No one C. Adults D. Late enrollees
A. Newborns B. No one C. Adults *D. Late enrollees*
Before granting a license, the Director may ask for which of the following type of information? A. Criminal background information B. College degree C. Verification of medical history D. Copy of tax returns
*A. Criminal background information* B. College degree C. Verification of medical history D. Copy of tax returns
A producer or insurer must collect all of the following types of information about the consumer to determine the suitability of a recommendation to purchase an annuity, except: A. Job title B. Investment objectives C. Financial situation D. Tax status
*A. Job title* B. Investment objectives C. Financial situation D. Tax status
All of the following events trigger continuation coverage under COBRA for family members, except: A. Non-payment of premium B. Events stated in the policy C. The named insured's death D. The named insured's divorce
*A. Non-payment of premium* B. Events stated in the policy C. The named insured's death D. The named insured's divorce
Which of the following is not eligible to purchase group life insurance? A. An individual B. A trust C. An association D. An employer
*A. An individual* B. A trust C. An association D. An employer
Producers must provide a buyer's guide and policy summary to all prospective purchasers of life insurance prior to accepting the applicant's initial premium, unless the policy contains an unconditional refund provision of at least how many days? A. 10 B. 3 C. 7 D. 5
*A. 10* B. 3 C. 7 D. 5
A licensing candidate must be at least ___ years of age to be licensed. A. 18 B. 21 C. There is no age requirement D. 25
*A. 18* B. 21 C. There is no age requirement D. 25
If an individual wants to transact business as an insurance producer, he/she must meet all of the following requirements, except: A. Apply for a license within 2 years of passing the licensing exam B. Not commit any act that is grounds for denial C. Pay all required fees D. Be at least 18 years old
*A. Apply for a license within 2 years of passing the licensing exam* B. Not commit any act that is grounds for denial C. Pay all required fees D. Be at least 18 years old
Under what terms may an Army reservist who was just discharged from active military duty reinstate his/her former disability policy without evidence of insurability? A. If s/he submits written application within 90 days of discharge from active duty B. If s/he submits written application within 30 days of discharge from active duty C. If s/he is not in the hospital following discharge D. If he is in the hospital following discharge
*A. If s/he submits written application within 90 days of discharge from active duty* B. If s/he submits written application within 30 days of discharge from active duty C. If s/he is not in the hospital following discharge D. If he is in the hospital following discharge
All LTC policies in AZ must offer the policyholder which of the following benefit options? A. Inflation protection B. Dividends C. Accelerated death benefits D. Life insurance
*A. Inflation protection* B. Dividends C. Accelerated death benefits D. Life insurance
Insurance companies may use genetic testing: A. Only with an individual's express consent B. At any time during the application process C. To determine premium rates D. As a means to determine whether to consider the applicant
*A. Only with an individual's express consent* B. At any time during the application process C. To determine premium rates D. As a means to determine whether to consider the applicant
The Director may take any of the following disciplinary actions, except: A. Suspend a license for up to 2 years if the producer is convicted of a misdemeanor B. Order payment of fines of up to $2,500 if the licensee committed an intentional violation of insurance law C. Suspend or revoke a license if the licensee forged a client's signature on an application D. Suspend a license if the producer provided incorrect incomplete info on a license application
*A. Suspend a license for up to 2 years if the producer is convicted of a misdemeanor* B. Order payment of fines of up to $2,500 if the licensee committed an intentional violation of insurance law C. Suspend or revoke a license if the licensee forged a client's signature on an application D. Suspend a license if the producer provided incorrect incomplete info on a license application
For cause, the Director of Insurance may suspend, revoke, or refuse renewal of a producer license for up to __ months. A. 18 B. 24 C. 36 D. 12
A. 18 B. 24 C. 36 *D. 12*
Disregarding household income requirements, which of the following persons is NOT eligible for Medicaid (AHCCCS) in AZ? A. An eligible pregnant woman B. A 4 year old child C. A 21-year old college student D. A woman under age 65 who requires treatment for breast cancer
A. An eligible pregnant woman B. A 4 year old child *C. A 21-year old college student* D. A woman under age 65 who requires treatment for breast cancer
All LTC policies in AZ must offer the policyholder which of the following benefit options? A. Life insurance B. Inflation protection C. Dividends D. Accelerated death benefits
A. Life insurance *B. Inflation protection* C. Dividends D. Accelerated death benefits
Which statement about insurance info and privacy protection is TRUE? A. Personal info may be disclosed over the telephone at any time B. An insurer may not investigate criminal or fraudulent activity C. Personal info may be given to a third party at any time D. An insurer must provide written privacy protection disclosures
A. Personal info may be disclosed over the telephone at any time B. An insurer may not investigate criminal or fraudulent activity C. Personal info may be given to a third party at any time *D. An insurer must provide written privacy protection disclosures*
Which of the following acts is a violation of the CAN-SPAM Act? A. Sending a personal email to 100 people using a phony email address B. Using one's work computer to send a nasty email to a commercial client C. Using one's own personal computer to send multiple emails that contain false information D. Sending a commercial email to 100 insurance prospects with a phony email address and sender name
A. Sending a personal email to 100 people using a phony email address B. Using one's work computer to send a nasty email to a commercial client C. Using one's own personal computer to send multiple emails that contain false information *D. Sending a commercial email to 100 insurance prospects with a phony email address and sender name*
A temporary license may be issued to a designated individual for all of the following reasons, except: A. The disability of an individual licensed on behalf of a business entity B. A resident license applicant is unable to pass the license exam C. The death of a licensed producer for the purpose of selling the business D. An insurance producer enters active in the Armed Forces
A. The disability of an individual licensed on behalf of a business entity *B. A resident license applicant is unable to pass the license exam* C. The death of a licensed producer for the purpose of selling the business D. An insurance producer enters active in the Armed Forces
For AZ health plans, all of the following eligibility requirements apply to children, except: A. There is no requirement of approval for claims by a noncustodial parent B. Noncustodial parents are able to insure their children C. Children, even if born out of wedlock, must be covered D. Coverage only extends to newly born children of the insured
A. There is no requirement of approval for claims by a noncustodial parent B. Noncustodial parents are able to insure their children C. Children, even if born out of wedlock, must be covered *D. Coverage only extends to newly born children of the insured*
Marketing standards prohibit all of the following practices with respect to LTC insurance, except: A. Twisting B. Misrepresentation C. Advertising D. Using high pressure sales tactics
A. Twisting B. Misrepresentation *C. Advertising* D. Using high pressure sales tactics
Which of the following groups is NOT eligible for group disability insurance? A. 6 businesses that joined together to obtain insurance B. A labor union C. A trade association D. A group of 3 businesses in the same industry
*A. 6 businesses that joined together to obtain insurance* B. A labor union C. A trade association D. A group of 3 businesses in the same industry
In order for a business entity to obtain a producer license, it must comply with which of the following requirements? A. Ensure that all EEs acting producers are licensed as producers B. Designated a license compliance officer C. Provide the name and address of the company's clients D. Only disclose the names of the company's CEO
*A. Ensure that all EEs acting producers are licensed as producers* B. Designated a license compliance officer C. Provide the name and address of the company's clients D. Only disclose the names of the company's CEO
When may an insurance company discriminate based on blindness? A. Never B. When charging premium rates C. At the time of application or insurance D. When cancelling insurance
*A. Never* B. When charging premium rates C. At the time of application or insurance D. When cancelling insurance
Within what time frame must a nonresident producer apply for a resident producer license upon moving to AZ? A. 30 days B. 90 days C. 60 days D. 10 days
A. 30 days *B. 90 days* C. 60 days D. 10 days
Within how many days must a producer notify the Director that the address of his business office has changed? A. 45 B. 30 C. 21 D. 15
A. 45 *B. 30* C. 21 D. 15
Unless a life insurance policy has been surrendered for cash value or placed on extended term, the policy can be reinstated at any time within how many years from premium default? A. 5 B. 4 C. 6 D. 3
A. 5 B. 4 C. 6 *D. 3*
How long must a health insurer maintain files containing the ads it has used? A. 6 months B. 1 year C. 5 years D. 3 years
A. 6 months B. 1 year C. 5 years *D. 3 years*
A small ER has how many EEs? A. Between 1 and 99 B. Between 2 and 20 C. Between 1 and 50 D. Between 2 and 100
A. Between 1 and 99 *B. Between 2 and 20* C. Between 1 and 50 D. Between 2 and 100
A resident licensee: A. Is issued a license without examination B. Must have a residence or principal place of business in this state C. Must hold a resident license in another state D. Cannot hold a nonresident license at the same time
A. Is issued a license without examination *B. Must have a residence or principal place of business in this state* C. Must hold a resident license in another state D. Cannot hold a nonresident license at the same time
Which of the following statements about life insurance policy loans is TRUE? A. Policy loans are the same thing as accelerated death benefits B. Policy loans must be provided without interest C. Policy loans are not available under term insurance policies D. Policy loans are the same thing as cash surrender value
A. Policy loans are the same thing as accelerated death benefits B. Policy loans must be provided without interest *C. Policy loans are not available under term insurance policies* D. Policy loans are the same thing as cash surrender value
Which of the following statements about life insurance buyer's guides and policy summaries is NOT true? A. They may be provided within 60 days of a direct solicitation B. They must be provided at the time of a direct solicitation C. They must show the generic name of the policy D. They must show all estimated values
*A. They may be provided within 60 days of a direct solicitation* B. They must be provided at the time of a direct solicitation C. They must show the generic name of the policy D. They must show all estimated values
If an enrollee is delinquent on a premium payment for a QHP and is receiving advance payments of the premium tax credit, the QHP issuer must provide: A. A 3 consecutive month grace period, if the enrollee paid at least one full month's premium during the benefit year B. Immediate termination of the plan without notice C. 180 days' notice of discontinuation of the plan D. Notice of delinquency and a 31-day grace period
*A. A 3 consecutive month grace period, if the enrollee paid at least one full month's premium during the benefit year* B. Immediate termination of the plan without notice C. 180 days' notice of discontinuation of the plan D. Notice of delinquency and a 31-day grace period
Telephone solicitation calls under the Telemarketing Sales Rules can be made: A. Between 8 am and 9 pm in the time zone of the customer B. Between the hours of 8 am and 5 pm in the time zone of the solicitor C. Between 8 am and 9 pm in the time zone of the solicitor D. Before 8 am and after 9 pm in the time zone of the customer
*A. Between 8 am and 9 pm in the time zone of the customer* B. Between the hours of 8 am and 5 pm in the time zone of the solicitor C. Between 8 am and 9 pm in the time zone of the solicitor D. Before 8 am and after 9 pm in the time zone of the customer
Which of the following Marketplace Plans pays 60% of the average overall cost of providing Essential Health Benefits for an individual? A. Bronze Plan B. Platinum Plan C. Silver Plan D. Gold Plan
*A. Bronze Plan* B. Platinum Plan C. Silver Plan D. Gold Plan
An insurer or producer may charge fees for services not customarily provided if they file the fee with the Director and meet the following conditions, except: A. The services required are the producer to spend more time than usual explaining coverages B. The services are in addition to those normally performed for insureds C. The service charges are reasonable with respect to the cost of the service performed D. The specific services and their related charges are disclosed in writing to the insured
*A. The services required are the producer to spend more time than usual explaining coverages* B. The services are in addition to those normally performed for insureds C. The service charges are reasonable with respect to the cost of the service performed D. The specific services and their related charges are disclosed in writing to the insured
It is an Unfair Claims Settlement Practice to fail to acknowledge a claim how long after receiving it? A. 5 business days B. 5 calendar days C. 10 business days D. 10 calendar days
A. 5 business days B. 5 calendar days *C. 10 business days* D. 10 calendar days
Which of the following groups is NOT eligible for group disability insurance? A. A labor union B. 6 businesses that joined together to obtain insurance C. A group of three businesses in the same industry D. A trade association
A. A labor union *B. 6 businesses that joined together to obtain insurance* C. A group of three businesses in the same industry D. A trade association
Annuity disclosures must contain all of the following information, except: A. A notice that interest rates may change B. A list of explanation of all fees C. The extended term period D. An explanation about how riders affect the contract
A. A notice that interest rates may change B. A list of explanation of all fees *C. The extended term period* D. An explanation about how riders affect the contract
All of the following are considered LTC Partnership Policy requirements, except: A. A policy sold to an individual who has not attainted age 61 as of the date of purchase must provide compound annual inflation protection B. A policy sold to an individual who has attained age 76 as of the date of purchase must provide compound annual inflation protection C. A producer who markets or offers to sell a LTC Partnership Policy must provide each prospective applicant the Pre-purchase Notice D. An insurer that issues for delivery a LTC Partnership Policy must attach the Post-purchase Notice
A. A policy sold to an individual who has not attainted age 61 as of the date of purchase must provide compound annual inflation protection *B. A policy sold to an individual who has attained age 76 as of the date of purchase must provide compound annual inflation protection* C. A producer who markets or offers to sell a LTC Partnership Policy must provide each prospective applicant the Pre-purchase Notice D. An insurer that issues for delivery a LTC Partnership Policy must attach the Post-purchase Notice
A group health or disability plan must disclose which of the following? A. All contractual provisions B. Whether a doctor may only prescribe drugs from a list C. The cost of every enrollee's individual premium D. A separate roster of all specialist physicians in the state
A. All contractual provisions *B. Whether a doctor may only prescribe drugs from a list* C. The cost of every enrollee's individual premium D. A separate roster of all specialist physicians in the state
Which of the following statements regarding using an assumed business name is NOT correct? A. An assumed business name may not misleading deceptive B. A producer may use an assumed name at any time C. The Director may deny the use of an assumed name D. A trade name must be lawfully registered
A. An assumed business name may not misleading deceptive *B. A producer may use an assumed name at any time* C. The Director may deny the use of an assumed name D. A trade name must be lawfully registered
Which statement about insurance information and privacy protection is TRUE? A. An insurer may not investigate criminal or fraudulent activity B. Personal information may be disclosed over the telephone at any time C. Personal information may be given to a third party at any time D. An insurer must provide written protection disclosures
A. An insurer may not investigate criminal or fraudulent activity B. Personal information may be disclosed over the telephone at any time C. Personal information may be given to a third party at any time *D. An insurer must provide written protection disclosures*
Which of the following statements is true of health insurance advertisements? A. Copies of ads must be maintained in the insurer's file for 1 year B. An ad may state the plan offers "complete and comprehensive converage" C. Testimonials must represent the current opinion of the author D. An ad may disparage a competitor
A. Copies of ads must be maintained in the insurer's file for 1 year B. An ad may state the plan offers "complete and comprehensive coverage" *C. Testimonials must represent the current opinion of the author* D. An ad may disparage a competitor
Which of the following is not a requirement that a business entity must comply with in order to become licensed? A. Ensure that EEs who act as a producer are licensed B. Ensure that all officers, directors, and partners are licensed C. Identify a licensed producer who will be responsible for compliance D. Provide the Director names of all EEs
A. Ensure that EEs who act as a producer are licensed *B. Ensure that all officers, directors, and partners are licensed* C. Identify a licensed producer who will be responsible for compliance D. Provide the Director names of all EEs
Limited benefits, such as dental and vision care for adults, that do not apply to individual health insurance as regulated by the ACA are considered: A. Essential Health Benefits B. Minimum Essential Coverage C. Excepted Benefits D. Qualified Health Plan Benefits
A. Essential Health Benefits B. Minimum Essential Coverage *C. Excepted Benefits* D. Qualified Health Plan Benefits
Which of the following is NOT a prohibited insurance practice? A. Falsely portraying a policy's dividends B. Offering a client season tickets to the Dallas Cowboys in exchange for buying insurance C. Giving a client a $5 gift card as a thank you for buying an insurance policy D. Denying insurance because a person is blind
A. Falsely portraying a policy's dividends B. Offering a client season tickets to the Dallas Cowboys in exchange for buying insurance *C. Giving a client a $5 gift card as a thank you for buying an insurance policy* D. Denying insurance because a person is blind
Life insurance policies are contestable for how long? A. For 10 years after the issue date B. As long as the contract is in force C. Until the insured reaches age 40 D. For 2 years after the issue date
A. For 10 years after the issue date B. As long as the contract is in force C. Until the insured reaches age 40 *D. For 2 years after the issue date*
Which of the following acts constitutes an unfair claims settlement practice? A. Frequently denying claims based on facts and law B. Routinely settling claims without conducting an investigation C. Often settling claims for amounts higher than the claimant expects D. Regularly denying claims when insured is not liable
A. Frequently denying claims based on facts and law *B. Routinely settling claims without conducting an investigation* C. Often settling claims for amounts higher than the claimant expects D. Regularly denying claims when insured is not liable
Which of the following is included in the Telemarketing Sales Rule? A. Immediately disconnect callers who ask not to be called again B. Suggest payment guidelines for the sale of certain services C. Set limits on the time a telemarketer can call customers D. Require the telemarketer have a script to read to consumers
A. Immediately disconnect callers who ask not to be called again B. Suggest payment guidelines for the sale of certain services *C. Set limits on the time a telemarketer can call customers* D. Require the telemarketer have a script to read to consumers
All of the following statements about obtaining a nonresident license are correct, except: A. It is issued to a person whose home state is not Arizona B. The applicant's resident license must a valid and in good standing C. An examination is not required as long as the resident state is reciprocal D. The application fees are waived for nonresident licenses
A. It is issued to a person whose home state is not Arizona B. The applicant's resident license must a valid and in good standing C. An examination is not required as long as the resident state is reciprocal *D. The application fees are waived for nonresident licenses*
Which of the following statements is not true about producer licensing? A. Only a licensed insurance producer can issue policies through vending machines B. Operators of self-storage facilities can be issued a license to offer and sell insurance in connection with the rental of self-storage space C. A licensed insurance producer who assists in adjusting losses for his customers is exempt from requiring an adjuster's license D. A licensed insurance producer maintains an office in AZ and can be licensed as a Mexican insurance surplus lines broker
A. Only a licensed insurance producer can issue policies through vending machines B. Operators of self-storage facilities can be issued a license to offer and sell insurance in connection with the rental of self-storage space *C. A licensed insurance producer who assists in adjusting losses for his customers is exempt from requiring an adjuster's license* D. A licensed insurance producer maintains an office in AZ and can be licensed as a Mexican insurance surplus lines broker
A producer may share commissions with another producer: A. Only if they represent the same insurer B. Only if they are both licensed in the same line of insurance C. After permission is granted by the insured D. As long as there is a contract between the producers
A. Only if they represent the same insurer *B. Only if they are both licensed in the same line of insurance* C. After permission is granted by the insured D. As long as there is a contract between the producers
A producer may share commissions with another producer: A. Only if they represent the same insurer B. As long as there is a contract between the producers C. Only if they are both licensed in the same line of insurance D. After permission is granted by the insured
A. Only if they represent the same insurer B. As long as there is a contract between the producers *C. Only if they are both licensed in the same line of insurance* D. After permission is granted by the insured
Which of the following violates the Gramm-Leach-Bliley Act? A. Providing an annual disclosure notice B. Disclosing a customer's nonpublic personal information without consent C. Refusing to disclose a customer's nonpublic personal information to non-affiliated third parties D. Allowing customers to opt-out of the sharing of their nonpublic personal information
A. Providing an annual disclosure notice *B. Disclosing a customer's nonpublic personal information without consent* C. Refusing to disclose a customer's nonpublic personal information to non-affiliated third parties D. Allowing customers to opt-out of the sharing of their nonpublic personal information
Which of the following statements does NOT apply to life insurance nonforfeiture options in AZ? A. Reduced paid-up options must be made available within 60 days of premium default B. An extended term option must be made available, upon request, within 60 days of premium default C. Reduced paid-up options must be made available within 30 days of premium default D. A cash surrender option must be provided on policies that have been in force for at least 3 years
A. Reduced paid-up options must be made available within 60 days of premium default B. An extended term option must be made available, upon request, within 60 days of premium default *C. Reduced paid-up options must be made available within 30 days of premium default* D. A cash surrender option must be provided on policies that have been in force for at least 3 years
An annuity may be reinstated: A. So long as interest at 10% is charged for the period being reinstated B. Within 2 years of the lapse date, so long as evidence of insurability is provided C. Within 1 year of the lapse date D. Never
A. So long as interest at 10% is charged for the period being reinstated B. Within 2 years of the lapse date, so long as evidence of insurability is provided *C. Within 1 year of the lapse date* D. Never