Chapter Exam - Arkansas Laws and Rules

When an insurance company fails to provide reasonable explanations for a denial of a claim, this is called a(n)

unfair claim settlement

a producer's license CANNOT be revoked without

a hearing given to the producer

an insurer is best described as

any person, corporation, or society that writes insurance contracts

example of replacement is

cancelling term life to buy whole life

The beneficiary of any life insurance policy or annuity contract is protected from the ___ of the insured

creditors

During hearing proceedings, if a person files a waiver of immunity or privilege, and the testimony is produced before court or jury, the person loses their ___

immunity

A producer who sells insurance in Arkansas but resides in another state is called a(n)

nonresident producer

An insurance producer must notify the Commissioner within how many days of conviction of a crime

thirty (30)

a producer who sells insurance in Arkansas but resides in another state is called a(n)

Nonresident producer

which of the following basic is a producer's fiduciary responsibility?

collecting premiums and paying them to the insurance company

What is arkansas REQUIRED grace period for a life insurance contract?

31 days

temporary producer license may be issued for a period not to exceed

90 days

Anyone who willfully violates a cease and desist order from the Commissioner is subject to a fine of up to

$1,000

commissioner must give a min of how many days notice of a disciplinary hearing?

10 days

the standard free-look (right to examine) period in arkansas is

10 days

renewal period for a producer's license is a

2 year term

All insurers must be members of what organization, as a condition of their authority to transact insurance in Arkansas

Arkansas life and disability insurance guaranty association

which of the following constitutes grounds for suspending an Arkansas producer's license

Felony conviction

According to Arkansas Law, commissions may be paid to:

Licensed and duly appointed producers

What is a certificate of authority?

The license required for an insurer to conduct business in the state

the following are considered deceptive and unfair practices, and are prohibited, EXCEPT - referring to an insurance premium as an investment, deposit, or saving - making any misrepresentation or false, deceptive, or misleading statement - asking probing questions to client to determine which products may be suitable - indicating that cash or loan values are death benefits payable in addition to the insurance policy's face amount

asking probing question to client to determine which products may be suitable

which of the following is not information found in a life insurance buyer's guide?

how to take legal action against an insurance company

AR insurance department may take each of the follower action except - issue cease and desist order - impose fines - revoke license - incarceration

incarceration

What MUST the company do prior to conducting an HIV related test

obtain a written consent from the proposed insured

A life insurance policy becomes incontestable after it has been in force for

2 years

Lapsed individual life insurance may be reinstated within?

3 years

A licensed Producer must report any administrative action taken against the licensee in another jurisdiction or by another agency department in Pennsylvania within how many days of the final disposition?

30 days

Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy without needing to prove insurability?

31 days

The standard grace period for a life insurance policy sold in Arkansas is

31 days

the commissioner must examine the financial affairs of each admitted insurer operating in Arkansas at least once every how many years?

5

an insured may continue coverage under a group plan during their total disability if the premiums are paid for how long?

6 months

save on premiums, a life insurance policy can be backdated up to:

6 months

a producer who knowingly submits a FALSE statement in support of a claim may be found guilty of:

Fraud

which is the best way to describe controlled business

Policies written on people that a producer has influences over

A producer may begin to solicit insurance ONLY when

appointed by an insurer

how long must the commissioner maintain a complete record for every licensee in AR for?

as long as he deems necessary

any person who knowingly sell insurance products with a person or entity that is not licensed in Arkansas is guilty of

class D felony

making a statement that is false or maliciously critical of the financial condition of an insurer is known as

defamation

commissioner is empowered to

enforce law relating to insurance

a Fraternal benefit society has each of the following characteristics EXCEPT - incorporated - operates on a lodge system - exists for profit - exists for the benefits of its members

exist for profit

a foreign insurance company is defined as one that is:

formed under the laws of a state other than Arkansas

Maria the insurance producer completes a sale by collecting the required signatures on the applications and obtaining the initial premium. Afterwards, she deposits the checks into her personal checking account. Maria has committed what crime?

fraud

no one is allowed to act as a producer for any insurance company in Arkansas that:

is unauthorized to do business in Arkansas

The Arkansas Life and Disability Insurance Guaranty Association assures payment of benefits

liability insurance

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

providing incorrect, mislead, incomplete, or materially, untrue information in the license application is

misrepresentation

if dividends are illustrated, the advertisement MUST state that the dividends are:

not guaranteed

When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT

obtain the beneficiary's signature

suitability is best described as:

obtaining information from the applicant to determine whether an insurance or annuity product is appropriate

which one of these options is NOT consider false advertising: - publishing misleading information - deceptive data in a brochure - putting a license number on a flyer - announcing untrue facts in a flyer

putting a license number on a flyer

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

rebate

The promise of a discount in premium as an inducement to purchase insurance is an Unfair Trade Practice known as

rebating

a producer who shares commissions with a client may be guilty of

rebating

a producer replaced a client's insurance policy when it was not in the client's best interest. The producer could be found guilty of

twisting

which of the following is NOT a reason for commissioner to deny or refuse a producer license application? - Recently convicted of a felony - Engaged in a fraudulent insurance practices - unintentionally misrepresented a material fact on the application - intentionally violate state insurance laws

unintentionally misrepresented a material fact on the application

When can a producer share commission with another producer?

when the other producer is licensed in the same line of business

law requires that an insurer must notify the commissioner of a producer appointment termination

within 30 day s of termination