Chapter exam Florida laws and rules
The life and health insurance guaranty association is funded by
"Assessments on member companies"
A life policy loan in Florida cannot charge a fixed rate of interest higher than?
10%
A life policy loan in Florida cannot charged a fixed rate of interest higher than?
10%
What percentage of eligible persons must buy a policy cover in a Noncontributory group
100%
The minimum age at which a person can sign a life insurance application is
15 years
A person is required to be at least how old before he or she is license as an agent in most states?
18
And insurance company can contest a Life Insurance contract due to application fried within
2 years
In Florida most life insurance policies have a contestability period of
2 years
Insurance agents must notify the commissioner (or Director) of a change of home address within a maximum of how many days?
30
The conversion period For a terminated employee to convert group life coverage to an individual plan is
31 days
An individual covered under a group life insurance policies considered to be
A certificate holder
Which of the following employers test does a professional employer organization normally handle
Administration task
J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken?
All of the employees must be notified of the cancellation either by the insurance company or through J
Which of the following situations does NOT apply to the Florida replacement rule
An existing policyholder purchases an additional policy from the same insurer
An insurance broker is a person who represents:
An insured or prospective insured
The coordination of benefits (COB) provision exists in order to
Avoid duplication of benefit payments
Is fair to discriminate in the amount of benefits for life and death Policies
Between individuals of different classes
A variable life insurance agent must be license and appointed as a life and variable contract Agent as well as
Broker dealer
According to Florida's rules on disclosures a Life Insurance Applicant is Expected to be provided with
Buyers guide and policy summary
The Bureau of Unclaimed Property is overseen by the
Chief Financial Officer
As a condition for a loan a bank requires the borrower to purchase Credit insurance from a specific company what is the bank guilty of?
Coercion
The 14 day free look period for life insurance policy begins at the
Date of delivery
Which two entities regulate variable annuities?
Department of Financial Services; and Securities Exchange Commission
Individual life insurance proceeds are exempt from creditors claims when they are payable to any of the following entities except the insured's
Estate
An insurance company may be judged guilty of false advertising if
Exaggerates its dividends in a newspaper advertisement
All of the following provisions must be included in life insurance policies except
Extended term
Which of the following is an unfair claims practice?
Failing to effectuate prompt, fair, and equitable settlements of claims
And insurance company that promises lower insurance rates than any other company in the country may be charged with
False advertising
The act of an insurance company publishing misleading information about his policy provisions is called
False advertising
T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as
Fiduciary responsibility
Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called
Fraternal life insurance organizations
Which of the following employees may not be excluded from a group life plan
Full-time employees after the probationary period
Which of the following is a standard provision of the conversion privileges in a group life policy
Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis
And which policy is exempt from replacement regulations
Group Life policy
Which of the following situations are not subject to Florida life insurance laws?
Insurance companies' day-to-day operations
Which of the following best describes Credit Life Insurance
Insurance issued on a debtor to cover outstanding balances on installment loans
Which of the following statements is correct about the replacement of one insurance policy with another
It is strictly regulated and requires full disclosure by both the producer and the replacing insurance company
Who is a mutual insurance company owned by?
Its policyholders
The fund that assures policyholders payment of benefits on Life and Health policies, if the company is insolvent at the time of the claim, is called the
Life and Health Insurance Guaranty Association
The rules and regulations of the life and health insurance guaranty association apply to
Life and Health policies issued by companies authorized in that particular state
If an agent would like to sell variable annuities which state examination was the agent passed?
Life and variable contracts
An agent who tells a client that dividends are guaranteed may be guilty of
Misrepresentation
Convincing a prospective insured to buy an insurance policy based on exaggeration is called
Misrepresentation
What are adjustable rates for life policy loans in Florida based on?
Moody's corporate bond index
When an existing life insurance policy is being re-issued with a reduction in cash value the agent must sign the
Notice regarding replacement of the life insurance or annuity
K is an agent who made an improper sale of annuity to a client. Which of the following corrective actions could the department of financial services likely order K to take?
Pay monetary restitution to the client
If at the time of an insured's death, the insurance company discovers that the insured's age was missed stated on the application for life insurance company will most likely
Pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?
Policy was returned within the free-look period, premium will be fully refunded
I know insurer shell refused to ensure an individual because of
Race
All these are considered sources of underwriting information about an applicant except
Rating Services
Group life policies MUST include all of the following provisions EXCEPT
Right to Loan Proceeds
Which of these is not a legal entity for selling life insurance in Florida
Risk management advisers
Which of the following is not considered rebating
Sharing commission with an agent licensed in the same line of business
Which action by an insurance agent is considered rebating
Splitting commissions with a policyholder who has purchased additional coverage
If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in that particular state, which of the following would be liable?
The agent and the company
According to Florida's life insurance replacement laws a policyowner Must be provided with a written comparison and summary statement when it is presented by
The policy owner
The replacement of life insurance and annuity regulation is designed to protect the interests of
The policy owner
Which of the following parties must provide an insured with proper disclosure concerning the replacement of an insurance company
The producer/agent who sells the new insurance policy
Which of the following statements is correct if an insured converts his life policy to paid up insurance and buys new insurance
The transaction is considered replacement
An example of an unfair claims settlement practices is
Turn it down a claim without providing the basis of denial
An agent who makes misleading statements that lead to the termination of an existing insurance policy so that the new policy with another insured can be taken out has committed
Twisting
A life insurance policyowner may sell their policy to a(n) ___ In order to receive a percentage of the policies face value
Viatical settlement provider
The insurer must provide a prospective buyer with
a Buyer's Guide and Policy Summaryp
Replacement is involved in all of the following situations except when
a Term policy is converted to a permanent plan with the same insurance company
A stock life insurance company that issues both participating and nonparticipating policies is doing business on
a mixed plan
All of the following provisions are required in a group life policy except
an Accidental Death and Dismemberment provision
An example of sliding would be
charging for an additional product without the applicant's consent
_____ can be defined as "using the contract values of an existing policy to purchase a new policy with an existing insurer".
churning
Which of the following areas of state regulation is not protected by the savings clause in ERISA
commerce
The purpose of the Guaranty Fund is to
ensure that claims filed against insolvent insurance companies will be paid
The life insurance and annuity replacement regulation defines replacement as
exchanging an existing policy for a new policy
The financial services commission may hold hearings
for any reason deemed necessary
M completes an application for health insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT
free-look period has expired
According to Florida law, which of the following information does not need to be obtained by an agent recommending an annuity purchase?
marital status
Which type of insurance company allows their policy owners to elect the governing body
mutual
In Florida, agents are allowed to engage in rebating if
offered to all insureds in the same actuarial class
An example of rebating would be
offering a client something of value not stated in the contract in exchange for their business
An example of unfair discrimination would be
offering different terms of coverage for different policyowners having the same risk classification
Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract
once each year
Replacement regulations apply to which of the following types of contracts
ordinary life
The fundamental reason for regulation of insurance is to
protect consumers
According to Florida law, group life insurance conversion privileges must NOT
require evidence of insurability
A stock insurance company is owned by it's
stockholders
When replacing or exchanging an annuity, the agent must disclose to the annuitant
the possible tax ramifications as a result of the transaction
T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert
to an individual policy upon employment termination
A written agreement to provide life insurance policy holder immediate cash in Exchange for the sale and transfer of a life insurance policy is
viatical settlement
Which of the following is not a consequence for placing business with an unauthorized insurer?
First degree misdemeanor
In Florida, when agents Recommend changes being made for existing coverage the agent must follow establish procedures. The name of this rule is called the
Florida replacement rule
If an insurance company is organized under the laws of New Jersey and license to do business here it is considered which of the following in Texas?
Foreign company
Which of the following employees may NOT be excluded from a group life plan?
Full-time employees after the probationary period
An insurance company may not reject a prospective insured's Insurance application on the basis of which of the following factors?
Gender
What would be an accurate definition of controlled business
Insurance business that is written on the agent's own life, property, or interests
The commissioner (or Director) of insurance may suspend, revoke, or refused to renew the license of an agent who
Is found guilty of misrepresentation or fraud in obtaining the license
In Florida, the element of an insurance transaction would be
Issuing an insurance contract
According to Florida law which of the following statements accurately describes an admitted mail order insurance Company?
It may solicit insurance business by mail without the assistance of a licensed agent
And insurance company may compensate all of the following people except
License agent not appointed by the company
What is the main reason for regulating the insurance industry?
Maintain the solvency of insurance companies
During the course of insurance transaction if the agent makes a false or incomplete statement he or she could be found guilty of
Misrepresentation
Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?
Misrepresentation
Which unfair trade practice involves an agent suggesting that an insurance policy is like a share of stock?
Misrepresentation
Which unfair trade practice involves making a false statement on an insurance application in order to receive money from an insurer
Misrepresentation
Which of the following professional organizations has its code of ethics incorporated into the Florida law
National Association of Insurance and Financial Advisors (NAIFA)
Which of the following is not an unfair claim statement practice
Needing written document claim details
J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?
coercion
The policy summary contains specific information on all of the following, EXCEPT:
commission
The following acts are examples of unfair methods of competition and deceptive practices in the business of insurance EXCEPT the use of
comparisons showing that a policy has higher benefits
The commissioner (or Director) of insurance has the power to
conduct examinations of insurance companies
Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as
defamation
In Florida, an insurer domiciled and incorporated in this state is called a(n)
domestic company
The commissioner (or Director) of insurance is empowered to
enforce state laws relating to insurance
Agents that have been license for less than six years must complete ___ Hours of continuing education every two years
24 hours
Within how many days must a licensee notify the department of financial services of a change in address?
30 days
A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination?
31 days
A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agents license will terminate if a certain period of time lapses without being appointed how long is this period of time?
48 months
Go to requires an insurance agent must complete _____ hours of continuing education on the subject of law and ethics every two years
5 hours
What is the maximum percentage of controlled business an agent may produce?
50%
According to Florida law an additional lapse notice must be issued after the standard grace period has expired for policy owners age
64 years or older
An insurance company that is incorporated in New Hampshire and does business in Florida is defined as
A foreign insurer
Which of the following individuals must be license does an agent?
A person who places insurance on behalf of anyone seeking insurance.
All of the following entries are classified under the four principal areas of Florida insurance law except
A. An agents commission B. Policyowner rights C. Policy provisions D. An agents licensing requirements A. an agents commission
All of the following constitute an unfair trade practice understate law EXCEPT
Attempting to replace coverage written by another agent within one year of its issue date- this is ok
Which of the following actions by an insurance company is an unfair claims practice?
Attempting to settle claims on the basis of an application that was altered without the consent of the insured
Which of the following acts is an agent NOT authorized to do on behalf of an insurer
Authorize claim payments
All of the following are Nonforfeiture Options except
Automatic Premium Loan Option
Defamation is BEST described as publishing or circulating which of the following types of information?
Brochures falsely criticizing the financial condition of an insurance company
Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?
Buyer's Guide
Which of the following unfair trade practices involves an agent who makes malicious statements about another person's financial condition
Defamation
Which of the following actions by an insurance company is considered an unfair claims settlement practices?
Denying an insurance claim without indicating the basis of denial under the policy
Before approving an application for a business entity acting as an agent the commissioner (or Director) must find that the business entity has
Designate an agent to be responsible for compliance with insurance laws
The insurance commissioner (or Director) may exam in the records of an insurance company in order to
Determine the sovereignty of the company
An insurance company incorporated under the laws of the state in which it home office is located is called in ___ Company
Domestic
Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy?
Notice to existing and replacing insurers of intention to replace
Which entity approves the insurance policy forms used in Florida
Office of Insurance Regulation (OIR)
Which department oversees 'Market Conduct Examinations' in Florida?
Office of Insurance Regulation. OIR
Which of the following types of insured's are life insurance companies allowed to make policy rate discriminations against
People that smoke
Which action could result in a hearing being ordered by the department of financial services?
Performing insurance transactions without a license
Certificate of authority does which of the following
Permits an insurance company to transact business in that state
Which of the following statements regarding a nonresident insurance agent is CORRECT?
The agent must hold a similar license in their state of residence
Which of the following factors is not considered when the department of financial services determines if an agents home is an insurance agency?
The amount of premium collected at this location
According to state insurance law while transacting insurance business, agents act as representatives of
The insurer
W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim?
The proceeds would be reduced based on whatever the premium would have been if purchased at age 59
In order for domestic foreign or alien insurance company to conduct business it be authorized by whom
The state in where they are conducting business
State insurance laws specifically allow the commissioner (or Director) to issue a temporary license to which of the following individuals?
The surviving spouse of a deceased agent - this is to allow the surviving spouse time to take over or dissolve their deceased spouse's insurance business
Inducing are attempting to induce any insured person through misrepresentation to lapse forfeit or surrender insurance is
Twisting
Which of the following are an example of unfair trade practice?
Twisting and churning sliding coercion misrepresentation defamation fraud Unfair discrimination control business rebating false advertising unfair claims settlement
Which of the following is considered an accurate statement of an unfair trade practice?
Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company
A foreign insurance company is one that is Incorporated
Under the laws of another state
Which of the following activities will NOT result in the suspension of an agents license?
Working for a foreign insurer
An agent license can be suspended or revoked by
Writing primarily controlled business
Deceptive advertising is considered to be
a form of misrepresentation
All the following will result in the suspension of an agents license EXCEPT
acting with fiduciary responsibility
Insurance companies that are organized in countries outside of the United States are referred to as
alien
An example of an unfair trade practice is
an agent making a material misrepresentation to the insured
An agent may legally share commissions only with
another agent who is licensed in the same line of insurance
One of the state of purposes of life and health insurance guaranty association is
assist in the prevention of insurer insolvencies
Which of the following is an example of rebating
returning a portion of a premium as inducement to purchase insurance
All the following are defined as doing insurance business except
selling mutual funds
