Ethics

why is strict regulation of an insurance producer's conduct necessary for the public welfare

it is possible for sales persons to take advantage of the public's lack of knowledge about insurance

karl works with each of his clients to to determine which type of policy would be best for the individual. as a result, he sells a wide variety or products

karl is using a needs selling methodology

which of the following is most likely to provide the most specific definitions of minimum standards of behavior

law

replacement of one policy for another is a reasonable method for marketing

life insurance

a false statement of a fact is

misrepresentation

any written or oral statement that does not accurately describe a policy's features, benefits or coverage is considered

misrepresentation

over the last 30 years, insurance producers have become

more complex

the unauthorized practice of law is most likely to occur in the instance related activity of

needs analysis

the unauthorized practice of law is most likely to occur to the instance related activity of

needs analysis

an insurance producer must be dedicated to the principles of

needs selling

an unauthorized insurer is one that is

not licensed in a given state

when replacement of a life insurance policy is involved, an agent must do all of the following except

notify the existing insurer of the replacement

when conducting examination of insurers, state insurance departments are looking for

patterns of behavior

which of the following is generally not a qualification to becoming an insurance producer

pay a fee to the insurer for which the individual will work

any inducement on the sale of insurance that is not specified in the insurance contract is

rebating

chuck tells a prospect that he will return 10% of the prospect's first year premium if he buys it from Chuck, this is an example of

rebating

which of the following occurs if the buyer of an insurance policy receives any part of the producer's commission or anything else of significant value as an inducement to purchase a policy

rebating

an agent proclaims " our dividends are guaranteed and I will give you 1/2 of my commission if you sign up now

rebating and misrepresentation

all of the following are considered unfair trade practices except

replacement

all of the following are considered unfair trade practices, except

replacement

which of the following would not be an appropriate requirement for obtaining a loan

requiring that the applicant obtain property insurance from a specific producer to cover the home being mortgaged

which one of the following penalties is not one of the options the insurance commissioner can use to punish an insurer engaged in unethical behavior

revoke all policies issued by the insurer

when an insurance producer, guardian or trustee is expected to maintain a standard of conduct that is higher then the standard expected from most people

she is known as a fiduciary

which of the following was created to pay for the costs associated with insolvent insurers

state guarantee association

which of the following was created to pay the costs associated with insolvent insurers

state guarantee association

as an ethical model, the insurer will establish certain employee standards or guidelines for transacting business, includes all but

supporting local political organizations

under an agency agreement, the principal is often bound by

the actions of the agent

with regard to the elements of agency law, all of the following are correct except

the acts of the principal are binding on the agent

a code of ethics that is most likely to make promises to the public served by the professional is covered by

the code

which of the following is not required under the NAIC life insurance policy illustration regulation model

the illustration must be signed and dated by the applicant or policy owner certifying which of the non-guaranteed elements of the policy the producer has guaranteed

ethical conduct on the part of insurance producers is not irrelevant to

the insurance industry

an insurance agent acts on behalf of

the insurer

which one of the following NAIC regulations set forth marketing and disclosure standards for producer's who solicit life insurance sales

the life insurance solicitation and life insurance replacement regulation

which of the following NAIC regulations set forth marketing and disclosure standards for producers who solicit life insurance sales

the life insurance solicitation regulation and life insurance replacement regulation

an insurers ethical responsibility towards its field force includes all but

the number of sales and commission earned

an insurance producer must be dedicated to

the principles of needs selling

the specific disclosure requirements that have been implemented with regard to medicare supplemental policies include all but

the producers signature on all policy riders and endorsements

the number of hours of continuing education a producer must have to keep their license on an ongoing basis is regulated by

the state insurance department

which of the following is an objective of the NAIC

to assist state officials in administering their state laws

when investigating violations of insurance law, the commissioner has all of the following authority except

to imprison offenders

all of the following are objectives of the NAIC except

to preserve federal regulation of the insurance business

inducing a person to lapse, surrender or terminate insurance for the purpose of purchasing a similar policy

twisting

failure to investigate and settle claims is considered a violation of

unfair claims marketing practices

which of the following ruled that insurance should be regulated at the federal level

united states vs southeastern underwriters association

the training of producers and sales managers is an important responsibility of the

insurer

which of the following characteristics has the most influence on a producer's long term success in selling

integrity

which of the following characteristics has the most influence on a producer's long term success in selling insurance policies

integrity

an unauthorized insurer is one that

is not licensed in a given state

an insurer's compliance with unfair claim practices law

is one way for the company to lead by example

financial ratings

- am best - weiss - s & p

an agents fiduciary responsibility to the client includes

- continued professional education - thorough product knowledge - ethical conduct

violations of state advertising laws

- omission of material - the guarantee of policy dividends - inaccurate use of statistical data

elements of personal code of ethics

- sense of purpose - attitude - integrity

guides to insurance companies financial integrity and managerial and operational integrity

- standard & poor - am best company - moody's investment services

which of the following is a successor of IMSA

CEFLI

the goal of which of the following is to ensure that illustrations do not mislead life insurance purchasers and to make illustrations more understandable

NAIC life insurance policy illustration regulation model

which of the following organizations developed illustration questionnaires to help producers understand the assumptions that were used to create and design sales

SFSP

which of the following organizations developed illustration questionnaires to help producers understand the assumptions that were used to design and create sales

SFSP

insurance producers often act for insurance companies in ways that are expected., but may not have been specified in a written agency agreement, the type of authority described here is

implied authority

which of the following is not an ethical advertising practice

implying that a insurance company has been approved by an individual that has not endorsed the policy

during the application process, what party does the producer represent

insurer

ethics is best described as

a personal code on how to act with fellow members of a group or community

which of the following statements regarding agency is correct

an agent may create a contract on the principal's behalf

which of the following statements regarding agency is correct

an agent may create a contract on the principals behalf

a report that consists of information gathered in personal interviews is known as

an investigative report

professionals that behave unethically erode the public trust

and damage the entire industry

industrial insurance is generally less complex

and easier to understand then more recent types of insurance

insurance producers may act in ways that exceed the authority the insurer intended for them to have. But if client's have no way of knowing that and rely on the producers representations, the insurer may be bound by the producer's actions. this type of agency authority described here is

apparent authority

proper training of producers generally begins

before the producer is hired and continues throughout their career

when new insurance is purchased, which of the following would not be considered an act of replacement

borrowing 10% of the cash value to pay a new premium

the insurance industry has had a few inherent conflicts of interest

built into the way business is conducted

mixing personal funds with premiums collected is

commingling

insurance producers are generally paid

commission

most insurers will prohibit employees from serving as director in any outside business. the reason for this is that the insurer is attempting to avoid

conflicts of interest

which of the following is not one of the ways insurers have been maintaining the positive ethics that the insurance industry was once known for

consistently monitoring their competitors advertising policies

what should you do when you encounter a situation with a client that you do not feel you can handle competently

consult with experts

a deliberate attempt to discredit the good name and reputation of another insurer by means of false, malicious or derogatory statements is

defamation

malicious statements designed to injure the reputation of another insurer best defines

defamation

oral or written statements that are false, maliciously critical or derogatory in regard to the financial condition of an insurer are generally known as

defamation

when a producer spreads a false story that damages a competing producer's reputation, the offense is called

defamation

the chief responsibility of the insurance department is to

enforce insurance laws

in the past 35 years, insurance products have shifted from more traditional products to

equity based life insurance products

the best way for a professional to avoid costly errors is to

follow the code of ethics

money entrusted to producers by insured must be used for paying premiums to the insurer and

for no other reason

an insurer's reputation is one of their

greatest strengths

insurance producers often act for an insurance company in ways that are expected, but may not have been specified in a written agency agreement. the type of agency authority described here is

implied authority