Insurance Regulation

Which of the following is an example of an unfair claims settlement practice? AUsing arbitration when the insured and insurer cannot reach agreement BFailure to promptly settle a claim when liability has been clearly established CDenying coverage after a reasonable investigation has been conducted DMaking claims payments which clearly indicate under which coverage payment has been made

B Failure to promptly settle a claim when liability has been clearly established

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? AExaggerating the benefits provided in the policy BStating that the competitors will arbitrarily increase their premiums each year CMaking comparisons between different policies DStating that the insurance policy is a share of stock

C Making comparisons between different policies

Agents selling which of the following types of insurance are exempt from the state licensing requirement? AWhole life insurance BHealth insurance CTravel insurance DVariable products

C Travel insurance

Question 10 of 15 A temporary agent's license is valid for what time period? A12 months B90 days C30 days D15 months

D 15 months

Which of the following is NOT required to be appointed by an insurer? AAgent BNonresident producer CProducer who sells only life insurance DBroker

D Broker

The Commissioner discovers that a certain insurance company has been using defamation in its advertisements. The Commissioner will most likely issue a(n) AWrit of noncompliance. BArrest warrant. CViolation statement. DCease and desist order.

D Cease and desist order

Insurance companies in Maryland must submit forms to the Insurance Commissioner in duplicate. What is the one exception to this rule? AIf the forms are in a foreign language BIf the Commissioner approved a previous version of the form CIf the form is more than 5 years old DIf the forms are filed electronically

D If the forms are filed electronically

Question 5 of 15 How often must the Commissioner examine domestic insurers? AAnnually BOnce every 2 years COnce every 3 years DOnce every 5 years

D Once every 5 years

Authorized insurer

An insurance company that has received a Certificate of Authority from the Department of Insurance to transact insurance in this state.

A broker requests a hearing with the Commissioner. Within how many days of the request must the hearing be held? A10 B30 C60 D90

B 30

Who do public adjusters represent? AThe state government BInsureds CInsurers DThe federal government

B Insureds

Commission

Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium

Moral turpitude

Conduct that is contrary to community standards of justice, honesty, or good morals

Commissioner

The head of the State Department of Insurance

Inducement

an offer that attempts to influence the other party

Exempt

not subject to a duty or obligation

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? A3 days B5 days C10 days D14 days

A 3 days

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? A5 days B7 days C10 days D3 days

A 5 days

How is the Commissioner selected for the office? AAppointment by the Governor BAppointment by the Department of Insurance CElection by authorized insurers DPublic election

A Appointed by the Governor

Twin brothers have applied for life insurance from Company A. The insurance company found that while neither of them smoked and both shared a very similar lifestyle, one of the brothers was in a much stronger financial position than the other. Because of this, the company charged one a higher rate for insurance than the other. This practice is called ADiscrimination. BTwisting. CAdverse selection. DPost underwriting.

A Discrimination

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report AMust be informed of the source of the report. BAre entitled to obtain a copy of the report from the party who ordered it. CMust be advised that a copy of the report is available to anyone who requests it. DMay sue the reporting agency in order to get inaccurate data corrected.

A Must be informed of the source of the report

A producer was found guilty of violating several regulations of the Insurance Code. The Commissioner has issued a cease and desist order. Which of the following is true regarding the producer's liabilities to his clients? AThe producer still has to fulfill his liabilities to the client. BThe company will take over producer's liabilities. CThe producer's liabilities will be transferred to the Commissioner. DThe producer will be relieved from all of his license obligations and liabilities.

A The producer still has to fulfill his liabilities to the client

Statute

A formal law enacted by legislature; insurance statutes can be found in the state insurance code

Reciprocity

A mutual interchange of rights and privileges

How many days after the completion of an examination must the Commissioner prepare a final report of its results? A30 days B60 days C90 days D180 days

B 60 days

Which federal act provides benefits to injured civilians who are employed by the federal government? AU.S. Longshore and Harbor Workers Compensation Act BFederal Employees Compensation Act CFederal Employers Liability Act (FELA) DThe Jones Act

B Federal Employees Compensation Act

Public adjusters are compensated by AFederal government. BInsureds. CInsurance companies. DState government.

B Insureds

ABC Insurance Company wishes to begin transacting business in Maryland. Before it can do so, it must do which of the following? AObtain approval of each of its corporate officers and executives BObtain a certificate of authority CReceive permission from the Governor of Maryland DReceive a letter of clearance from ABC's home state

B Obtain a certificate of authority

In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the ALoading and unloading test. BSitus and status test. CMaritime and navigable waters test. DWharf and pier test.

B Situs and status test

An insurer or producer may NOT knowingly employ an individual to act in a fiduciary capacity if that individual has been convicted of a felony or crime of moral turpitude within the past AYear only. B5 years only. C10 years. D15 years.

C 10 years

How long must producers maintain records of continuing education completion? A2 years B3 years C4 years DIndefinitely

C 4 Years

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? AConditional receipt BDisclosure rule CFair Credit Reporting Act DConsumer Privacy Act

C Fair Credit Reporting Act

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of AMisrepresentation. BRebating. CTwisting. DDefamation.

C Twisting

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? A$1,000 B$100 per violation CRevocation of license D$2,500

D $2,500

How many hours of continuing education must a producer complete every 2 years? A12 B16 C18 D24

D 24

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? AThey provide additional information from an outside source about a particular risk. BThey provide information about a customer's character and reputation. CThe customer has no knowledge of this action. DThe customer's associates, friends, and neighbors provide the report's data.

D The customer's associates, friends, and neighbors provide the report's data

Licenses expire every 2 years on AJanuary 1. BDecember 31 of odd-numbered years. CThe anniversary of its issuance. DThe last day of the insurance producer's birth month.

D The last day of the insurance producer's birth month

Cease and Desist

to stop or discontinue

Home office

insurer's headquarters, principal place of business

The Department of Insurance requires a license for anyone engaged in insurance transactions so they can have control over AThe insurers' financial records and profits. BThose who are insured. CThe names of the insured for homeland security reasons. DThose selling insurance or advising the public.

D Those selling insurance or advising the public

During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes ACoercion. BMisrepresentation. CDefamation. DTwisting.

D Twisting