Law Quiz 2: NJ Laws Pertinent to Insurance

Making statements which are false and derogatory about the financial condition of the insurer is: A. perjury B. discrimination C. rebating D. defamation

D. defamation

A branch office registration form must be filed with the Banking and Insurance Commissioner a MINIMUM of how many days before conducting business at the branch office? A. five B. ten C. twenty D. thirty

D. thirty

A voluntarily terminated producer license may be reinstated during the same license period if the producer takes which of the following actions? A. Completes a new license application B. Pays the quarterly renewal fee C. Completes an approved continuing education course D. Post a $500 reinstatement bond

A. Completes a new license application

If a producer's license is suspended, he must wait how long before applying for reinstatement? A. Immediately after the period of suspension B. 5 years or until the next Departmental inspection C. 1 year D. 5 years

A. Immediately after the period of suspension

The Banking and Insurance Commissioner may revoke the license of a producer who A. Uses the license primarily to obtain insurance for his or her family B. Becomes associated with a limited lines insurance company while maintaining his or her producer status C. Loses an insurance company appointment D. Deposits commission in a trust account

A. Uses the license primarily to obtain insurance for his or her family

The first violation of the NJ Fraud Prevention Act can result in a fine of A. $1,000 B. $5,000 C. 10,000 D. $15,000

B. $5,000

The New Jersey Life and Health Guaranty Association is derived from A. The New Jersey Department of Banking and Insurance budget B. Assessment on member companies C. The New Jersey General Treasury D. A special legislation appropriation

B. A special legislation appropriation

When the beneficiary of a life insurance policy is a minor, the insurer can pay the proceeds A. Only when the beneficiary turns 21 B. If a legal guardian has been appointed C. Only when the beneficiary turns 18 D. Only if the beneficiary asks nicely

B. If a legal guardian has been appointed

Which of the following activities does not require a license? A. Telemarketing insurance products over the phone to senior citizens B. Scheduling appointments for producers to sell insurance C. Quoting insurance premiums over the phone D. Explaining policies to policyholders in response to THEIR questions

B. Scheduling appointments for producers to sell insurance

A producer's license is considered the property of A. The producer B. The State of NJ C. The Commissioner D. The DOBI

B. The State of NJ

A producer who unknowingly engages in a prohibited trade practice, can be issued a fine not to exceed A. $250 B. $500 C. $1,000 D. $5,000

C. $1,000

If an insurer or producer violates a cease and desist order, the Commissioner could assess a penalty not to exceed A. $500 B. $1,000 C. $5,000 D. $50,000

C. $5,000

A producer who knowingly engages in a prohibited trade practice, can be issued a fine not to exceed A. $250 B. $1,000 C. $5,000 for the first offense; $10,000 for each subsequent offenses D. $10,000

C. $5,000 for the first offense; $10,000 for each subsequent offenses

If the Guaranty Association assumes management of an insolvent insurer, the maximum amount of death benefits for which they are liable is A. $100,000 per contract B. $100,000 per person C. $500,000 per person D. $1,000,000 person

C. $500,000 per person

If a producer changes their address, how many days do they have to notify the Department? A. 10 B. 20 C. 30 D. 60

C. 30

If a producer's license is revoked, he must wait how long before applying for reinstatement? A. 1 year B. 3 years C. 5 years D. 10 years

C. 5 years

An insurer who is placed under an order of liquidation by a court of competent jurisdiction is defined under the terms of the New Jersey Life and Health Insurance Guaranty act as A. An incompetent insurer B. An impaired insurer C. A bankrupt insurer D. An insolvent insurer

D. An insolvent insurer

A producers certification of license status contains all of the following information except: A. A reference number B. Expiration date C. Authorities granted D. Place of birth

D. Place of birth

A producer who shares commission with a client may be found guilty of: A. Fraud B. Reclining C. Comingling D. Rebating

D. Rebating

The act of using misrepresentations to induce an insured person to terminate an existing policy and purchase a new policy is referred as A. churning B. subrogation C. rebating D. twisting

D. twisting