Life and Health Law 1 (Ch. 26)
During an investigation, the Department of Financial Services and the Office of Financial Regulation may do all of the following except: issue an injunction examine witnesses subpoena witnesses compel an agent's attendance and testimony
issue an injunction
Which is true about the agents' change of address rule? 1. The agent must notify the DOI within 30 days. 2. The agent must notify the DOI within 31 days. 3. There is a $250 fine for violating this rule. 4. The agent must notify the DOI of his/her change of company. 1 only 2 only 1 & 3 1,3, & 4
1 & 3
Which of the following are true? 1. Notification to the Department of Insurance is required within 30 days of change of address. 2. Notification to the Department of Insurance is required within 30 days of change of company. 3. An agent will lose licensure as a result of 1 year non-appointment. 4. An agent will lose licensure as a result of 4 years non-appointment 1 & 2 1 & 3 1 & 4 2 & 4
1 & 4
An agent may write controlled business provided she writes at least what percentage of other similar business? 25% 50% 75% 100%
100%
Grounds for refusal, revocation or suspension of an agent's license includes: failing to pay to an insurer any money belonging to the insurer voilating the provision against twisting willfully overinsuring any property or health risk All of the above
All of the above
Which of the following statements is/are true regarding misrepresentation? An innocent misrepresentation of a material fact is grounds to void a contract A fraudulent misrepresentation of an immaterial fact would not necessarily void the contract An advertisement that would cause a reasonable person to believe the state or federal government stands behind any returns on insurance products is a misrepresentation. All of the above
All of the above
Of the following terms, which best describes the act of using cash value from one policy to purchase another policy? Twisting Rebating Embezzlement Churning
Churning
Which of the following would NOT be a consequence for aiding and abetting an unauthorized insurer? Conviction of a first-degree misdemeanor Conviction of a third-degree felony Liability for all unpaid claims Suspension or revocation of all insurance licenses
Conviction of a first-degree misdemeanor
Which of the following acts could constitute defamation? Using a reporting agency, such as Standard & Poors, to illustrate a company's ability to pay future obligations Copying, for circulation, a newspaper article regarding a company's unstable financial condition none of the above
Copying, for circulation, a newspaper article regarding a company's unstable financial condition
Circulating untrue statements about an insurance company would be classified under Florida law as: Misrepresentation Defamation False advertising All of the above
Defamation
Will the annual premium required for a 3% reserve interest assumption be greater or smaller than for a 3 1/2% reserve interest assumption? Smaller Greater Not enough information to answer The annual premium has nothing to do with interest assumption
Greater
Which areas of insurance have most frequently been plagued with unauthorized insurers: Health Insurance Life Insurance Annuities Property Insurance
Health Insurance
What would cause the Chief Financial Officer to conduct a hearing? If he feels you have engaged in twisting If he heard you had participated in illegal activities If he has reasonable cause to believe you have defamed an insurance company If he feels you are engaged in actively misrepresenting insurance coverage to the public
If he has reasonable cause to believe you have defamed an insurance company
Which of the following is NOT true concerning the Florida Insurance Guarantee Fund? All life, health, and annuity insurers are members as a condition of their authority to transact insurance in Florida Residents of other states whose company is domiciled in Florida It does not cover Health Maintenance insurance It automatically covers contracts covering Medicare Parts C & D
It automatically covers contracts covering Medicare Parts C & D
Defamation is all the following EXCEPT: It may be derogatory It is not meant to be maliciously critical It can be written (Libel) It can be spoken (Slander)
It is not meant to be maliciously critical
All the following types of insurance companies may be approved to operate in nearly all states EXCEPT: Fraternal Insurance Companies Mutual Insurance Companies. (issue Par. Policies). Lloyds of London Stock Insurance Companies (issue Non Par. Policies).
Lloyds of London
All the below are characteristics of a mutual company EXCEPT: Owned and controlled by policy owners Makes a profit for stockholders The policyholders elect a board of trustees or directors to manage the firm Pays dividends from surplus
Makes a profit for stockholders
Under Florida's Code of Ethics, rebating is declared unethical but may still be done if all of the following is adhered to except: The rebate must be available to all insureds in the same actuarial class The rebate must be uniformly applied to all who purchase the same policy The agent must file a rebating schedule with the insurance company issuing the policy Notice must be given to the Department of Insurance
Notice must be given to the Department of Insurance
Which is not involved in the administration of Insurance? Chief Financial Officer Financial Services Commission Office of Insurance Regulation Office of Financial Regulation
Office of Financial Regulation
Who comprises the Financial Services Commission? The Governor, CFO, Attorney General, & the Insurance Commissioner The Governor, CFO, Attorney General, & the Agriculture Commissioner The Governor, CFO, Insurance Commissioner, & the Agriculture Commissioner The Governor, CFO, Insurance Commissioner, & the Speaker of the House
The Governor, CFO, Attorney General, & the Agriculture Commissioner
Which of the following is sometimes called the American Agency system? The career agency system The Personal Producing Agency system The Independent Agency system Direct Selling
The Independent Agency system
The Financial Services Commission consists of all the following except: The Chief Financial Officer The Governor The Agriculture Commissioner The Insurance Commissioner
The Insurance Commissioner
The agency of state government involved in the regulation of the Insurance industry in the state of Florida are: The Office of Insurance Regulation The Department of Insurance The Office of financial Regulation The Securities & Exchange Commission
The Office of Insurance Regulation
Which of the following would not be found in the Buyer's guide?The name of the agent The beneficiary Dividend information Loan interest rates
The beneficiary
An unaffiliated agent may affiliate with which of the following? An insurance agency An insurer An independent agency They may not affiliate with anyone
They may not affiliate with anyone
Which of the following is not true regarding unaffiliated agents?They are self-appointed and act as an independent consultant. They are prohibited from being affiliated with an insurance company. They may not receive any commissions of any kind. They pay the same appointment fees as an agent who is affiliated with an insurer.
They may not receive any commissions of any kind.
An individual becomes licensed, then appointed by a domiciled insurance company. He subsequently writes insurance on all his relatives. Which statement would be correct? This is called controlled business and is encouraged because family members would rather deal with someone they know. This is controlled business and could subject the agent to revocation of his license. This is rebating and is allowed. This is rebating and is not allowed.
This is controlled business and could subject the agent to revocation of his license.
Miami Mutual rewards their clients with a matching deposit of 10% into their annuity when they open an account. Which statement below is correct? This is rebating and would be allowed. This is rebating and would not be allowed. This is twisting and would be allowed. This is twisting and would not be allowed.
This is rebating and would be allowed.
Which of the following is considered an unfair practice? a gift valued at not more than $15 a gift valued at not more than $25 a gift valued at not more than $75 a gift valued at more than $100
a gift valued at more than $100
Which of the following would not be considered controlled business? an agent writing business solely on his family an agent writing business on his partner an agent writing business on his employees an agent writing business on his neighbor
an agent writing business on his neighbor
If a domestic insurer has held a certificate of authority for less than three years, how often must the Office of Insurance Regulation conduct an examination? as often as warranted at least once every year at least once every three years at least once every five years
at least once every year
17. To legally conduct insurance business in the state of Florida, an insurer must have which of the following? certificate of authority solicitation license transaction certificate policy delivery license
certificate of authority
Which of the following would be considered an agent? customer representative general lines agent limited customer representative service representative
general lines agent
The Office of Financial Regulation has the authority to issue all of the following except: cease and desist orders emergency cease and desist orders subpoenas injunctions
injunctions
The Office of Financial Regulation (OFR) regulates all of the following except: banks insurers financial institutions the securities industry
insurers
The term agency refers to which of the following? agent adjuster location all of the above
location
All of the following are characteristics of a mutual insurance company except: management elects the board of directors the policyowners are the owners of the company dividends, if any, are paid to the policyowners it must be incorporated in order to operate
management elects the board of directors
All of the following would be found under the Unfair Trade Practices Act except: false advertising coercion discrimination rebating
rebating
Hoggie was licensed in March of 2010 and was appointed in April of the same year. In March of 2011 Hoggie gave up his appointment but maintained his license with the intent of returning to the business at a later time. What must Hoggie do to get reappointed in April of 2015? apply to the insurance company for reappointment pay all late fees and reapply for the appointment retake the examination continue to flip burgers and forget about it
retake the examination
Concealing coverage within a policy is considered: fraud sliding misrepresentation rebating
sliding
A company that charges different premiums for people in the same actuarial class could be found guilty of: twisting unfair discrimination segregation unfair trade practices
unfair discrimination
When does the insurance company NOT do an autopsy under AD&D insurance? when the death is caused by an accident when the death is caused by illness when it is prohibited by law when the death is caused by homicide
when it is prohibited by law
The following penalties may be imposed upon an agent by the Chief Financial Officer EXCEPT: Fines of $5,000 for nonwillful and $75,000 for willfully submitting fraudulent signatures on an application or other policy-related document Up to $50,000 for violation of a cease & desist order Fines of $5,000 for nonwillful and $75,000 for willful violations of twisting and churning Revocation of the agent's company contract
Revocation of the agent's company contract
What is the purpose of the insurance license? To have someone to blame when things go wrong To help protect the general public by announcing which insurance agents commit poor business practices through public service announcements To help protect the general public by requiring a minimum level of insurance knowledge and competence To help the government track the whereabouts of those conducting insurance activities
To help protect the general public by requiring a minimum level of insurance knowledge and competence
An agent who has been licensed for 7 years must have how many hours of continuing education? 20 hours every 2 years including 5 hours of laws & rules 20 hours every 2 years including 3 hours of unauthorized insurers 24 hours every two years 10 hours every year
20 hours every 2 years including 5 hours of laws & rules
An insurer may not deliver a policy, application, certificate rider, endorsement, or annuity contract until such forms have been approved by the Office of Insurance Regulation, and such forms have to have been filed with the office at least how many days before delivery to a consumer? 15 days 30 days 45 days 60 days
30 days
Florida law requires anyone convicted of a felony to report this to the Office of Insurance regulation within: 10 days 30 days 45 days 60 days
30 days
A licensed and appointed agent may share his commission with: Any licensed agent Any appointed agent Any licensed and appointed agent with the same company A licensed and appointed agent who works in the same line of business
A licensed and appointed agent who works in the same line of business
An applicant asks an agent for a greater face value or death benefit than the agent's company is willing to offer a policy for. The agent places this application with another company who WILL offer a policy for that benefit. Even though the agent is NOT appointed with that company this would be Excess or rejected business and is allowed Not allowed until the agents becomes appointed with the company Dejected business Surplus amounts
Excess or rejected business and is allowed
Fraud can involve the unintentional concealment of a non-material fact on an application. True False
False
Monies collected by an agent are held by the agent in what capacity? Holder Creditor Debtor Fiduciary of trust
Fiduciary of trust
An agent's obligation to handle funds of a client or insurance company honestly and fairly and not use them for the agent's own purpose is called: Fiduciary responsibility Solicitation Legal Responsibility Ethical responsibility
Fiduciary responsibility
Florida law requires continuing education for all agents. Which of the following is true concerning an agent who has five years' experience and has earned the Chartered Life Underwriter designation? The agent needs 24 hours of continuing education The agent needs 20 hours of continuing education The agent needs 10 hours of continuing education No continuing education is needed
The agent needs 24 hours of continuing education
Which of the following statements concerning an agent's license is not correct? The agent must report in writing, to the OIR, with-in 30 days of pleading guilty to a felony The insurance license will terminate if four years elapses without being appointed The insurance license is suspended automatically for bankruptcy An agent may appoint himself as an agent
The insurance license is suspended automatically for bankruptcy
An emergency cease and desist order would be issued by the Office of Financial Regulation in all of the following circumstances except: The office finds that a subpoenaed person has not appeared before the court. The office finds that the conduct of the financial institution is likely to cause insolvency. The office finds that the conduct of the financial institution is likely to cause substantial dissipation of assets or earnings. The office finds that the conduct of the financial institution is likely to cause substantial prejudice to the depositors or shareholders.
The office finds that a subpoenaed person has not appeared before the court.
Which of the following is NOT classified under the four principal areas of the Florida Insurance law: The payment of commissions to agents The qualifications & licensing requirements of the agents The rights of policyowners & beneficiaries Policy Provisions
The payment of commissions to agents
Can an agent in charge be designated as the agent in charge for more than one location? Yes, as long as insurance activities requiring licensure as an agent do not occur at any location when the agent is not physically present Yes, provided that the agent in charge has a designated office at each location insurance activities may be conducted even if the agent in charge is not physically present Yes, the number of locations is unlimited and there are no requirements requiring physical presence No, an agent in charge may be named agent in charge of only one location
Yes, as long as insurance activities requiring licensure as an agent do not occur at any location when the agent is not physically present
Which of the following undertakes to effect settlement of claims?agents agencies adjusters commissioners
adjusters
Willful violation of the Insurance code is a: third degree felony second degree misdemeanor first degree felony first degree misdemeanor
second degree misdemeanor
The term agent may include all of the following except: service representative life agent health agent title agent
service representative
Adding a rider or endorsement to a policy without the client's knowledge or telling them that the rider or endorsement is required by law would be an example of coercion intimidation tacking on sliding
sliding
Adding on coverages without the knowledge of the insured/applicant is an example of: excess charges sliding rebating excess insurance
sliding
The state would require an agent's home office to be licensed as an "insurance agency" if: the agent advertised in the yellow pages the agent had client meetings at Starbucks the agent hung out a sign on the front lawn the agent had more than $50,000 in revenue
the agent hung out a sign on the front lawn
Which of the following is not an example of an insurable risk? the loss must be catastrophic the loss must be due to chance the loss must be predictable the loss must be measurable
the loss must be catastrophic
A licensed insurance company that is domiciled in and is permitted to do business in the licensing state is called: A fraternal company A permitted company An authorized company A domestic company
A domestic company
Of the following terms, which best describes the act of replacing existing life insurance with a new life insurance policy based upon incomplete or incorrect representations? Twisting Rebating Embezzlement Concealment
Twisting
Charging a risk in the same actuarial class as another a higher premium would be an example of: Unfair discrimination Coercion Rating Adverse selection
Unfair discrimination
All of the following describe an unaffiliated agent except: a licensed agent a limited lines agent one who is not appointed by an insurer one who is self-appointed
a limited lines agent
Public adjusters prepare, complete and file claims on behalf of who? an insured an insurer both of the above none of the above
an insured
Which of the following would make rebating a prohibited practice? rebating to all in the same actuarial class maintaining copies of all rebating schedules for the most recent 3 years maintaining copies of all rebating schedules for the most recent 5 years rebating without regard to discrimination
maintaining copies of all rebating schedules for the most recent 3 years
Under certain circumstances, an agent is allowed to place business with and be paid commissions by an insurance company without actually being appointed by that company. Which law allows for this? the reinsurance provision the 1035 exchange law the exchange of business law none of the above
the exchange of business law
Regulation of all of the following are directly administered by the CFO except: insurance agents the securities industry insurance fraud insurance consumer protection
the securities industry
If an agents fails to maintain an appointment with an appointing entity writing the class of business in which the agent is licensed, after what period of time must the agent qualify as a first time applicant? 18 months 24 months 48 months the license is perpetual
48 months
Who is charged with rehabilitating or liquidating insurers where necessary? Office of Financial Regulation Office of Insurance Regulation Department of Rehabilitation Financial Services Commission
Office of Insurance Regulation
Giving a prospect or policy owner anything of significant value as an inducement to buy insurance is called: Discounting Misrepresentation Rebating Twisting
Rebating
An agent may be permitted to do all the following (EXCEPT) Show a proposal for a company with which he is not appointed if he is licensed for that line of business Write excess business with outside companies other than his or her parent company Show a proposal from another company to applicants which have been rejected by his parent company Receive commissions from companies for which he is not yet appointed
Receive commissions from companies for which he is not yet appointed
Any activity limiting a client's free choice regarding transacting insurance is intimidation coercion defamation twisting
coercion
Regarding group health, an agent is permitted to charge a consulting fee in lieu of receiving a commission if the agent rebates the commission received within 30 days of receipt to the third party she is consulting maintains records of the agreement for three years the compensation is based on a written contract between the agent and the party being charged the negotiated fee all of the above are correct none of the above are correct
all of the above are correct
If an unauthorized insurer fails to pay part or all of the claim, who is responsible for paying the claim? the Department of Financial Services the Florida Life and Health Insurance Guarantee Association any agent involved in the transaction who knew, or reasonably should have known, that the insurance contract was made with an unauthorized insurer all of the above
any agent involved in the transaction who knew, or reasonably should have known, that the insurance contract was made with an unauthorized insurer
All the following are major areas in which the Chief Financial Officer and the Office of Insurance Regulation are involved except: regulating banks with-in the state regulating policy forms, provisions and rates assessing insurer solvency issuing certificates of authority
assessing insurer solvency
Which of the following statements concerning a mail order company in Florida is not true? the company must be authorized to do business in the state the policy must be delivered by a licensed agent a mail order company requires no personal agent solicitation does not require an appointed agent
does not require an appointed agent
The Department of Financial Services (department) have all of the following powers and duties except: enforce the insurance code enact laws relating to the insurance code conduct an investigation to determine if a person has violated the code employ actuaries
enact laws relating to the insurance code
What % of an agent's business can be controlled business? 25% 50% 75% 100%
50%
The Bureau of Unclaimed Property is part of which Division?Division of Accounting and Auditing Division of Consumer Services Division of the Consumer Advocate Division of Banking
Division of Accounting and Auditing
When MUST the Office of Insurance Regulation conduct a market conduct examination on domestic insurers? as often as warranted at least once every year at least once every three years at least once every five years
at least once every five years
Any person who holds an insurance license must complete a minimum of five hours of continuing education on the subject of unfair trade practices unauthorized entities fiduciary responsibilities laws and ethics
laws and ethics