Life Insurance - Chapter 7

After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT a. Imprison the licensee b. Impose a civil penalty c. Issue a cease and desist order d. Suspend or revoke the license

a. Imprison the licensee

What was created to keep telemarketers from calling consumers who do not wish contacted? a. National Do Not Call Registry b. Confidential No Call Act c. Freedom of Information Act d. Call Control Registry

a. National Do Not Call Registry

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as a. Rebating b. Twisting c. False advertising d. Coercion

a. Rebating

A licensed producer moving to Pennsylvania may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state? a. 30 b. 60 c. 90 d. 180

c. 90

Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is associated with this? a. Brokering b. Monetary gatekeeping c. Fiduciary capacity d. Financial trust

c. Fiduciary capacity

The National Do Not Call Registry was created to regulate a. Insurers b. Insurance solicitors c. Telemarketers d. Field underwriters

c. Telemarketers

Which of the following entities must approve all continuing education courses in this state? a. The appointing insurer b. The State Board of Education c. The Commissioner d. The NAIC

c. The Commissioner

A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT a. Have paid all applicable fees b. Be responsible for at least 25% of total commissions collected by the office that he or she manages c. Have an authority to act on the insurer's behalf d. Be found sufficiently fit, competent and reliable by the Department of Insurance

b. Be responsible for at least 25% of total commissions collected by the office that he or she manages

Which of the following is an example of an unfair claims settlement practice? a. Using arbitration when the insured and insurer cannot reach agreement b. Failure to promptly settle a claim when liability has been clearly established c. Denying coverage after a reasonable investigation has been conducted d. Making 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

A producer licensed in Pennsylvania must notify the Insurance Department of any charge of address in his or her residence or business address within how many days? a. 15 b. 20 c. 30 d. 10

c. 30

A producer sold an insurance policy. Subsequently, his licensed was suspended. In this case, how much of the commission will the producer receive? a. All b. Half c. Quarter d. None

a. All

According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls? a. 7 am until 9 pm b. 8 am until 9 pm c. 10 am until 10 pm d. 7 am until 7 pm

b. 8 am until 9 pm

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice? a. Unfair Discrimination b. Defamation c. Illegal d. A legal advertising strategy

c. Illegal

Which of the following would NOT be considered an unfair and deceptive practice? a. Rebating b. Defamation c. Misrepresentation d. Controlled business

d. Controlled business

What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act? a. $1,000 b. $5,000 c. $10,000 d. $15,000

b. $5,000

When a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. Without passing an examination, she could qualify for a temporary license for a maximum period of a. 90 days b. 180 days c. 1 year d. 2 years

b. 180 days

Prior to license renewal, all insurance producers must successfully complete how many hours of continuing education? a. 20 credit hours b. 24 credit hours c. 15 credit hours d. 18 credit hours

b. 24 credit hours

Which of the following statements is INCORRECT? a. A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. b. A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. c. No insurance producer may charge a fee for the completion of an application for a contract of insurance d. The fee charge by the licensee must be disclosed in advanced in writing to the person and must be reasonable in relationship to the services provided

b. A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all the insureds by 10% over the next two years. What term best describes this act? a. Errors and omissions b. Fraud c. Defamation d. Unfair discrimination

b. Fraud

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? a. Statements made with the intent to deceive are unlawful b. Only written statements can be considered fraud c. Omissions of material fact on insurance application are fraud d. False statements about financial condition of an insurer are unlawful

b. Only written statements can be considered fraud

All of the following are requirements for producer license renewal EXCEPT a. Record of fingerprints b. Renewal examination c. Up-to-date continuing education d. Renewal fees

b. Renewal examination

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to a. 3 years b. 5 years c. 10 years d. 12 years

c. 10 years

Which of the following is an example of a producer's fiduciary responsibilities? a. A producer helping clients to file claims b. A producer reviewing his/her client's coverage c. A producer offering additional coverages to his client d. A producer promptly forwarding premiums to the insurance company

d. A producer promptly forwarding premiums to the insurance company

All of the following violations may result in an agent's imprisonment EXCEPT a. Embezzling funds from the insurer b. Knowingly obtaining information about a consumer under false pretenses c. Engaging in the business of insurance after being convicted of breach of trust d. Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction

d. Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction

Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? a. Whenever it is requested by the Commissioner b. Under no circumstances; nonpublic personal financial information cannot be shared with third parties c. If a consumer decides to opt out d. If a consumer does not sign and return the notice of disclosure within 30 days

d. If a consumer does not sign and return the notice of disclosure within 30 days

The Gramm-Leach-Bliley Act passed to a. Define insurance as interstate commerce b. Allow consumers access to credit and private consumer reports c. Allow insurance companies to medical information for underwriting purposes d. Protect private customer information filed with a financial institution

d. Protect private customer information filed with a financial institution

Which of the following regulatory authorities participated in creating the National Do Not Call Registry? a. FTC b. SEC c. NAIC d. BBB

a. FTC

Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the Department may impose a civil penalty of a. $1,000 for each violation b. $2,000 for each violation c. $3,000 for each violation d. $5,000 for each violation

d. $5,000 for each violation

How long does a temporary producer's license last for surviving spouse of a deceased producer? a. 90 days b. 150 days c. 180 days d. 365 days

c. 180 days

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit? a. Agent's report b. Any federal report c. Consumer report d. Inspection report

c. Consumer report

If an insurer changes a form that it uses to transact insurance, it must do which of the following? a. Submit it to the Department of Insurance so it can be kept in the insurer's official records b. Nothing, as long as the insurer has a Certificate of Qualification c. File the form with the Commissioner for approval d. File the form with the NAIC for approval

c. File the form with the Commissioner for approval

A producer has become disabled. In order to keep his business going, what may the producer's designee do? a. File for federal aid designed for this situation b. Hire a temporary agent to run the business during the producer's disability c. Obtain a temporary license d. Solicit new business

c. Obtain a temporary license

A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license? a. Nothing; license of active duty military service personnel are automatically reinstated for a full licensing term b. The licensee must complete the continuing education requirements and pay the lapse renewal fees. Requirements cannot be waived c. The licensee may submit a request to the department to have requirements and fees waived. The departments will then determine if the request is permissible d. Nothing; the license is automatically reinstated for an additional 6 months following return from military service

c. The licensee may submit a request to the department to have requirements and fees waived. The departments will then determine if the request is permissible

How soon after the due date should the insurer pay the agent appointment fees? a. Immediately b. Within 10 days c. Within 30 days d. Within 60 days

c. Within 30 days

Which of the following would be required to be licensed as an insurance producer? a. A person whose activities are limited to producing insurance advertisements b. A salaried full-time employee who furnishes information for the group insurance c. An insurance company director who performs executive, administrative, and managerial duties d. A salaried employee who advertises and solicits insurance

d. A salaried employee who advertises and solicits insurance

Which of the following would NOT be considered an exception to the National Do Not Call List? a. Calls for which the consumer has given prior written permission b. Calls for which are not commercial or do not include unsolicited advertisements c. Calls by or on behalf of tax-exempt nonprofit organizations d. Calls based from outside of the United States

d. Calls based from outside of the United States

Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? a. Whenever it is requested by the Commissioner b. Under no circumstances; nonpublic personal financial information cannot be shared with third parties c. If a consumer decides to opt out d. If a consumer does not sign and return the notice of disclosure within 30 days

d. If a consumer does not sign and return the notice of disclosure within 30 days

A producer has successfully completed 52 hours of continuing education (CE). How many hours can the producer apply to her current reporting period, and how many hours can she carry toward the next reporting period? a. Only 24 hours of the 52 earned may applied to this reporting period b. 24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following c. 24 hours will be applied to the current reporting period, and 28 can be applied to the period immediately following d. 26 hours will be applied to the current reporting period, and the remaining 26 can be applied to the period immediately following

b. 24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following

Any licensed person whose activities interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to a. 3 years b. 5 years c. 10 years d. 12 years

c. 10 years