PHP Ch. 7
Every office that transacts surplus lines insurance must have on staff a person who -
Is licensed as a surplus lines broker
If a married woman wishes wishes to transact insurance under her maiden name, what must she do in order to be legal?
File papers with the Director stating she will be operating under an assumed business name.
An insurance company assures its new policy holders that their premium costs will not increase for a period of at least 5 years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by %10 over the next 2 years. What term best describes this act?
Fraud
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 -
Rebating
How many days after an initial hearing date does an insurance producer to report any criminal prosecution to the Director?
30
Which of the following would be considered an illegal inducement to purchase insurance?
Confirming future dividends in a life insurance proposal
When is an insurer NOT required to state coverage under which a claim payment is made?
Insurers are always required to disclose the coverage under which a claim is paid
Which of the following is a qualification fir an adjuster's license?
Must be at least 18 years old
Which of the following is qualification for a producer's license?
Must be at least 18 years old
Which of the following is NOT a qualification for obtaining a producer's license?
Must be retained by a licensed insurance agency
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must -
Respond to the consumer's complaint
If a producer waits more that 1 year to renew a license after it has expired, what is the producer required to do to be licensed again?
Retake a licensing exam
All of the following are considered unfair trade practices in the business of insurance EXCEPT -
Sharing commissions
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
According to CAN-SPAM once a person requests to be excluded from a commercial e-mail list, this request must be honored within -
10 days
A temporary license typically lasts for how many days in Arizona?
180
How many hours of training is a producer required to take before soliciting annuity products?
4 hours?
Although most domestic insurers must be examined at least once every 5 years, how often may the Director examine an insurer?
Whenever necessary
In Arizona, the Director of Insurance serves -
At the pleasure of the Governor
What is the maximum civil penalty for violating Insurance Information and Privacy Protection laws?
$10,000
A producer's license was due for renewal fee. How much can she expect to pay in addition to the renewal fee?
$100
In Arizona any item can be considered an illegal inducement if its worth more than -
$25
Which of the following would be considered an illegal inducement to purchase insurance in Arizona?
A 50$ voucher toward a policy holder's next transaction with an agent
Property and casualty producers can usually do something for their clients that life and health producers cannot provide. What is this service?
Bind coverage
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT -
Dividends from a mutual insurer
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status
When a new insurance company wishes to transact business in the state, it must do all of the following EXCEPT -
Obtain approval of each of its corporate officers and executives
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
Oral statements cannot be considered as fraud
A producer in New Mexico wants to become a producer in Arizona. The department will waive certain examination requirements, provided that New Mexico would waive these same requirements if an Arizona producer sought licensure in New Mexico. What term is used to describe this phenomenon?
Reciprocity
A producer in another state wants to become a producer in Louisiana. The other state gives the same privileges to Louisiana producers wanting to be licensed in that state as it does to its own producers. Louisiana, therefore, extends the licensing privileges to the prospective producer of the other state. What is this called?
Reciprocity
A newly licensed producer decided to hold a cookout for friends and family. The producer gave a short presentation about his company and specific insurance product that they offer. In this scenario the producer was -
Soliciting - (sell specific)
Which of the following qualifications for selling insurance in the state of Arizona is NOT correct?
The applicant must have two letters of recommendation attesting to trustworthiness, reliability, and good reputation?
If an insurance policy does NOT have the proper countersignature -
The policy will still be considered valid
Insurance institutions and producers must provide notice of their information gathering practices to applicant and policy holders no later than -
The time the policy was delivered
If a producer changes his or her residential address, the Director must be notified of the change within how many days?
30 days
According to the NAIC Insurance Data Security Model Law, licensees are required to report cybersecurity events to the state of insurance department within what time period of discovery?
72 hours
Which of the following would NOT be accepted as a document showing that an applicant for a license is in the United States legally?
A Social Security Card
Which of the following statements does NOT accurately describe an insurance broker?
A broker does not represent individual clients
All of the following would be considered rebating EXCEPT -
An agent misrepresents policy benefits to convince a policy owner to replace policies
Transacting insurance could include all of the following EXCEPT -
Designing insurance advertisements
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered -
Discrimination
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertising
When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?
False financial statement
if any insurer believes an act of fraud is being committed the insurer should -
File a report with the Director
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT -
Inviting prospective clients to the grand opening of the company's new office
A producer who omits a statement which may mislead or deceive the persons addressed has committed -
Misrepresentation
On its advertisement a company claims it has funds in its possession that are actually not available for payment of losses or claims. This company is guilty of -
Misrepresentation
An application for a life insurance policy was rejected because of information disclosed in an inspection report. The applicant reviewed the consumer reporting agency's file and found they collected incorrect information concerning his personal life. He can legally require the reporting agency to -
Reinvestigate
When must an applicant be notified that an insurer is gathering information about him or her?
When consulting a source other than the applicant or public records
The necessary proof of loss claim is submitted to an insurer. Assuming the claim is complete, how long does the insurer have to pay the claim without additional interest?
30 days
A licensed producer is granted an inactive during military service. He is active duty for 365 days. For how long will the time period for submission of the license renewal fee be extended?
365 days
How long are title insurance licenses in effect?
4 years
In Arizona, the Director of Insurance is -
Appointed by the Governor
Who decides if a license property or casualty insurance producer can be licensed as a resident surplus lines broker?
The Director
The 30 day payment of claims requirement applies to which of the following persons?
A state worker filing a personal injury claim
Which of the following would NOT be accepted as a document showing that an applicant for a license is in the united States legally?
A valid credit card with a major United States credit company
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report -
Must be informed of the source of the report
The Gramm-Leach-Bliley Act was passed to -
Protect private customer information filed with a financial institution
All of the following are true regarding rebates EXCEPT -
Rebates are allowed if it's in the best interest of t he client
Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchases the insurance policy today
How many credit hours of ethics training are licensed residents producers required to complete every licensing period?
6 hours
Which of the following would be considered an insurance transaction?
Receiving an application for insurance
If the Director believes that a producer may be in violation of an insurance law or regulation, what may be issued that would legally force the produce to stop committing the violation?
Cease and desist order
Who requires that a prospective producer take and pass a written examination on the kinds of insurance business specified in the application?
Director
A premium payment is due on the Saturday before Memorial Day. What is the latest the insured can mail the payment for it to be considered on time?
Tuesday after the due date
The Director may require a producer to submit fingerprints in all of the following situations EXCEPT -
Upon insurer insolvency
All of the following are requirements for producer's license renewal EXCEPT -
Renewal examination
If a property or casualty producer has less than 2 years left on his or her existing license, what percentage of the surplus lines broker license fee will the producer be charged for the addition of that license?
50%
When a company uses a strategy of intimidation
Illegal
Which of the following could be considered an adjuster?
Paid claim investigators
Which of the following lines of authority describes property and casualty insurance for noncommercial purposes?
Personal Lines
Which of the following pays for the examination of an insurer's service fees to determine compliance with the State Insurance Code?
The insurer
In order to solicit or issue insurance through a vending machine, producers must display evidence of their authority nearby. Which of the following does NOT need to be included in this notice?
The insurer's phone number
If a premium payment is mailed, how can an insurer establish the date of payment?
The postmark on the envelope
What is the minimum age for obtaining an insurance producer's license in this state?
18
An insurance policy or countersignature endorsement must be signed by any of the following EXCEPT -
Director of Insurance
If after an examination and a hearing the Director determines that an insurer has failed to comply with the insurance code statues regarding charging extra fees or applying service charges, the Director will order the insurer to -
Refund the fee to the customer
Which of the following policies must comply with the signature regulation for insurance policies?
An insured's initial policy with an insurer
All of the following are instances of fraud EXCEPT -
An insurer sharing policyholder information
In order to get a nonresident license is this state a producer must -
Apply and pay a fee to a nonresident state that reciprocates
Which of the following shows the types of insurance an insurer is permitted to transact?
Certificate of Authority
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverage based on the insured's habits and lifestyle
A producer is in the Army Reserves and is called into active Military service. She makes a request that her license be placed on inactive status while she is away. The written statement she provides must have all of the following information EXCEPT -
Information about next of kin or spouse
Which of the following is designed to protect security and confidentiality of nonpublic information and the security of the information system?
Information security program
The producer or broker must keep at the place of business the usual and customary records pertaining to insurance transactions for at least -
Three years