Practice Exam #1

Which of the following is TRUE regarding the Life & Health Guaranty Association?

A alien insurer would be convered

An insurance company incorporated under the laws of the State of Oklahoma would be considered a(n)

Domestic insurer

Who is the Oklahoma Insurance Commissioner?

John Doak

Which of the following individuals would NOT be considered incompetent?

a convicted felon currently serving time in prison

Which of the following is NOT advertising?

a letter to an existing insured when it does not urge them to increase coverage

Which of the following is NOT true regarding the responsibilities of a producer to the insurer under agency law?

a producer receives unlimited authority from the insurer

All of the following activities would be considered misrepresentation ,EXCEPT?

a producer state that dividends paid for the past five years were 5%

A producer's license can be revoked for any of the following EXCEPT?

accused of a felony

The Oklahoma insurance Department can suspend a producer's license for all of the following reasons, EXCEPT?

accused of a felony

An insurer formed under the laws of Switzerland, authorized to do business in the State of Oklahoma, and holding an Oklahoma Certificate of Authority would be referred to as:

alien insurer

Which of the following policies would be subject to the "Policy Replacement Law"?

allowing a whole life policy to lapse to purchase another whole life policy

An insurer licensed to sell insurance in Oklahoma is referred to as:

an admitted insurer

When must an "insurable interest" exist in life insurance?

at the time the application is completed

An individual licensed as a life producer would be authorized to perform all of the following EXCEPT?

bind life insurance coverage

A producer's responsibilities include all of the following EXCEPT?

changing provisions in the policy

A legally binding contract required that each party give something of value to the other;

consideration

The insurance company writes the insurance policy and the insured most comply with the contract terms without negotiation. The courts will interpret any ambiguity in favor of the insured. What is the name of this unique contractual feature?

contract of adhesion

A producer has a responsibility to act in the best interest of the insured. This responsibility is known as:

fiduciary obligation

Which of the following is a producer's primary responsibility under Agency Law??

identify types of risk exposures the prospects face from a financial needs approach

Which of the following is NOT true regarding a "speculative risk"?

insurance can be written on speculative risk

The Telephone Consumer Protection Act (aka do not call registry) applies to which of the following entities calling consumers at home?

insurance company representative

A shareholder is to stock insurer as a policyowner is to a :

mutual insurer

Which of the following is required to become a licensed Oklahoma resident producer?

pass a licensing exam with a score of 70% or better

Which of the following is false about a stock insurance company?

policy owners have voting rights

Policy replacement regulations would govern which of the following?

replacing a whole life policy with a different company

Regarding a replacement transaction, all of the following are duties of the insurance company, EXCEPT?

report the replacement situation to the life & health guarantee association

Which of the following situations is subject to replacement regulations?

sale of an individual life policy that causes an existing individual life policy to be lapsed

All of the following are elements necessary to the formation of a binding legal contract EXCEPT?

signatures of both parties

An insurance policy is a contract of adhesion, written by the insurer. If the language is unclear, courts will interpret any ambiguity in favor of:

the insured

The law of large numbers states that:

the larger the number if units considered, the more predictable are the losses

The definition of risk is:

the potential for loss

If a licensed insurance producer dies, which of the following would be able to receive a temporary producer license?

the surviving spouse

Consideration is a trade of value between parties and is a requirement to have a legally binding contract. The insured's consideration in a life insurance contract is:

truthful statements on the application and payment of premium

All of the following are sources of regulation of the insurance business EXCEPT?

unilateral practice

Which of the following would NOT have an insurable interest in the life that is being insured?

a voter insuring the life of the President

Which of the following policies would be subject to the "Policy replacement Law"?

allowing a whole life policy to lapse to purchase another whole life policy

Which of the following is NOT a risk management technique?

ascertain the risk

Which of the following is NOT true regarding insurance?

insurance is a device for handling speculative risk

All of the following are elements of an insurable risk EXCEPT?

loss must be intentional

BlueCross/Blueshield is considered what type of insurer?

medical service organization

Which of the following is true regarding mortality tables?

mortality tables predict the probability of losses based on the number of deaths in a given year

Which of the following statements is correct regarding Amanda, a licensed producer, who lives in Oklahoma and wants to sell a life insurance policy in Kansas>?

must have an Oklahoma resident license and a Kansas non resident license

An insurance company that is owned by the policy owners who receive the company's profits in the form of dividends is a(n):

mutual insurer

A producer who lives in another state is called:

non-resident agent

All of the following are true regarding the National Association of Insurance commissioners (NAIC) EXCEPT?

state mandated organization

Which of the following is the primary source of regulation of the insurance industry?

the State Government

An insurer may be examined as often as necessary. Who decides when an exam is necessary?

the insurance commissioner

Which of the following is NOT a responsibility the producer has to his/her insured?

to invest insurer's premium

Which of the following statements is true regarding a producer selling insurance for a fraternal insurer?

to receive a commission, the producer must be licensed and have an insurer appointment

Insurance is considered which type of risk management technique?

transfer