3 - Laws and Rules Pertinent to Insurance

Dread Disease policies cover? A) a single disease or illness only. B) all diseases or illnesses caused by epidemics. C) all diseases or illnesses designated as incurable. D) all diseases or illnesses designated as terminal.

A) a single disease or illness only. Dread Disease policies cover a single disease or illness only.

An insurance company that requires an application for reinstatement has how many days to reject the application before reinstatement is automatic? A) 30. B) 45. C) 60. D) 90.

B) 45. If the insurer takes no action within 45 days, the policy is considered reinstated automatically.

An insurance company that is organized or chartered in a country other than the United States is defined as? A) foreign. B) alien. C) domestic. D) external.

B) alien. An alien company is one that is chartered and organized in any country other than the United States.

The Department of Financial Services may conduct a hearing when a person is suspected of? A) being licensed in multiple lines of authority. B) holding a nonresident license in another state. C) engaging in the business of insurance without a license. D) sharing commissions with a similarly licensed individual.

C) engaging in the business of insurance without a license. A hearing may be conducted if anyone is suspected of engaging in the business of insurance without a license.

Florida insurance law requires that coverage be provided for a newborn baby from a covered family member for a period of? A) 1 month. B) 6 months. C) 12 months. D) 18 months.

D) 18 months. Florida law requires coverage be provided for a newborn from a covered family member for 18 months.

Florida's Health Insurance Coverage Continuation Act (Mini COBRA) applies to employers who employ less than how many employees? A) 50. B) 40. C) 30. D) 20.

D) 20. The Health Insurance Coverage Continuation Act applies to employer's with less than 20 employees.

In small group accident and health plans, a late enrollee is an individual who? A) is covered under another group plan. B) applies for coverage during an open enrollment period. C) is permitted to enroll after an administrative review. D) elects coverage after the initial eligibility period.

D) elects coverage after the initial eligibility period. In small group accident and health plans, a late enrollee is an individual who elects coverage after the initial eligibility period. The late enrollee may be required to provide evidence of insurability.

An insurance company MAY lawfully refuse to issue health coverage based on? A) religion. B) gender. C) marital status. D) residence.

D) residence. An insurance company MAY lawfully refuse to issue health coverage based on residence.

When may the Financial Services Commission hold hearings? A) For any purpose within the scope of the insurance code deemed necessary. B) Only when there is a filed complaint against the agent/company. C) Only for severe violations of the insurance code. D) Only for insolvency protection.

A) For any purpose within the scope of the insurance code deemed necessary. The Financial Services Commission may hold hearings "for any purpose within the scope of the insurance code deemed necessary".

Which is the purpose of the Florida Employee Health Care Access Act? A) To make group health insurance available to employers with 50 or fewer employees. B) To make health insurance available to individual available to individual employees 65 or older. C) To make health insurance available to individual employees below a certain income level. D) To make individual health insurance available to unemployed individuals.

A) To make group health insurance available to employers with 50 or fewer employees. The Act makes group health insurance available to small employers, defined as employers with 50 or fewer employees.

An agent knowingly collects money for a premium or an additional charge for insurance that is not provided for in the policy. This would be an example of? A) excess charges. B) controlled business. C) rebating. D) misrepresentation.

A) excess charges. "Excess charges" occur when an agent collects extra premium for insurance products that are not in the insurance policy.

Which of the following is NOT considered to be an element of replacement? A) The agent knows a new policy will take the place of an existing policy. B) An existing policy is subjected to a loan of 10% of its value. C) An existing policy is allowed to lapse. D) An existing policy is reissued with a reduced cash value.

B) An existing policy is subjected to a loan of 10% of its value. Subjecting an existing policy to a loan is not an element of replacement. Allowing that same policy to lapse and replacing it with another would be.

An insurance company formed under the laws of Canada would be known in Florida as? A) a domestic company. B) an alien company. C) a foreign company. D) a mutual company.

B) an alien company. An insurance company incorporated under the laws of another country is called an alien company.

Replacement of one insurance policy with another is? A) illegal and not permitted in this state. B) strictly regulated and requires full disclosure. C) permitted only in the first year of the policy. D) guaranteed to return all invested dollars in the replaced policy.

B) strictly regulated and requires full disclosure. Replacement of insurance policies is strictly regulated and requires full disclosure.

A Professional Employer Organization typically handles only which of the following employer tasks? A) Hiring and firing of employees. B) Determining compensation. C) Administration functions. D) Method of the work to be performed.

C) Administration functions. A Professional Employer Organization (PEO) typically handles the administration functions for an employer.

ABC Life Insurance company's home office is located in Massachusetts and is incorporated in Massachusetts. In Florida they are considered to be? A) Assessment Mutual Company. B) Non-Admitted. C) Foreign. D) Domestic.

C) Foreign. A foreign insurer is an insurance company that is incorporated in another state.

All of the following are a part of the "rules of disclosure" EXCEPT? A) Buyer's guide. B) Policy summary. C) 14 day free look. D) Conditional receipt.

D) Conditional receipt. The rules of disclosure review what needs to be provided to each prospective purchaser of a life insurance policy. This includes a buyer's guide, policy summary, and 14 day free look.

The Florida insurance rule that establishes procedures that must be followed by agents who are recommending changes to existing coverage is the Florida? A) Life Insurance Solicitation Law. B) Code of Ethics. C) Life Policy Change Law. D) Replacement Rule.

D) Replacement Rule. The Florida Replacement Rule sets forth the requirements and procedures to be followed by insurance companies and producers when replacing existing life insurance contracts.

Which of the following statements is CORRECT about the Life and Insurance Guaranty Association? A) It guarantees that anyone can buy life and health insurance. B) It is funded by insurance companies through assessments. C) It guarantees that premiums will not be increased. D) It is limited to guarantees or policies of $1,000,000 or more.

B) It is funded by insurance companies through assessments. The Life and Insurance Guaranty Association is funded by insurance companies through assessments and will pay claims if an insurance company becomes insolvent.

In Florida, what is the minimum schedule of time in which claims MUST be made to an insured under an Individual Disability policy? A) Weekly. B) Biweekly. C) Monthly. D) Quarterly.

C) Monthly. Claims on an individual disability policies must be paid out at monthly intervals, at minimum.

During what period is a new insurance policyowner entitled to review a policy and return it for a full refund? A) During the 14 days prior to its effective date. B) Within 14 days after delivery of the policy. C) Within 30 days of purchase. D) After receipt, but only with the prior approval of the agent.

B) Within 14 days after delivery of the policy. After the policy has been received and read, the policyholder has 14 days to excercise the provision for an unconditional refund.

The primary purpose of regulation of the insurance industry is to? A) shift the balance of control to the federal government. B) promote the public welfare by maintaining the solvency of insurance companies. C) control the advertising and sales literature used by the insurance industry. D) require insurers to conform to both Securities & Exchange Commission (SEC) and state regulation.

B) promote the public welfare by maintaining the solvency of insurance companies. The primary purpose of regulation of the insurance industry is to promote the public welfare by maintaining the solvency of insurance companies.

An insurance company can be any of the following EXCEPT? A) domestic and admitted. B) foreign and nonadmitted. C) domestic and alien. D) alien and nonadmitted.

C) domestic and alien. A domestic insurer is an insurance company incorporated in this state. An alien insurer is one that is incorporated outside the United States.

Which of the following would require an insurance agent ,who works out of his home, to become licensed as an insurance agency? A) Listing the location address on business cards/marketing materials and solicits business to be done at that location. B) Serves only as a location to meet a client with whom the agent has made a prior appointment. C) Makes sales calls from the location. D) Receives calls from clients from the location.

A) Listing the location address on business cards/marketing materials and solicits business to be done at that location. If an agent's home is considered a place where a consumer can come purchase insurance, they would be considered the same as an insurance branch and must be licensed as an insurance agency.

Of the following, which is NOT an association requirement for Group insurance eligibility? A) The members of the association must be at least 25 years of age. B) The association must have been in existence for at least 2 years. C) The association must hold regular meetings at least annually. D) The association must have at least 100 members participate if the premium is contributory.

A) The members of the association must be at least 25 years of age. All of these are association requirements for Group insurance eligibility EXCEPT "the members of the association must be at least 25 years of age".

All of the following apply under the federal ERISA law EXCEPT? A) the Florida law on retirement plans supersedes ERISA. B) qualified pension plans receive favorable tax treatment. C) fiduciary responsibility is required. D) funding, participation, and vesting are addressed.

A) the Florida law on retirement plans supersedes ERISA. ERISA supersedes state law relating to employee retirement plans.

The Florida Life and Health Insurance Guaranty Association was established to provide funds A) to pay creditors of insolvent insurers. B) to protect an insured in the event of an insurer's insolvency. C) when an insurer fails to pay a disputed claim. D) to assist insolvent insureds in paying their insurance premiums.

B) to protect an insured in the event of an insurer's insolvency. The Florida Life and Health Insurance Guaranty Association exists to protect an insured in the event of an insurer's insolvency.

An insurance company that has not been approved by the state is considered to be? A) Foreign. B) Authorized. C) Admitted. D) Unauthorized.

D) Unauthorized. Insurers who have not been approved to do business in the state are considered unauthorized or non-admitted.

Which of the following is CORRECT about the replacement rule? A) The replacement rule applies only to health insurance policies. B) The agent has 90 days from the effective date to deliver a buyer's guide. C) Instructions regarding the rule are available from appointed life insurers. D) Up to 30 days is allowed for a full refund of premium.

C) Instructions regarding the rule are available from appointed life insurers. The replacement rule sets forth the requirements and procedures to be followed by insurance companies and agents when replacing existing insurance contracts with new ones.

In Florida, coverage for a child who is dependent on the parents for support due to physical handicap may be continued beyond the contractual limiting age when which of the following is correct? A) The child is an inpatient in a healthcare facility. B) The child becomes a full time student. C) The child is capable of obtaining coverage on her own. D) The child is incapable of self sustaining employment.

D) The child is incapable of self sustaining employment. Insurers are required to retain coverage on dependent children beyond the limiting age if they are incapable of self-support because of mental or physical impairment.