8 Laws and Rules Pertinent to Insurance

Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice?

30 [days] Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give 30 days notice.

After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12-month period?

31-day

A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license?

24 [hours] A newly licensed General Lines agent must complete a MINIMUM of 24 hours of continuing education within 24 months after initial licensure.

The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days?

90 days

Under the Texas code, the MAXIMUM for which a spouse may be insured in a company group life program with a $50,000 death benefit is:

$25,000

A Long-Term Care policy must offer a MINIMUM benefit period of how many months?

12[months]

Under the Nonforfeiture Law, a cash surrender value payment may be deferred by the insurance company for NO LONGER than how many months?

6 [Months] A company shall reserve the right to defer payment of any cash surrender value for a period of six months after demand for payment of the cash surrender value and surrender of the policy.

Who can purchase a plan through the Marketplace?

Any legal resident except those incarcerated. Any legal resident, except those incarcerated, can purchase a plan through the Marketplace.

An applicant for an agent's license must meet which of the following requirements?

Be honest, trustworthy, and reliable. An applicant for an agent's license must be honest, trustworthy, and reliable.

An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for which of the following reasons?

Failure to pay for coverage. An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for failure to pay for coverage.

The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who

Is found guilty of misrepresentation or fraud in obtaining the license. The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who is found guilty of misrepresentation or fraud in obtaining the license.

Group life policies MUST include all of the following provisions EXCEPT

Right to Loan Proceeds. Group life policies MUST include all of the following provisions EXCEPT Right to Loan Proceeds.

Under the Texas insurance code, which of the following statements about the Suicide clause is CORRECT?

Suicide may not be a defense against payment after the second year. Suicide may not be a defense against payment after the second year.

Insurance company agent appointments remain in force for which of the following maximum periods of time, if any?

Until terminated or withdrawn. The correct answer is "Until terminated or withdrawn". Insurance company agent appointments remain in force until terminated or withdrawn.

A life insurance illustration is NOT required to include the

company's mortality table. A life insurance illustration is NOT required to include the company's mortality table.

In Texas, a domestic insurance company is defined as a company that

is incorporated and formed in Texas

An agent who tells a client that dividends are guaranteed may be guilty of

misrepresentation. An agent who tells a client that dividends are guaranteed may be guilty of misrepresentation.

An insurance agent does NOT have fiduciary responsibilities to

other agents. Because the agent handles money of the insured and insurer, he/she has a fiduciary responsibility.

All of the following are defined as doing insurance business EXCEPT

selling mutual funds

Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT

transportation to and from an outpatient facility

Under the Texas insurance code, an insurance company must pay death benefits for suicide if the policy has been in force for a MINIMUM of

two years. Because an insurance company cannot contest a death benefit claim from suicide if it occurred after the policy was in force for a minimum of two years (incontestability period).

A foreign insurance company is one that is incorporated

under the laws of another state

Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Texas Insurance Code covering

unfair methods of competition. Because boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Texas Insurance Code covering unfair methods of competition.

A Health Maintenance Organization (HMO) may issue an Evidence of Coverage form after it has been approved by the

Commissioner of Insurance. A Health Maintenance Organization (HMO) may issue an Evidence of Coverage form after it has been approved by the Commissioner of Insurance.

Insurance agent licenses normally must be renewed every

Insurance agent licenses normally must be renewed every 2 years.

Which of the following BEST describes Credit Life insurance?

Insurance issued on a debtor to cover outstanding balances on installment loans

All of the following may charge fees for insurance advice EXCEPT

Legal reserve agents. All of these may charge fees for insurance advice EXCEPT legal reserve agents.

An agent MUST give a prospective insured an Outline of Coverage when taking an application for a

Medicare Supplement policy. An agent MUST give a prospective insured an Outline of Coverage when taking an application for a Medicare Supplement policy.

If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in Texas, which of the following would be liable?

The agent and the company Any agent that sells an insurance policy for an unauthorized insurer runs the risk of being responsible for unpaid claims if the unauthorized insurer does not pay.

Which of the following statements is NOT CORRECT about the Commissioner of Insurance?

The governor appoints the Commissioner to a two-year term.

Which of the following circumstances would cause a Medicare Supplement policy to be cancelled?

The insured fails to pay the premium. Failing to pay the premium would cause a Medicare Supplement policy to be cancelled.

An agent may legally share commissions only with

another agent who is licensed in the same line of insurance An agent may legally share commissions only with another agent who is licensed in the same line of insurance.

An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of

coercion In this situation, the agent may be guilty of coercion

A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of

coercion A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of coercion.

Under an individual life insurance policy, an insured may assign a MAXIMUM of what percentage of policy ownership?

100% Under an individual life insurance policy, an insured may assign a maximum of 100% of policy ownership.

All of the following statements about health coverage for newborns are correct EXCEPT

coverage during the first year is limited to congenital defects. All of these statements about health coverage for newborns are correct EXCEPT "coverage during the first year is limited to congenital defects".

Which of the following actions by an insurance company is considered an unfair claims settlement practice?

denying an insured's claim without indicating the basis of denial under the policy

A group life insurance policy may NOT insure groups consisting exclusively of persons who are

elated by marriage, blood or legal adoption A group life insurance policy may NOT insure groups consisting exclusively of persons who are related by marriage, blood or legal adoption.

An insurance company may be judged guilty of false advertising if it

exaggerates its dividends in a newspaper advertisement. An insurance company may be judged guilty of false advertising if it exaggerates its dividends in a newspaper advertisement.

An organization that solicits insurance only among its members is known as a

fraternal benefit society An organization that solicits insurance only among its members is known as a fraternal benefit society.