Ch 11 Colorado Laws and Rules

Which of the following words may be used in the advertisement of life insurance or annuities?

Guaranteed

G takes out a life insurance policy on October 8th, 2008. On August 3, 2009, G takes his own life. When G's beneficiary files a claim,

The claim will be denied under the suicide provision

The USA Patriot act was signed into law as a response to

9/11 Terrorist Attacks

Which of the following is an example of defamation?

A brochure including an untrue statement regarding a competitor's ability to pay claims

All of the following are considered a form of advertisement EXCEPT

Communication or materials used within an insurer's own organization

Paying insurance premiums on a more frequent basis will cause the policy to have

Higher Premiums

A license is deemed to be used for controlled business if during any 12-month period...

The licensee's total premiums on controlled business exceeded the total premiums on all other business

Upon request, when must the Colorado Supplement to the Summary of Benefits and Coverage Form be provided?

Within 7 business days

To be valid, a group life insurance policy...

may not be issued to a group formed solely for the purpose of obtaining insurance

Renewing a producer's license requires __ hours of continued education every 2 years.

24

A producer must remit premiums to the insurer within ___ days after receipt.

45

When replacing an exiting life insurance policy, the replacing insurer must notify the existing insurer within ___ business days.

5 business days

How long must a replacing insurer maintain the records of a replacement transaction?

5 years

When may the Commissioner conduct an examination of an insurance company?

as often as deemed necessary

If an insurance company wishes to discriminate rates based on gender, it must

be justified by actuarial statistics

Licensing is required for all of the following except

Selling prepaid legal services

Colorado's replacement rules apply to all of the following types of insurance EXCEPT

Single premium whole life

Which situation allows the producer to also be the beneficiary on a client's application for life insurance

When insurable interest exists

If an annuity application was not taken in person, an insurer must provide the applicant a Buyer's Guide

Within 5 business days of the insurer receiving the application

A company that has not been authorized to operate in Colorado is known as

a nonadmitted insurer

Which of the following potential insurance sales would be subject to replacement regulations?

A new policy that causes an existing life insurance policy to be surrendered

If a producer offers to refund part of a prospect's premium in exchange for the purchase of a life insurance policy, the producer is committing the illegal act of

Rebating

Which of the following coverage exclusions or limitations is permitted under a long-term care policy issued in Colorado?

pre-existing conditions

In Colorado, what is required to be covered in individual and group medical expense policies?

Diabetes

As a condition to be approved for a loan, a creditor may require the borrower to

Obtain an insurance policy through an insurer of the borrower's preference.

If a producer chooses to conduct business under an assumed name, when must notification be given to the Commissioner?

Prior to using the assumed name

Which of the following is required for a life insurance Lapse Notice?

Reason stated why policy will lapse

In Colorado, all of the following are considered unfair trade practices except

Replacement

All of the following penalties apply to anyone giving intentional false testimony during an insurance examination EXCEPT

guilty of a felony

On June 1, 2004 G takes out a $20,000 Whole life insurance policy with an Accidental Death and dismemberment rider. On July 1, 2005 G intentionally overdoses on sleeping pills and takes her own life. What will G's beneficiary receive as a death benefit?

$20,000

A producer who violates a cease and desist order may, after a hearing, be fined up to $___.

$500

Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of ___ from the policy's effective date.

1 year

An insurer cannot deny a claim unless

There is a reasonable explanation of the claim

Which of the following is NOT a required provision for an accident and health policy?

Insurance with other insurers

Which of the following statements regarding the Notice Regarding Replacement of Life Insurance is CORRECT?

A copy of the notice must be signed by the applicant and submitted with the application

When a minor is designated as the sole primary beneficiary,

A guardian will be court appointed in the event of a death claim

Which of the following is CORRECT regarding a producer's fiduciary responsibility with client's funds?

A producer may never commingle personal funds with funds paid by or to a client.

A fiduciary responsibility is defined as

A relationship of special trust and confidence when a person is entrusted with another's funds

A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of

Adhesion

A producer that only sells insurance to family members is said to be engaging in

Controlled business

Who is not eligible to receive commissions from the sale of an insurance product?

Corporate Executive

An insurer that terminates a producer's appointment must inform the Commissioner within how many days?

30

A life insurance applicant realized he failed to disclose material history and calls the producer. Any changes made to the application must be initialed by the

Applicant

According to the Colorado Fraud Statute, all of the following must contain a warning against insurance fraud EXCEPT

Certificates of authority

Which of the following documents are not required to mention the Colorado Fraud Statute

Certificates of authority

Ultimately, who is responsible for a producer-generated advertisement?

Insurer

Which information is NOT included in the Colorado Supplement to the Summary of Benefits and Coverage form?

Insurer's prior year financials

When a claim has been denied, the insurer must

Issue a statement to the policyowner explaining the coverage, provision, or laws on which denial was based

The primary difference between the Colorado Partnership LTC policy and other LTC policies is

Medicaid asset protection

If an insurer is authorized to conduct business in another state and wishes to conduct business in Colorado, it must..

Receive a certificate of authority from Colorado

A verbal or written statement which misleads a policy's features, benefits, or coverage is considered

misrepresentation

Which of the following statement is CORRECT regarding insurable interest in a life insurance contract?

A person generally is considered to have an unlimited insurable interest in himself or herself.

Which of the following offers an insurance applicant the right to review the contract and receive a full refund?

Free-look period

If a producer is found to be writing primarily controlled business,

the Commissioner will not renew the license

In Colorado, a life insurance applicant has ___ days after policy delivery for a full refund of premium if not satisfied for any reason

15

T calls to file a claim on his health insurance policy. Within how many days must the insurer provide T's proof of loss forms?

15 days

When an employee's coverage terminates under a group health policy, the employee must be offered continuation coverage for

18 months

From what point must the insurer pay interest on the proceeds of a death claim?

Date of death

An insurer can deny a claim under a longterm care insurance policy for any material misrepresentation made by the insured if it has been in effect for

Fewer than 6 months

Which of the following is an example of a misrepresentation?

describing a universal life policy as a security

All accident and health policies issued in Colorado that provide major medical services must offer policyholders the opportunity to purchase

home health care coverage

If an applicant for an annuity refuses to provide suitability information, the producer should

obtain the consumer's signed statement documenting his or her refusal to provide suitability information

Interest on life insurance proceeds is

required if the claim was not paid within 30 days of the date insurer received the claim

If a producer is going to deposit any premium into a bank account prior to remitting the funds to the insurer, he/she must use a

separate insurance trust account

In regards to maternity care, which of the following is not required to be covered in the State of Colorado?

standard newborn circumcision

The commissioner may issue an emergency cease and desist order without a hearing for all of the following circumstances EXCEPT

Writing controlled business

In addition to suspending/revoking license and issuing fines, the Commissioner has the authority to do all of the following except

Issue prison sentences

In Colorado, which of the following is true regarding the commingling of an insured'd funds with the funds of the producer?

Its never okay

Which of the following is NOT a problem when existing life insurance is replaced with new coverage?

Comprehensive coverage may increase under the new policy

When recommending the purchase or exchange of an annuity, a producer must determine the suitability of the purchase by performing all of the following EXCEPT

Determining the marital status of the applicant

When may the commissioner issue an emergency cease and desist order?

If there is suspicion of an unauthorized person engaging in insurance business without being licensed

What is the maximum amount the Commissioner can fine an insurer for each violation of a cease and desist order?

$10,000

How does the Commissioner attain this position?

Appointed by the Governor

If a producer completes an insurance application, collects the initial premium and issues the appropriate receipt,

Coverage is contingent upon the insurer's underwriting policies

Circulation of a maliciously critical statement about an insurer's financial condition meant to damage the insurer's reputation or business is called

Defamation

Which of the following is a duty of the commissioner?

Reviewing and approving license applications

When a life insurance underwriter is determining insurability, it is illegal to base these decisions on ___.

Sexual Orientation

A health insurer may exclude medical coverage for any claims that result from

Skydiving

Which of the following is an example of rebating?

returning a portion of a premium as inducement to purchase insurance

Which of the following statements is true regarding the replacement of a life insurance policy in Colorado?

The replacing insurer must maintain copies of all records regarding replacement for at least 5 years

When is it appropriate for a producer's spouse to be the primary beneficiary on an applicant's life insurance policy?

When insurable interest exists