CH 5

An insurer must acknowledge receipt of a notice of claim within how many days ?

15 days

An agent completed a CE course in 2022. Until what year must the agent keep the records of completion ?

2026

If an agent has completed 35 hours of continuing education in one renewal period, how many CE hours will the agent have to complete in the next renewal period

24

Anyone who violates the insurance code of Texas may be fined up to

25,000

All of the following would be considered an insurance transaction EXCEPT

Obtaining an insurance license

What is the major difference between a stock company and a mutual company ?

Ownership

A Participating insurance policy may do which of the following ?

Pay dividends to the policy owner

Who might receive dividends from a mutual insurer ?

Policy holders

How many hours of continuing education can be carried over from one licensing period to the next?

0 Hours

The commissioner of insurance issues and desist order and immediately receives a request for the charges to be reviewed in a hearing. Within how many days must the hearing be held ?

30 days

How long must producer maintain records of continuing education course completion

4 years

The insurance commissioner may examine the affairs of any insurer as often as necessary, but not less frequently than once every

5 years

What percentage of continuing education hours must be in a classroom setting ?

50%

The commissioner of insurance issues a cease and desist order to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?

60 days

An agents license will terminate within how many days from the due date of obligatory fees and continuing education requirements ?

90

Which of the following individuals could legally receive commissions form the sake of a life insurance policy ?

A licensed life insurance agent

Which of the following is another term for an authorized insurer ?

Admitted

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien insurer

All of the following statements about the continuing education requirement in this state are true EXCEPT

All licensed agents must comply by January 1 of even-numbered years

All of the following would be considered rebating EXCEPT

An Agent misrepresents policy benefits to convince a policy owner to replace policies

What is a foreign insurer?

An insurer with a home office in another state

In Texas, how is the commissioner of insurance placed in office

Appointed by the governor for a term of 2 years

If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered to be

Authorized

An insurer that holds a certificate of authority in the state in which it transacts business is considered a/an

Authorized insurer

To legally transact insurance in this state, an insurer must obtain which of the following ?

Certificate of authority

Forcing a client to buy insurance from a particular lender as condition of granting a loan is defined as

Coercion

Which entity had the authority to grant a temporary insurance agents license ?

Commissioner of the insurance

In Texas, the states continuing education requirement

Consists of completing 24 hours of CE each biennium

An insurance professional advise a client regarding the benefits of her life insurance policy, in exchange for a fee. Which of the following terms best describes this type of insurance professional ?

Counselor

Which of the following terms describes making false statements about the financial conditions of any insurer that are intended to injure any person engaged in the business of insurance

Defamation

Which of the following actions is not in violation of unfair claims settlement practice act

Denying an unsubstantiated claim

If a licensed agent in Texas receives a criminal conviction, that information must be reported to

Department of insurance

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer

Circulating deceptive sales materials to the public is what type of unfair trade practice?

False advertising

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer ?

Foreign

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization ?

Fraternal benefit society

To become a Texas insurance agent, an individual must

Have passed a licensing exam within the 12 months before applying

To become a Texas insurance agent, an individual must

Have passed a licensing exam within the 12 months before applying.

An insurer devises an intimidation strategy in order to corner a large portion of the insu market. Which of the following best describes this practice?

Illegal

Which of the following is NOT true regarding a certificate of authority

It is issued to group insurance participants

An insurer advertises a health policy that is covered by the Life and Health Insurance Guaranty Association. The advertisement includes a short list of benefits and approximate rates. The end of the advertisement includes statement that protection is provided by the Guaranty Association. Which of the following is true?

Mentioning the Guaranty Association in advertisements is considered to be unfair trade practice.

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation

For which of the following actions can an agents license be suspended or revoked

Rebates of premiums

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

All of the following are considered unfair trade practices in the business of insurance EXCEPT

Sharing commissions

All of the following are considered unfair trade practices in the business of insurance except

Sharing commissions

Which of the following types of insurers is owned by stock holders

Stocks

A license may NOT be denied, suspended, or revoked if the licensee

Submits an unsigned insurance policy application

All of the following are unfair claims settlement practices except

Suggesting negotiations in setting the claim

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 purchased the insurance policy today

An agent licensed in Texas is moving to Kansas. Which of the following applies to?

The agent has 30 days to notify the department of insurance of the new address

The following are all causes for the insurance commissioner to suspend or impose conditions upon the continuance of an agent license ECXPET

The applicant has been shown to be a poor person credit risk

Which of the following is not a licensing requirement for a corporation in the state of Texas?

The business must be able to pay up to $50,000 in the event that is it proven not to be negligent.

Who do agents represent

The insurance company

All insurers that provide life or accident and health insurance coverage in Texas must be a members of what association ?

The life and Health insurance Guaranty Association

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

The policy will not be affected

An agent explains the details of a life insurance policy to a client. The agent does not realize, however, that the state has recently rewritten two of the provisions. As a result, the agent inadvertently misrepresents the policy, making it more attractive than it really is. What best describes this situation?

There is no misconduct

All of the following statements apply to temporary licenses EXCEPT

They allow licenses to sell new polices

What is the purpose of the life insurance guaranty association

To help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company

An insurance agent wants for a client to replace her current annuities plan with another one. He presents the new one in an incomplete and dishonest way, which makes the new contract seem far more appealing than the original one. The policy owner ended up surrendering her original contract and replacing it with the new one. Which term best describes what the agent did.

Twisting

An applicant properly notifies her insurer of a straightforward claim, but the insurer waits an exceedingly long time to process it. Which of the below terms best describes the behavior of the insurer?

Unfair claims settlement practice

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

defamation

Which of the following best describes an insurance company that has been formed under the laws of this state

domestic