Ch 8 - Health Basics
Independent Agency
An independent agent is a person who enters into an agency agreement with more than one insurer. The independent agent has ownership of the business written, pays the cost of office space, clerical support, marketing, and the collection of renewal information.
Coinsurance
Cost sharing method stated as a percentage
If the applicant for an insurance policy is a minor, the application must be signed by the minor's: A Insurance producer B Guardian C Attorney D Grandparents
Guardian --- If the applicant is a minor, a guardian must sign the application.
Completing the Application
HIPAA Disclosures and Consent occurs Formal request for the insurer to issue a policy Required signatures
Underwriting Process
Insurability is determined Medical exam may be requested Classification of risk and rating
A medical exam required for underwriting on a proposed insured is paid for by the: A Medical examiner B Insured C Producer D Insurer
Insurer
All of the following are individual underwriting factors, EXCEPT: A Tobacco use B Age C Gender D Marital Status
Marital Status --- Individual underwriting factors include age, gender, tobacco use, occupations and hobbies, physical condition, moral hazard, health history, and the plan applied for.
Which one of the following is the best underwriting class for disability insurance? A Preferred B Substandard C Standard D Rejected
Preferred ---------- Issued as a Preferred Risk means a lower rate will be used if the insured meets the insurance company's qualifications as a preferred risk (lower than average risk).
Which one of the following is the initial source of underwriting information? A The application B The medical exam C The attending physician statement D The investigative consumer report
The application
Law of Agency
This is a relationship between 2 parties where one (the agent) may act on behalf of the other (the principal) and bind the actions or words of the principal.
Direct Mail or Direct Response
A direct mail or direct response marketing system does not use an agent. Policies are usually marketed directly from the insurer's home office. The insurer offers its contracts to the public through direct mail campaigns, and newspaper, radio, television, magazine and internet advertising.
The primary source of information for an insurer underwriting a potential risk is the: A Paramedical exam B Agent's report C Attending physician's statement D Application
Application
Disability insurance underwriters are concerned about the probability of: A Separation of service B Death C Illness or injury D Divorce
Illness or injury
Morbidity Table
Mathematical probability of loss due to sickness or injury
This type of policy covers various expenses that an insured may incur due to a routine accident or sickness. A Disability income B Dental expense C Long-term care D Medical expense
Medical expense
The __________ is the person applying for insurance coverage and is responsible for completing an application. A Insured B Producer C Policyowner D Insurer
Policyowner --- The policyowner is the person applying for insurance coverage and is responsible for completing an application.
Preexisting Condition
Prior medical condition
Accidental Injury
Spontaneous, unforeseen, and unintended act causing injury
A disability income policy may provide a benefit for loss of time from employment in which of these ways? A A daily amount for each day hospitalized and a lesser amount for each day at home B A flat benefit amount or a percentage of pre-tax income C A percentage of pre-tax income only D A flat benefit only
A flat benefit amount or a percentage of pre-tax income
If the premium paid by the applicant is the Offer, then the policy issued by the insurer is the: A Counter-offer B Underwriter's decision C Acceptance D Conditional acceptance
Acceptance --- The premium paid by the applicant is the Offer and the policy issued by the insurer is the Acceptance.
Agent
An insurance agent is a person who transacts insurance, other than life, disability, or health insurance, on behalf of an admitted insurance company. A life agent is authorized to transact life, disability and health insurance.
An application for health insurance is not required to be signed by the: A Insured B Producer C Beneficiary D Applicant
Beneficiary --- The producer, applicant, and insured must sign the application.
Which one of the following is not a source of underwriting information? A College transcripts B Medical exams C Medical Information Bureau (MIB) D An inspection report
College transcripts --- The sources of underwriting information include the application, medical exams, an Attending Physician's Statement, the Medical Information Bureau (MIB), an inspection report, and the agent's report.
Before the insurer can share any medical information, the applicant must have all of the following, except: A Notification of the rights to maintain privacy B An opportunity to refuse the dissemination of information C Compensation for any information that is disseminated D Notification of the treatment of the information
Compensation for any information that is disseminated ---------- Before an insurer can share any medical information, the applicant must be notified of the treatment of the information, rights to maintain privacy, and an opportunity to refuse the dissemination of information.
The insurer's underwriter may find information about an applicant's moral character, hobbies, work and general reputation from a: A Medical Examination B Attending Physician Statement C Agent's Report D Consumer Investigative Report
Consumer Investigative Report ---- A Consumer Investigative Report is a general report of the applicant's finances, character, morals, work, hobbies and other habits. It is sometimes called an Inspection Report.
Upon receipt of an application, the insurer's underwriter may issue the contract with exclusions or limitations. This means that: A Coverage is issued, but at a higher rate than quoted B Coverage is not issued C Coverage is issued, but there are limits on the insurer's obligation to pay D Coverage is issued at the rate that was quoted
Coverage is issued, but there are limits on the insurer's obligation to pay --- Exclusions/limitations may be temporary or permanent, but in any case they limit the insurer's obligation to pay.
If the insurer issues a policy after receiving an application for health insurance in which questions regarding preexisting conditions were left blank, what would be the consequence to the insured's coverage if a preexisting condition caused a claim shortly after the policy was issued? A Coverage would be as stipulated in the policy because the company issued the policy even though the question was left blank B The policy would be sent back to underwriting for approval C The policy would be cancelled D The policy would be reissued
Coverage would be as stipulated in the policy because the company issued the policy even though the question was left blank --- If a policy is issued with questions unanswered, the contract will be interpreted as if the question had not been asked and is therefore waived by the insurer. However, if the insurer can demonstrate that an inadvertent omission is a material concealment, the policy may be voided, because intentional or unintentional concealment allows the insurer to void the policy.
This type of coverage is used for replacing the insured's loss of earnings. A Dental expense B Medical expense C Disability income D Long-term care
Disability income ------ Disability Income (Loss of Time or Income) is a valued contract that pays weekly or monthly benefits due to injury or sickness. The benefit is either a percentage of the insured's past earnings or a flat dollar amount.
Self-funded employee health care benefit plans which are not fully insured are governed under which of the following federal acts? A FCRA B FICA C COBRA D ERISA
ERISA --- ERISA is the federal law that governs the administration and operation of employee benefit plans, including health care and other welfare benefit plans.
Which of the following is also known as a "captive agent"? A Exclusive agent B Direct writer C Independent agent D Actuary
Exclusive agent
In the event there is a policy issued and there are questions on the insurance application that went unanswered: A A new application must be filed B The insurer will cancel the policy C The agent will fill in the answers after the fact D It will be assumed that the insurer waived their right to have answers to those questions
It will be assumed that the insurer waived their right to have answers to those questions ------------------- If a policy is issued with application questions unanswered, the contract will be interpreted as if the question had not been asked and is therefore waived by the insurer.
Which of the following is not a government-sponsored plan of health care? A State disability insurance B Medicare Supplement C Medicaid D Medicare
Medicare Supplement --- Medicare Supplement plans are available from commercial insurance companies and are not government-sponsored.
Individual underwriting factors may include all of the following, except: A Health history B Age C Tobacco use D Religion or political affiliation
Religion or political affiliation
Copayment
Stated dollar amount paid by the insured per claim
Which of the following is NOT a common rating classification? A Substandard B Standard C Preferred D Subrated
Subrated ---------- The three classifications for risks are standard, preferred and substandard.
Regarding insurance company underwriting practices for health insurance, which one of the following statements is false? A The applicant must be notified and give consent for information to be received by a third party B The applicant's consent to the notice of information practices gives the insurer the right to obtain the various investigative, medical, and financial reports necessary to compete the underwriting process C The applicant's signature on the policy delivery receipt serves as the notice of the insurer's information practices D The notification of information to be received by a third party is disclosed to the applicant as part of the application
The applicant's signature on the policy delivery receipt serves as the notice of the insurer's information practices --- The signature on the application by the applicant serves as the notice of the insurer's information practices.
Consumers must be made aware of all of the following in a replacement sale, except: A The financial ratings from each rating service B There may be a waiting period for pre-existing conditions C The new policy may be offered with lower benefits, limitations, or exclusions of coverage D The new policy may have a higher premium
The financial ratings from each rating service
Who pays for any reports or Medical Exams required as part of the underwriting process for insurance? A The insured B The insurance company C The producer D The policyowner
The insurance company --- The insurance company pays for any reports or medical exams required as part of the initial underwriting.
Insurer as Principal
The insurer is the source of the authority in which the agent must abide, as stipulated in the agency contract. This means that the insurer is responsible for the agent's acts, as long as they remain in the bounds of the contract. If the agent exceeds its authority, the agent may become personally liable for his/her actions or obligate the insurer to coverage it did not intend to offer.
Medical Information Bureau (MIB)
The primary purpose is to collect adverse medical information about an applicant's health (supported by insurance companies) and act as an information exchange. MIB is a member-owned corporation that operates on a not-for-profit basis. The MIB's underwriting services are used exclusively by MIB member life and health insurance companies to assess an individual's risk and eligibility during the underwriting of life, health, disability income, critical illness, and long-term care insurance policies. These services "alert" underwriters to fraud, errors, omissions or misrepresentations made on insurance applications and the MIB may help lower the cost of life and health insurance for consumers. The MIB's coded reports represent general medical information and other conditions (typically hazardous hobbies and adverse driving records) affecting the insurability of the applicant. If the coded reports are inconsistent with the information provided by the applicant, underwriters are required to conduct a further investigation to obtain more information about the reported medical histories or conditions prior to making an underwriting decision. Because the MIB information is general, the report cannot be used for the sole purpose of declining an applicant for insurance.
A _______________ insurance company is owned by its policyholders. A Private B Government C Stock D Mutual
mutual
A _______________ insurance company is owned by its policyholders. A Stock B Private C Government D Mutual
mutual
Accident and Health Insurance
Injury and sickness losses are covered
A medical exam required for underwriting on a proposed insured is paid for by the: A Medical examiner B Producer C Insurer D Insured
Insurer
An individual jumps off a roof and breaks his leg. Which of the following statements is correct: A Jumping of the roof was an accident and breaking his leg was intentional B Jumping off the roof was intentional and breaking his leg was intentional C Jumping off the roof was an accident and breaking his leg was an accident D Jumping off the roof was intentional and breaking his leg was an accident
Jumping off the roof was intentional and breaking his leg was an accident ------ The individual jumping off a roof was a conscious decision and intentional; breaking his leg would be considered an accident.
In an AD&D policy, the capital sum provides benefits for which of the following losses? A Loss of limb or eyesight from accidental causes B Loss of limbs or eyesight from disease such as diabetes C Death from accidental causes D Death from all causes
Loss of limb or eyesight from accidental causes ----- Accidental Death and Dismemberment policies only provide benefits for death and loss of limbs or eyesight due to accidental causes. The policy will end whenever 100% of the principal sum is paid
The _________ was created in order to alert insurer home office underwriters of errors, omissions, or misrepresentations made on insurance applications. A Consumer Investigative Report B Attending Physician's Statement C MIB D The Agent's Report
MIB
The _________ was created in order to alert insurer home office underwriters of errors, omissions, or misrepresentations made on insurance applications. A MIB B The Agent's Report C Attending Physician's Statement D Consumer Investigative Report
MIB --- The MIB is supported by insurance companies and it collects medical information about an applicant's health as reported by insurance companies after underwriting.
Replacement of health or disability insurance generally requires that the new policy must do which of these? A Increase the premium and reduce the benefits provided B Lower the insured's annual premium by a minimum of 5% C Materially improve the insured's position in all or nearly all respects D Promise to Increase the benefits provided without an increase in premium
Materially improve the insured's position in all or nearly all respects --- In most instances, the replacement of a health or disability policy must improve the insured's position, which could include increased benefits at reduced cost. However, replacing health or disability insurance only for the purpose of reducing the premium is not always a wise decision. A new policy that provides the same or increased benefits (with or without a change in premium) may include exclusions for preexisting conditions which would be covered by the existing policy, and the replacement might not be in an insured's best interest. A reduction in benefits without a corresponding reduction in premium (or with an increase in premium) is never in a person's best interest.
Medical Examination
Medical Examination Records of an examination conducted by a medical professional regarding the applicant's present health. It is usually requested by the insurer after determining if the amount of coverage, age of applicant or health history warrant the examination. Medical exams are the insurer's expense.
This type of policy covers various expenses that an insured may incur due to a routine accident or sickness. A Dental expense B Medical expense C Disability income D Long-term care
Medical expense --- A Medical Expense contract covers the various expenses which an insured may incur due to an accident or sickness.
Accident and Health insurers would use which of the following formulas in determining premium rates? A Morbidity + Interest - Expenses B Mortality - Interest + Expenses C Morbidity - Interest + Expenses D Mortality + Interest - Expenses
Morbidity - Interest + Expenses ---------- Mortality is used for life insurance, morbidity for health insurance.
What factors are not used in underwriting an individual disability policy? A Age and gender B Health history and foreign travel C Political affiliation and religious preference D Smoking and hobbies
Political affiliation and religious preference --- Religious preference and political affiliation are not factors used in underwriting individual health policies.
A specified period that must elapse before new coverage goes into effect for a given condition is known as which of the following? A Probationary period B Exclusion C Benefit period D Waiting period
Probationary period --- A probationary period is a specified period of time after the effective date of a policy before new coverage goes into effect for specified conditions, such as losses due to a sickness or preexisting conditions.
The specified period that must elapse before new coverage is effective for nonaccidental losses is known as which of the following? A Waiting period B Morbidity table C Exclusion D Probationary period
Probationary period --- Disability policies may exclude coverage for illnesses for a short period of time (such as 7 to 10 days) after a new policy takes effect to avoid claims for preexisting conditions. Accidental injuries are never subject to a probationary period.
Which of the following has primary responsibility for ensuring that the application is filled out completely? A Producer B Actuary C Home office underwriter D Insurer
Producer
Policy Delivery
Producer explains rating, premiums, coverages, and policy benefits Statement of Good Health Legal delivery
Which one of the following is the worst underwriting class for disability insurance? A Rejected B Substandard C Preferred D Standard
Rejected -------- Rejection means the policy is not issued and will be declined since the applicant is considered an excessive risk.
Individual underwriting factors may include all of the following, except: A Tobacco use B Age C Religion or political affiliation D Health history
Religion or political affiliation
By signing an insurance application for disability insurance, the applicant is: A Warranting that statements made on the application are true B Guaranteeing that statements made on the application are true C Representing that statements made on the application are true D Guessing that statements made on the application are true
Representing that statements made on the application are true --- The applicant is representing that statements made on the application are true.
Regarding insurance company underwriting practices for health insurance, which one of the following statements is false? A The notification of information to be received by a third party is disclosed to the applicant as part of the application B The applicant must be notified and give consent for information to be received by a third party C The applicant's signature on the policy delivery receipt serves as the notice of the insurer's information practices D The applicant's consent to the notice of information practices gives the insurer the right to obtain the various investigative, medical, and financial reports necessary to compete the underwriting process
The applicant's signature on the policy delivery receipt serves as the notice of the insurer's information practices ---- The signature on the application by the applicant serves as the notice of the insurer's information practices.
With a conditional coverage receipt issued by the agent, the coverage is in effect: A The date the insurer cashes the check B The date the policy is issued C The date of application, if it is accompanied by premium, or date of a completed medical exam, if required D The date the insurer mails the policy to the agent
The date of application, if it is accompanied by premium, or date of a completed medical exam, if required
Consumers must be made aware of all of the following in a replacement sale, except: A The financial ratings from each rating service B The new policy may have a higher premium C The new policy may be offered with lower benefits, limitations, or exclusions of coverage D There may be a waiting period for pre-existing conditions
The financial ratings from each rating service ---- Upon issue of a new policy, there may be a new waiting period (probationary period) for pre-existing conditions or the policy may be issued with lower benefits, or with more limitations or exclusions compared to the old policy. Premiums may also be higher in the new policy.
Ultimately who has the responsibility to determine if an individual meets all the underwriting requirements set forth by the insurer? A The agent B The home office underwriter C The proposed insured's physician D The paramedical examiner
The home office underwriter ---- It is ultimately the home office underwriter's responsibility to determine if this individual meets all the underwriting requirements set forth by the insurer.
What is the name of the process in which an insurer selects, classifies, and determines the rate to be charged for the insurance applied for? A Underwriting B Financing C Auditing D Marketing
Underwriting
Certain disability and health care insurance products may be subject to specific advertising regulations. In general, insurance producers should do which of these? A Duplicate ads of other agents seen in newspapers or magazines, changing only the name, address, and phone number for their agency B Avoid all advertising since it is costly and does not often produce consistent results C Use company-provided advertisements for each product they wish to market D Create and use their own product-specific advertising
Use company-provided advertisements for each product they wish to market --- Advertising should be restricted to the use of company-provided advertisements. A producer who wishes to create his/her own advertising must usually submit those ads for company approval before they may be used. If not approved, the ads cannot be used.
Which is true regarding the advertising of Accident and Sickness Insurance? A Advertisements may use words or phrases such as 'all', 'complete', 'comprehensive' B When an agent misleads the public in an advertisement, only the agent is accountable C When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group D Sales talks and personal testimonials are not considered advertising
When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group
Which is true regarding the advertising of Accident and Sickness Insurance? A When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group B Advertisements may use words or phrases such as 'all', 'complete', 'comprehensive' C When an agent misleads the public in an advertisement, only the agent is accountable D Sales talks and personal testimonials are not considered advertising
When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group --------- Both agent and insurer are accountable. Such words as all, complete, or comprehensive are prohibited. Sales talks and testimonials are considered advertising and are regulated activities.
Answers to questions in applications for health and disability insurance are considered representations and not warranties. If an applicant later realizes he/she answered a question incorrectly, how may the answer be changed? A The applicant will have the opportunity to correct any wrong answers when the policy is delivered B Wrong information may be corrected at any time prior to issuance of the policy C The applicant will have up to 2 years to correct any wrong information in the application D Once submitted, answers in an application for insurance cannot be changed
Wrong information may be corrected at any time prior to issuance of the policy --- Because the application is the primary source of underwriting information, any changes to the application may only be made before a policy is issued. Once a policy is issued, the answers in the application may be used to deny or rescind coverage if determined to be material misrepresentations.
Direct Writer
A direct writer is an agent who is employed by, rather than contracted with, an insurer.
Fiduciary Duty
A fiduciary is a person who handles insurer funds in a trust capacity. If fiduciary funds are received by an insurance agent, broker, solicitor, life and/or accident and health agent, analyst or surplus lines broker, all of the following are required: Premiums collected must be kept separate and not be commingled. Such diverting , misappropriating, or using these funds for personal use is considered theft and punishable by law. Premiums, less commissions, must be remitted to the insurer Fiduciary funds received must be maintained in a trust account at a bank or depository in California In the case of any alternative method of maintaining fiduciary funds under a written agreement, such agreements must be obtained from every insurer or person entitled to the funds authorizing the maintenance and retention of any earnings on those funds.
Inspection Report
A general report of the applicant's finances, character, morals, work, hobbies, and other habits. This is sometimes referred to as a Consumer Investigative Report. This can be completed by the insurer or a third-party provider. The applicant must be made aware of any information gathering and has rights provided under the FCRA.
Agent's Report
A personal statement submitted by the producer to the insurer regarding any personal knowledge of the applicant, including information observed during the application process. This information remains confidential between the agent and the insurer, and it does not become part of the entire contract.
Which of the following is not a prohibited form of advertising? A Advertisements for Medicare Supplements that create undue anxiety in the minds of prospects B An advertisement that implies that claim settlements are generous C An advertisement that uses the words 'only', 'just', 'merely', 'minimum', or similar words to imply a minimal imposition of restrictions and reductions D A side-by-side comparison of two policies issued by different insurers
A side-by-side comparison of two policies issued by different insurers
Which of the following is not a prohibited form of advertising? A An advertisement that implies that claim settlements are generous B An advertisement that uses the words 'only', 'just', 'merely', 'minimum', or similar words to imply a minimal imposition of restrictions and reductions C Advertisements for Medicare Supplements that create undue anxiety in the minds of prospects D A side-by-side comparison of two policies issued by different insurers
A side-by-side comparison of two policies issued by different insurers --- comparisons of policies are not prohibited, but they must be complete, accurate, and fair.
In the event a policy is delivered by an agent to the insured, and the premium payment is to be collected at the time of this delivery, normally what else must the agent obtain to make the delivery complete? A Additional payment reflecting lost interest B A statement of good health C An affidavit from the applicant D Postage and handling fees
A statement of good health
In the event a policy is delivered by an agent to the insured, and the premium payment is to be collected at the time of this delivery, normally what else must the agent obtain to make the delivery complete? A Additional payment reflecting lost interest B An affidavit from the applicant C Postage and handling fees D A statement of good health
A statement of good health ---- It is the agent's responsibility to deliver the policy and verify that the insured has remained in good health.
Timothy owns an individual A&H policy, and in the event of an accident, he is required to prove only that the injury itself is unforeseen and unintended. Tim's policy is based on which of the following definitions of accident? A Accidental Bodily Injury B Accidental Means C Accidental Death D Accidental Dismemberment
Accidental Bodily Injury
Timothy owns an individual A&H policy, and in the event of an accident, he is required to prove only that the injury itself is unforeseen and unintended. Tim's policy is based on which of the following definitions of accident? A Accidental Death B Accidental Dismemberment C Accidental Means D Accidental Bodily Injury
Accidental Bodily Injury --- Tim's policy is based on Accidental Bodily Injury (or, Accidental Injury) as opposed to Accidental Means. Under the Accidental Means definition, both the cause and the result must be unintended and not under the control of the insured.
If an application is submitted without a premium payment, coverage will go into effect when the: A Agent obtains a signed Statement of Good Health from the insured and the premium is collected at policy delivery B Policy is issued C Application is signed or any required medical exam is completed, whichever occurs later D Insurer mails the policy to the agent
Agent obtains a signed Statement of Good Health from the insured and the premium is collected at policy delivery ---- If an application is submitted without a premium payment there is no coverage until a signed Statement of Good Health and premium are collected at the time of policy delivery.
The JKL Insurance Company is incorporated in Switzerland, has its home office in Florida, and is authorized to conduct the business of insurance to Californians through its branch office in Fresno, California. To the state of California, JKL is a: A Sovereign insurer B Domestic insurer C Foreign insurer D Alien insurer
Alien insurer --- Since JKL is incorporated in another country it would be an alien insurer in California. There is no such thing as a "sovereign insurer."
Exclusive Agency
An exclusive or captive agent is a person under agreement to represent a single insurer, or a group of insurers, having common ownership. The insurer retains the rights to the business written by the agent. If the agent leaves the insurer, the book of business is kept by the insurer. The insurer normally provides services to its exclusive agents, such as providing office space and clerical support, preparing contracts, and mailing renewals.
What must a producer give an insured who purchased an accident and health policy no later than policy delivery? A The company's rate book B Claim forms C An outline of coverage (also called a policy summary) D Any and all sales literature
An outline of coverage (also called a policy summary) ---- An outline of coverage (also called a policy summary) must be provided to a prospective buyer of health insurance at the time of application or policy delivery. The outline of coverage includes benefits, premiums, and other relevant information regarding the sale of the policy.
Application
Application Part I - General: Contains general questions about the applicant, such as gender, marital status, residence, date of birth, occupation, and past and present insurance. ------ Part II - Medical: Contains questions pertaining to medical background, past and present health, any medical visits, hospitalizations, or surgeries in recent years, and medical status of immediate family members, including their ages and causes of death.
Which of the following is not one of the three types of agent authority? A Apparent authority B Express authority C Assumed authority D Implied authority
Assumed authority --- The three types of binding authority are Express, Implied, and Apparent.
Attending Physician Statement (APS)
Attending Physician Statement (APS) Used in cases in which the individual application and/or medical reports reveal conditions of which more information is required. This statement is completed by the applicant's personal physician treating a specific condition. An applicant must sign a written release to enable a release of the APS.
A client requests a Medical Expense Policy several months after the agent suggested the policy. The underwriter will most likely order which of the following? A Attending Physician's Statement B Blood Test C Stress Test D Consumer Report
Attending Physician's Statement
Authority
Authority indicates the capacity in which an agent legally represents an insurer, and may be express, implied, or apparent. All three are equally binding. Express authority is explicitly written in the agency contract. Implied authority is authority which an agent is assumed to have and could not otherwise conduct business under the terms of the agency contract. Apparent authority is created when an agent exceeds the authority expressed in the contract, and the insurer does nothing to counter the public impression that such authority exists.
When gathering information from a third party to use during underwriting, an insurance company must meet the requirements of the: A Social Security Act (SSA) B Underwriting Information Act (UIA) C Freedom of Information Act (FOIA) D Fair Credit Reporting Act (FCRA)
Fair Credit Reporting Act (FCRA)
When gathering information from a third party to use during underwriting, an insurance company must meet the requirements of the: A Social Security Act (SSA) B Freedom of Information Act (FOIA) C Fair Credit Reporting Act (FCRA) D Underwriting Information Act (UIA)
Fair Credit Reporting Act (FCRA) --- An insurance company must meet requirements under the Fair Credit Reporting Act (FCRA) when gathering information from a third party to use during underwriting.
A producer gathers information about the applicant for the insurer in order to avoid adverse selection. This is considered to be: A Principle of indemnity B Law of large numbers C Application process D Field underwriting
Field underwriting
____________ is the initial step of the total process of insuring a health risk. A The sales presentation B Field underwriting C Collecting the premium payment D Completing medical exams
Field underwriting
Health care providers are required to preserve patient confidentiality and protect health and medical information under the: A Fair Credit Reporting Act (FCRA) B Health and Human Services Act (HHSA) C National Association of Insurance Commissioners Underwriting Disclosure Model Act (NAICUDMA) D Health Insurance Portability and Accountability Act (HIPAA)
Health Insurance Portability and Accountability Act (HIPAA)
Deductible
Initial amount payable before benefits apply
Information about an applicant's work behavior or character gathered from neighbors or co-workers would be included on an? A Agent's Report B APS C MIB D Inspection Report
Inspection Report --- An Inspection Report is a general report of the applicant's finances, character, morals, work, hobbies and other habits. It is sometimes called a Consumer Investigative Report.
All of the following are alternatives an insurer may have when asked to insure a substandard risk, EXCEPT: A Limit the coverages of the policy B Attach a rider to the policy excluding certain coverages or conditions C Issue the policy with a waiting period after which the insurer may cancel the policy D Charge a higher than standard premium
Issue the policy with a waiting period after which the insurer may cancel the policy
An individual jumps off a roof and breaks his leg. Which of the following statements is correct: A Jumping of the roof was an accident and breaking his leg was intentional B Jumping off the roof was intentional and breaking his leg was an accident C Jumping off the roof was intentional and breaking his leg was intentional D Jumping off the roof was an accident and breaking his leg was an accident
Jumping off the roof was intentional and breaking his leg was an accident
An individual jumps off a roof and breaks his leg. Which of the following statements is correct: A Jumping of the roof was an accident and breaking his leg was intentional B Jumping off the roof was intentional and breaking his leg was intentional C Jumping off the roof was intentional and breaking his leg was an accident D Jumping off the roof was an accident and breaking his leg was an accident
Jumping off the roof was intentional and breaking his leg was an accident --- The individual jumping off a roof was a conscious decision and intentional; breaking his leg would be considered an accident.
Timothy owns an individual A&H policy, and in the event of an accident, he is required to prove only that the injury itself is unforeseen and unintended. Tim's policy is based on which of the following definitions of accident? A Accidental Dismemberment B Accidental Means C Accidental Death D Accidental Bodily Injury
Accidental Bodily Injury
The written formal request by an applicant to an insurer requesting the insurer to issue a policy based upon information provided is: A An illustration B An application C A receipt D A quote
An application ----------- An application is a written formal request by an applicant to an insurer requesting the insurer issue a policy based upon information contained in the application.
The __________ is the person applying for insurance coverage and is responsible for completing an application. A Policyowner B Producer C Insurer D Insured
Policyowner