Chapter 10: Insurance Regulation

4) An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice? A. Defamation B. Illegal C. A legal advertising strategy D. Unfair Discrimination

B. Illegal

7) All of the following are considered unfair trade practices in the business of insurance EXCEPT A. Defamation B. Sharing commissions C. Boycott D. Rebating

B. Sharing commissions

9) Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must A. Respond to the consumer's complaint B. Defend the report if the agency feels it is accurate C. Change the report D. Send an actual certified copy of the entire report to the consumer

A. Respond to the consumer's complaint

14) Within how many days must a producer respond to an inquiry from the Commissioner? A. 3 days B. 10 days C. 15 days D. 30 days

D. 30 days

6) All of the following are licensing requirements for a business entity, EXCEPT A. Demonstrating general fitness, competence, and reliability B. Maintaining on staff at least 1 licensed person in good standing C. Applying for a license in the same lines of authority as held by licensed designees D. Having all employees complete continuing education courses once every 2 years

D. Having all employees complete continuing education courses once every 2 years

13) A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT A. Be responsible for at least 25% of total commissions collected by the office that he or she mangers B. Have an authority to act on the insurer's behalf C. Be found sufficiently fit, competent and reliable by the Department of insurance D. Have paid all applicable fees

A. Be responsible for at least 25% of total commissions collected by the office that he or she mangers

1) Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? A. Rebating B. Twisting C. Switching D. False advertising

B. Twisting

2) Which of the following would be considered an unfair claims settlement practice? A. Requesting the insured swear under oath concerning the facts of the claim B. Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation C. Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered D. Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim .

C. Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

12) Which of the following would NOT be considered an unfair and deceptive practice A. Defamation B. Misrepresentation C. Controlled business D. Rebating

C. Controlled business

8) After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT A. Impose a civil penalty B. Issue a cease and desist order C. Suspend or revoke the license D. Imprison the licensee

D. Imprison the licensee

5) The Federal Fair Credit Reporting Act A. Regulates consumer reports B. Protects customer privacy C. Regulates telemarketing D. Prevents money laundering

A. Regulates consumer reports

11) How long does a temporary producer's license last for the surviving spouse of a deceased producer? A. 90 days B. 150 days C. 180 days D. 365 days

C. 180 days

15) For how long must a company maintain a complete file of all advertisements used? A. 30 days after the advertisement expires B. No more than 3 years C. At least 4 years D. 90 days after the advertisement is first used

C. At least 4 years

3) A producer's license must be renewed A. Every 5 years B. Annually C. Biennially D. Every 3 years

C. Biennially

10) According to the telemarketing sales rules, what are the permissible calling hours for telemarking calls? A. 10am until 10pm B. 7am until 7pm C. 7am until 9pm D. 8am until 9pm

D. 8am until 9pm