Chapter LAH8: Texas Laws and Rules Pertinent to Insurance
An employee is covered under a group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse may be insured for under this program?
$25,000
An insured may assign up to __ of policy ownership under an individual life insurance policy
100%
What is the MINIMUM benefit period that must be offered by a Long-Term Care policy?
12 months
In Texas, how long must a policy be in force before an insurance company must pay death benefits for suicide?
2 years
A new agent must complete at LEAST __ hours of continuing education within 24 months of initial license
24
General life, accident, and health agents must complete a minimum of _______ continuing education hours per renewal period.
24
The Insurance Commissioner must give how many days notice prior to holding a hearing regarding an agent's unfair or deceptive practice?
30
An HMO must hold an open-enrollment period at least annually for:
31 days
An individual life insurance policy must have a grace period of at least __________ days.
31 days
Every 12-months after the initial enrollment period, an HMO must hold an open enrollment period of
31 days
In Texas, an individual insurance policy is REQUIRED to have a grace period of
31 days
An individual who was denied a license must wait to reapply for a license a minimum of:
5 years
__ of continuing education MUST be completed in the classroom or classroom equivalent
50%
How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law
6 months
A temporary agent's license by the Commissioner of Insurance is valid for up to __ days
90
Who is NOT eligible for an agent license in this state?
A 17-year old who passed the licensing exam 6 months ago
Which of the following does not describe an eligible group for group life insurance?
A group consisting exclusively of persons related by marriage or blood
An individual may be denied a license or be disciplined by the Department for all of the following reasons, except if the individual has:
Actively engaged in soliciting and writing insurance for the general public
A license may be suspended or revoked for which of the following?
An agent is actively engaged in soliciting insurance only to family members
A licensed agent is required to obtain which of the following before transacting insurance in Texas?
An appointment from an insurer
Which of the following is considered false advertising?
An insurer exaggerates its dividends in statements published in a newspaper
In Texas, which of these statements regarding the suicide clause is TRUE?
An insurer may not use suicide as a defense against payment after the second year
A licensed life insurance agent in Texas can share commissions with which of the following?
Another licensed life insurance agent in Texas who assisted with the sale
Coverage for newborns must begin:
At birth
Which of the following statements about continuing education is true?
At least 50% of continuing education hours must be completed in a classroom or classroom equivalent setting
A certificate of __ permits an insurance company to transact business in Texas
Authority
The Texas Department of Insurance requires all licensees to:
Be honest, trustworthy, and reliable
Which of the following is a requirement for obtaining a Texas insurance agent's license?
Be honest, trustworthy, and reliable
Which of the following is a method used by an HMO to compensate a physician or provider for providing a defined set of health care services and is based on a predetermined payment per enrollee:
Capitation
Holding which of the following professional designations will exempt a person from taking the life licensing examination?
Chartered Life Underwriter (CLU)
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
Coercion
An Evidence of Coverage form may be issued by a Health Maintenance Organization (HMO) after being approved by the
Commissioner
All of the following are required to be included in a life insurance illustration, except:
Company specific mortality tables
Which of the following is NOT included in a life insurance illustration
Company's mortality table
Which of the following statements about health coverage for newborns is NOT true?
Coverage is limited to only congenital defects
Publishing or circulating information that is maliciously derogatory to the financial condition of an insurance company with the intent to injure is known as:
Defamation
The commissioner may examine the records of an insurance company for the purpose of:
Determining solvency
All Medicare supplement policies must offer coverage for all of the following, except:
Disability income
Under the ACA (Affordable Care Act), a catastrophic plan may be purchased by any of the following, except an individual:
Enrolled in Medicaid
How often must an insurance agent license normally be renewed?
Every 2 years
Which of these provisions is NOT required in life insurance policies?
Extended term
According to the Texas Insurance Code, an insurance company incorporated in New Mexico is a(n):
Foreign insurer
What is an organization that solicits insurance only to its members?
Fraternal benefit society
If an insurer requires an individual to be tested for the AIDS virus, all of the following are required, if applicable, except:
Gather statistical information that identifies the applicant to share with other insurers
A long-term care policy issued in Texas must, at a minimum, be offered as:
Guaranteed renewable
All of the following statements about life insurance policy provisions are correct, except:
If a policy lapses due to unpaid premiums, it may only be reinstated up to 2 years after lapse
With respect to advertising requirements, all of the following are allowable unless the insurer:
Includes the terms investment, savings plan, or profit sharing
Which of the following groups may NOT be insured by a group life insurance policy?
Individuals who are related by blood
An insurance agent does NOT owe a fiduciary duty to:
Insurance counselors
A Certificate of Authority is issued to an insurer for which of the following reasons?
It certifies the insurer is authorized to transact insurance in this state
Which of the following may NOT charge fees for insurance advice?
Legal reserve agents
Which of the following is not a duty of the commissioner?
Make state insurance laws
An applicant MUST receive an Outline of Coverage when an application is taken for a(n)
Medicare Supplement policy
What prohibited trade practice is committed if an agent provides misleading information regarding guaranteed dividends, terms, advantages, or disadvantages of a policy?
Misrepresentation
Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?
Misrepresentation
Which type of insurance company is owned by its policyholders?
Mutual insurer
An enrollee may have coverage cancelled or nonrenewed by an HMO (Health Maintenance Organization) for which of the following?
Nonpayment of premium
To terminate an agent's appointment, the insurer must:
Notify the Texas Department of Insurance of the termination of appointment
When taking an application for Medicare supplement policy, an agent must provide the applicant with a(n):
Outline of Coverage
Which of the following is not included in a Summary of Benefits and Coverage?
Premiums
An agent's appointment:
Remains in force until terminated or withdrawn
Which of the following is not a prohibited claims settlement practice?
Requiring a claimant's income tax return while investigating a fire
Which of the following is NOT a required provision in group life policies?
Right to Loan
A small employer health insurer may not offer coverage to an eligible employee unless the employee has:
Satisfied the applicable waiting period
Which of the following is NOT transacting insurance?
Selling stocks, bonds, and mutual funds
Who owns a stock insurance company
Stockholders
The commissioner is authorized to perform all of the following duties, except:
Suspend insurance licenses for up to 5 years
All of these statements about the Commissioner of Insurance are true EXCEPT
The Commissioner must be elected
How long does an insurance company's appointment last
Until terminated
What is required for an agent whose license has been revoked?
Wait at least five years before applying for a new license
A plan through the Marketplace may be purchased by
any legal resident (except those imprisoned)
B the insurance agent tells his clients that their rights may be impaired if they fail to complete a release form within a given period of time. B may be found guilty of
coercion
The phrase "transacting business" includes
collecting premiums
An insurance company organized under New York laws and licensed to do business in Texas is considered a(n)
foreign company
Credit Life Insurance is
insurance issued on a debtor to cover outstanding loan balances
During a sales presentation for a participating life insurance policy, and agent MUST
make a prospect understand that dividends are NOT guaranteed
An example of rebating would be
returning a portion of a premium as inducement to purchase insurance
To terminate an agent's appointment, an insurance company must
send termination notice to the Texas Department of Insurance
Foreign Insurance Company conducting insurance business in Texas
was formed under the laws of another state
Under Nonforfeiture Law, a cash surrender payment may be deferred up to:
6 months
All of the following regarding Evidence of coverage are correct, except:
The evidence of coverage must be delivered in writing
Why would the Insurance Commissioner examine the records of an insurance company
To determine the solvency of the company
