FL-2-15 Chapter 10 Practice Questions

If an agent does not notify the insurer of an address change, what is the maximum penalty that can be imposed for a one-time offense?

$250

Under special circumstances, continuing education requirements may be extended beyond the 2-year period for a maximum period of

12 months

What is the minimum age that a person can obtain a life insurance license?

18

Continuing education requirements must be met every

2 years

In order to maintain an insurance license, an agent licensed for less than 6 years will need to satisfy Florida's continuing education requirement of

24 hours every 2-year period.

If a licensee changes his or her residence address, within how many days must the department be notified?

30

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws?

Absolute

What is reinsurance?

An agreement between a ceding insurer an assuming insurer

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

An applicant for an insurance agent's license must

Complete a prelicensing education course.

Which of the following types of insurers is owned by stockholders?

Stock

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of

Twisting

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

Authorized insurer.

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

Authorized.

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility.

No insurance policy form can be issued, delivered, or used in this state unless it has been

Filed with and approved by the Office of Insurance Regulation.

Which of the following activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance agent's license?

Forgery

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity.

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 purchases the insurance policy today

An applicant for a life agent's license may obtain a temporary license for a maximum period of

6 Months

Which of the following is true regarding branch agency licensing?

Agent in charge must be licensed.

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies.

What is a foreign insurer?

An insurer with a home office in another state

What are the 2 offices of the Financial Services Commission?

The Office of Financial Regulation and the Office of Insurance Regulation

Which of the following entities is responsible for agent licensing and administrative supervision?

The Office of Insurance Regulation

An agent transacts business for Insurer A and Insurer B, both selling life insurance, and for Insurer C, selling health insurance. How many appointments must the agent hold?

Three - one for each insurer

Which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another?

Twisting

All of following are the general qualifications for an agent's license EXCEPT

Have a high school diploma.

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Who examines the books and records of insurance companies in Florida?

The Chief Financial Officer

How often must domestic insurance companies be examined by the Chief Financial Officer in Florida?

At least every 5 years

If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of

Churning.

An insurance producer just sold an insurance policy to his sister. What kind of business is this?

Controlled

Which of the following authorities grants and revokes licenses?

Department of Financial Services

Which of the following is NOT a responsibility of the Office of Insurance Regulation?

Enacting new insurance laws (State Legislature's Job)

An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as

Excess.

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

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. The insurer is hoping that this advertising will help to eliminate the competition and therefore create a monopoly. Which of the following best describes this act?

Illegal

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

The Office of Insurance Regulation is responsible for all of the following insurer activities EXCEPT

Issue of securities.

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

All of the following would be considered an insurance transaction EXCEPT

Obtaining an insurance license.

When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT

Provide a 30-day advance notice to the Commissioner.

What method do insurers use to protect themselves against catastrophic losses?

Reinsurance

If a person accumulates more continuing education hours than is necessary to fulfill the requirements for a 2-year period, which of the following will occur?

The extra hours may be continued into the next period.

An insured submits a proof of loss form within 10 days of a loss. The insurer, however, does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?

Unfair claims settlement

In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year?

50%

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

Concealment.

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination.

Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in

Expiration of the license.

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?

Insurance Guaranty Association

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status.

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

An insured purchased an insurance policy 5 years ago. Last year, the insured received a dividend check from the insurance company that was not taxable. This year, the insurer did not send a check. From what type of insurer did the insured purchase the policy?

Mutual

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

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.

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

Admitted

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility?

Promptly forwarding premiums to the insurance company