Insurance Regulations - Health/Disability WA State

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Fraud According to Title 18, Sections 1033 & 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud. This includes statements made on an application for insurance, renewal of a policy, claims for payment or benefits, premiums paid, and financial condition of an insurer.

What is utmost good faith?

The principle that applies that there will be no fraud, misrepresentations or concealment between the parties. As it pertains to insurance policies, both the insurer and insured must be able to rely on the other for relevant information. The insured is expected to provide accurate information on the application for insurance, and the insurer must clearly and truthfully describe policy features and benefits, and must not conceal or mislead the insured.

Which of the following is NOT a goal of risk retention?

To minimize the insured's level of liability in the event of loss. Usually results from three basic desires of the insured: to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured.

Which of the following provisions is NOT mandatory for health insurance policies in WA?

Unpaid premiums Physical exams and autopsy, misstatement of age, and legal actions are all madatory provisions required by WA state law

The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as

Utmost good faith.

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years

How many hours of continuing education is each producer required to complete during each 2 year licensing period?

24 hours

How many hours of ethic education are producers required to complete every licensing period?

3 hours NOTE: A producer must complete 24 hours of CE, including 3 hours in ethic

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

For how many years must insurance producers keep records of written disclosures regarding producer compensation?

5 years

Once an individual is licensed as an insurance producer for life or accident and health insurance, how many hours of training must the producer initially complete to sell long term care insurance?

8

A copy of a replacement notice is provided to the applicant, and an additional copy signed by the applicant is retained by the insurer. A direct response insurer must deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of accident and sickness coverage. The form must be filed with the commissioner prior to use in this state. The replacement notice in essence must state the following:

All of the above are required in a replacement notice - this notice is for your benefit and is required by law - The agent is required to give you this notice - It may not be advantageous to drop or change existing policy. It may include some disadvantages as well

Under the Health Care False Claims Act, any person who makes false claims or conceals material information regarding a claim will be deemed guilty of

Class C Felony

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

Which of the following acts is NOT considered to constitute an act of transacting insurance?

Filing forms with the Department

Every health care service provider that issues group policies for hospital or medical expense must offer the contract holder an option to include a contract provision granting persons who become ineligible for coverage under the group contract the right to continuing the group benefits

For a period of time and at a rate agreed upon

Which of the following is correct regarding the premium funds received by a producer in the fiduciary capacity?

Funds may be kept in a separate account

In an effort to contain the costs of health care caused by impact of fraudulent claims, the state has enacted penalties and deterrents by the creation of which of the following laws

Health Care False Claim Act The act was created with the goal of limiting fraudulent health care claims that drive up the costs of health care in WA To that end, the act establishes specific penalties for and deterrents to fraudulent health care claims

Any person who transacts insurance without a license is punishable with a Class B felony. If the Commissioner has reason to believe that any person has violated this rule, the Commissioner may do any of the following EXCEPT 1) suspend or revoke any licenses 2) Assess a civil penalty up to $25K per violation 3) Impose a prison sentence of no more than 6 months 4) Issue and enforce a cease and desist order

Impose a prison sentence of no more than 6 months

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Which of the following is correct about a group health insurance policy?

It cannot exclude newborn children from coverage

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. What is the company guilty of?

Misrepresentation

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

The purpose of insurance regulation is to:

Promote the public welfare

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution

Which of the following is an agreement between an insured and an insurer, where the insurer agrees to indemnify the insured for specific losses in exchange for a premium?

The insurance contract

In regards to the coverage of maternity services, health carriers must allow decisions regarding the length of inpatient stay be determined by

The mother and the attending provider

The Commissioner may disapprove an HMO agreement form under all of the following circumstances EXCEPT

The purchase is solicited by advertising

B receives her medicare supplement policy but decides she doesn't want to keep it. How many days does B have to return her policy for a full refund?

30 days

Paula applied for a Medicare Supplement policy 1 month before her 65th birthday. The policy was issued on her bday, Jan 31. Her agent mailed the policy by certified mail, and Paula received the policy on Feb 5. How long does Paula have to examine the policy and decide whether or not to keep it?

30 days from the date it was received. Medicare supplement policies must include a 30-day free look provision

How many years must insurance producers keep records of written disclosures regarding producer compensation?

5 years

If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that the insurer be notified of the child's birth and pay any required fee within how many days of the date of birth for coverage to continue? a) 180 b) 31 c) 60 d) 90

60 days

A health carrier that provides coverage for maternity services must provide the same coverage for newborns as for the mother for at least

3 weeks

B receives her Medicare Supplement policy but decides she doesn't want to keep it. How many days does B have to return her policy for a full refund?

30 days All Medicare Supplement policies must provide a 30 day free look provision

Once an individual is licensed as an insurance producer for life or accident and health insurance, how many hours of training must the producer initially complete to sell long-term care insurance?

8 hours

The general powers and duties of the Insurance Department include all of the following EXCEPT 1) Determining if a producer has acted in violation of the Insurance Code 2) Enacting statutes to regulate the insurance industry 3) Distributing information regarding the Department's activities 4) Enforcing the Insurance Code

Enacting statutes to regulate the insurance industry

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

Filed with and approved by the Commissioner

Issuers of disability insurance policies that provide hospital or medical expense coverage on an expense - incurred or indemnity basis to persons eligible for Medicare must do which of the following?

Provide to all applicants the pamphlet "Guide to Health Insurance for People with Medicare