Life & Health Law 1 (Chapter 26)

What % of an agent's business can be controlled business? 25% 50% 75% 100%

50%

The Gramm-Leach-Bliley Act of 1999, also known as the Financial Services Modernization Act, protects which of the following as to privacy of personal financial information? information of individuals used for personal, family, or household purposes businesses key-person insurance all of the above

information of individuals used for personal, family, or household purposes

What is the application fee for the issuance or renewal of an agency license? $0 $25 $50 $100

$0

Which is true about the agents' change of address rule? 1. Agent must notify the DOI within 30 days. 2. The agent must notify the DOI within 31 days. 3. There is a $250 fine for violating this rule. 4. The agent must notify the DOI of his/her change of company 1 only 2 only 1 & 3 1,3, & 4

1 & 3

Which of the following are true? 1. Notification to the Department of Insurance within 30 days of change of address. 2. Notification to the Department of Insurance within 30 days of change of company. 3. Loss of licensure as a result of 1 year non-appointment. 4. Loss of licensure as a result of 4 year non-appointment 1 & 2 1 & 3 1 & 4 2 & 4

1 & 4

Which of the following, regarding insurance company financial conditions is/are true? 1. a company must file annual financial statements 2. a company must file a financial statement every 3 years 3. the Office of Insurance Regulation will carry out a complete examination of a company's financial condition annually 4. the Office of Insurance Regulation will carry out a complete examination of a company's financial condition every 3 years 1 & 3 1 & 4 2 & 3 2 & 4

1 & 4

Which of the following statements concerning an agent's license is /are correct? 1. The insurance license is perpetual unless revoked or suspended 2. The insurance license will terminate if one year elapses without being appointed 3. Is suspended automatically with a bankruptcy 4. Is subject to biannual review by the appointing company 1 only 1 & 2 2 & 3 all the above

1 only

3. The Department of Financial Services is concerned with: 1. Assets and investments of insurance companies 2. The types and degree of risk of investments made by insurance companies 3. Examinations of records 4. Limiting the dollar amount that can be invested in different types of investments

1, 2, 3, 4

An agent may write controlled business provided she writes at least what per-centage of other similar business? 25% 50% 75% 100%

100%

An agent who has been licensed for 7 years must have how many hours of continuing education? 20 hours every 2 years including 3 hours of ethics 20 hours every 2 years including 3 hours of unauthorized insurers 24 hours every two years 10 hours every year

20 hours every 2 years including 3 hours of ethics

Florida law requires anyone convicted of a felony to report this to the Office of Insurance regulation with-in: 10 days 30 days 45 days 60 days

30 days

A licensed insurance company that is domiciled in, and is permitted to do business in, the licensing state is called: A fraternal company A permitted company An authorized company A domestic company

A domestic company

A licensed and appointed agent may share his commission with: A licensed agent An appointed agent A licensed and appointed agent with the same company A licensed and appointed agent who works in the same line of business

A licensed and appointed agent who works in the same line of business

All of the following are penalties provided for the violation of any of the provisions of the agents' qualification laws except: A minimum fine of $500 and not more than $5000 A minimum fine of $500 and not more than $3500 Imprisonment of not more than 6 months Suspension or revocation of the agents' license

A minimum fine of $500 and not more than $5000

Fines and penalties for violating provisions of the life agents qualification laws include: Denial, suspension, revocation and non-renewal of license Misdemeanor fine of not less than $500 nor more than $3500 Imprisonment for not more than six months as well B above All of the above

All of the above

Grounds for refusal, revocation or suspension of an agent's license includes: Material misstatement in the application for licensure demonstrating incompetence attaining a license for the purpose of writing controlled business All of the above

All of the above

Which of the following statements is/are true regarding misrepresentation? An innocent misrepresentation of a material fact is grounds to void a contract A fraudulent misrepresentation of an immaterial fact would not necessarily void the contract If convicted of misrepresentation, person would be guilty of a second degree misdemeanor All of the above

All of the above

Define a Capital Stock Insurance Company: Any insurance company incorporated in and having its home office in this state An insurance company incorporated in some other state having its executive or home office in this state An insurance company with a stated amount of capital stock owned by stockholders who compose the company and direct it by means of officers and directors An insurance company owned and controlled by the policyholders and directly managed by a board of trustees, or directors, who are chosen by the policyholders

An insurance company with a stated amount of capital stock owned by stockholders who compose the company and direct it by means of officers and directors

The Specific duties of the Chief Financial Officer are all of the following EXCEPT: Enforce the Insurance Laws and Codes of Florida Assist companies in their marketing practices Investigate reported violations of insurance laws Conduct hearings of agents suspected of unfair trade practices

Assist companies in their marketing practices

Which of the following would NOT be a consequence for aiding and abetting an Unauthorized Insurer? Conviction of a first-degree misdemeanor Conviction of a third-degree felony Liability for all unpaid claims Suspension or revocation of all insurance licenses

Conviction of a first-degree misdemeanor

Circulating untrue statements about an insurance company would be classified under Florida law as: Misrepresentation Defamation Both

Defamation

If an insurance company becomes insolvent, which agency is responsible for managing the finances until the company becomes solvent? Office of Financial Regulation Office of Insurance Regulation Department of Financial Services Financial Services Commission

Department of Financial Services

When are unauthorized entities most likely to engage in the business of insurance? During Soft cycles During Hard cycles During the transition from soft to hard cycles During the transition from hard to soft cycles

During Hard cycles

An applicant asks an agent for a greater face value or death benefit than the agent's company is willing to offer a policy for. The agent places this application with another company who WILL offer a policy for that benefit. Even though the agent is NOT licensed with that company this would be Excess or rejected business Not allowed until the agents becomes licensed with the company Dejected business Surplus amounts

Excess or rejected business

Fraud can involve the unintentional concealment of a non-material fact on an application. True False

False

Monies collected by an agent are held by the agent in what capacity? Holder Creditor Debtor Fiduciary of trust

Fiduciary of trust

2. An agent's obligation to handle funds of a client or insurance company honestly & fairly and not use them for the agent's own purpose is called:

Fiduciary responsibility

Define a legal reserve: The amount set aside by Federal Reserve Bank as required by law Future liabilities to policyholders A leeway provision None of the above

Future liabilities to policyholders

Will the annual premium required for a 3% reserve interest assumption be greater or smaller than for a 3 1/2% reserve interest assumption? Smaller Greater Not enough information to answer The annual premium has nothing to do with interest assumption

Greater

ERISA (E.R.I.S.A) is concerned with which of the following? Commercial Banking Securities Commerce Health Insurance

Health Insurance

Which areas of insurance have most frequently been plagued with unauthorized insurers: Health Insurance Life Insurance Annuities Property Insurance

Health Insurance

What type of benefits does a M.E.W.A provide? Retirement benefits Life insurance benefits Health insurance benefits all the above

Health insurance benefits

All of the following are eligible for group insurance EXCEPT: Trade Unions Associations Employers Home owners' associations

Home owners' associations

The two major factors used to determine the legal reserve required for life insurance policies include: I. The type of company II. Mortality Tables III. The Morbidity Table IV. The assumed interest rate I and II II and III III and IV II and IV

II and IV

What would cause the Chief Financial Officer to conduct a hearing? If he feels you have engaged in twisting If he heard you had participated in illegal activities If he has reasonable cause to believe you have defamed an insurance company If he feels you are engaged in actively misrepresenting insurance coverage to the public

If he has reasonable cause to believe you have defamed an insurance company

All the following types of Insurance companies may be approved to operate in nearly all states EXCEPT: Fraternal Insurance Companies Mutual Insurance Companies. (issue Par. Policies). Lloyds of London Stock Insurance Companies (issue Non Par. Policies).

Lloyds of London

All the below are characteristics of a mutual company EXCEPT: Owned and controlled by policy owners Makes a profit for stockholders The policyholders elect a board of trustees or directors to manage the firm Pays dividends from surplus

Makes a profit for stockholders

Embezzlement includes all of the following EXCEPT: None of the following are exceptions Converting premiums to the agents own use Converting a claim payment to the agents own use Converting policy loan values to the agents own use

None of the following are exceptions

Under Florida's Code of Ethics, rebating is declared unethical but may still be done if all of the following is adhered to except: The rebate must be available to all insureds in the same actuarial class The rebate must be uniformly applied to all who purchase the same policy The agent must file a rebating schedule with the insurance company issuing the policy Notice must be given to the Department of Insurance

Notice must be given to the Department of Insurance

1. Which is not involved in the administration of Insurance?

Office of Financial Regulation

Who regulates a complaint on an insurance agent? FINRA Office of Insurance Regulation Department of Financial Services Office of Financial Regulation

Office of Insurance Regulation

Which of the following is NOT a duty of an agent when replacing a life insurance policy? Leaving with the applicant a copy of all sales proposals Submitting to the replacing insurer with the application, a copy of all sales proposals used for presentation to the applicant Presenting to the applicant, at time of policy delivery, a "Notice to Applicant Regarding Replacement of Life Insurance" Submitting to the replacing insurer with the application, a copy of the "Notice to Applicant Regarding Replacement of Life Insurance"

Presenting to the applicant, at time of policy delivery, a "Notice to Applicant Regarding Replacement of Life Insurance"

Defamation is all the following EXCEPT: The act of defamation is considered a tort Punishable as a second degree misdemeanor It can be written (Libel) It can be spoken (Slander)

Punishable as a second degree misdemeanor

Giving a prospect or policy owner anything of significant value as an inducement to buy insurance is called: Discounting Misrepresentation Rebating Twisting

Rebating

An agent may be permitted to do all the following (EXCEPT) Show a proposal for a company with which he is not appointed if he is licensed for that line of business Write excess business with outside companies other than his or her parent company Show a proposal from another company to applicants which have been rejected by his parent company Receive commissions from companies for which he is not yet appointed

Receive commissions from companies for which he is not yet appointed

The following penalties may be imposed upon an agent by the Chief Financial Officer EXCEPT: $1,000 for failure to answer a subpoena Up to $50,000 for violation of a cease & desist order Assess fines equal to the agent's earned commission in a fraudulent case Revocation of the agent's company contract

Revocation of the agent's company contract

A Single-Employer based, fully self insured health plan covering the employers, employees and their dependents is directly regulated by: The State Government The Federal Government Both the State and the Federal Government Neither the State or Federal Government

The Federal Government

Who comprises the Financial Services Commission? The Governor, CFO, Attorney General, & the Insurance Commissioner The Governor, CFO, Attorney General, & the Agriculture Commissioner The Governor, CFO, Insurance Commissioner, & the Agriculture Commissioner The Governor, CFO, Insurance Commissioner, & the Speaker of the House

The Governor, CFO, Attorney General, & the Agriculture Commissioner

Which of the following is sometimes called the American Agency system? The career agency system The Personal Producing Agency system The Independent Agency system Direct Selling

The Independent Agency system

The Financial Services Commission consists of all the following except: The Chief Financial Officer The Governor The Agriculture Commissioner The Insurance Commissioner

The Insurance Commissioner

Florida law requires continuing education for all agents. Which of the following is true concerning an agent who has five years experience and has earned the Chartered Life Underwriter designation? The agent needs 24 hours of continuing education The agent needs 20 hours of continuing education The agent needs 10 hours of continuing education No continuing education is needed

The agent needs 24 hours of continuing education

The law in Florida says that an agent who assists an applicant in the replacement of insurance coverage must provide all disclosure forms and sales materials used to whom, if it is requested? The applicant The insurance company The agent The Office of Insurance Regulation

The applicant

Which of the following would not be found in the Buyer's guide? The name of the agent The beneficiary Dividend information Loan interest rates

The beneficiary

Which of the following is NOT classified under the four principle areas of the Florida Insurance law: The payment of commissions to agents The qualifications & licensing requirements of the agents The rights of policyowners & beneficiaries Policy Provisions

The payment of commissions to agents

In a replacement transaction, which of the following must send an important notice regarding replacement of life insurance to the new insurance company? The replacing insurance company The replacing insurance agent

The replacing insurance agent

Which of the following is not true concerning "stock" insurance companies? They sell only non-participating policies They sell both par and non-par policies They seek a profit for their stockholders They may operate on the mixed plan

They sell only non-participating policies

Of the following terms, which best describes the act of replacing existing life insurance with a new life insurance policy based upon incomplete or incorrect representations? Twisting Rebating Embezzlement Concealment

Twisting

Charging a risk in the same actuarial class as another a higher premium would be an example of: Unfair discrimination Coercion Rating Adverse selection

Unfair discrimination

Can an agent in charge be designated as the agent in charge for more than one location? Yes, as long as insurance activities requiring licensure as an agent do not occur at any location when the agent is not physically present Yes, provided that the agent in charge has a designated office at each location insurance activities may be conducted even if the agent in charge is not physically present Yes, the number of locations is unlimited and there are no requirements requiring physical presence No, an agent in charge may be named agent in charge of only one location

Yes, as long as insurance activities requiring licensure as an agent do not occur at any location when the agent is not physically present

A Professional Employer Organization (PEO) typically handles only which of the following employer tasks? administrative functions determining compensation hours and method of the work to be performed evaluation of employee performance

administrative functions

A CPA may do which of the following with-out being licensed in the state? advising clients of the need to obtain insurance advising clients as to the amount of insurance needed advising clients of the 'line of insurance' needed all of the above

all of the above

The agencies of state government involved in the regulation of the Insurance business in the state of Florida are: The state legislature The Department of Financial Services The state courts all of the above

all of the above

Which of the following would not be considered controlled business. An agent writing: business solely on his family business on his partner business on his employees business on his neighbor

business on his neighbor

Which of the following acts could constitute defamation? Using a reporting agency, such as Standard & Poors, to illustrate a company's ability to pay future obligations copying, for circulation, a newspaper article regarding a company's unstable financial condition none of the above

copying, for circulation, a newspaper article regarding a company's unstable financial condition

Which of the following statements concerning a mail order company in Florida is not true? the company must be authorized to do business in the state the policy must be delivered by a licensed agent a mail order company requires no personal agent solicitation does not require an appointed agent

does not require an appointed agent

If an agents fails to maintain an appointment with an appointing entity writing the class of business in which the agent is licensed, after what period of time must the agent qualify as a first time applicant? two years four years six years the license is perpetual

four years

Which of the following would make rebating a prohibited practice? rebating to all in the same actuarial class maintaining copies of all rebating schedules for the most recent 3 years maintaining copies of all rebating schedules for the most recent 5 years rebating without regard to discrimination

maintaining copies of all rebating schedules for the most recent 3 years

All of the following are characteristics of a mutual insurance company except: management elects the board of directors the policyowners are the owners of the company dividends, if any, are paid to the policyowners it must be incorporated in order to operate

management elects the board of directors

Alcoholism or drug addiction would be considered which of the following hazards? physical moral morale all of the above

moral

When a stock company issues both par and non-par policies, it is referred to as doing business: on a dual plan on a mixed plan as a combination plan none of the above

on a mixed plan

All the following are major areas in which the Chief Financial Officer and the Office of Insurance regulation are involved except: rate regulation applicable to life insurance regulating policy forms, provisions and rates supervising the methods of obtaining insurance policing against unauthorized insurance activities

rate regulation applicable to life insurance

All of the following would be found under the unfair trade practices act except: false advertising coercion discrimination rebating

rebating

Hoggie was licensed in March of 1995 and appointed in April of the same year. In March of 1996 Hoggie gave up his appointment but maintained his license with the intent of returning to the business at a later time. What must Hoggie do to get reappointed in March of 2000. apply to the insurance company for reappointment pay all late fees and reapply for the appointment retake the examination continue to flip burgers and forget about it

retake the examination

Willful violation of the Insurance code is a: third degree felony second degree misdemeanor first degree felony first degree misdemeanor

second degree misdemeanor

Adding on coverages without the knowledge of the insured/applicant is an example of: excess charges sliding rebating excess insurance

sliding

When does the insurance company NOT do an autopsy under AD&D insurance? when the death is caused by an accident when the death is caused by illness when it is prohibited by law when the death is caused by homicide

when it is prohibited by law

Any person who holds a license to sell life insurance must complete a minimum of three hours of continuing education on the subject of unfair trade practices unauthorized entities fiduciary responsibilities suitability in annuity & life insurance transactions

suitability in annuity & life insurance transactions

The state would require an agent's home office to be licensed as an "insurance agency" if: the agent advertised in the yellow pages the agent had client meetings at Starbucks the agent hung out a sign on the front lawn the agent had more than $50,000 in revenue

the agent hung out a sign on the front lawn

The amount and frequency of premium payments are found in which clause of a life or health insurance policy? the insuring clause the consideration clause the method of payment clause the mortality or morbidity clause

the consideration clause

Under certain circumstances, an agent is allowed to place business and be paid commissions by an insurance company without actually being licensed by that company. Which law allows for this? the reinsurance provision the 1035 exchange law the exchange of business law none of the above

the exchange of business law

Which of the following is not an example of an insurable risk? the loss must be catastrophic the loss must be do to chance the loss must be predictable the loss must be measurable

the loss must be catastrophic

An individual becomes licensed, then appointed by a domiciled insurance company. He subsequently writes insurance on all his relatives. Which statement would be correct? this is called controlled business and is encouraged, family members would rather deal with someone they know this is controlled business and could subject the agent to revocation of his license

this is controlled business and could subject the agent to revocation of his license

Miami Mutual rewards their clients with a matching deposit of 10% into their annuity when they open an account. Which statement below is correct? this is rebating and would be allowed this is rebating and would not be allowed

this is rebating and would be allowed

4. Fraternal Benefit Societies are required to do all of the following except: be non-profit have a lodge system operate as a society, corporation or association to provide the insured with a policy

to provide the insured with a policy

A company that charges different premiums for people in the same risk class could be found guilty of twisting unfair discrimination segregation unfair trade practices

unfair discrimination