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
