Marketplace Part 2 - Section 3

All the following are true concerning conservation of a company commissioner has the right to take over a company if financial reports are negative. workers comp claims are paid first. all companies report their financial reports to commissioner every year. except:

$100,000 is the most that a guaranteed company will pay for a life claim in life insurance, perhaps not even that much, by limiting exposure to no more than $250,000 in death benefits.

An agent who wishes to sell certified Partnership LTC policies in California must complete at least how many hours of special training before marketing any partnership-approved policies?

16 hours. An agent who wishes to sell certified partnership LTC policies in California must complete at least 16 hours of special training before marketing any partnership approved policies. This includes eight hours on California long-term care insurance and eight hours specifically dedicated to the California Partnership Program.

If someone has a Life Agent Combo and a Property/Casualty license, then how many CE hours would be required in the current license term?

24 hours Rationale - Since this person has a Life and P/C license then they would be required to complete 24 hours per license term.

How many hours of continuing education are required per renewal for a life-only agent?

24 hours, 3 of the hours must be in ethics

Life only agents writing annuities are required to complete an ____________ course before submitting their first application.

8 hour. Though all require a training course before submitting the first application, only Life Agents can sell annuities and are required to complete an 8 hour annuities course.

When a company, an organization or a group of affiliated organizations form a subsidiary for the purpose of having the subsidiary provide all or part of the insurance for the parent company or companies, this subsidiary is known as a:

A captive insurer

All the following are true for continuing education requirements. New agents selling long-term care need 8 hours of continuing education credits a year for 4 years. A life agent needs 3 hours of Ethics training credits each license term. A property and casualty agent needs 24 hours of continuing education credits each license term. except:

A life agent needs 48 hours of continuing education credits for the first and second licensing periods

A managing general agent with a life agent license and a written management agreement with one or more insurers is prohibited from doing which of the following?

A managing general agent CAN do all of these. Accept and decline risk Appoint, supervise, train and terminate agents on behalf of the insurer Accept premiums from producers in behalf of the insurer None of these are excluded from the powers and authority given to the managing general agent.

Any person to whom the commissioner has issued a seizure order and who refuses to deliver any books, records, or assets of an insurer faces:

A misdemeanor punishable by a fine up to $1,000, a year in jail, or both.

Which of the following statements is true?

A person with either a Life only or A&H only, or both a Life and A&H license must complete 24 hours of CE, which includes 3 hours of Ethics prior to license renewal.

In order to qualify as a fraternal benefit society, an organization must have:

A representative form of government. A lodge system. Ritualistic work.

The difference between the chronic illness rider and long-term care insurance is:

Both required the insured to incur long-term care expenses

An A&H agent is entitled to transact insurance coverage for sickness, bodily injury, or accidental health and may include benefits for disability income and:

Complete 3 hours of CE in ethics and code which will be included in the 24 hours of CE required and pay a fee.

All of the following are not considered an administrator: Life agent. Life company. An employer acting on behalf of their employees. except:

Contracted by an insurance company.

Which one of the following is not a principal part of the Gramm-Leach-Bliley Act?

Do not call provisions

An individual who handles premium payments in a trust capacity is considered to be:

Fiduciary. When a licensee is handling premium payments they are acting in the capacity of a fiduciary.

The purpose of insurance regulation is to protect the public by all of the following, Make sure rates are adequate, reasonable and equitable. Prevent fraud and insurer insolvency except:

Interpreting policy provisions

Conservation applies to?

It refers to taking over and managing the affairs of a financially troubled insurer. Allows for rehabilitation such as reorganization, consolidation, conversion, merger, or any other action the Commissioner feels is required to return the insurer to financial stability. Any insurer with a Certificate of Authority.

Which is false concerning the accelerated death benefit for chronic illness rider?

It requires an A&H license to sell

A licensed producer who appoints and supervises other producers, earns a commission override on the business of those producers and has overall responsibility for producers in a given territory is considered a(n):

Managing general agent

What entity has been actively involved in helping insurance remain under the jurisdiction of state government by bringing uniformity through model laws for the insurance industry?

N A I C. The National Association of Insurance Commissioners develops model laws, standards, and guidelines for the insurance industry to protect the interest of policyowners and preserve state regulation.

Which of the following would require a Certificate of Registration to act as an Administrator in connect with collection of premiums and settling claims for life, health, or annuity coverages?

None of these would require a Certificate of Administration to act as an administrator.

Reciprocal Insurance company is an unincorporated company that consists of subscribers managed by an attorney.

Reciprocal Insurance

An analyst may not receive any fee not based upon a written agreement signed by the party to be charged. This agreement must include all the following, Statement that the analyst has both a Life and A&H license and receives commissions for the sale of products. A statement that information and services concerning insurance policies may be obtained from the insurer without cost. Amount of the fees except:

Statement of services to be performed to which no fee will be charged

Aiding, assisting, or advertising for a nonadmitted is:

Subject to fine of $500.00 plus $100.00 for every month the licensee continues to do so. Is a misdemeanor. Illegal unless licensed as a surplus lines broker.

When the insurer reinsurance a contract they are referred to as the:

The ceding insurer. Primary insurer.

Which statement is false concerning interpretation of policy provisions?

The executive branch does not enact the laws but interprets them.

The accelerated death benefit for chronic illness rider must disclose all of the following The policy or certificate is not a California Partnership for LTC policy program. The policy or certificate does not provide long-term care insurance subject to California LTC insurance law. Benefits paid under the chronic illness rider are treated for federal income tax purposes as accelerated life insurance death benefits under IRC 101(g). except:

The policy or certificate is a Medicare supplement

A surplus lines broker is required to obtain every applicants signature on a statement that provides all of the following information Guarantee funds will not pay for claims if the insurer becomes insolvent. The policy is being issued by an insurer who is not licensed by the State of California. The insurer does not participate in any of the CA insurance guarantee funds. Except:

The policy was denied by insurers licensed by the State of California

A Property and Casualty Agent is required to continue their education by completing:

a total of 24 hours per license term of continuing education courses. Property and Casualty agents are required to complete 24 hours of continuing education each license term.

All of the following are true concerning code and ethics: Avoid talking bad about your competition. Use simple language. Review and update files.

except Be untruthful and inaccurate when you explain your services.

"Paid in capital" applies to all companies alien mutual. domestic stock. domestic mutual. except:

foreign mutual. "Paid-in capital" or "capital paid-in" means: In the case of all other insurers except a foreign mutual insurer.

All the following are examples of a pretext interview: pretends to be someone they are not. misrepresents the purpose of the interview. refuses to identify themselves. except:

gathering information for underwriting

All the following are true concerning termination of license?

license is terminated at the time a partnership or organization is dissolved if licensee is the organization. license is terminated at the death of licensee. a change in the partners of a partnership.

All the following are true concerning termination of license. a change in the partners of a partnership. license is terminated at the death of licensee. license is terminated at the time a partnership or organization is dissolved if licensee is the organization except:

licensee can give up their license with a 90 day notice

All the following are fiduciary duties making deposits in a timely manner. taking insured payments. giving insureds a receipt when payments are made except?

making sure your accounting is done proper in the same account, so you know what is your money and what is the company's money.

All the following are true: underwriting division handles the selection of risks. actuarial handles what to charge for the premiums. claims division handles claims. except:

marketing division handles selling products and the expenses of the company

All the following are true concerning penalties of unfair trade practices, $5000 fine. purpose is to regulate trade practices. commissioner can take action against the agent. except:

must be intentional

All the following are true concerning ethics with senior citizens. no pretext interviews. do not oversell. use simple language except:

must give an additional 30 days more for a free look period than people who are not senior citizens

All the following are true concerning altering disability income polices applications: only by insured. never by an agent. only by insurer with written consent. except:

never.

All the following statements are true: admitted companies can do business in state. a standard market insurer writes for average or better insureds surplus line insurer can write business for nonadmitted companies. except:

nonadmitted insurers cannot write in California

All the following are true concerning the code the insurance commissioner has the power to institute rules and regulations. the rules and regulations are open to the public. the insurance commissioner is elected by voters. except:

the code is the complete guide to ethical behavior