Missouri Statues, Rules and Regulations Common to All Lines: Practice Questions

What is the fine, per violation, when found guilty by the director of unfair method of competition or an unfair or deceptive act or a prohibited practice? a-$25,000 b-$1000 c-$250,000 d-$100,000

$1000

A producers license lasts for how many years before it needs to be renewed? a-2 b-3 c-5 d-until it is terminated

2

Which of the following is NOT a punishment for violating the directors cease and desist order? a-Suspension or revocation of license b-a monetary fine c-imprisonment d-community service

community service

How many days does a producer have to report to the director any administrative action taken against the producer? a-45 days b-10 days c-15 days d-30 days

30 days

Which of the following persons is required to hold a producer license? a-A person who negotiates insurance contracts b-a person who creates insurance advertisements c-a person who takes messages related to claims d-a person who administers employee benefits

A person who negotiates insurance contracts

How is the director selected for the office? a-Appointed by the governor b-appointed by the NAIC c-elected by state insurers d-elected by popular vote

Appointed by the governor

A person who receives or collects money to be forwarded to the principle is said to have what kind of responsibility? a-Fiduciary b-Bailor c-Bailee d-trustee

Fiduciary

Which of the following would be considered an illegal inducement to purchase insurance? a-Listing the insurance companies the agent represents in a letter b-inviting perspective clients to the grand opening of the producer's new office c-confirming future dividends and a life insurance proposal d-mailing an emergency brochure to a perspective client

confirming future dividends and a life insurance proposal

Which of the following terms describes making false statements about the financial condition of an insurer that are intended to injure any person engaged in the business of insurance? a-Undercutting b-twisting c-slandering d-defamation

defamation

Which of the following authorities is required to conduct a financial examination of the states insurers? a-NAIC b-state insurance board c-Guaranty Association d-director

director

Which of the following will NOT be considered unfair discrimination by insurers? a-Cancelling individual coverage based on the insureds marital status b-assigning different risk classifications to applicants based on gender identity c-discriminating in benefits and coverages based on the insureds habits and lifestyle d-charging applicants with similar health histories different premiums based on their ethnicity

discriminating in benefits and coverages based on the insureds habits and lifestyle

When twin brothers applied for life insurance from company A, the company found that while neither of them smoked in 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 a-discrimination b-twisting c-controlled business d-adverse selection

discrimination

The director, or his designated examiner, may examine the conduct of any insurance company operating in Missouri. The director must conduct a financial examination of every insurer license in Missouri at least a-every three years b-every five years c-every year d-every other year

every five years

To maintain an insurance license, all Missouri producers must successfully complete the required continuing education. All of the following statements concerning continuing education are correct, EXCEPT a-CE requirement may be extended for up to one year b-excess CE credits may not be applied toward the next requirement period c-Each licensee is required a minimum of 16 hours every two years d-required CE hours must be divided between the producers line of authority

excess CE credits may not be applied toward the next requirement period

The director may suspend, revoke, refuse to renew an insurance producer license for any one or more of the following causes, EXCEPT a-violating any insurance law or regulation b-improperly withholding or converting money received in the course of doing insurance business c-failing to comply with an administrative or court order directing payment of state or federal income tax d-failing to notify the director of a change of address

failing to notify the director of a change of address

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a-Twisting b-defamation c-false advertising d-unfair claims

false advertising

All of the following are among the directors board powers EXCEPT a-withdraw or amend any rule or regulation b-issue certificates of authority or suspend licenses c-have interest and insurance companies regulated by the Department d-regulate the internal affairs of the Department

have interest and insurance companies regulated by the Department

An insurer publishes intimidating brochures that portray the insurers competition as financially and professionally unstable. Which of the following best describes this act? a-Legal, provided that the other insurers are paid royalties for the usage of their names b-illegal under any circumstances c-legal, provided that the information can be verified d-illegal until endorsed by the guaranty Association

illegal under any circumstances

A producer has submitted a new application to his insurer; however, 30 days later there was still no coverage available for the applicant. What must the producer do? a-Submit a request for coverage to the insurer b-inform the applicant in writing c-nothing: producer has no further obligations once the application is submitted to the insurer d-submit a complaint to the Department of Insurance

inform the applicant in writing

State law specifically prohibits using illegal inducements in the marketing of the insurance. All of the following would be considered illegal inducements EXCEPT a-inviting perspective clients to the grand opening of the company's new office b-issuing or delivering insurance company stock in return for purchasing insurance c-promising returns and profits from the purchase of insurance d-offering benefit certificates or securities in return for purchasing insurance

inviting perspective clients to the grand opening of the company's new office

Whenever it appears that a producer or an insurer is violating an insurance law of Missouri, the director will do which of the following? a-Have a person arrested b-report the person to the governor c-issue a cease and desist order d-levy a monetary fine

issue a cease and desist order

In order to conduct an examination of an admitted insurance company in Missouri, the director may a-issue subpoenas and administer oaths to anyone on any matter that is relevant b-issue subpoenas only to an insurance company executive officer c-issue subpoenas only two employees of the Home Office d-administer oaths 2 executive officers concerning financial matters

issue subpoenas and administer oaths to anyone on any matter that is relevant

Which of the following best describes a misrepresentation? a-Discriminating among individuals in the same insuring class b-issuing sales material with exaggerated statements about policy benefits c-making a deceptive or untrue statement about a person engaged in the insurance business d-making a malicious critical statement that is intended to injure another person

issuing sales material with exaggerated statements about policy benefits

In which of the following situations is it legal to limit coverage based on marital status? a-Legal separation during the application process b-divorce within the last six months of applying for insurance c-it is never legal to limit coverage based on marital status d-excessive number of divorces, as defined by the insurance code

it is never legal to limit coverage based on marital status

The director has just finished examining a domestic insurer. When is the director next required to examine that insurer? a-2 years from now b-no later than 5 years from now c-no sooner than 3 years from now d-next year

no later than 5 years from now

All of the following are true regarding rebates EXCEPT a-dividends are not considered to be rebates b-rebates are allowed if it's in the best interest of the client c-rebates are only allowed if specifically stated in the policy d-rebating can be anything of economic value, given as an endorsement to buy

rebates are allowed if it's in the best interest of the client

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 a-rebating b-coercion c-twisting d-controlled business

rebating

A producer in another state once to become a producer in Missouri. The other state gives the same privileges to Missouri producers wanting to be licensed in that state as it does its own producers. Missouri therefore extends the privileges of its producers to the perspective producer of the other state. What is this called? a-Fair exchange b-equanimity c-equal privilege d-reciprocity

reciprocity

Paul is a producer in Kansas and wants to become a producer in Missouri. The Department will waive certain examination requirements, provided that Kansas would waive the same requirements if a Missouri producer sought licensure in Kansas. What term is best used to describe this phenomenon? a-Equanimity b-reciprocity c-equality d-fair exchange

reciprocity

How many hours of continuing education must be completed in ethics an Missouri law each licensing period? a-16 b-1 c-3 d-5

3

Every producer licensed in Missouri must notify the director of a change in his/ her residence address within a-10 days and the notice must be in writing b-30 days c-30 days and the notice must be in writing d-10 days

30 days and the notice must be in writing

All of the following actions could be grounds for the director to suspend or revoke an insurance license EXCEPT a-a producer has their license suspended or revoked in any state b-a producer demonstrates a lack of trustworthiness or competence c-a producer uses poor judgment and binding a risk d-a producer is convicted of a felony

a producer uses poor judgment and binding a risk

If an individual producers license expires and the producer doesn't want to pass a written exam, the license must be reinstated within what time period from the renewal date? a-9 months b-12 months c-3 months d-6 months

12 months

How long is the producer licensed period in this state? a-1 year b-2 years c-4 years d-5 years

2 years

Which of the following is NOT true regarding a certificate of authority? a-It is issued to group insurance participants b-it may be necessary for transacting business in a specific state c-it is equivalent to an insurance license d-it is issued by the state Department of Insurance

It is issued to group insurance participants

Which of the following is the closest term to an authorized insurer? a-Certified b-licensed c-legal d-admitted

admitted

Which of the following is the closest term to an authorized insurer? a-legal b-admitted c-certified d-licensed

admitted

The Missouri life and health insurance guaranty Association was created to protect all of the following EXCEPT a-policy owners b-beneficiaries c-insureds d-insurers

insurers

Which of the following actions is prohibited by the state regulations on producer commissions and compensation? a-Compensation from surplus lines producers b-profit sharing c-retrospective commissions d-sharing commissions

retrospective commissions

Which of the following is an example of a producer being involved in an unfair trade practice of rebating? a-Inducing the insured to drop a policy in favor of another one when it is not in the insured's best interest b-charging a client a higher premium for the same policy as other client in the same insuring class c-making deceptive statements about a competitor d-telling a client that his first premium will be waived if he purchases the insurance policy today

telling a client that his first premium will be waived if he purchases the insurance policy today

What must an insurance company that is organized in, and has its Home Office in Missouri, do in order to legally transact insurance in the state? a-Obtain approval from the National Association of insurance companies b-receive a certificate of authority from the director c-receive approval from the state legislator d-nothing, they automatically qualify to transact insurance in the state

receive a certificate of authority from the director

Who is responsible for covering the expenses associated with the examination of domestic insurers? a-The director b-the Department of Insurance c-the insurance guaranty Association d-the examined insurer

the examined insurer

In Missouri, it is illegal to receive a Commission from this sale of insurance UNLESS a-the payee holds a valid insurance producer license b-the payor holds a valid insurance producer license c-the insured gives written consent allowing the Commission to be split d-the payor and payee both hold valid insurance producer licenses

the payee holds a valid insurance producer license

A producer completed an insurance transaction in 2007. One can the producer dispose of the records for this transaction? a-2008 b-2009 c-2010 d-2012

2010

Albert Jones, CPCU, has prepared an insurance course and obtained approval for the course for six hours of continuing education credits. Al presented this course to various agent groups during the continuing education term on four different occasions. How many continuing education credit hours may al claim for his own license renewal? a-0 b-6 c-12 d-24

6

An individual who is a resident of another state may obtain a Missouri nonresident license without testing provided a-he is currently licensed in the state where he is domiciled b-he attained that license by passing a test suitable to the Missouri Department c-the state where he lives affords the same privilege to residents of Missouri d-all of these requirements are met

all of these requirements are met

The purpose of the Missouri life and health Guaranty Association is to a-help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company b-encourage life insurers to write substandard business c-allow producers to continue to solicit insurance, even if the company they represent is financially impaired d-protect the reputation of the insurance Department if they issue a certificate of authority to a company that becomes insolvent

help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be a-certified b-qualified c-approved d-authorized

authorized

An insurer that holds a certificate of authority in the state in which it transacts business is considered a/an a-self-insurer b-authorized insurer c-local insurer d-certified insurer

authorized insurer

In insurance, producers are permitted to share or split commissions if a-there is a written agreement between the agents b-both are properly licensed for the line of insurance c-the insured knows and agrees to the agreement d-the insurance Department knows of the arrangement

both are properly licensed for the line of insurance