PA Supplement Quiz Questions
Which of the following acts is NOT part of soliciting insurance? A) approaching a prospect through the mail B) completing an insurance application C) approaching a prospect in person D) performing clerical work for an insurance agency
D) performing clerical work for an insurance agency *In general, the solicitation of insurance is the act of approaching people by any means, including the mail or in person, with the intent of inducing them to buy insurance. Soliciting also includes the actual sale of an insurance policy, including the completion of an application.
Which type of insurer is domiciled in a state other than PA? A) foreign B) domestic C) alien D) interstate
A) foreign *An insurer chartered in a state, commonwealth or territory other than PA is called a foreign insurer. A domestic insurer is an insurance company formed under the laws of PA. An alien insurer is formed under the laws of a foreign country.
Executing the insurance laws of PA is whose responsibility? A) Insurance Commissioner B) insurance producers C) certified insurers D) PA legislature
A) Insurance Commissioner
An insured submits notice of loss to his insurer with all additional and necessary information on January 1. As a general rule according to PA law, by what date must the insurer complete its claims investigation? A) January 31 B) March 31 C) June 30 D) December 31
A) January 31
Unless exempt, insurance producers must complete how many hours of approved continuing education courses during each 2-year license period? A) 12 B) 16 C) 24 D) 40
C) 24
Which insurers must use the uniform health insurance claim form developed by the PA Insurance Dept.? A) only private insurers who provide coverage for more than 500 insureds per group policy B) no insurer is compelled to use the uniform claim form C) all insurers D) only public health care insurers, such as the Dept. of Public Welfare and Medicaid
C) all insurers *ALL insurers must use the uniform claim form, including such public health care insurers as the Dept. of Public Welfare.
Insurers can guard against the prohibited practice of post-claims underwriting in LTC coverage by A) using unambiguous questions on LTC applications, which will correctly reflect the applicant's health condition B) refusing to pay claims for any insured who is older than 85 years C) assigning all challenged coverage problems to Medicaid D) having the producer fill out the applicant's health information on all application forms
A) using unambiguous questions on LTC applications, which will correctly reflect the applicant's health condition *Applications for LTC insurance, except those that are guaranteed issue, MUST use unambiguous questions that will correctly determine the condition of the applicant's health. Post-claims underwriting is prohibited. An insurer must determine an applicant's acceptability as an insured before a policy is issued.
A conversion privilege under a group health insurance plan generally must be exercised within how many days after the group coverage terminates? A) 31 B) 60 C) 90 D) 180
C) 90
All of the following are violations of PA insurance law EXCEPT A) a licensed producer accepting business that was solicited by a person who is not a licensed producer B) requiring a consumer to purchase insurance from a designated financial institution as a condition of taking out a loan C) a licensed producer sharing a portion of his commission with a first-time insurance buyer D) a licensed producer recommending the replacement of a life insurance policy for an annuity contract
D) a licensed producer recommending the replacement of a life insurance policy for an annuity contract
Producers must report any criminal charge to the Commissioner within how many days of the charge? A) 5 B) 10 C) 15 D) 30
D) 30
To be qualified for an insurance producer license in PA, an individual applicant must have reached the age of A) 18 B) 20 C) 21 D) 26
A) 18
What mandatory provision states that the insured is entitled to either 31 days or 1 month to pay an overdue premium, during which time the policy will continue in force? A) replacement B) reinstatement C) entire contract D) grace period
D) grace period *A grace period is a 31-day period or 1-month time period for payment of any premium (except the first), during which time the death benefit coverage continues in force.
Which of the following people is paid a fee from his or her client to examine life insurance policies and provide advice? A) agent B) managing general agent C) assessment association D) life insurance counselor
D) life insurance counselor *A life insurance counselor examines life insurance policies and annuities and gives advice on the contract's terms, coverage, conditions or benefits. The counselor charges a fee for this service.
Once appointed, a producer's appointment extends A) for 3 years B) for 5 years C) until the appointment is terminated by the Insurance Dept. D) until the appointment is terminated by the appointing insurer
D) until the appointment is terminated by the appointing insurer
Good Health Insurance Company's medical expense policy includes a probationary period equal to the maximum time allowed by PA law. Which of the following statements is CORRECT? A) no claims are payable under the policy for the first 30 days after policy issue B) no claims are payable under the policy for the first 30 days following every policy renewal date C) the insured must have been in good health for the 30 days preceding policy application D) the insured must have been in good health for the 30 days both preceding policy application and following policy issue
A) no claims are payable under the policy for the first 30 days after policy issue
In PA, a producer's term of licensure is A) 1 year B) 2 years C) 5 years D) unlimited
B) 2 years
By examining an insurer's records, the Insurance Commissioner assesses the company's A) profitability B) compliance with state laws C) workforce morale D) adherence to NAIC regulations
B) compliance with state laws
Disability income insurance policies in PA must provide a maximum benefit period of at least A) 1 month B) 3 months C) 6 months D) 1 year
C) 6 months
Specified disease coverage in PA must provide an overall aggregate benefit limit of at least A) $1,000 B) $2,500 C) $4,000 D) $5,000
D) $5,000
What is the maximum period of time within which an insurance producer can reinstate a lapsed license without having to reapply for the license? A) 30 days B) 45 days C) 60 days D) 1 year
D) 1 year
Medicare supplement policies must provide a free-look period of at least A) 3 days B) 10 days C) 20 days D) 30 days
D) 30 days
A health insurance policy that provides coverage for the insured's family members must provide that benefits are payable for a newly born child beginning A) 10 days after the insurer is notified of the birth B) 30 days after the date of birth C) 30 days after the child is added to the policy D) at the moment of birth
D) at the moment of birth
A producer must do which of the following when a new insurance policy is sold? A) give the applicant a copy of the producer's certificate B) warn the applicant about the risks of replacement C) inform the Commissioner that a new policy has been sold in PA D) send the insurer the applicant's signed statement disclosing whether the new insurance will replace existing insurance
D) send the insurer the applicant's signed statement disclosing whether the new insurance will replace existing insurance *The producer must send the insurer a statement, signed by the applicant, stating whether or not the new insurance product will replace an existing insurance product.
All of the following are allowable activities for an individual who holds a temporary license EXCEPT A) procure new business from a deceased producer's existing clients B) renew the business of a deceased producer C) maintain the business of a disabled producer D) perform any acts necessary to keep a deceased producer's business going until the estate is settled
A) procure new business from a deceased producer's existing clients
Prohibition against which of the following insurance practices extends to consumers as well as producers? A) twisting B) rebating C) misrepresentation D) defamation
B) rebating
To enroll in the PA Children's Health Insurance Plan (CHIP), a child must meet all of the following criteria EXCEPT A) meet family size and income guidelines B) be a resident of PA C) be under the age of 10 D) be a US citizen or alien with lawful immigration status
C) be under the age of 10 *To enroll in CHIP, a child (except for newborns) must be a resident of PA, be under age 19 and be a US citizen or an alien with lawful immigration status. Applicants must not be eligible for Medicaid or have any other insurance. CHIP health insurance will be free or at a low cost based on family size and income guidelines.
The Insurance Commissioner is responsible for all of the following duties EXCEPT A) issuing certificates of authority B) enforcing provisions of the Insurance Code C) conducting insurer investigations D) enacting insurance laws
D) enacting insurance laws
The deductible amount for specified disease coverage cannot be more than A) $500 B) $250 C) $1,000 D) $2,500
B) $250 *Specified disease coverage has a deductible amount of no more than $250, an overall aggregate benefit of at least $5,000 and a benefit period of at least 2 years.
An insurance company's license to do business in PA is called A) a notice of risk assignment B) a certificate of authority C) a mutual benefit card D) a license to solicit registration
B) a certificate of authority
In PA, producer appointment are made by A) policyowners B) insurers C) the Insurance Dept. D) the National Association of Insurance Commissioners
B) insurers
What is the maximum term of a temporary license that is issued as a result of a licensee's death? A) 30 days B) 60 days C) 90 days D) 180 days
D) 180 days
Which of the following comparison methods is to be used in a life insurance Surrender Comparison Index Disclosure? A) interest-adjusted method B) cost-plus-benefit method C) amortization method D) final costs comparison method
A) interest-adjusted method *The purpose of cost disclosures is to provide the purchaser of life insurance a means of making a cost comparison of the same type of life insurance policies that have the same premium payment period and pattern. One common method used to compare cost involves the Surrender Comparison Index, which MUST use the interest-adjusted method. Disclosure must include an explanation of the purpose and use of the Surrender Comparison Index.
The practice of using misrepresentation to induce any person to lapse, forfeit, surrender, exchange or convert an insurance policy is also known as A) twisting B) rebating C) unfair discrimination D) coercion
A) twisting
All of the following statements regarding the treatment of life insurance policy loans in PA are true EXCEPT A) loans do not have to be made available until a policy has been in force for 3 years B) if a policyowner fails to repay a loan within a prescribed period of time, the policy may be voided by the insurer C) if a policy loan is outstanding at the insured's death, the insurer may deduct the outstanding amount from the death proceeds D) insurers may charge a variable rate of interest on their policy loans
B) if a policyowner fails to repay a loan within a prescribed period of time, the policy may be voided by the insurer
On September 1, Max turned 35. Two months later, he applied for a $150,000 life insurance policy. His application was approved and a policy was issued, dated August 1. Which of the following statements is CORRECT? A) Max lied about his age on the application and the insurer has the right to cancel the policy B) the insurer violated PA's law regarding backdating of insurance policies C) the policy was issued appropriately D) the policy will be issued with a rate-up in premium
C) the policy was issued appropriately
A producer who knowingly violates the state's unfair trade practices law may be fined up to A) $1,000 for each violation B) $2,000 for each violation C) $5,000 for each violation D) $10,000 for each violation
C) $5,000 for each violation
What is the MINIMUM number of outpatient visits a group health insurance policy must provide each year for covered alcohol treatment services? A) none B) 60 C) 30 D) 100
C) 30 *Covered outpatient alcohol treatment services must provide a minimum of 30 outpatient, full-session visits or the equivalent per year. These treatment services may be subject to a lifetime limit, for a covered individual, of 90 days of non-hospital, residential alcohol treatment services and 120 outpatient, full-session visits, or equivalent partial visits.
The Commissioner of Insurance is appointed by the governor for a term of A) 8 years B) 6 years C) 4 years D) 2 years
C) 4 years *The Commissioner of Insurance, who is the head of the PA Insurance Dept., is appointed by the governor to a 4-year term.
The Commissioner must examine insurers at least once every: A) 3 years B) 7 years C) 5 years D) 2 years
C) 5 years *The Commissioner may conduct an examination of the records, transactions and affairs of insurers to determine whether they are fiscally sound, comply with the law and fulfill their financial obligations. This examination may be conducted as the Commissioner deems appropriate, but must be conducted at least once every 5 years.
Health insurance policies that provide maternity benefits must provide for a minimum of how many hours of inpatient care following a Caesarean delivery? A) 24 B) 48 C) 96 D) 132
C) 96
Tyrone applied for a life insurance policy on April 1. The application was submitted to the insurer on April 7. The company approved the application on April 30 and issued the policy on May 5. Tyrone's producer delivered the policy to his new client on May 10. When does Tyrone's free-look period begin? A) April 30 B) May 5 C) May 10 D) May 11
C) May 10
Before applying for the insurance producer licensing exam, an individual must complete a minimum of A) 24 credit hours of approved pre-licensing courses, with a least 3 of the 24 hours on ethics B) 12 credit hours of approved pre-licensing courses, with no ethics requirement C) 24 credit hours of approved pre-licensing courses, with no ethics requirement D) 12 credit hours of approved pre-licensing courses, with a least 3 of the 12 hours on ethics
A) 24 credit hours of approved pre-licensing courses, with a least 3 of the 24 hours on ethics
How many hours of continuing education must an insurance producer complete during each 2-year license period? A) 24 hours B) 20 hours C) 12 hours D) 10 hours
A) 24 hours *To receive a license renewal, a producer successfully must complete 24 hours of approved continuing education during each 2-year period. Up to a maximum of 24 excess continuing education credit hours may be carried forward from one licensing period to the next.
The law requires that licensed producers advise the Insurance Dept. of a change in their residential or business address within how many days of such a change? A) 30 B) 40 C) 45 D) 50
A) 30
A producer who converts premiums for his own use most accurately describes which of the following? A) breach of fiduciary duty B) fraud C) misrepresentation D) concealment
A) breach of fiduciary duty *An insurance producer shall be responsible in a fiduciary capacity for all funds received or collected as an insurance producer and shall not, without the express consent of the insurance entity on whose behalf the funds were received, mingle the funds with the producer's own funds or with funds held by the insurance producer in any other capacity.
The Commissioner may deny, revoke or suspend a producer license for any of the following EXCEPT A) failing to meet the annual production quota as determined by the insurer B) providing false information in a license application C) misappropriating money being held in a fiduciary capacity D) committing a felony
A) failing to meet the annual production quota as determined by the insurer
Under PA's life insurance disclosure requirements, all of the following elements of an insurance policy sale must be identified and described EXCEPT A) the producer's commission B) the policy's face amount C) dividends payable D) the policy's cash surrender value
A) the producer's commission
In PA, the free-look provision for all individual life or endowment insurance policies is: A) 21 days B) 10 days C) 45 days D) 30 days
B) 10 days *All individual life insurance policies in PA must include a provision that allows the policyowner to return the policy within 10 days of delivery for a full refund of the premium if the policy is unsatisfactory.
In the case of a Med Supp insurance policy, the policyholder can return the policy for a full refund of the premium within how many days after the policy is purchased? A) 15 days B) 30 days C) 21 days D) 10 days
B) 30 days *All Med Supp policies must include a 30-day free-look period during which the policyholder can return the policy for a full refund of the premium if he/she is unsatisfied with it.
When a policy covers chemotherapy, cancer hormone treatments and other approved cancer treatments, benefits are available when treatment is received at all of the following EXCEPT A) through outpatient treatment at a hospital B) in a facility that is not licensed by the state to dispense with medical treatment C) in a doctor's office D) through hospital inpatient treatment
B) in a facility that is not licensed by the state to dispense with medical treatment *When an individual or group health insurance policy covers cancer chemotherapy and FDA-approved cancer hormone treatments and services, the covered individual must be entitled to benefits in any medically appropriate treatment setting.
Which of the following statements is NOT correct regarding variable life insurance in PA? A) all variable life policies must be filed for approval with the commissioner B) investment risk if the responsibility of the insurer C) the separate account is primarily composed of stocks and bonds D) variable life insurance is a security
B) investment risk if the responsibility of the insurer *Owners of variable life insurance policies assume the policy investment risk, unlike FIXED policies, in which values can be guaranteed.
All of the following are unfair trade practices EXCEPT: A) rebating premiums B) paying commissions to licensed agents C) offering advantages in dividends that were not specified in the policy D) making derogatory statements regarding an insurer's financial condition
B) paying commissions to licensed agents *Rebating by refunding premiums or by offering special dividends and defamation are unfair trade practices.
Which of the following applicants for a producer's license would be required to take the licensing exam? A) Bob, who is applying for a property and casualty license and holds the CPCUA designation B) Todd, who is licensed in CA as a property and casualty producer and is applying for the same license in PA C) Diane, who is applying for a property and casualty license and is a licensed real estate broker D) Jan, who is applying for a limited lines license
C) Diane, who is applying for a property and casualty license and is a licensed real estate broker *Applicants who hold certain professional designations or are applying for limited lines licenses are not required to take a licensing exam. Nonresidents applying for a license in the same line of authority are also exempt.
Which of the following life insurance prospects must be provided with a disclosure statement at the time of solicitation? A) Arnold, who is applying for a deferred fixed annuity with a $5,000 premium deposit B) June, who has requested the conversion of her $100,000 term policy to a permanent plan, under the policy's conversion option C) Juan, who is applying for a second whole life policy with the same insurer, in the amount of $250,000 D) Leana, who is applying for a $1,000 policy on the life of her granddaughter
C) Juan, who is applying for a second whole life policy with the same insurer, in the amount of $250,000
Chris purchased a short-term disability insurance policy from Good Health Insurance Company. The policy's face page states that coverage excludes pre-existing conditions. When the policy was issued, Chris was recovering from a broken leg. A week later, Chris slipped on an icy sidewalk and broke the same leg again. How will Good Health Insurance Company likely respond to Chris' claim? A) it will likely deny benefits since the accident was associated with a pre-existing condition B) it will likely pay the claim since it was associated with an accident, not an illness C) it will likely deny the claim, citing the probationary period exclusion D) it will likely deny the claim and cancel the policy, citing the probationary period exclusion
C) it will likely deny the claim, citing the probationary period exclusion
An applicant for a resident producer license A) must live in PA B) may only reside in PA C) may either reside in PA or have their principal place of business in this state D) may only have their principal place of business in PA
C) may either reside in PA or have their principal place of business in this state *An applicant with a principal place of residence or business in PA may apply for a resident insurance producer license.
Suppose that in order to motivate a buyer to sign an application for insurance, a producer promises a gift equal to 1/2 of the commission. This is an example of A) twisting B) sharing a commission C) coercion D) rebating
D) rebating *It is illegal for insurers or producers to induce applicants to purchase insurance by making agreements that are not specifically included in the insurance contract. One such illegal agreement is a promise to rebate part or all of a premium. It is also illegal for an agent or insurer to give advantages in dividends or benefits not specified in the contract or to give any other valuable consideration not included in the contract.
All individual accident and health insurance policies delivered in PA must state the following EXCEPT A) the policy's exceptions B) the date on which the insurance takes effect C) the identification of each rider D) the policy's conformity with federal guidelines
D) the policy's conformity with federal guidelines *All individual health policies delivered in PA must state the entire premium, the policy's exceptions and reductions, the date on which the insurance takes effect, the persons insured and identification of each form and rider.
The purpose of PA's replacement regulations is to: A) prohibit all replacement transactions by deeming them unfair methods of competition B) ensure that policyholders are given the information they need to make informed decisions regarding such transactions C) encourage replacement transactions as a way to promote competition D) limit replacement transactions to those that would produce premium savings for their policyholders
B) ensure that policyholders are given the information they need to make informed decisions regarding such transactions *Replacement regulations ensure that policyholders are given the information they need to make informed decisions regarding transactions, reduce opportunities for misrepresentation and incomplete disclosure, and set up penalties for failure to comply with replacement regulations.
All of the following are true regarding PA's life insurance replacement regulations EXCEPT A) no replacement transaction can be completed unless and until the insured/applicant is provided with a written comparison of the policy's terms, conditions and benefits B) no replacement transaction can be completed unless and until the insured/applicant signs a statement verifying knowledge that a replacement will take place C) no replacement transaction can be completed unless and until the insured/applicant is given a "Notice Regarding Replacement of Life Insurance" by the soliciting producer D) no replacement transaction can be completed unless the insured/applicant is provided a copy of all sales proposals or other sales materials
A) no replacement transaction can be completed unless and until the insured/applicant is provided with a written comparison of the policy's terms, conditions and benefits
To motivate a buyer to sign an application for insurance, a producer promises a gift of 50% of the commission. This is an example of A) rebating B) twisting C) sharing a commission D) coercion
A) rebating
Life insurance policies must include a provision entitling policyholders to a grace period for payment of premium, during which time the death benefit coverage continues in force. How long must this grace period last? A) 7 days or 1 week B) 31 days or 1 month C) 365 days or 1 year D) 90 days
B) 31 days or 1 month *A life insurance policy must provide for a 31-day or 1-month grace period for payment of any premium except the first. The death benefit coverage must continue in force for the duration of the grace period.
A complaint record must be kept for at least A) 2 years B) 4 years C) 3 years D) 1 year
B) 4 years *Everyone engaged in the insurance business must maintain a complete record of all the complaints received during the preceding 4 years. The record must list the total number of complaints, their classification by line of insurance, the nature of each complaint and the time it took to process each complaint.
Which of the following statements regarding the establishment of premium rate in PA is NOT correct? A) an insurer's rates may not discriminate against policyowners because of race, creed or national origin B) an insurer whose rates were rejected by the Commissioner may not appeal the decision C) all rate filings are subject to a 30-day waiting period D) PA insurers are required to file their rate schedules with the Commissioner
B) an insurer whose rates were rejected by the Commissioner may not appeal the decision *If an insurer's rates are denied by the Commissioner, it may request a hearing to demonstrate that the rates accurately reflect the experience of the insurer in the particular market.
The Insurance Dept. may deny an application for a producer's license for all of the following reasons EXCEPT A) failing to satisfy pre-licensing requirements B) being a treasurer of a local bank C) being less than 18 years old D) failing to pay all applicable fees
B) being a treasurer of a local bank *The Dept. will issue a resident or nonresident insurance producer license, for a period not to exceed 2 years, to an applicant when the Dept. determines that the applicant is at least 18 years of age; has not committed any act that is prohibited under the state insurance laws; has satisfied the pre-licensing education requirements; has passed (or is exempt from) the insurance producer licensing exam; has paid all applicable fees; and possesses the general fitness, competence and reliability sufficient to satisfy the Dept. that the applicant is worthy of licensure.
The failure to conspicuously disclose that an advertisement for a Med Supp policy is intended to solicit an insurance purchase and that an insurance producer or company will contact the prospect is known as A) rebating B) cold-lead advertising C) unfair discrimination D) high-pressure advertising
B) cold-lead advertising *The illegal marketing practice of cold-lead advertising fails to disclose in a conspicuous manner that a purpose of the marketing method is the solicitation of Med Supp insurance and that an insurance company or producer will contact the prospect.
An insurance company that is incorporated in and has its home office in Connecticut with an agency in Pennsylvania is classified as what kind of company with respect to Pennsylvania? A) fraternal B) foreign C) domestic D) alien
B) foreign *Insurers are classified by their state of domicile and are either domestic, foreign or alien. A domestic insurer is formed under laws of PA and has its home office in the state. A foreign insurer is incorporated in a state other than PA and has an office in PA. An alien insurer is domiciled in a country other than the US. A fraternal insurer is organized under a lodge system with a representative form of government and can be chartered in any state (i.e., Everence).
All of the following are considered unfair claim practices EXCEPT A) misrepresenting the amount of coverage payable under the policy B) insisting on investigating a claim based on an uncertain cause of loss C) attempting to settle a claim for less than the contract provides D) failing to act promptly on communications regarding claims
B) insisting on investigating a claim based on an uncertain cause of loss
A person may not act as a PA insurance producer unless that person is: A) at least 21 years old B) licensed in the line of authority under which a contract is issued C) a resident of PA for at least 3 years D) employed by at least 1 insurer
B) licensed in the line of authority under which a contract is issued *A person may not sell, solicit, or negotiate insurance in PA for any line of insurance unless the person is licensed for that qualification. An individual does not need to be employed by an insurance company or have been a PA resident for any specified time period. The minimum age to obtain a license is 18.
All of the following may result in license suspension or revocation EXCEPT A) intentionally violating a cease and desist order B) making a factual but subjective comparison of the 2 policies C) violating an insurance regulation D) making a false statement in a license application
B) making a factual but subjective comparison of the 2 policies *It is not illegal to compare insurance policies as long as those comparisons do not misrepresent the policy's coverages and terms.
When an insurance transaction involves a replacement, a producer must do all of the following EXCEPT A) give the applicant a notice regarding replacement of life insurance signed by the applicant and producer B) notify the existing insurer when one of its subsidiaries is the issuer of the replacement policy C) make a list of all of the applicant's existing life insurance policies D) obtain a signed statement from the applicant disclosing any existing insurance policies to replace
B) notify the existing insurer when one of its subsidiaries is the issuer of the replacement policy
All of the following people must be licensed to transact insurance business in PA EXCEPT: A) insurance producers who hold their Chartered Life Underwriter designation B) the chief financial officer of an insurer who does not solicit or negotiate risks C) producers who specialize in annuities D) producers who work for more than 1 insurance company
B) the chief financial officer of an insurer who does not solicit or negotiate risks *Some people who work in the insurance business do not need to be licensed, including officers or salaried employees of an insurance company who do not solicit, negotiate or place risks.
Nonresidents may be licensed to sell insurance in PA under which of the following circumstances? A) they passed the state exam B) they hold a valid license in their state of residence C) they completed the pre-licensing curriculum D) they are moving to the state within 10 days
B) they hold a valid license in their state of residence *An individual who is currently licensed as a resident insurance producer in another state or territory may apply to the Dept. for a nonresident insurance producer license for the equivalent lines of authority as the individual is licensed in his home state.
Susan's producer license lapsed because she forgot to pay her licensing renewal fee 10 days after it was due. Which of the following statements is CORRECT? A) Susan's failure to pay the renewal fee cannot be waived and her license will not be reinstated B) Susan's license will be reinstated only if she pays a $500 penalty and shows proof of completing the continuing education requirements C) Susan's license may be reinstated if she makes a request for reinstatement and submits the renewal application, registration fee and continuing education certification D) Susan's license can never be reinstated
C) Susan's license may be reinstated if she makes a request for reinstatement and submits the renewal application, registration fee and continuing education certification *A licensee who allows a license to lapse by failing to renew in a timely manner, pay the fee required, or complete the continuing education required, may, within 1 year of the license renewal date, ask the Dept. to reinstate the license. Persons requesting reinstatement of a lapsed license must submit a completed renewal form, the required fee and verification that the person has completed all required continuing education for the previously licensed and lapsed periods.
Anitra purchased a $300,000 universal life policy from Long Life Insurance Company. Which of the following must she be given at least once a year as long as she continued to own the policy? A) a policy review by the producer who sold her the policy B) a copy of Long Life's annual statement C) a copy of Long Life's privacy statement D) an offer to convert the policy to an annuity
C) a copy of Long Life's privacy statement
A temporary license may be issued to all of the following individuals EXCEPT A) a deceased producer's personal representative until new personnel is trained to run the business B) the surviving spouse of a deceased producer in order to sell the business C) a person selling insurance for the estate of a deceased producer D) a person holding a power of attorney (POA) for a producer in the armed forces
C) a person selling insurance for the estate of a deceased producer *Temporary licenses may be issued to a producer's spouse, designee or personal representative if the producer dies, becomes disabled or enters active military service.
Suitability standards for the purchase of LTC insurance include all of the following EXCEPT A) current range of covered costs B) average use of covered services C) availability of family caregivers D) current and future financial obligations to sustain the policy
C) availability of family caregivers *Factors to be considered in the suitability of a recommended purchase of LTC care coverage include average use of covered services, the current range of covered costs and the current and future financial obligations to sustain the policy.
Which of the following could be paid an insurance commission or fee? A) Lenny, a retired insurance producer who no longer maintains a license but whose book of business generates policy renewals B) Patricia, an employee benefits attorney who refers a business client to a producer specializing in group insurance C) both of these D) neither of these
C) both of these
Any attempt by the existing insurer or its producers to dissuade a policyholder from replacing an existing insurance policy is also known as A) coercion B) dissuasion C) conservation D) representation
C) conservation
All of the following insurance practices are illegal in PA EXCEPT A) soliciting or procuring insurance without a license B) paying a fee for services as an insurance producer to anyone who is not properly licensed C) paying a renewal commission to a person who is not licensed, but was licensed at the time of sale D) using insurance premiums for a producer's personal uses
C) paying a renewal commission to a person who is not licensed, but was licensed at the time of sale *It is legal to pay a renewal commission to a person who is not currently licensed but was licensed at the time the policy was sold.
All of the following are powers and duties of the Insurance Commissioner EXCEPT A) issuing cease and desist orders B) conducting complaint hearings C) prosecuting producers who violate state insurance laws D) appointing an examiner
C) prosecuting producers who violate state insurance laws *Producers who violate state insurance laws are prosecuted by the attorney general.
Which of the following statements regarding childhood immunizations in PA is CORRECT? A) they are covered only for those eligible for Medicaid B) they must be covered by all health insurance policies issued in PA C) they are covered by health insurance policies for low-income insureds only D) they must be excluded from health care policy coverage
C) reinstatement of a lapsed policy if the insurer gets proof of cognitive impairment or functional incapacity of the insured *All health insurance policies delivered in PA must include benefits for childhood immunizations. They must cover medically necessary booster doses of all immunizing agents used in childhood immunizations.
LTC policies must have a provision regarding reinstatement that allows which of the following? A) reinstatement of a lapsed policy if requested within 2 years of the lapse B) no reinstatement of a lapsed policy because of loss of the insured's functional capacity C) reinstatement of a lapsed policy if the insurer gets proof of cognitive impairment or functional incapacity of the insured D) automatic reinstatement of a lapsed policy regardless of the reason for the lapse if the insured is over age 80
C) reinstatement of a lapsed policy if the insurer gets proof of cognitive impairment or functional incapacity of the insured *LTC policies must contain a reinstatement provision in the event a lapse occurs and the insurer is provided proof of cognitive impairment or functional incapacity.
Long-term care policies must have a provision regarding reinstatement that provides for which of the following? A) reinstatement of a lapsed policy if requested within 1 year of the lapse B) no reinstatement of a lapsed policy for anyone over the age of 75 C) reinstatement of a lapsed policy if the insurer receives proof of cognitive impairment or functional incapacity of the insured D) automatic reinstatement of a lapsed policy regardless of the reason for the lapse if the insured is over age 80
C) reinstatement of a lapsed policy if the insurer receives proof of cognitive impairment or functional incapacity of the insured
In PA, all of the following are considered unfair trade practices EXCEPT A) misrepresentation B) rebating C) replacement D) defamation
C) replacement *Misrepresentation, defamation, boycott or coercion, unfair discrimination and rebating are considered unfair trade practices. Replacement is, in itself, not unfair or illegal. If an agent uses misrepresentation to induce an insured to drop an existing insurance policy in order to purchase a similar policy from the producer, replacement can become the illegal act of twisting.
Which of the following insurance transactions is subject to replacement regulations? A) sale of a life insurance policy where the current and replacing policy are issued by the same insurer B) sale of a group life insurance policy C) sale of a new policy that causes an existing life insurance policy to be surrendered D) sale of a group annuity that causes an existing group annuity to be forfeited
C) sale of a new policy that causes an existing life insurance policy to be surrendered *Sales of group life insurance policies and group annuities are NOT subject to replacement regulations, nor are policies replaced within the same insurance company.
What is the maximum term of a temporary license when it is issued as a result of a licensee's death? A) 60 days B) 90 days C) 30 days D) 180 days
D) 180 days *A temporary license is valid for up to 180 days and is NOT transferable. The dept. may impose requirements upon a temporary licensee, including requiring a sponsor and limiting the lines of authority of a temporary licensee, as deemed necessary to protect insureds and the public. A person may not use a temporary license to transact new insurance business. The purpose of a temporary license is to maintain, transfer, or conclude existing business, not to generate new business.
In PA, insurers must maintain all of their insurance advertisements on file for: A) 2 years B) 5 years C) 3 years D) 4 years
D) 4 years *Each insurer must maintain a file containing every individual contract advertisement and typical blanket, franchise and group advertisements used by the company, and must indicate the form number of the contract advertised along with the manner of distribution. The file must be kept for 4 years or until the next regular examination of the company, whichever is longer, and is subject to inspection by the Insurance Dept.
The Commissioner may examine an insurer at her discretion, but must examine insurers at least every A) 3 years B) 10 years C) 4 years D) 5 years
D) 5 years *Insurers must be examined at least every 5 years.
What is an authorized insurer? A) a producer who has the authority to represent an insurance company B) a policyholder who has a legal contract with an insurance company C) a producer who is authorized by the Commissioner to transact insurance business in PA D) a company that is authorized by the Commissioner to transact insurance business in PA
D) a company that is authorized by the Commissioner to transact insurance business in PA *An authorized insurer is one that has a certificate of authority (COA) from the Commissioner to transact insurance business in PA.
Which type of insurer is formed under the laws of a country other than the US? A) domestic B) interstate C) foreign D) alien
D) alien *An insurer chartered in a state, commonwealth or territory other than PA is called a foreign insurer. A domestic insurer is an insurance company formed under the laws of PA. An alien insurer is formed under the laws of a foreign country.
All of the following are standards the Commissioner uses to measure an insurer's solvency EXCEPT: A) level of working capital B) asset portfolio C) market conduct reports D) amount spent on advertising
D) amount spent on advertising *The Commissioner measures an insurer's financial condition by the following: failure by the insurer to maintain a certain level of working capital; adverse financial or market conduct examination reports; an asset portfolio that is considered insufficient; any false or misleading statements the insurer may have filed; and a net loss by the insurer in the prior 12-month period that is greater than an amount specified by the regulations. The Commissioner does NOT consider the amount the insurer spent on advertising.
Who is responsible for the content of insurance advertising? A) National Association of Insurance Commissioners (NAIC), which oversees insurance advertising nationally B) producers who use the advertising C) the advertising agency that creates and disseminates insurance advertising D) any insurance company whose contracts are advertised
D) any insurance company whose contracts are advertised *Each insurance company must maintain complete control over the content, form and dissemination of advertisements for its insurance contracts, regardless of who creates or writes them.
All of the following conditions or medical procedures may be excluded from coverage under an individual accident and health insurance policy EXCEPT A) nervous disorders B) cosmetic surgery C) an injury covered by worker's comp D) childhood immunizations
D) childhood immunizations *All health insurance policies issued in PA must include benefits for childhood immunizations. These policies must provide coverage for medically necessary booster doses of all immunizing producers used in childhood immunizations.
To protect insureds, policyowners and beneficiaries against insurer insolvency, the PA Insurance Dept. has established: A) licensing requirements B) claim settlement procedures C) replacement regulations D) guaranty funds
D) guaranty funds *The state guaranty funds protect policyowners, insureds and beneficiaries when life, accident & health insurers, property & casualty insurers and annuity providers fail to fulfill their financial obligations.
Executing the insurance laws of PA is whose responsibility? A) certified insurers B) PA legislature C) insurance producers D) insurance dept.
D) insurance dept. *The Commonwealth of PA Insurance Dept. is the state agency charged with the execution of PA's insurance laws. The Commissioner of Insurance is the head of the Dept. The PA legislature enacts the insurance laws.
An insurance producer must be appointed by the A) broker B) policyowner C) state of PA D) insurer
D) insurer *An insurance producer must be appointed in writing by the insurance company in order to represent the company, sell its insurance, solicit applications, and (if authorized by the insurer) countersign policies on the insurer's behalf. An appointed producer represents the company and has the power to bind it to insurance contracts.
Med Supp policies are designed primarily for A) people designated by the federal government as qualifying for public assistance B) people who are uninsurable due to preexisting conditions C) dependents of employees insured through their employer group plan D) people eligible for Medicare
D) people eligible for Medicare *Med Supp policies are health insurance policies delivered in PA that are designed primarily to supplement coverage for the hospital, medical or surgical expenses of persons eligible for Medicare by reason of age (65+).
An individual with a temporary license may do all of the following EXCEPT A) maintain the business of a disabled producer B) perform any acts necessary to keep a deceased producer's business going until the estate is settled C) renew the business of a deceased producer D) procure new insurance
D) procure new insurance *An individual with a temporary license may not solicit, negotiate or procure new business. He/she is authorized to wind down the business affairs of a deceased or disabled producer.
PA's laws about LTC insurance were created for all of the following reasons EXCEPT A) to protect applicants against deceptive sales practices B) to promote public interest and availability of LTC policies C) to establish standards for LTC insurance D) to provide affordable coverage to all in PA who want LTC insurance
D) to provide affordable coverage to all in PA who want LTC insurance *PA's LTC laws and regulations were not intended to ensure affordable coverage for those who want LTC insurance. The purpose of LTC according to PA insurance law is to protect purchasers of coverage from deceptive sales practices and establish standards for this type of insurance.
