P&C part 3 (Texas)
the commisioner of insurance issues a cease and desist order and immediatley receives a request for a hearing.within what number of days must the hearing be held?
30 days
An agent's license will terminate within how many days from the due date of obligatory fees and continuing education requirements?
90 days
An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?
rebating
all of the following are considered unfair trade practices in insurance except: a). rebating b). defamation c). sharing commissions d). boycotting
sharing commisions
Words or terms that appear in an insurance policy in bold face print include
specific definitions and their meaning as used in the policy
An employee is entitled to _________ if he or she has a disability and has not attained maximum medical improvement.
temporary income benefits
An agent discovers his newest client was the result of a referral. To show his thanks to the referring customer, the agent could
thank the client
under the Texas Property and Casualty Insurance Guaranty Associaton, what is the maximum amount that a claimant may recover from an occurence under a policy issued by an insolvent insurer?
the lesser of the amount of loss, the amount of insurance written, or 300,000
a temporary license holder can receive commision from any of the following except?
the license holder's sister in law
all the following about rebates are true EXCEPT
they are allowed if in the best interest of a client (theyre not)
A producer or broker who makes oral or written statements intended to injure another producer or insurer is guilty of the unfair trade practice of defamation.
true
Agents must complete 24 hours of continuing education every renewal period. All CE hours must be completed during the reporting period; licensees are not allowed to carry over excess hours to the next reporting period.
true
Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.
true
Funds not paid out after paying claims and other operating costs are returned to the policyowners in the form of a dividend. If all funds are paid out, no dividends are paid.
true
insurers can delay an acceptance or rejection decision for 30 days if arson is suspected
true
all of the following would be considered an insurance transcation except
obtaining an insurance license
which of the following insurers are owned by stockholders?
only stock insurance companies are owned and controlled by stockholders
a participating insurance policy may do which of the following?
pay dividends to a policy owner
Property and Casualty Insurance Guaranty Associaton
pays claims to insured if insurer's company becomes insolvent
which of the following statements is INCORRECT with regard to surplus lines insurance?
policies written by surplus lines insurers typically contain standard forms and coverages
what is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation of rebating?
$25
which of the following is another term for an authorized insurer?
admitted.
In Texas, the state's continuing education requirement
consists of completing 24 hours of CE each biennium
Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?
discrimination
which of the following is an example of a producer's fiduciary responsibility?
promptly forwarding premiums to the insurance company
all of the following are requirements for an individual to be licensed except
provide a financial statement
An employee who refuses services or refuses to cooperate with the Rehabilitation Commission loses entitlement to supplemental income benefits.
true
In Texas, unless higher limits are purchased, the maximum payable amount for all auto personal injury protection benefits arising out of a single incident shall not exceed:
$2,500
The minimum auto liability limits for Texas are ________ for bodily injury or death to any one person in any one accident, ___________ for bodily injury or death to 2 or more persons in any one accident, and ________ for damage to property of others arising out of in any one occurrence.
$30,000 $60,000 $25,000
assigned risk plans
A plan through which people can buy insurance if they are unable to purchase insurance in the regular or voluntary market, because of their high risk or other factors.
Under Texas Worker's compensation law, an insurance carrier will pay death benefits to legal beneficiary in an equal amount to what portion of the employee's average weekly wage?
75%
Insurance procured from an unauthorized insurer is called
surplus lines insurance
all of the following statements apply to temporary licenses except
they can be renewed
Unfair settlement practices include refusing or delaying a settlement solely because there is other insurance available to partially or entirely satisfy the claim loss. The claimant who has a right to recover from more than one insurer has the right to choose the coverage from which to recover and the order in which payment is to be made.
true
When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating.
true
an employee may be eligible for supplemental income benefits upon
the expiration of the impairment income benefit period
Insures must file all rates and forms for Commissioner's approval within how many days prior to use?
60 days
The Commissioner of Insurance issues a cease and desist order to an agent. If the agent wishes to contest these charges in court, how many days after the order was issued does the agent have to make the request?
60 days
what is the required notice of cancellation of a Homeowner's policy to the insured?
10 days
An insurer must acknowledge receipt of a Notice of Claim within how many days?
15 days
Controlled Business
An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees.
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate of Authority
what are considered residual markets?
FAIR plans, Assigned risk plans, and a joint underwriting association
T/F: policies written by a surplus lines insurer typically contain standard coverages and forms
False
unfair claims settlement practice
If an insurer knowingly or frequently commits an act that neglects or deceives an insured, its behavior falls under the category of unfair claim settlement practice. In this instance, there is no reason why the insurer was warranted in waiting to process the claim.
Who might receive dividends from a mutual insurer?
Policyholders
If a licensed agent in Texas receives a criminal conviction, that information must be reported to the
Texas Department of Insurance
Bobs insured declared bankruptcy. It has not yet payed the $1,000 dollar claim. Which of the following is true?
The Property and Casualty Insurance Guarnaty Associations will pay it.
Residual Market
The term refers collectively to insurers and other organizations that make insurance available through a shared risk mechanism to those who cannot obtain coverage in the admitted market.
FAIR plans (Fair Access to Insurance Requirements)
This plan addresses the issue of property insurance availability. This plan makes insurance available to risks that were previously considered uninsurable because of environmental hazards. this plan states that no application can be denied simply because of environmental factors beyond the applicants control.
An insured who has filed two or more claims in the preceding policy year may have their premium surcharged.
True
The Insurance Commissioner must examine each insurer at least once every 5 years.
True
the commision will refer an employee who is receiving supplemental income benefits to the Rehabilitation Commision if it determines that rehabilitation will
return the employee to work earlier
It is never legal to limit coverage based on marital status
true
It would be considered unfair discrimination to ask an applicant for their sexual orientation, as well as using sexual orientation as a rating factor to determine insurability.
true
Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.
true
The Commissioner is appointed to office by the Governor, with the advice and consent of the Senate, for a 2-year period. The Commissioner's appointment ends on February 1 of each odd numbered year.
true
If the death of an employee results from a compensable injury, the insurance carrier will pay
10,000 for the cost of the burial
The date of "maximum medical improvement" is defined as the earliest of the date that, based on medical probability, further medical improvement to an injury can no longer be reasonably anticipated, or
104 weeks
The average weekly wage of an employee who has worked for the employer for at least ________ immediately preceding an injury is computed by dividing the sum of the wages paid in the 13 consecutive weeks by 13.
13 consecutive weeks
To be entitled to supplemental income benefits, an employee must have an impairment rating of ____ or more as determined by law.
15%
an agent completed a CE course in 2022. when must the agent keep records of all complettion?
2026
what is the minimum percentage of a licensee's total volume of premiums in a calender year that must come from business other than controlled business?
25%
The commissioner of insurance receives a cease and desist order and immediately receives a request for the charges to be reviewed in a hearing. Within what number of days must the hearing be held?
30 days
the limits of liability for bodily injury or property damage stated in the auto insurance policy are 30/60/25. What are the maximum limits of liability for underinsured or uninsured motorists?
30/60/25
how long must producer maintain records of continuing education course completion?
4 years
If a deceased employee is survived by an eligible spouse and 3 dependent children, what percentage of the death benefit will be paid to the spouse?
50%
Cancellation to take effect on the 12-month anniversary of the policy requires the insurer to give prior written notice of...
at least 30 days (unlike the usual 10)
An auto policy may be cancelled for various reasons after it has been in effect for.....
at least 60 days
Unless the customer is also an insurance agent or was formerly an agent, it is illegal for the agent to pay or offer to pay for referrals.
True
twisting
Twisting is an illegal act, in which an agent misrepresents the terms of an insurance or annuities contract or draws incomplete comparisons, in a way that would compel the insured to surrender the contract for the new one.
joint underwriting association
a voluntary association of admitted insurers whose members have been authorized by the state to provide a particular type of insurance to the public. This type of insurance is not available from a private insurer in the voluntary market.
All property losses under the basic form are settled on an....
actual cash value basis (ACV)
Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or _____ into the state as a legal insurer.
admitted
which of the following is another term for authorized insurer?
admitted
Fiduciary Duty
agents are legally obligated to treat applicants and insured's in an ethical manner. a fiduciary is someone in a position of trust. more specifically, it is illegal to for insurance producers to commingle premiums collected from the applicants to their own personal funds
who are members of the Texas Windstorm Insurance Association?
all authorized property insurers
an applicant for a license in texas must include a statement with his application that provides information about all of the following EXCEPT
intending to apply for another license
Misrepresentations (insurer's role)
it is illegal to publish, circulate, or issue any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, or the payment of dividends. also refers to verbal statements
in texas, an employed injured on the job will not receive loss of time benefits unless the disability lasts...
longer than a week
lifetime benefits are payed for until the employee's death for all the following injuries excpet
loss of hearing in both ears
anyone who violates the Insurance Code of Texas will face...
a $25,000 fine
The Commissioner must have at least 5 years of experience in one of the following occupations:
an executive in the administration of business or government, a practicing attorney, or a certified public accountant.
A repetitive trauma injury arising out of employment, such as _______ is compensable.
carpal tunnel syndrome
Injuries that occur to an employed to and from when work are....
covered under worker's compensation only if the means of transportation are payed for by an employer
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and 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
discrimination
A risk manager's license is good for how many years?
2 years
within how many years must an agent renew their license?
2 years
who is considered a non resident agent?
A nonresident agent is one who resides in a state other than Texas, but who has met the licensing requirements and is authorized to write insurance in the state of Texas.
who is considered a nonresident agent
An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state
an insurance professional advises a client regarding the benefits of her life insurance policy, in exchange for a fee. which of the following best describes this type of insurance professional?
Counselor
which of the following is NOT a possible penalty for a violation of insurance code?
a fine up to $100,000 (no more than 25,000)
which members of a corporation or partnership are required to obtain an individual insurance agent's license in order for the association to be licensed?
at least one officer or partner and any other person acting as an agent
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
coercion
an insurance professional advises a client regarding the benefits of her life insurance policy, in exchange for a fee. which of the following terms best describes this type of insurance professional?
counselor
all of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
dividends from a mutual insurer.
In insurance transactions, fiduciary responsibility means
handling insurer funds in a trust capacity
which of the following is not true regarding a certificate of authority?
it is issued to group insurance participants
all of the following are adjusters lines in texas except
life and health
all of the following adjuster's license are available in this state EXCEPT
life and health claims adjuster
A person who, for a fee, gives advice or recommendations on benefits provided by an insurance contract is called
risk manager
An Insurance Service Representative may perform any of the assigned duties in the office of a property and casualty agent, EXCEPT
solicit applications
a licensed agent is moving from texas to kansas. what must they do?
the agent has 30 days to notify the department of insurance of the new address
If a person suspects that a fraudulent insurance act has been or is about to be committed in this state, the person must report the information in writing to the Insurance Fraud Unit of the Department within 30 days.
true
If an agent does not fulfill their continuing education requirements or pay the necessary fees, their license will expire within 90 days of the due date.
true
No one whose license has been revoked can receive another license in Texas for 5 years.
true
Temporary licenses are not renewable and cannot be issued more than once in any 6-month period to the same applicant. A written examination is not required. Temporary licensees cannot sell insurance that replaces an existing individual life insurance policy or annuity contract that is in force.
true
an agency must have 25,000$ to pay for ommissions and errors
true
what percentage of continuing education hours must be in a classroom setting?
50%
Insurer's must file all rates and forms for the commisioner's approval within how many days prior to use?
60 days
Under Texas workers' compensation law, lifetime income benefits are paid at what percentage of the employee's average weekly wage?
75 percent of employees average weekly wage
which of the following activities may be performed by a managing general agent?
all of the above
The permitted types of transactions are usually limited to insurance that is difficult to place, or insurance that is not readily available through an authorized insurer in the state. These unauthorized insurers are called
excess or surplus line insurers
An employee, or a person acting on the employee's behalf, ___________ to notify the employer of the injury. Income benefits are not paid during the first week of a disability.
has 30 days after the date of the injury
intimidation strategies are....
illegal
Regarding workers compensation, employees who have reached maximum medical improvement will be entitled to
impairment income benefits
When an employee reaches the status of "maximum medical improvement," he or she is entitled to________. This is typically equivalent to 70% of the employee's average weekly wage. The employee will receive benefits for a period of time that is consistent with his or her impairment rating.
impairment income benefits
The Texas Windstorm Insurance Association provides windstorm and hail insurance
in the seacoast territory of the state
According to the Texas Financial responsibility law, operating a motor vehicle without required liablity insurance is considered a/an...
misdemeanor
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
mutual
an insurance agent wants for a client to replace her current annuities plan with another one. he presents a new one in an incomplete and dishonest way, which makes the new contract seem far more appealing than the original one. the policyowner ends up surrendering her original contract and replacing it with a new one. what is this called?
twisting
After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until it hears what the other company will pay. The insurer's action will be classified as
unfair
An applicant properly notifies her insurer of a straightforward claim, but the insurer waits an exceedingly long time to process it. Which of the below terms best describes the behavior of the insurer?
unfair claims settlement practice