part 2 law 113 to 145

Question: 139 What is the minimum percentage of a licensee's total volume of premiums in a calendar year that must come from business other than controlled business?

80% During any calendar year, at least 25% of a licensee's total volume of premiums must be from business other than controlled business.

Question: 125 Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?

A U.S. citizen living abroad To be eligible for health coverage on the Marketplace, the individual must be a U.S. citizen or national or be lawfully present in the United States, must live in the United States, and cannot be currently incarcerated. Medicare recipients are not eligible for coverage in the Marketplace.

Question: 137 If an insurance company offers Medicare supplement policies, it must offer which of the following plans?

A and B Reasoning An insurance company must make available to each applicant a policy form offering the basic core benefits (Plan A) if it will offer any Medicare Supplement policies. An insurance company does not have to issue all or any of the plans B through N.

Question: 129 An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Certified insurer. Insurers who meet the state's financial requirements and hold a Certificate of Authority to transact business in the state are considered authorized or admitted.

Question: 115 Which of the following provisions states the insurer's right to change premium amounts?

Coverage Limitations The Renewal Provision, also known as a "Continuation Provision", must be included on the first page of Medicare supplement policies. This provision explains the right of the insurer to alter premium amounts.

Question: 133 Which of the following is TRUE about credit life insurance?

Creditor is the insured. In credit life insurance, the creditor is the policyowner and the beneficiary; the debtor is the insured.

Question: 136 A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases an insurance policy from the bank in the amount of the loan. This is an example of

Defamation. Reasoning This is an example of the illegal practice of coercion.

Question: 114 All of the following are unfair claims settlement practices EXCEPT

Failing to acknowledge pertinent communication pertaining to a claim. When settling claims, negotiation can come into play.

Question: 118 All insurers that provide life or accident and health insurance coverage in Texas must be members of what association?

Federal Association of Insurers The Life and Health Insurance Guaranty Association was created to protect policyholders against an insurance company's failure to perform its contractual obligations due to impairment or insolvency. All insurers that provide life, accident and health insurance, annuities or hospital service coverage in Texas must be members of this association.

Question: 134 All of the following are mandatory life insurance policy provisions EXCEPT

Grace period. Policy backdating is not a mandatory provision; in fact, backdating a policy more than 6 months is prohibited.

Question: 142 Most HMOs operate through what type of system?

Individual fee-for-service system Reasoning Most HMOs operate almost exclusively through a group enrollment system, in which each member pays a fixed monthly premium, whether or not they have used the services of the HMO that month.

Question: 116 If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?

Insurer is not responsible for the contents of the testimonial The ad must disclose whether the person making the testimonial has a financial interest in the insurer. If the person is compensated, the testimonial must include "Paid Endorsement" or similar language.

Which of the following is NOT true regarding a Certificate of Authority?

It is equivalent to an insurance license. Before insurers may transact business in a specific state, they must apply for a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set down by the state.

Question: 138 Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Misrepresentation Permitting individuals of the same class to be charged a different rate for the same insurance is an unfair trade practice of discrimination.

Question: 132 Each HMO enrollee must be provided

Nondisclosure agreement. Texas HMOs must provide each enrollee evidence of coverage that includes information about the HMO, plan benefits and cancellation provisions.

Question: 124 When an individual obtains an insurance license for the primary purpose of writing insurance on themselves, or for members of their immediate family, or business, this is called

Personal insurance. When producers sell policies on themselves, their family, or business associates, this is called "controlled business." In this state, at least 25% of a licensee's total volume of premiums in a calendar year must be from business other than controlled business.

Question: 135 Which of the following best describes the unfair trade practice of defamation?

Refusing to deal with other insurers Reasoning Making oral or written statements directly or indirectly which are derogatory or maliciously critical of another insurer would be an example of the unfair trade practice of defamation.

Question: 131 Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Reinstatement rule Anytime a new policy is issued that replaces or modifies existing insurance, a replacement form must be submitted to the ceding company.

Question: 121 A participating insurance policy may do which of the following?

Require 80% participation A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.

Question: 144 An agent discovers his newest client was the result of a referral. To show his thanks to the referring customer, the agent could

Return the customer's first premium of a new policy. 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.

Question: 141 According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT

Screenings for autism and behavioral disorders in children. Reasoning Cervical cancer exams as a preventive service will only be available for women at higher risk. All the other services are required preventive care services.

Question: 120 All of the following statements are correct regarding credit life insurance EXCEPT

The amount of insurance permissible is limited per borrower. In credit life insurance, the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan.

Question: 119 An agent receives an Emergency Cease and Desist Order for chronically misrepresenting his insurance policies. The agent knows that he did not commit the violations

The hearing must be set for exactly 30 days after the request is made. The hearing must be held no later than the 30th day after the date the Commissioner receives the request for a hearing.

Question: 145 Which of the following may be included on an insurance advertisement?

Trade names in place of the insurer's name Reasoning An insurer may use a testimonial from an individual in exchange for compensation, as long as the advertisement is identified as "Paid Endorsement."