State Laws, Rules, and Regulations
Which of the following positions is responsible solely for offering advice on insurance policies (for a fee)? A) Agent B) Sub-agent C) Broker D) Counselor
D
Which of the following will NOT be considered unfair discrimination by insurers? A) Discriminating in benefits and coverages based on the insured's habits and lifestyle B) Charging applicants with similar health histories different premiums based on their ethnicity C) Cancelling individual coverage based on the insured's marital status D) Assigning different risk classifications to applicants based on gender identity
A
Which of the following is an example of a producer being involved in an unfair trade practice of rebating? A) Making deceptive statements about a competitor B) Telling a client that his first premium will be waived if he purchases the insurance policy today C) Inducing the insured to drop a policy in favor of another one when it's not in the insured's best interest D) Charging a client a higher premium for the same policy as another client in the same insuring class
B
During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes A) Twisting. B) Coercion. C) Misrepresentation. D) Defamation.
C
If an agent changes his residence address, within how many days must the agent notify the Commissioner of the change? A) 10 days B) 15 days C) 30 days D) 60 days
C
When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for A) 8 years. B) 10 years. C) 3 years. D) 5 years.
C
Which of the following are the authorities that an agent can hold? A) Authorized and admitted B) Primary and secondary C) Express and implied D) Apparent and allowed
C
Which of the following entities has the power to issue certificates of authority? A) NAIC B) Federal Insurance Regulation Board C) Commissioner of Insurance D) Department of Insurance
C
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting? A) Reciprocal B) Fraternal C) Stock D) Mutual
C
What is a foreign insurer? A) An insurer with a home office in another country B) An insurer with licensed agents doing business in other countries C) An insurer with licensed agents who are citizens in more than one country D) An insurer with a home office in another state
D
What is the function of a certificate of authority? A) It gives the Commissioner of Insurance his or her authority. B) It is given to the Department of Insurance by the Federal Insurance Regulation Board to allow it to enforce the provisions of the Insurance Code. C) It is presented to all agents when they receive their licenses. D) It allows an insurer to transact insurance in Georgia.
D
What is the major difference between a stock company and a mutual company? A) Amount of death benefit B) Number of producers C) Types of whole life policies D) Ownership
D
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? A) Apparent B) Assumed C) Express D) Implied
D
Which of the following best describes the unfair trade practice of defamation? A) Assuming the name and identity of another person B) Issuing false advertising material C) Refusing to deal with other insurers D) Making derogatory oral statements about another insurer's financial condition
D
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? A) Switching B) False advertising C) Rebating D) Twisting
D
Which of the following is required of an insurer in order to legally transact insurance in Georgia? A) Decree of power B) Insurer's certificate C) Agent's license D) Certificate of authority
D
All of the following statements regarding continuing education requirements in this state are true EXCEPT A) Producers may repeat the same courses to meet the required CE hours for a licensing period. B) CE hours must be completed every 2 years by the last day of the producer's birth month. C) Ethics education is required every licensing period. D) Excess hours may be carried over to the next licensing period.
A
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? A) False advertising B) Unfair claims C) Twisting D) Defamation
A
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered A) An unfair trade practice. B) A misrepresentation. C) A required disclosure. D) A legal representation of the Association.
A
In which of the following situations is it legal to limit coverage based on marital status? A) Divorce within the last six months of applying for insurance B) It is never legal to limit coverage based on marital status. C) Excessive number of divorces, as defined by the Insurance Code D) Legal separation during the application process
B
A participating insurance policy may do which of the following? A) Require 80% participation B) Pay dividends to the policyowner C) Provide group coverage D) Pay dividends to the stockholder
B
Agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period? A) 1 year B) 3 years C) 5 years D) 7 years
C
How long is the Commissioner's term of office? A) 2 years B) 3 years C) 4 years D) 6 years
C
After an insurer has filed an application for a certificate of authority, how long does the Commissioner have to approve the application? A) 15 days B) 30 days C) 45 days D) 90 days
D
Authorized insurance companies are examined by the Commissioner at least once every A) Year. B) 2 years. C) 3 years. D) 5 years.
D
When does a producer's license expire? A) Every 2 years on the last day of the producer's birth month B) Every even-numbered year C) Every 3 years D) Annually on January 1
A
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? A) Defamation B) Undercutting C) Twisting D) Slandering
A
All of the following are examples of transacting insurance in Georgia EXCEPT A) Preliminary insurance negotiations. B) Making an insurance contract go into effect. C) Placing advertisements for an insurer. D) Insurance solicitation.
C
What documentation grants express authority to an agent? A) Fiduciary contract B) State provisions C) Agent's contract with the principal D) Agent's insurance license
C
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.
D
The violation of a cease and desist order may result in a fine of A) $3,000. B) $5,000. C) $7,500. D) $10,000.
D
What is the title of the chief officer of the Department of Insurance? A) Superintendent B) Commissioner C) President D) Director
B
Which of the following is an example of apparent authority of an agent appointed by an insurer? A) The agent has business cards and stationery printed. B) The agent puts up a sign with the insurer's logo without express permission. C) The agent accepts a premium payment after the end of the grace period. D) The agent accepts a premium payment during the grace period.
C
Which of the following is the closest term to an authorized insurer? A) Licensed B) Legal C) Admitted D) Certified
C
Which of the following would be considered false advertising? A) Stating that a policy has limitations and exclusions B) Failing to include premiums in sales materials C) Implying that the agent is the insurer D) Stating the differences in benefits between Whole Life Insurance and Term Life Insurance
C
Which of the following may NOT be included in an insurance company's advertisement? A) An identification of a limited policy as a limited policy B) That its policies are covered by a state Guaranty Association C) The policies' limitations or exclusions D) The name of a specific agent
B
What term is used for replacing insurance policies for the sole purpose of making commissions? A) Misrepresentation B) Replacement C) Coercion D) Churning
D
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 A) Twisting. B) Controlled business. C) Adverse selection. D) Discrimination.
D
Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing the involvement or lack of involvement of A) A change of health. B) An inducement. C) A change in policy amount. D) Replacement.
D
Which of the following is NOT true regarding a Certificate of Authority? A) It may be necessary for transacting business in a specific state. B) It is equivalent to an insurance license. C) It is issued by the state department of insurance. D) It is issued to group insurance participants.
D
Producers will be deemed to be using their license primarily to write controlled business if, during any 12-month period, A) The total premiums on controlled business exceed the total premiums on all other business written. B) The licensees write more than 5 policies classified as controlled business. C) The licensees write more than two policies on themselves or their property. D) The total premium on controlled business equals 15% or more of the total of all premiums on business written.
A
Which of the following is true regarding statistics used in an advertisement? A) The source must be identified. B) The statistics and how they are used must be certified by an independent accountant. C) They must be derived from data occurring within the last 1 year only. D) They must be derived from data occurring within the last 5 years only.
A
An insurance agent's responsibilities include all of the following EXCEPT A) Perform professionally. B) Represent the client. C) Perform faithfully. D) Represent the insurer.
B
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.
B
In order for an insurer to legally transact insurance, it must obtain which of the following? A) Authorization of Power B) Certificate of Authority C) Power of Authority D) Director's Decree
B
On a participating health insurance policy issued by a mutual insurance company, dividends paid to policyholders are A)Guaranteed. B) Not taxable since the IRS treats them as a return of a portion of the premium paid. C) Paid at a fixed rate every year. D) Taxable as ordinary income.
B
Rebating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT A) An agent offers tickets to a baseball game as an inducement to buy insurance. B) An agent uses misrepresentation to convince a person to cancel an existing policy and take a new policy from him. C) An agent offers the use of his lake house to person as an inducement to buy. D) An agent offers to share his commission with a policyholder.
B
When do certificates of authority expire in Georgia? A) Every December 31 B) June 30 of the year following issuance C) January 1 of the year following issuance D) After 2 years
B
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority? A) Implied B) Assumed C) Apparent D) Express
C
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming? A) Domestic B) Unauthorized C) Foreign D) Alien
C
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as A) Unlawful distribution of dividends. B) Coercion C) Rebating D) Twisting
C
Insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is A) A fraternal insurer. B) A stock company. C) A mutual insurer. D) A reciprocal company.
C
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer? A) Alien B) Nonadmitted C) Foreign D) Domestic
C
Pertaining to insurance, what is the definition of a fiduciary responsibility? A) Promptly forwarding premiums to the insurance company B) Helping insureds to file claims C) Performing reviews of insured's coverage D) Offering additional coverage to clients
A
When transacting business in this state an insurer formed under the laws of another country is known as a/an A) Alien insurer. B) Domestic insurer. C) Foreign insurer. D) Admitted insurer.
A
Which of the following best describes a misrepresentation? A) Making a maliciously critical statement that is intended to injure another person B) Discriminating among individuals of the same insuring class C) Issuing sales material with exaggerated statements about policy benefits D) Making a deceptive or untrue statement about a person engaged in the insurance business
C
Which of the following will NOT be considered unfair discrimination by insurers? A) Cancelling individual coverage based on the insured's marital status B) Assigning different risk classifications to applicants based on gender identity C) Discriminating in benefits and coverages based on the insured's habits and lifestyle D) Charging applicants with similar health histories different premiums based on their ethnicity
C
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? A) False advertising B) Rebating C) Twisting D) Switching
C
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A) An offer of employment. B) Stocks, securities, or bonds. C) An offer to share in commissions generated by the sale. D) Dividends from a mutual insurer.
D
An agent is acting ethically in all of the following situations EXCEPT A) Working within the conditions of his/her contract. B) Representing the insurer, not the insured. C) Keeping customers' best interests in mind. D) Always representing the insured.
D
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? A) Stating that the insurance policy is a share of stock B) Exaggerating the benefits provided in the policy C) Stating that the competitors will arbitrarily increase their premiums each year D) Making comparisons between different policies
D
Which of the following statements is INCORRECT? A) Misrepresenting the true nature or facts of a policy or its benefit in order to induce a policyholder to surrender one policy and replace it with another is illegal. B) It is illegal to be involved in any activity of boycott, coercion, or intimidation that is intended to restrict fair trade or to create a monopoly. C) Discrimination in rates, premiums, policy benefits, etc. for persons within the same class or with the same life expectancy is illegal. D) Replacing insurance policies for the purpose of making commissions is legal.
D