State Laws, Rules, and Regulations
Which following terms will be permissible in describing a life insurance policy in company advertisements?
variable plan
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
apparent
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
authorized insurer
What is the major difference between a stock company and a mutual company?
ownership
When a policy is being replaced, the replacing company notifies the
replacement company
Which of the following is an example of a producer's fiduciary duty?
the trust that a client places in the producer in regard to handing premiums
In replacement, an existing insurer must provide policyowners with a policy summary for existing life insurance within how many days of receiving the written communication and replacement?
10
The violation of a cease and desist order may result in a fine of
10,000
When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for
3 years
An agent must be a resident of the state and be present in the state for at least how many months each year?
6
A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered
a felony
What documentation grants express authority to an agent?
agent's contract with the principal
When transacting business in this state an insurer formed under the laws of another country is known as a/an
alien insurer
Pertaining to insurance, what is the definition of a fiduciary responsibility?
promptly forwarding premiums to the insurance company
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
rebating
An insurance agent's responsibilities include all of the following EXCEPT
represent the client
When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy until the conclusion of the next regular examination by the Insurance Department or for
3 years
The authority granted to an agent through the agent's contract is referred to as
expressed
Which term describes the benefits of a life insurance policy that the policyowner does not automatically relinquish even if the policy lapses?
nonforfeiture values
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
not taxable since the IRS treats them as a return of a portion of the premium paid
If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?
paid endorsement
If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of
churning
The act of trying to discourage a policyholder from dropping his/her existing policy is called
conservation effort
Which of the following entities is responsible for determining whether an advertisement might mislead or deceive a person of average education and intelligence?
the commissioner
If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true?
the policy will not lapse since payment to the agent is the same as a payment to the insurer
Authorized insurance companies are examined by the Commissioner at least once every
5 years
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?
foreign
Which of the following would be considered a violation of life insurance advertising regulations?
calling a variable insurance policy an investment plan
An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held?
30 days
If an agent changes his residence address, within how many days must the agent notify the Commissioner of the change?
30 days
A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default?
60
A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n
reciprocity agreement
Insurers must keep files of all advertisements used in Georgia for the minimum of how many years?
4
The duties of an agent where replacement is involved include all of the following EXCEPT
splitting the commission with the agent who originally policy being replaced
Which of the following terms refers to the acts of soliciting insurance, making an insurance contract effective, and dealing with matters arising from that contract?
transacting insurance
Existing insurers must provide policyowners with a policy summary for the existing life insurance within how many days of receiving the written communication and replacement?
10
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
twisting
Who elects the Commissioner of Insurance to office?
voters
An agent is acting ethically in all of the following situations EXCEPT
always representing the insured
Which of the following types of agent authority is also called "perceived authority"?
apparent
Whenever agents submit applications to insurers, they must also submit statements disclosing whether or not replacement is involved. Who must sign these statements?
applicant and agent
Insurers must screen all marketing plans to ensure that an advertisement does NOT use as the name of any kind of an annuity contract any phrase that
doesn't include the word "annuity" unless accompanied by other clear language indicating it is an annuity
The Commissioner of Insurance is
the chief officer of the department of insurance