STUDY GUIDE QUESTIONS 8

Which of the following statements is true regarding the replacement of a life insurance policy in Colorado?

the replacing insurer must maintain copies of all records regarding the replacement for at least 5 years

An insurer cannot deny a claim unless

there is a reasonable explanation of the claim

When is it appropriate for a producers spouse to be the primary beneficiary on an applicants insurance policy?

when insurable interest exists

Which situation allows the producer to also be the beneficiary on a clients application for life insurance?

when insurable interest exists

If an annuity application was not taken in person, an insurer must provide the applicant a Buyers Guide

within 5 days of the insurer receiving the application

The commissioner may issue an emergency cease and desist order without a hearing for all of the following circumstances EXCEPT

writing controlled business

What is the maximum amount the commissioner can fine an insurer for each violation of a cease and desist order?

$10,000

On June 1, 2004 G takes out a $20,000 whole life insurance policy with an AD &D rider. On July 15, 2005 G intentionally takes his own life. What will G's beneficiary receive as a death benefit?

$20,000

An producer who violates a cease and desist order may, after a hearing, be fined up to

$500

K is an insured under a life insurance policy owned by a third party. Which of these statements is true?

K has no ownership rights

If an insurance company wishes to discriminate rates based on gender, it must?

be justified by actuarial statistics

Which of these is NOT considered to be a cost connected with an individual's death

business expenses

According to the Colorado Fraud Statute, all of the following must contain a warning against insurance fraud EXCEPT:

certificate of authority

Which of the following documents are NOT required to mention the Colorado Fraud Statute

certificates of authority

All of the following are considered a form of advertisement EXCEPT

communication or materials used within an insurers own organization

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?

company x

Which of the following is NOT a problem when existing life insurance is replaced with new coverage?

comprehensive coverage may increase under the new policy

A producer that only sells insurance to family members is said to be engaging in

controlled business

Who is not eligible to receive commissions from the sale of an insurance product?

corporate executive

If a producer completes and insurance application, collects the initial premium, and issues the appropriate receipt?

coverage will be contingent on the underwriting policies

From what point must the insurer pay interest on the proceeds of a death claim?

date of death

Circulation of a maliciously critical statement about any insurer's financial condition to injure the insurer is called

defamation

Which of the following is an example of a misrepresentation?

describing a universal life policy as a security

When recommending the purchase or exchange of an annuity, the producer must determine suitability of the purchase by performing all of the following EXCEPT

determining the marital status of the applicant

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?

each partner must own a policy on the other partners

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve

establishes the needs of the individual and his dependents

Which of the following offers an insurance applicant the right to view the contract and receive a full refund?

free look period

What is considered a valid reason for small businesses to insure the lives of its major shareholders?

fund a buy-sell agreement

Which of the following words may be used in the advertisement of life insurance or annuities ?

guaranteed

All of the following penalties apply to anyone giving intentional false testimony during an insurance examination EXCEPT

guilty of felony

Paying insurance premiums on a more frequent basis will cause the policy to have

higher premiums

In life insurance, the needs approach is used mostly to establish

how much life insurance a client should apply for

How does the Commissioner attain his position?

appointed by the governor

When may the commissioner conduct an examination of an insurance company?

as often as deemed necessary

Which of the following is required for a life insurance lapse notice?

reason stated why policy will lapse

If a producer offers to refund part of a prospects premium in exchange for the purchase of a life insurance policy, the producer is committing the illegal act of

rebating

If an insurer is authorized to conduct business in another state and wishes to conduct business in Colorado, it must

receive a certificate of authority from colorado

Interest on life insurance proceeds is

required if the claim was not paid within 30 days of the date insurer received the claim

Which of the following is an example of rebating?

returning a portion of a premium as inducement to purchase insurance

Which of the following is a duty of the commissioner

reviewing and approving license applications

Which of these factors does NOT influence an applicant's need for life insurance?

self- maintenance expenses

Licensing is required for all of the following EXCEPT

selling prepaid legal services

If a producer is going to deposit any premium into a bank account prior to remitting the funds to the insurer, he/she must use a

separate insurance trust account

When a life insurance underwriter is determining insurability, it is illegal to base these decisions on

sexual orientation

Colorados replacement rules apply to all of the following types of insurance EXCEPT

single premium whole life

Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of ____ from the policy's effective date?

1 year

In Colorado a life insurance applicant has ___ days after policy delivery for a full refund of premium if not satisfied for any reason

15

Renewing a producer's license requires __ hours of continued education every 2 years

24

An insurer that terminates a producer's appointment must inform the Commissioner within how many days?

30

A producer must remit premiums to the insurer within ___ days after receipt

45

When replacing an existing life insurance policy, the replacing insurer must notify the existing insurer within

5 business days

How long must a replacing insurer maintain the records of a replacement transaction?

5 years

Three law partners form a Cross-Purchase Buy and Sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement?

6

Upon request, when must the Colorado Supplement to the Summary of Benefits and Coverage Form be provided?

7 business days

Which of the following is an example of defamation

a brochure including an untrue statement regarding a competitor's ability to pay claims

Which of the following statements regarding the Notice Regarding Replacement of Life Insurance is CORRECT

a copy of the notice must be signed by the the applicant and submitted with the application

When a minor is designated as the sole primary beneficiary,

a guardian will be court appointed in the event of a death claim

Which of the following potential insurance sales would be subject to replacement regulations?

a new policy that causes an existing life insurance policy to be surrendered

Which of the following statements is CORRECT regarding insurable interest in a life insurance contract?

a person is generally considered to have unlimited insurable interest in himself or herself

Which of the following is CORRECT regarding a producers fiduciary responsibility with clients funds?

a producer may never commingle personal funds with funds paid by or to a client

A fiduciary responsibility is defined as

a relationship of special trust and confidence when a person is entrusted with another's funds

A life insurance applicant realized he failed to disclose material medical history and calls the producer. Any changes made to the application must be initialed by the

applicant

Which of these is not a reason for purchasing life insurance on the life of a minor?

if both parents were to die, it will provide death benefits of the child

When may the commissioner conduct an examination of an insurance company?

if there is suspicion of an unauthorized person engaging in insurance business without being licensed

In a key employee life insurance policy, the third party owner can be all of the following, EXCEPT

insured

Employer noncontributory group life policies must allow for all of the following EXCEPT

insured can determine the benefit amount

Ultimately, who is responsible for a producer generated advertisement

insurer

When a claim is denied, the insurer must

issue a statement to the policy owner explaining the coverage, provision, or laws on which denial was based

In addition to suspending/revoking licenses and issuing fines, the commissioner has the authority to do all of the following EXCEPT

issue prison sentences

Which statement regarding third party ownership of a life insurance policy is true

it is used extensively in estate-planning as well as business circumstances

In Colorado, which of the following is true regarding the commingling of an insureds funds with the funds of a producer?

it'a never okay

To be valid, a group life insurance policy

may not be issued to a group formed solely for the purpose of obtaining insurance

A company that has not been authorized to operate in Colorado is known as

nonadmitted insurer

As a condition to be approved for a loan , a creditor may require the borrower to

obtain an insurance policy through an insurer of the borrower's preference

If an applicant for an annuity refuses to provide suitability information, the producer should

obtain the consumers signed statement documenting his or her refusal to provide sustainability information

If a producer chooses to conduct business under an assumed name, when must notification be given to the Commissioner?

prior to using the assumed name

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

split-dollar plan

The premiums paid by an employer for his employee's group life insurance are usually considered to be

tax-deductible to the employer

The USA patriot act was signed into law as a response to

the 9/11 terrorist act

Which statement regarding a key employee life policy is NOT true?

the beneficiary is named by the key employee

G takes out a life insurance policy on October 8, 2008. On August 3,2009, Gtakes his own life. when G's beneficiary files a claim

the claim will be denied under the suicide provision

If a producer is found to be writing primary controlled business?

the commissioner will not renew license

Which information is NOT included in the Colorado supplement of Benefits and Coverage form?

the insurer's prior year financials

A license is deemed to be used for a controlled business if, during the immediately preceding 12 - month period,

the licensees total premiums on controlled business exceeded the total premiums on all other businesses