Washington Laws and Rules Pertinent to Insurance
The Commissioner of Insurance serves a term of ___ years.
4
A Medicare Supplement policy can be cancelled by the insurer for
Nonpayment
Twisting is
Replacing an insurance policy from one insurer to another based on misrepresentation
To be classified as a small employer in Washington, an employer must employ
1-50 employees
If an accident and health (disability) policy is reinstated after it had lapsed for nonpayment, there is a waiting period of ___ days before a claim of covering sickness will be covered.
10
Within ___ days after policy delivery, disability policies can be returned for a 100% premium refund.
10
A disability policy where the premiums are due monthly require a grace period of
10 days
The free look period provided in a life insurance policy is usually
10 days
An individual insurance producer who allows his or her license to expire may, within ___ months from the expiration date, reinstate the same license without passing a written exam.
12
What is the MINIMUM benefit period that must be offered by a Long-Term Care policy?
12 months
An insurer must send a notice of appointment for a producer within ___ days from the date of an executed agency contract or after submitting the first application to the insurer.
15
A producer license applicant must be at least ___ years of age.
18
A temporary license is valid for a maximum of ___ days
180
After a disability policy has been in force for ___ year(s), it is considered incontestable.
2
A life insurance policy becomes incontestable after it has been in force for
2 years
Written notice of a health (disability) insurance claim should be given to the insurer within ___ days after the occurrence of any loss covered by the policy.
20
Producers must complete ___ hours of continuing education biannually.
24
In conjunction with a Washington insurance license renewal, which one of the following is the continuing education REQUIREMENT?
24 hours every 2 years
Carmen's individual life insurance policy has recently lapsed. She may reinstate her policy anytime within ___ year(s)
3
No legal action can be initiated after ___ years from the initial time written proof of loss has been provided.
3
The open enrollment period for Medicare and Medicare Supplements begins ____ months before an individual's 65th birthday.
3
Tim's individual life insurance policy has just recently lapsed. His policy may be reinstated at any time within ___ year(s)
3
Washington requires that a licensee completes ___ hour(s) of continuing education on the subject of ethics every reporting period.
3
Washington requires that an insurance producer must complete ___ hour(s) of continuing education on the subject of laws and ethics every reporting period.
3
An insurer must submit all policy forms and applications to the Commissioner at least ___ days before they can be used.
30
Every producer licensed in Washington must notify the Commissioner within ___ days of any change of the address.
30
If an Insurer terminates a producer's appointment, it must notify the Commissioner within ___ days of the termination.
30
The Right-to-Examine period is ___ days for all Long-Term Care Policies sold in Washington.
30
Within ___ days after policy delivery, both Medicare Supplement and Long-Term Care policies can be returned for a 100% premium refund.
30
The required grace period for life insurance policies sold in Washington is
30 days
The standard grace period for a life insurance policy sold in Washington is
30 days
Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?
31 days
The standard grace period for a group life insurance policy sold in Washington is
31 days
The Commissioner must examine the financial affairs of each admitted insurer operating in Washington at least once every
5 years
An insurer may exclude preexisting conditions on a Medicare Supplement policy for ___ months.
6
If an insurer refuses to pay a claim, how many days must the insured wait to take legal action against a health insurer after submitting written proof of loss?
60
The grace period for an accident and health (disability) policy is ___ days for weekly premium policies.
7
As classified by the Affordable Care Act (ACA), a Silver Plan offers
70% actuarial level of coverage provided
A person cannot sell Long-Term care insurance unless that person is licensed as an insurance producer and has successfully completed a one-time education course of
8 hours
A life policy loan in Washington cannot charge a fixed rate of interest higher than
8%
Proof of loss on a health (disability) insurance claim must be submitted to an insurer within ___ days after the insured's date of loss.
90
An insurance producer is BEST defined as
A person who has a contract with an insurance company to represent it
An example of rebating is
A producer who shares commissions with a client
Life insurance replacement can be best described as
A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered
A company that is chartered and organized in any country other than the United States is called a(n) _____ company.
Alien
A group policy may be issued to a labor union. The members eligible for insurance under the policy shall be
All of the members of the union
Which of the following statements regarding the Fair Credit Reporting Act is TRUE?
An insurer does NOT need to discuss any credit history inconsistencies with the applicant
All of these are considered forms of advertising EXCEPT
An insurer's AM Best rating
Before a producer may sell, solicit, or negotiate insurance from an insurer, the producer must have a(n)
Appointment
In Washington, an insurance producer cannot sell, solicit, or negotiate policies for an insurer unless there is an agreement in place between the producer and insurer. This agreement is called a(n)
Appointment
_____ is the authority given to a producer to sell, solicit, or negotiate policies on the behalf of an insurer.
Appointment
Advertising regulations exist to
Assure full and truthful disclosures to the public
When does a family health (disability) policy's coverage for a newborn child begin?
At the moment of birth
No insurance company may transact business in Washington without a Certificate of _____.
Authority
An insurance company that has qualified and received a Certificate of Authority from the Insurance Department to sell insurance in this state is called a(n)
Authorized insurer
Which of these procedures do insurers have the right to perform where it is not forbidden by law?
Autopsy
A domestic insurance company in Washington MUST
Be formed under the laws of Washington
What happens if the insurer discovers that the insured's age was accidentally misstated on an application for an individual life insurance policy?
Benefits will be calculated according to how much coverage the premium paid would have been purchased for the correct age
Coverage for newborns under an accident and health (disability) plan MUST include coverage for
Birth abnormalities
How are health plans classified according to the Affordable Care Act?
Bronze, Silver, Gold, Platinum
What enables applicants to compare different life insurance policies and helps them choose which policy is best for their needs?
Buyer's guide
An example of replacement is
Canceling a term life policy to buy a whole life policy
Which of the following is required for an insurer to conduct business in this state?
Certificate of Authority
In the event of a controversy between the insured and the company, the producer is considered to represent the
Company
An Outline of _____ is required for long-term care policies and provides a brief description on the important features of the policy.
Coverage
Which of the following unfair trade practices involves a producer who makes malicious, public statements regarding an insurer's financial condition?
Defamation
Which of the following unfair trade practices involves a producer who makes public, malicious statements about an insurer's financial condition?
Defamation
Advertising regulations exist in order to
Demonstrate full and truthful disclosures to the public
A Medicare Supplement policy's outline of coverage MUST include a(n)
Description of policy benefits
Which of the following circumstances requires an individual to be a licensed producer?
Discussing premiums with a potential insured
A company that is chartered and organized of the state in which its home office is located is called a(n)
Domestic insurer
One role of the Commissioner is to
Enforce state insurance laws
What is the purpose of the Washington Life and Disability Insurance Guaranty Association?
Ensures that claims filed against insolvent insurance companies will be paid
What provision states that the policy and application shall constitute the entire contract between parties?
Entire contract
How often must the Commissioner examine each domestic insurance company?
Every 5 years
How often must an insurance producer's license in Washington be renewed?
Every two years
Replacement can be BEST described as
Exchanging a new policy for one already in force
Which of these is not a characteristic of a Fraternal Benefit Society
Exists for profit
An example of an Unfair Claims Settlement practice is
Failing to promptly provide reasonable explanations for the denial of claims
A producer is meeting with a client to determine whether an annuity would be suitable for purchase. Which of the following topics needs to be discussed with the client?
Financial objectives
Violations of US Code Title 18 section 1033, may result in
Fine and/or imprisonment
The renewability provision for an individual long-term care insurance policy must be located on the policy form's
First page
XYZ Life Insurance company's home office is located in Ohio and is incorporated in Ohio. In Washington, they are considered to be
Foreign
What is a nonprofit entity, operating under a lodge system?
Fraternal
An association operating solely for the benefit for its members and their beneficiaries is called a
Fraternal Benefit Society
Which of the following is NOT considered to be an act of "transacting insurance"?
Gathering prospective buyer information
Under the Affordable Care Act, which of these plans is designed to provide coverage that is actuarially equivalent to 80% of the full actuarial value of the benefits provided under the plan?
Gold
In Washington, a Long-Term Care policy must be ______ renewable.
Guaranteed
In Washington, a Medicare Supplement policy must be ______ renewable.
Guaranteed
The Washington Life and Health _____ Association is used to rehabilitate insolvent users.
Guaranty
A producer's license may only be suspended or revoked if the producer
Has been afforded a right to a hearing
Maria the producer would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisement?
Her name
Which of the following is NOT information found in a life insurance buyer's guide?
How to take legal action against an insurance company
Refusing an insurance applicant because of marital status is an example of
Illegal discrimination
If an accident and health (disability) is reinstated after it had lapsed for nonpayment, accidents will be covered
Immediately
Under which circumstance may a deferred insurance commission be paid to an individual?
Individual was a licensed producer at the time of the sale
An insurer is REQUIRED to offer which of the following to each long-term care applicant at the time of purchase?
Inflation protection
An _____ _____ sells, solicits, or negotiates insurance contracts for compensation.
Insurance producer
The identity of the _____ must be made clear in every health (disability) insurance advertisement.
Insurer
Who is required to notify the producer in the event of appointment termination?
Insurer
A foreign insurance company doing business in Washington
Is a company that was formed under the laws of another state
An alien insurer
Is an insurer that is operating in the U.S. but headquartered outside the U.S.
Which of the following is CORRECT regarding disclosure regulation?
It requires the delivery of a buyer's guide and a disclosure document to applicants
An insurance company may only pay commissions to a(n)
Licensed producer appointed by the insurer
An insurer would be committing Unfair Discrimination if coverage was denied based upon
Marital status
A type of policy that would help pay for uncovered Medicare claims is called
Medicare Supplement
The Life and Disability Guaranty Association provides funds to carry out its powers and duties by assessing
Member insurers
A producer may be disciplined by the Commissioner for which of the following actions?
Misappropriation of premium funds
A licensee who informs an insured of inaccurate terms, benefits, or advantages of any policy is committing which of the following violations?
Misrepresentation
Benefits for a Medicare Supplement policy
Must not duplicate Medicare benefits
During the examination of an insurer's books and records by the Commissioner, the insurer
Must not impede the examination
All of the following are typically included in a life insurance policy illustration EXCEPT
Names of the beneficiaries
A person who is not a legal resident of Washington may be licensed to act in this state as a(n) _____ insurance provider without taking a written examination.
Nonresident
A producer who is licensed in Washington but resident in another state is called a
Nonresident producer
Charles is a producer who is licensed in Washington but resides in Oregon. Charles is considered to be a(n)
Nonresident producer
When replacing a life insurance policy, a producer must provide the applicant with a
Notice Regarding Replacement
When a producer is determining the suitability of an annuity for a client, which of these is NOT usually taken into consideration?
Number of dependents
When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT
Obtain the beneficiary's signature on a summary of all policies to be replaced
Suitability is best described as
Obtaining information from the applicant to determine whether an insurance or annuity product is appropriate
Inducement is BEST defined as
Offering to buy, sell, give, or allow a prospective insurance employment, stock or special favors in exchange for an insurance contract
A producer who sells an individual life insurance policy in Washington must deliver to the policyowner a(n)
Policy Summary and Buyer's Guide
XYZ Corp was issued a group health policy for its employees. Under this plan a
Policy must be issued to XYZ, and a certificate must be issued to each employee
Replacement regulation is designated to protect
Policyowners from misrepresentations and loss of benefits
All Medicare Supplement policies MUST contain which provision?
Pre-existing conditions may be excluded from coverage for a maximum of 6 months
A life insurance producer is required to give a disclosure notice about information practices to an applicant or proposed insured
Prior to or at the time of signing the application
A(n) _____ negotiates an insurance contract on behalf of an insurer.
Producer
An individual who has a contract with an insurance company to represent it is called a(n)
Producer
The _____ is responsible for determining the appropriateness of a Medicare Supplement policy for an applicant
Producer
When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer?
Promptly
Which of the following is NOT a circumstance to which a temporary producer license can be issued?
Prospective producer who is willing to take the state licensing exam
What is considered the purpose of the Guaranty Association?
Protects insured from insolvent insurers
Which of these is NOT an Unfair Claims Settlement practice?
Providing claim payments to insureds under the the guidance of the insurance contract
An example of misrepresentation is
Providing incorrect, misleading, incomplete, or materially untrue information in the license application
Barry offers Chris a mountain cabin for the weekend to secure his order for his insurance business. This is an example of
Rebating
Insurance producer Kelly offers an insured $500 shopping card if an insurance product is purchased through her. What is this an example of?
Rebating
The promise of a discount in premium as an inducement to purchase insurance is known as
Rebating
Which of the following is an example of a producer's fiduciary duty?
Recording receipt and remittance of premiums due to the insurance company
Any transaction in which new life insurance is purchased and, as a result, the existing life insurance will be surrendered is called
Replacement
Which of these individuals would require continuing education?
Resident producer
Long-term care policies sold in Washington may NOT exclude coverage for
Senile dementia
Which of these is NOT an Unfair Claims Settlement practice?
Settling a claim by arbitration
Kiara filled out a life insurance application and was given a policy illustration that showed future premiums being paid out of nonguaranteed values. This illustration MUST disclose that
She may need to resume premium payments, depending on actual results
According to the Affordable Care Act, what metal tier is required to have an actuarial value of 70% with covered individuals paying 30% through deductibles, co-pays, and other cost sharing features?
Silver Plan
A(n) _____ company is owned by its shareholders.
Stock
A ______ is the person who is responsible for payment for a health maintenance organization (HMO).
Subscriber
What may be the result of replacing an existing life insurance policy with a new one?
Surrender charge
A _____ license may be issued in cases where a producer has become disabled or dies, requiring a replacement to service the producer's business.
Temporary
A producer does NOT have a fiduciary responsibility to
The Washington Guaranty Association
An advertisement for an insurance product may contain
The insurer's name
When a Medicare Supplement insurance policy is being replaced, who must sign the notice of replacement?
The producer and the applicant
An insurer may pay a commission in which of the following scenarios?
To a licensed producer who is appointed with the insurer
An example of an unfair claims settlement practice is
Turning down a claim without providing the basis of denial
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as
Twisting
A producer has committed an insurance crime that violates the U.S. Code 1033 (interstate commerce). Who would be responsible for the prosecution of this crime?
US Attorney General
An insurance company that has been denied or not yet applied for a Certificate of Authority is called
Unauthorized
A policyholder's unmarried child is incapable of self support due to a physical disability. The child is provided medical care coverage under the parent's policy
Until policy termination with proof of incapacity
Under which circumstances may a commission be shared between two producers?
When they are both licensed in the same line of business
The Fair Credit Reporting Act protects consumers
With guidelines regarding credit reporting and distribution