ARKANSAS HEALTH INSURANCE EXAM

A long-term care policy typically provides all of the following levels of care EXCEPT:

Acute care

What does the Group Life underwriting risk selection process help protect insurance companies from?

Adverse Selection

When does a nondisabled person first qualify for a Medicare Supplement Policy?

Age 65

The waiver of premium does NOT include which provision?

All future premiums are waived if the insured recovers from the disability

Which of the following is considered to be the period when the accumulated value in an annuity is paid out?

Annuitization phase

The deeds and actions of a producer indicate what kind of authority?

Apparent

All insurers must be members of what organization, as a condition of their authority to transact insurance in Arkansas?

Arkansas Life and Disability Insurance Guaranty Association

Bill requires some nursing care/supervision but NOT full time care. Which of these nursing home options would best serve him?

Assisted living

According to Arkansas law, when must a producer deliver the outline of coverage to a medicare supplement applicant?

At the time of application

According to the life insurance contract law, insurable interest exists

At the time of the application

What is implied authority defined as?

Authority that is not specifically given to an agent contract, but that an agent can reasonably assume to carry out his/her duties

A domestic insurance company in Arkansas MUST:

Be organized under Arkansas insurance laws

An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before:

Bringing legal action against the insurer

Insurable interest does NOT occur in which of the following relationships?

Business owner/client

Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have?

Calendar year deductible

What is issued to each employee of an employer health plan?

Certificate

What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day?

Claim will be paid if application is approved

One definition of replacement is "the act of replacing an existing insurance policy with another." Replacement is:

Closely regulated and required full disclosure

In Arkansas, which of the following is considered an unfair trade practice?

Coercion

In order for a contract to be valid, it must:

Contain an offer & acceptance

An employee under a group insurance policy has the right to name a beneficiary and the right to:

Convert to an individual policy in the event of employment termination

Medicare provides coverage for all EXCEPT:

Custodial care

In group health care, what is the purpose of the coordination of benefits provision?

Determines what is paid by the primary & secondary insurers in the event of a claim

A pharmacy benefit covers prescription drugs derived from a list called a:

Drug formulary

A Medicare Supplement policy must NOT contain benefits which:

Duplicate Medicare benefits

Which would be considered a possible applicant & contract policyholder for group health benefits?

Employer

A professional liability for which producers can be sued for mistakes of putting a policy into effect is called:

Errors and omissions

How often must a Commissioner examine each domestic insurance company?

Every 5 years

A healthcare provider claim may be settled using which of the following payment methods?

Fee-for-service

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

File written proof of loss

Maria the producer completes a sale by collecting the required signatures on the application by obtaining the initial premium. After, she deposits the check into her personal checking account. She has committed what crime?

Fraud

Premium mode is a term used to describe the:

Frequency of the premium payment

A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the commissioner is required to:

Give written notice to the producer

Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this?

Guaranteed insurability rider

A health insurance policy that allows an insurer to change the policy owners premiums, but NOT cancel the policy is called a(n):

Guaranteed renewal policy

Which type of long-term care benefit would be most appropriate for a stroke victim who requires speech therapy administered at her home?

Home healthcare

Which is NOT considered to be included in a health benefit plan?

Hospital Indemnity Plan

Medicare Part B covers:

Hospital room/board

The Arkansas Insurance Department may take each of the following actions EXCEPT:

Incarceration

Simon purchased a fixed immediate annuity. His payment amount will be dependent upon principle, interest and the contracts ______:

Income period

Medical Expense Insurance would cover:

Injury occurring at the insured's residence

Who is responsible for assembling the policy forms for insureds?

Insurance carriers

The DO NOT CALL registry offers exemptions for calls placed from all of the following EXCEPT:

Insurance sales calls

Ambiguities in an insurance policy are always resolved in favor of the:

Insured

An accident and health policy that provides reimbursement benefits makes them payable to the:

Insured

A common exclusion with vision plans is:

Lasik Surgery

The Arkansas Life & Disability Insurance Guaranty Association assures payment of benefits from insurance policies for insolvent insurers, and covers all of the following insured policies, EXCEPT:

Liability Insurance

A dread disease policy is considered to be a type of

Limited health insurance policy

An insurers ability to make unpredictable payouts to policy owners is called:

Liquidity

Which of the following is considered to be a POS plan?

Managed care plan

Which would NOT be considered in underwriting a health insurance risk?

Marital status

Convincing a prospective insured to buy an insurance policy based on exaggerations is called:

Misrepresentation

Which of the following is a legal entity created for the sole purpose of providing affordable group health coverage to its participants?

Multiple Employer Welfare Arrangement (MEWA)

Which of the following is NOT an unfair claim settlement practice?

Needing written documentation of claim details

What is the tax liability for employer contributions in Health Savings Accounts (HSA's)?

No tax payment needed

A beneficiary change can occur:

Normally, at any time

A nonparticipating policy will:

Not pay dividends

The monthly benefit for an individual disability income policy is usually limited to a percentage of the insured's income in order to avoid:

Over insurance

What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus?

Participating life insurance policy

States that have "no loss, no gain" laws require a replacing policy to:

Pay for ongoing claims under the policy it replaces

In what form do disability income policies typically pay benefits?

Periodic income

Which is the best way to describe controlled business?

Policies written on people that a producer has influence over

A person who is a nonsmoker, average weight, excellent health would fall into what risk classification:

Preferred

A rehabilitation benefit is intended to:

Prepare the insured to return to employment

What does Medicare part D cover?

Prescription drugs

The Fair Credit and Reporting Act's main purpose is to:

Protect consumers with guidelines regarding credit reporting and distribution

Who is the individual paid on a fee-for-service basis?

Provider

A life insurance company has transferred some of its risk to another insurer. The insurer assuming the risk is called the:

Reinsurer

What are applicants statements concerning occupation, hobbies and personal health history?

Representation

A life insurance policy owner does NOT have the right to:

Revoke an absolute assignment

An insurers claim settlement practices are regulated by the:

State insurance departments

Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan?

Taxes must be paid on 75% of all benefits received

Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT:

The beneficiary

This mandatory health policy provision states that the policy, including endorsements and attached papers, constitutes:

The entire insurance contract between the parties

Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?

The face amount and premium will remain constant over the 10-year period

In which of the following situations would the insurer be liable for a loss?

The insured suffered an injury during a bank robbery

Pat owns a 20-pay life policy with a paid-up dividend option. Which is true?

The policy may be paid up early by using policy dividends?

Which of the following does coordination of benefits allow?

The secondary payor to reduce their benefit payments so no more than 100% of the claim is paid

An insurer may pay a commission in which of the following scenarios:

To a licensed producer who is appointed with the insurer

J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisting

Which of the following pertains to the analysis of an applicants personal information and determining whether insurance should be issued or declined?

Underwriting

Which of the following is NOT a reason for the commissioner to deny or refuse a producer license application?

Unintentionally misrepresented a material fact on the application

Craig submits a $500 claim for medical expenses with a past due premium of $100, the insurer pays $400. Which of the uniform optional provisions covers this situation?

Unpaid premium

"Maximum benefits" refers to the:

Upper limit of the total lifetime benefits the insurance company will pay

A policy owner can receive a percentage payment of the death benefits prior to death by using what kind of contract?

Viatical Settlement agreement

When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)?

When the contribution or participation rules have been violated

A 70 y/o insured individual has suffered from kidney failure for the past 24 months. She is covered by her spouses large-group employer plan. How will Medicare be utilized in this situation?

Will be the 2nd insurer & pay for claims not fully covered by the group plan

An insurance producer must notify the commissioner of a change in legal name, email or address:

Within 30 days of change

Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs a $1,500 in covered healthcare services. How much will her group insurance carrier pay?

$1,000

Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?

$4,000

Medicare A does not pay for medical benefits provided for treatment in a skilled nursing facility beyond:

100 days

An insurer must furnish to a claimant forms for filing proof of loss within _____ days upon receiving a notice of claim:

15 days

Written notice for a health claim must be given to the insurer ____ days after the occurrence of the loss:

20 days

What is Arkansas required grace period for a life insurance contract?

31 days

Medicare Supplement Insurance is guaranteed issue if the policy effective date is within ______ months of the insured's Medicare Part B:

6 months

If a health insurance claim is not promptly paid, legal action may be taken against the insurer after:

60 days from the date proof of loss is furnished

How much does Medicare Part B pay for physician fees?

80%

Which best describes a conditional insurance contract?

A contract that requires certain conditions or acts by the insured individual

Which of the following is NOT considered advertising?

A.M Best company ratings

The two major actions required for a policyholder to comply with the Reinstatement Clause are:

provide evidence of insurability, pay past due premiums