Ch. 14 State Laws
The insurer must keep a copy of all replacement documents for what period of time? A 2 years B 90 days C 7 years D 3 years
D. 3 years **Insurers must keep replacement records for 3 years or until their next examination.
What type of insurer is placed under an order of liquidation by the court? A An impaired insurer B A member insurer C An admitted insurer D An insolvent insurer
D. An insolvent insurer **
Each insurer authorized to transact insurance in this state must maintain a register of all appointed __________________
producers- those authorized to sell, solicit, or negotiate insurnace on its behalf.
willful violation of a cease and desist order is punishable by ?
revocation of any license, fine up to $100,000, imprisonment for up to 10 years or both
coverave for adopted children
the 31 days of initial coverage begins on either the date of birth or the date of adoption placement, whichever is applicable
Graded death benefit
the full face amount is not paid at the insured's death unless a specified period has passed, usually 2 or 3 years. Until that period has elapsed, the benefits paid by the policy will grade (or increase) over time.
Missouri Life suicide exclusion?
within 1 year of issue date
Reexamination is not required for reinstatement if the applicant:
within 12 months from the renewal date Provides proof of compliance with continuing education requirements Pays a penalty of $25 per month for each month the license was expired Pays all required renewal fees
The following activities are considered transactions and require a producer to be licensed:
-Disseminating information regarding rates and/or quoting rates Initiating sales over the telephone Advising a prospective buyer on the terms of an existing policy, recommending additions or deletions to a policy, and/or signing an application for insurance Explaining, discussing, and/or interpreting coverage Signing or issuing binders, certificates, endorsements, insurance ID cards, or policies
For variable life insurance policies, loan provisions must:
-loans must be available after policy has been in force for 1 full year - At least 75% of the policy's cash surrender value may be borrowed -The interest rate charged on the loan cannot exceed the rate permitted by insurance code -Loan debt remaining at death or surrender will be deducted from benefits or cash value
Applied behavioral analysis budget?
$40,000 per year for individuals through 18
twisting
(making deliberately misleading statements or incomplete or fraudulent comparisons to encourage a person to lapse, forfeit, surrender, terminate, reassign, or borrow on any policy, or to purchase a new policy with a new insurer)
All variable annuity contracts must contain the following provisions:
-30 day grace period -5 year reinstatement period -statement and options in the event of premium default -a provision that stipulates the investment increment factor used to calculate policy benefits
Director of Insurance qualifications?
-Missouri resident experienced in insurance matters -appointed by the Governor with consent of the Senate. -Director holds the office with Governor until a successor is appointed
website and home pages of producers and insurers must contain:
-address and telephone number to contact insurer or producer -a notice of states in which the insurer or producer is authorized to transact insurance.
qualification for licensure as a producer in MO?
-be at least 18 -not have committed any act that would have license taken away -pay the required $100 license fee -pass the examination for the lines of authority applied for
Group Life insurance must:
-contain a 31 day grace period -2 year incontestability clause
suitability standards for variable life:
-insurance and investment objectives -financial situation and needs -any other information known to the insurer or producer making the recommendation
the replacing insurer must send the existing insurer within how many days?
5 working days
Any person being examined must make all documents and records available to examiners. If a requested document is not available, it must be provided within ____ calendar days.
10
small employer groups. minimums cannot exceed the following:
100% of eligible employees in groups of 3 or fewer employees 75% of eligible employees in groups of 4 or more employees
Producers must complete how many hours of continuting education in each 2 year license renewal period?
16 hours At least 3 of the required 16 hours must be on the topics of ethics, Missouri law, and producer duties and obligations to the Department.
Missouri producer licenses issue for what term?
2-year term
Both Insurers and producers must retain copies of their compensation agreements for how many years?
3 years and make them available for inspection at the director's request.
If a carrier decides to nonrenew a small group health plan, it cannot write any new business in the small group market for ____ years from the date it notifies the Director of the nonrenewal.
5
Group health insurance required provisions:
A 31-day grace period After being in force for 2 years, a policy may only be contested for nonpayment of premium A copy of the application must be attached to the policy Statements made by policyholder and insureds are representations and not warranties A statement of the conditions of the insurer's right to require evidence of insurability If an insured's age is misstated, premiums or benefits that vary based on age may be adjusted Preexisting conditions cannot be excluded or limited beyond 12 months prior to coverage
Cancer screening guidelines:
A pelvic exam and pap smear for any nonsymptomatic woman A prostate exam and laboratory tests for any nonsymptomatic man A colorectal cancer exam and laboratory tests for any nonsymptomatic individual
If an LTC policy applicant is age 80 or older, the insurer must obtain one of the following:
A report of a physical exam An assessment of functional capacity An attending physician's statement Copies of medical records
what is a utilization review?
A utilization review is a process by which a health insurer compares requests for service with its treatment guidelines to determine medical necessity, appropriateness, and efficiency.
Under a Utilization Review, within how many working days of making the initial determination must the insurer provide a confirmation to the enrollee and provider? A 2 B 5 C 3 D 4
A. 2
In Missouri, chiropractic care must be covered, but the policy may limit the number of treatments to how many per policy period? A 26 B 36 C 18 D 12
A. 26 **A health policy must cover chiropractic care, including initial diagnosis and services and supplies required to treat the diagnosed disorder. Any copayment may not exceed 50% of the total cost of providing any single chiropractic service. The policy may limit coverage to services provided within the insurer's network and limit the number of treatments to 26 per policy period.
Which of the following is not a policy requirement of a variable life insurance policy? A 3-year reinstatement period B Description of benefit calculations C Minimum death benefit D A 31-day grace period
A. 3-year reinstatement period **Variable life must include a 5-year reinstatement period for flexible premium policies.
LTC inflation protection must provide annual increases in benefits at no less than ________. A 5% B 4% C 3% D 8%
A. 5% **Inflation protection compounded annually at no less than 5% must be offered to each policyholder at the time the LTC policy is purchased.
In Missouri, an LTC policy MAY do which of the following? A Be terminated for non-payment of premium B Only provide coverage for skilled nursing care C Exclude pre-existing conditions for more than 6 months D Be terminated because of the insured's age
A. Be terminated for non-payment of premium
As part of the insurer's utilization review process, an enrollee (or a provider on behalf of an enrollee) must be allowed to appeal for coverage of what services? A Medically necessary pharmaceutical prescriptions and durable medical equipment B Emergency services C Only services provided by attending physician D All rendered services
A. Medically necessary pharmaceutical prescriptions and durable medical equipment
Which of the following statements pertains to the purpose of replacement regulations in Missouri? A To regulate the activities of insurers and producers B The insurer must pay interest on any claims not paid within 30 days C The insurer must pay interest on any claims not paid within 15 days D Missouri has no regulation on policy replacement
A. To regulate the actvities of insurers and producers
After receiving a first level grievance, an insurer is not required to do which of the following? A Acknowledge oral receipt within 5 working days B Notify the enrollee within 5 working days after the investigation is completed C Conduct a complete investigation within 20 working days D Notify the person who submitted the grievance of the resolution within 15 working days
A. acknowledge oral receipt within 5 working days **Upon receipt of a request for first level grievance review, an insurer must acknowledge receipt of the grievance in writing within 10 working days.
Intro, Initial or special offers, and enrollment periods:
An advertisement cannot describe an enrollment period as "special" or "limited" or use similar words in describing it when the insurer uses successive enrollment periods as its usual method of marketing its policies. --An advertisement cannot state or imply that only a specific number of policies will be sold, or that a time is fixed for the discontinuance of the sale of the particular policy advertised because of special advantages available in the policy.
Autism spectrum disorders include:
Asperger's disorder Pervasive Developmental Disorder not otherwise specified Rett's Disorder Childhood Disintegrative Disorder
How many hours of approved continuing education must Missouri insurance producers complete during a license renewal period? A 14 B 16 C 24 D 12
B. 16 **Producers must complete 16 hours of continuing education each 2-year renewal period.
Within how many days must an insurer notify the Director of the appointment of an agent? A 45 B 30 C 15 D 60
B. 30 days **Each insurer must maintain a register of all producers it has appointed and notify the Director within 30 days of appointment.
Group life insurance contracts must contain a grace period provision of how many days? A 90 days B 31 days C 14 days D 60 days
B. 31 days
Coverage for immunizations must be provided for children up to age ______. A 15 B 5 C 18 D 10
B. 5
Coverage for immunizations must be provided for children up to age ______. A 18 B 5 C 10 D 15
B. 5
All variable annuity contracts must contain which of the following provisions: A A 2-year reinstatement period B A grace period of 30 days C A 3-year reinstatement period D A grace period of 31 days
B. A grace period of 30 days **All variable annuity contracts must contain a grace period of 30 days and a 5-year reinstatement period.
Choose the false statement about LTC provisions. A Accelerated death benefits may be taxable B A non-qualified LTC contract includes an IRS disclosure regarding tax implications C An endorsement added after the date of issue must be signed by the insured D Activities of daily living and cognitive impairment will measure the need for LTC
B. A non-qualified LTC contract includes an IRS disclosure regarding tax implications
The Hospital Dental Procedure provision states that if a person is severely disabled or under age 5, a health policy must cover which of the following charges? A Only care deemed reasonable and uncustomary B Administration of general anesthesia and hospital charges for dental care C Only emergency care D Local anesthesia and physician's fees
B. Administration of general anesthesia and hospital charges of dental care **A health policy must cover administration of general anesthesia and hospital charges for dental care provided to a child under the age of 5, a person who is severely disabled, or a person who has a medical or behavioral condition that requires hospitalization or general anesthesia when dental care is provided.
Which of the following statements BEST describes an insurer's use of advertisements for a Medicare supplement policy? A Insurers are not permitted to advertise Medicare supplements B b. Ads for Medicare supplement coverage must first be approved by the Director C Insurers have no restrictions with respect to Medicare supplement ads D Ads for Medicare supplement coverage are the responsibility of the producer
B. Ads for Medicare supplement coverage must first be approved by the Director
What type of insurer is placed under an order of liquidation by the court? A An admitted insurer B An insolvent insurer C An impaired insurer D A member insurer
B. An insolvent insurer
How long must a producer keep record of all communications concerning a policy other than a group policy after the policy is no longer in force? A At least 2 years B At least 3 years C At least 1 year D Indefinitely
B. At least 3 years
A producer is guilty of ___________ when he makes a derogatory statement about a competing insurer's financial statement. A Coercion B Defamation C Twisting D Intimidation
B. Defamation **Defamation is making a false or maliciously critical statement regarding the financial condition of any person, with the intent to injure such person.
An LTC policy that only allows the insurer to increase a policy premium if it increases the premiums for all policies issued to the same class of individuals is considered: A Nonqualified B Guaranteed renewable C Noncancellable D Qualified
B. Guaranteed renewable **In a guaranteed renewable policy, the insurer can only increase the premium if it increases the premium for all insureds of the same class.
Which of the following is not a required provision of the group health policy? A 31-day grace period B Incontestable clause applies after the policy has been in force 3 years C Benefits other than for loss of time must be paid within 30 days of proof of loss D The insurer must provide the policyholder with a 31-day notice of cancellation before it becomes effective
B. Incontestable clause applies after the policy has been in force 3 years **Group health policies must stipulate that coverage is incontestable after 2 years.
Which of the following is not a required provision of the group health policy? A 31-day grace period B Incontestable clause applies after the policy has been in force 3 years C The insurer must provide the policyholder with a 31-day notice of cancellation before it becomes effective D Benefits other than for loss of time must be paid within 30 days of proof of loss
B. Incontestable clause applies after the policy has been in force 3 years **Group health policies must stipulate that coverage is incontestable after 2 years.
Required coverages for Cancer Screenings apply to which of the following policies? A Medicare Supplement B Major Medical C Long-Term Care D Short-term Major Medical of less than 6 months
B. Major Medical **Cancer Screenings coverages do not apply to supplemental policies like LTC, Medicare supplements, or short-term major medical. They do apply to major medical policies.
If a producer offers any special favor in dividends or other benefits to an insured, the producer is guilty of which of the following marketing practices? A Defamation B Rebating C Intimidation D Twisting
B. Rebating **Rebating is giving the insured a rebate of premium, special favors in benefits, or other inducement not otherwise specified in the policy.
When must a producer notify the Director of any change in legal address? A Within 15 days B Within 30 days C Within 90 days D Never
B. Within 30 days **
teleheath services. An electronic visit must:
Be initiated by the patient, or the patient's guardian, with the health care provider Be completed using a HIPAA-compliant online connection Include a permanent record of the electronic visit
Life insurance policies in Missouri may contain a suicide exclusion for up to: A 3 years after the policy's issue date B 2 years after the policy's issue date C 1 year after the policy's issue date D 10 years after the policy's issue date
C. 1 year **Missouri policies may exclude or limit death benefits for suicide in the policy's first year.
How many hours of approved continuing education must Missouri insurance producers complete during a license renewal period? A 24 B 14 C 16 D 12
C. 16 **Producers must complete 16 hours of continuing education each 2-year renewal period.
Choose the advertising standard that is not required for health policies in Missouri. A Advertisements for policies for a specific illness must state the specific illness B Insurance jargon is not permitted C Advertisements for an insurer can display any logo D Words, such as 'all' cannot be used
C. Advertisements for an insurer can display any logo **Advertisements cannot use any words, symbols or logos that are so similar to those used by government agencies, that a person could assume that the policy is connected to such agency.
Which of the following is NOT one of the requirements of telehealth services? A Deductibles, copayments, and coinsurance cannot be higher or imposed differently that for services provided in person B Benefits must be provided on the same basis as that service would be provided if delivered in person C Coverage for services from out-of-network providers must be the same as in-network providers D All policies are prohibited from denying or excluding coverage for services provided through telehealth if the same services are covered face-to-face
C. Coverage for services from out-of-network providers must be the same as in-network providers **nsurers may limit coverage for services provided through telehealth to in-network providers.
Mom has a group health policy at her job and Dad has a group health policy at his job. Under coordination of benefits which policy will the pay for the son's health care expenses? A Mom's policy because her income is higher B Mom's policy because her birthday is July 4 C Dad's policy because his birthday is March 1 D Dad's policy because he has been employed at his job for a longer time period
C. Dad's policy because his birthday is March 1 **For the dependent of parents who are not divorced or separated, the plan of the parent with the earlier birthday month and day is primary and will pay.
Which of the following is not a required provision of the group health policy? A The insurer must provide the policyholder with a 31-day notice of cancellation before it becomes effective B 31-day grace period C Incontestable clause applies after the policy has been in force 3 years D Benefits other than for loss of time must be paid within 30 days of proof of loss
C. Incontestable clause applies after the policy has been in force 3 years **Group health policies must stipulate that coverage is incontestable after 2 years.
Medicare supplement marketing standards must be established to assure all of the following, except: A Policy comparisons will be fair and accurate B Every effort is made to identify if the applicant has existing insurance C To promote the use of cold lead advertising D Excessive insurance is not sold or issued
C. To promote the use of cold lead advertising **Cold lead advertising is prohibited in the solicitation of Medicare supplement policies.
A married couple are insured by the wife's employer's group health insurance policy. When they become divorced, will the husband still be covered? A Yes, but only if the wife approves the continuation of coverage B No, the divorce eliminates his opportunity to be insured C Yes, if he informs the plan administrator within 60 days after the divorce is final D Yes, but only if the he requests coverage within 30 days after the divorce is final
C. Yes, if he informs within 60 days after divorce is final **A divorced spouse must inform the plan administrator of the divorce and the desire to continue coverage within 60 days after the divorce becomes effective.
What does the Department of Insurance do?
Charged with executing all laws relating to insurance and insurance companies doing business in this state. Does not have authority to make laws, it issues rules and regulations to enforce insurance laws. -Rules, regulations, and order issued by the department or directory cannot conflict with any exisiting Missouri Law.
Plans must cover general anesthesia and hospital charges for dental care provided to the following:
Children under 5 years old The severely disabled, or those with a medical/behavioral condition requiring hospitalization or general anesthesia when dental care is provided
physical therapy copays:
Copayment and coinsurance percentage for physical therapy services requiring a prescription cannot exceed the copayment or coinsurance percentage charged for a primary care physician's office visit. Plans must clearly state the terms of physical therapy coverage and all limitations and exclusions.
Low protein formula and food products?
Coverage must be provided for low protein modified food products, including formula, recommended by a physician for the treatment of a patient less than 6 years old with phenylketonuria (PKU) or any inherited disease of amino and organic acids. Coverage may be subject to the same deductible for similar services provided by the policy. Any required coinsurance or copayment may not exceed 50% of the cost of the formula or food products. Any annual benefit maximum must be at least $5,000 per covered child.
Credit insurance is commonly written as a life policy, but can be written in other lines to protect against other losses including:
Credit accident and sickness insurance Credit casualty insurance Credit involuntary unemployment insurance Credit property insurance
A small employer must have from 2 to _______ eligible employees. A 25 B 65 C 15 D 50
D. 50 **A small employer is actively engaged in business with a total employed work force consisting of at least 2 and no more than 50 eligible employees who work at least 50% of the working days during the preceding year.
A life insurance policy load interest rate can be a ________ APR rate. A 11% B 3% C 5% D 8%
D. 8% **A policy loan's interest rate must be either an 8% APR or an adjustable maximum interest rate determined once every 3 to 12 months.
Under the Cancer Screening Provision of Missouri law, which of the following must be covered? A A prostate examination and laboratory test for cancer of any symptomatic man, in accordance with current American Cancer Society guidelines B A pelvic examination and Pap smear for any symptomatic woman, in accordance with the current American Cancer Society guidelines C A colorectal exam cancer examination and laboratory tests for cancer for any symptomatic person, in accordance with the current American Cancer Society guidelines D A pelvic examination and Pap smear for any non-symptomatic woman, in accordance with the current American Cancer Society guidelines
D. A pelvic examination and pap smear for any non-symptomatic women, in accordance with the current American Cancer Society guidelines **This provision guarantees coverage for pelvic, prostate, and colorectal screenings, but only for non-symptomatic persons. This screening provision applies to cancer detection, not cancer treatment.
Health policies must provide coverage for all of the following, except: A Chemical dependency B Autism spectrum disorders C Clinical trials D Childhood immunizations to age 12
D. Childhood immunizations to age 12 **Childhood immunizations must be covered from birth to age 5.
Which of the following is NOT a duty of the Director of Insurance? A Regulate the Department of Insurance affairs B Conduct hearings C Prescribe forms and procedures D Create Missouri insurance laws
D. Create Missour insurance laws **The Director of Insurance does not create law. Instead, the Director has the authority to make any rules necessary to enforce the insurance laws passed by the state legislature.
Health policies must provide coverage for all of the following, except: A Chiropractic care B Cancer screenings C Low protein modified food products D Dental care for children up to age 18
D. Dental care for children up to age 18 **Coverage must be provided for anesthesia and hospital dental charges for children up to age 5.
Which of the following statements BEST describes Missouri law about the offer of inflation protection benefits with respect to LTC insurance? A Insurers do not have to offer inflation protection B Inflation protection coverage is required for all applicants age 80 or older C Inflation protection coverage must be automatically included in all policies D Insurers must obtain rejections of inflation protection in writing
D. Insurers must obtain rejections of inflation protection in writing **Rejection of LTC inflation protection must be in writing and signed by the policyholder.
Which of the following is NOT a required disclosure provision in a LTC policy? A Renewability B Benefit triggers C Status as tax-qualified D Investment options
D. Investment options **LTC policies do not contain investment characteristics or investment options.
A health policy is not obligated to cover which of the following? A Chiropractic care B Second opinion of a cancer diagnosis C Treatment of autism disorders D Preexisting conditions
D. Preexisting conditions **Health policies in Missouri may exclude a disease or physical condition not already specifically excluded if applicable medical treatment or advice was received within 12 months prior to the effective date of coverage.
All of the following coverages must be offered by health insurers in Missouri, except: A Loss or impairment of speech or hearing B Coverage for mental health services C Chemotherapy for breast cancer D Testing for lead poisoning
D. Testing for lead poisioning **Coverage for lead testing must be offered to all pregnant women and children up to age 6.
Which of the following health plans is considered the primary plan to pay a claim if more than one form of health insurance is in place to cover a loss? A The plan issued to the non-custodial parent B The plan with the highest deductible C The plan that has been in force for the longest time D The plan issued to the custodial parent
D. The plan issued to the custodial parent **A primary plan makes claim payment before all other plans. The custodial parent's plan is considered primary to the non-custodial parent's plan.
If treatment for mental illness disorders is provided by a health policy, how long is treatment for inpatient hospitalization per benefit period? A Up to 30 days per year B Up to 60 days per year C Up to 15 days per year D Up to 90 days per year
D. Up to 90 days per year **Inpatient hospital treatment is covered for up to 90 days per year.
In personal insurance transactions, producers must do all of the following EXCEPT: A Inform the applicant if coverage cannot be secured within 30 days of application B Handle applications and amendment requests as soon as reasonably possible C Inform the insured if the insurer needs information before renewal or policy change D Use professional designations to instill confidence about advising senior clients
D. Use professional designations to instill confidence about advising senior clients **It is an unethical and dishonest business practice to use a professional designation implying special certification in advising senior clients as a sales tactic.
Commissions may only be paid to producers who are?
Duty licensed- meaning licensed in the line of authority for the type of insurance sold.
Group health insurance can be only written on eligible groups such as:
Employers Creditors, credit unions, or parent holding companies Labor unions or similar employee organizations Associations with at least 50 members, organized in good faith and existing at least 2 years Groups approved by the Director as a discretionary group under Missouri law
The association funds what 3 accounts?
Heath, life, and annuity
False Testimony. The court may:
Hold the person in contempt Order the person to appear before the Director Order the person to testify about the matter in question or under investigation Order the production of records Grant injunctive relief Impose a civil penalty up to $50,000 for each violation Grant any other necessary or appropriate relief
Medicare Supplement Benefit Standards:
If an insured is eligible for and applies for Medicaid, and notifies the insurer within 90 days of becoming eligible, the policy must suspend benefits and premiums at the insured's request and for up to 24 months.
Dependent Child
If the parents are not separated or divorced, the primary plan is the one covering the parent whose birthday (considering only the month and day of birth, NOT the year) falls earliest in the calendar. If parents share the same birthday, the plan that has been in force longer is primary.
a developmental or physical disability is defined as a condition other than mental illness impairing intellectual or behavioral functioning and requiring treatment and or services:
Includes cerebral palsy and epilepsy Is severe, chronic, and manifests before age 19 Causes substantial limitations in 3 or more of these areas:Self-careLanguage use and comprehensionLearningMobility -Self-direction or ability to live independently
Inflation protection features must be at least as favorable as one of the following:
Increases in benefit levels are compounded at least 5% annually Guaranteed right to increase benefits without evidence of insurability or health status, so long as the option for the previous period was not declined Covers a percentage of actual/reasonable charges without setting a maximum indemnity limit
Defamation:
Making, publishing, or circulating an oral or written statement that is false, maliciously critical of, or derogatory to the financial condition of an insurer with the intent to injure that insurer.
If director determines that any person or business entity has serious plans to engage in an unfair method of competition or an unfair deceptive act or practice, the director may:
Issue a cease and desist order Issue a curative order requiring the person to take specific action Order a civil penalty or forfeiture Award reasonable costs of the investigation
minimum maternity benefits:
Maternity coverage must include at least 48 hours of inpatient care following a vaginal delivery, and at least 96 hours of inpatient care following a Caesarean section delivery, provided for mother and child in a hospital or other facility licensed to provide obstetrical care.
acts that are NOT considered rebating:
Paying bonuses or abating premiums from accumulated surplus Adjusting premiums for industrial policyholders who pay directly, saving collection expenses Adjusting group policy premiums based on loss or expense experience
coverage for preexisting conditions?
Missouri health policies may exclude a disease or physical condition for which the insured received medical diagnosis, treatment, or advice during the 12 months prior to the policy's effective date of coverage
Prohibited Group Enrollments?
Offering more than one group contract through any person unless such person is legally licensed.
Missouri plans must offer coverage for chemical dependency at the following standards:
Outpatient treatment through a non-residential program of at least 26 days per benefit period Residential treatment program of at least 21 days per benefit period Medical or social detoxification of at least 6 days per benefit period Medication-assisted treatment for substance abuse, including opioid-use disorders
The following must be included in all Missouri annuities:
Paid-up benefits must be granted when premium payments stop or if the contract owner submits a written request If a contract allows for a lump sum payment, and the contract is surrendered before it is annuitized, the insurer must pay a cash surrender benefit as prescribed by law. With the Director's approval, the payment may be deferred for up to 6 months after the insurer receives a written surrender request. Any paid-up annuity, cash surrender, or death benefits meet the minimum required by state law, and an explanation of how those benefits might be affected by credited interest, contract loans, prior withdrawals, or partial surrenders
Level 3 violations and above
Penalties increase further if noncompliance of the violator compels the Director to request enforcement by the court.
Immunization
Policies must cover immunizations from birth to age 5 with no deductible or copayment. HMOs may restrict benefits to immunizations by providers affiliated with the HMO's network.
Advertising materials should include:
Printed, audio, or visual material that could appear on TV, radio, internet, newspapers, billboards, etc. Descriptive literature and sales aids as used in direct mail Prepared sales talks/presentations
Rebating=
Providing anything of value not expressly stated in the contract as inducement to buy an insurance policy, including but not limited to: A rebate of insurance policy premiums A special favor or advantage in the dividends or benefits of an insurance policy Stocks, bonds, or securities (including dividends accruing on same) Any other valuable consideration (i.e., anything of value)
Director of Insurance has the power and authority to:
Regulate the internal affairs of the Department Prescribe procedures to be followed (including continuing education requirements) Assist with the interpretation of state laws relating to insurance Issue producer licenses, certificates of authority, and cease and desist orders Conduct hearings Supervise the state's guaranty funds Adopt, amend or withdraw any insurance rule or regulation
Commissions conditions:
The first-year commission or compensation cannot exceed 200% of the money paid for the sales or service of the policy in the second year Renewal commission or compensation must be the same amount in years 2-5; renewal commissions cannot be paid for fewer than 5 years If a policy is replaced, commissions or compensation for the replacement policy cannot exceed the renewal commissions payable on the policy that was replaced If the existing and replacing policy are issued by the same company, compensation cannot exceed what would be paid if they were issued by different companies (assuming policies are substantially similar in coverage and benefits)
A plan is a primary plan if either of the following statements is true:
The plan has no rules determining benefit order, or its rules differ from state code; OR The plan pays first according to state code benefit determination rules
The medicare supplement insurance minimum standards act:
This act establishes minimum standards, simplifies terms, and provides for full disclosures in the sales of Medicare supplement insurance. Violation of the act, or aiding another in violation, is a level 2 violation subject to a civil penalty imposed by the Director or a court of law.
What does the Missouri Life and Health Insurance Guaranty Association Act protect?
This guaranty association protects resident policyowners (and beneficiaries regardless of residence) of Missouri life and health policies or annuities against the failure of an insolvent member insurer to fulfill contractual obligations.
Premium rates
age gender business industry geographic area family composition (individual vs dependent enrollment) group size
Replacement
any transaction involving potential purchase of a new life insurance policy or annuity contract where the producer or insurer knows that an existing life insurance policy or annuity contract will be: Lapsed, forfeited, terminated, partially/fully surrendered, reassigned to the replacing insurer Converted or reduced by the use of a nonforfeiture benefit Amended to reduce the benefits provided or the term of coverage Reissued with a reduction in cash value Used as collateral or subjected to a loan exceeding 25% of the policy's loan value
chemotherapy lifetime maximum at least value:
at least $100,000
small employer
at least 2 and not more than 50 employees who work 30 hours per week or more for full time baiss
Chiropractic care
benefits are limited to a max of 26 office visits per policy period. co payment may not exceed 50% of total cost
Level 5 violation
carry the highest penalties.
Credit Life Insurance:
designed to pay off insured's debts
LTC insurance policies, nonforfeiture benefits do what instead of issuing a refund?
extend some type of coverage beyond termination date
A deferred annuity may contain a provision terminating the contract if no premium payments are received?
for 2 years and the paid up annuity is less than $20 per month
cold-lead advertising
marketing tactics that do not conspicuously disclose the purpose of contact is to solicit insurance, and future contact will be made by insurer or producer)
coverage for mental health services:
must cover at least 2 sessions per year to a licensed professional.
exisiting insurer
the insurer whose policy will be replaced
What is the maximum life insurance policy loan interest rate in this state? A 8% B 12% C 5% D 2%
A. 8% **The maximum life insurance policy loan interest rate is 8%.
Missouri law requires what standard of fiscal care and conduct of producers? A Fiduciary responsibility B Financial duty C Care of a trustee D Legal capacity
A. Fiduciary responsibility **Producers have fiduciary responsibilities to both their insurers and clients.
Insolvent Insurer:
is a member placed under an order of liquidation by the court.
Impaired Insurer:
is not insolvent, but has been placed under an order of rehabilitation or conservation
conservation
is the attempt by the existing insurer or producer to discourage a policyowner from replacement. Routine administrative actions (such as late payment reminders) are not considered conservation.
replacing insurer
is the insurance company that proposes to issue, or issues, a new policy or contract replacing an existing policy or contract.
alcoholism
limited to 30 days in any policy year
Existing life insurance or annuity
means a life policy or annuity contract that is in force, and includes coverage issued under a binding or conditional receipt.
Level 1 violations
no civil penalty required
Mandatory Policy Benefits and Design, All variable insurance policies msut:
-Include maximum charges for mortality/expenses (which must be born by insurer) -Minimum death benefit for a scheduled premium policy must be at least the same as the initial face amount, so long as the policy does not lapse -Reflect the investment experience of one or more actuarially-sound separate accounts -Policy must be credited with the full net-investment return applied to the benefit base -Variable death benefit changes must be determined at least once a year
All of the following advertising standards exist in Missouri, except: A Renewal premiums must be displayed if different from initial premiums B Testimonials must be facts C Ads may not use words like 'all,' 'full,' or 'complete' D Ads may not use insurance jargon
B. Testimonials must be facts **Testimonials must be genuine and represent the opinion of the author.
The Director may conduct a financial examination of an insurer whenever necessary but no less often than every _____ years. A 10 B 7 C 5 D 3
C. 5 **The Director or authorized examiner may examine any insurer as often as deemed appropriate, but each Missouri insurer must be examined at least once every 5 years.
Which of the following is not a policy requirement of a variable life insurance policy? A Minimum death benefit B A 31-day grace period C 3-year reinstatement period D Description of benefit calculations
C. A 3-year reinstatement period **Variable life must include a 5-year reinstatement period for flexible premium policies.
A final examination report must be filed no later than _____ days after an examination is completed. The examined insurer will then have _____ days to file any submissions or rebuttals about any matter discussed in the report.
60, 30
Life insurance policies in Missouri may contain a suicide exclusion for up to: A 1 year after the policy's issue date B 2 years after the policy's issue date C 10 years after the policy's issue date D 3 years after the policy's issue date
A. 1 year after the policy's issue date
A health policy must cover a newborn child for how many days after birth? A 31 days B 21 days C 25 days D 45 days
A. 31 days
If disciplinary action against a producer resulted in monetary relief of $200 or less, the producer's record will be expunged after ______ years. A 5 B 10 C 7 D 3
A. 5 **For disciplinary actions against a producer which result in forfeiture of $200 or less and impose no other legal sanction, all records will be expunged after 5 years.
Nonguaranteed elements
An advertisement cannot use the term "vanish," or "vanishing premium," or a similar term that implies the policy becomes paid up, to describe a plan using nonguaranteed elements to pay a portion of future premiums.
Any of the following practices are considered unfair trade practices if committed:
In conscious disregard of Missouri's Unfair Trade Practice Act; OR With such frequency as to indicate engaging in that conduct as a general business practice
Variable Products
In variable products, the dollar amount of benefits varies based on the investment results of one or several designated separate account(s). Variable life insurance and variable annuities combine features of insurance and securities investments and are regulated by the SEC.
Stock Operations and Advisory board contracts?
Issuing, delivering, or allowing stock, certificates, benefits, securities, or contracts promising profits and returns as inducement to buying insurance.
The state of Missouri is a member of the compact. The purposes of this compact include:
Promoting and protecting the interest of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products Developing uniform standards for insurance products covered under the Compact Establishing a central clearinghouse for the review and approval of insurance products covered under the Compact and, in certain cases, advertisements submitted by insurers Improving coordination of between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the Compact
MO, life insurance policies have these rules:
That are issued in connection with employer-sponsored pension or profit-sharing plans Where reduced benefits during early policy years are a primary feature of the plan That were term insurance policies before being converted automatically to permanent insurance at a specified age of the insured That only grade benefits for insured persons who are not yet 5 years old
How is a Universal Life insurance policy different from other types of life insurance? A It separately identifies interest credits and mortality charges B It does not provide a death benefit C It includes interest credits and mortality charges in the basic policy D It provides a death benefit
A. It separately identifies interest credits and mortality charges **A Universal Life insurance policy separately identifies interest credits, and mortality expense charges are made to the policy.
What is the maximum limit of coverage provided by the Association for the death benefits under a life insurance policy? A $25,000 B $1 million C $750,000 D $300,000
D. $300,000 **The Association pays a maximum of $300,000 on any one life insurance policy.
If an adjustable rate is used, the policy must state how frequently the rate is determined, which must be?
at least every 12 months and cannot be more often than every 3 months
Examination of insurance producers selling variable annuities:
The exam contains two parts: Part I is on securities and Part II is on variable contracts. An applicant is exempt from Part I of the exam if they: -Have previously passed a similar examination -Are currently registered with the SEC as a broker-dealer, or currently associated with a broker-dealer and have met qualification requirements
License information requirements:
The licensee's name, address, and identification number The issue and expiration dates of the license The lines of authority for which the license was issued Any other information required by the Director
The interest rate on a policy loan must either be?
capped at 8% per year, or must use an adjustable maximum interest rate which cannot exceed the higher of: -Moody's monthly average for the month ending 2 months before the rate is determined, OR -The policy's cash surrender value plus 1% per year
health coverage for newborns
children must be covered for accident and sickness for 31 days starting at the moment of birth.
A producer's license may be revoked or suspended for all of these reasons, except: A Being convicted of a crime involving moral turpitude B Being charged with a felony C Knowingly violating a state insurance law D Having an insurance license suspended or revoked in another state
B. Being charged with a felony **Revocation or suspension requires that the licensee is convicted, not merely charged.
Which of the following is NOT a qualification for obtaining an insurance producer license? A Passing a licensing exam B Paying a $200 license fee C Being at least 18 years old D Not committing a prohibited act
B. Paying a $200 license fee **The producer license fee is $100.
What must a producer provide when replacing a life insurance policy? A A list of all insurance policies purchased by the applicant B A premium invoice C A Notice Regarding Replacement signed by the producer and applicant D A policy information page
C. A notice regarding replacement signed by the producer and applicant
to solicit annuities, producers must comply with the insurer's product training standards and complete a one time 4 credit course on the following topics:
The parties to an annuity, and the types, primary uses, and classifications of annuity products How product-specific annuity contract features affect consumers How income tax affects qualified and non-qualified annuities Appropriate sales practices, replacement, and disclosure requirements
Which of the following statements about producer licenses is TRUE? A An employee who processes claims and does not get paid commission is required to obtain a producer license B An individual initiating sales over the telephone is exempt from licensing C Resident and nonresident producer licenses renew every 3 years D Resident producer licenses are issued for 2 years
D. Resident producer licenses are issued for 2 years **Resident producer licenses renew every 2 years in Missouri.
recordkeeping
for at least 3 years after the transaction is completed.
If the Director issues a summary order due to violations, the producer may request a hearing within how many days of notice of the order? A 60 B 45 C 15 D 30
D. 30 **The applicant may request a hearing within 30 days of notice of the order.
All MO life insurance policies, including variable life policies, are required by law to contain the following:
-31 day grace period for scheduled premium, 61 days for flexible premium -5 year reinstatement period for flexible premium policies -For a policy that lapses after being in force for at least 3 full years (or 5 full years for industrial insurance), pay a cash surrender value instead of a paid-up nonforfeiture benefit In the event of premium default, unless another nonforfeiture benefit is elected within 60 days, the policy's paid-up nonforfeiture benefit will be applied Statement of the maximum mortality and expense charges Any change in variable death benefits must be determined at least annually Cash value must be determined at least monthly Statement of any minimum death benefit Description of how benefits are calculated 2-year incontestability clause Insurer may defer payment of variable death benefits for up to 6 months
The director or any authorized examiners may conduct an examination as often as appropriate but must conduct a financial examination of every licensed Missouri insurer at least every ___ years.
5
coverage for mammography:
A baseline mammogram for women ages 35-39 A mammogram for women ages 40-49 every 2 years or as often as recommended by the patient's physician An annual mammogram for women age 50 and older A mammogram for any woman, regardless of age, when her physician recommends it due to her own past history of breast cancer or that of her mother or sister
Which of the following is NOT a duty of the Director of Insurance? A Create Missouri insurance laws B Conduct hearings C Prescribe forms and procedures D Regulate the Department of Insurance affairs
A. Create Missouri insurance laws **The Director of Insurance does not create law. Instead, the Director has the authority to make any rules necessary to enforce the insurance laws passed by the state legislature.
Which of the following is true about the Missouri insurance cease and desist order? A Notice of intent to initiate administrative action must be served personally or by certified mail B Violation may result in a minimum fine of $100,000 C An alternative to a cease and desist order is federal court action D It is the only recourse to stop an insurance unfair trade practice
A. Notice of intent to initiate administrative action must be served personally or by certified mail **Violators are also subject to suspension/revocation of a license or certificate of authority.
Which of the following is NOT a provision in a group life insurance policy? A 2-year incontestable provision B Funeral benefit up to $1,000 if there is no designated beneficiary C 31-day grace period D Individual policy conversion privilege after 5 years
B. Funeral benefit up to $1,000 if there is no designated beneficiary **In the absence of a designated beneficiary, the insurer may meet its liability by paying a funeral expense benefit up to $2,000 to the closest living relative.
Making a false statement about the benefits or the nature of an insurance policy is what unfair trade practice? A Unfair discrimination B Misrepresentation C Twisting D Defamation
B. Misrepresentation
A producer who makes a derogatory statement about a competing insurer's financial condition is guilty of what unfair trade practice? A Intimidation B Coercion C Defamation D Twisting
C. Defamation **Defamation consists of false or maliciously critical statements regarding the financial condition of any person, with the intent to injure such person.
Insurers must maintain advertisements in a file for how long after each advertisements' discontinuance of use? A 2 years B 3 years C 7 years D 5 years
D. 5 years **Each insurer must maintain at its home or principal office a complete file containing a full, accurate copy of every printed, published, or prepared advertisement of its individual policies. All advertisements must be maintained in the file for a period of 5 years after discontinuance of its use.
Which of the following is NOT a penalty for refusing to testify in a Department hearing? A Being ordered to testify in circuit court B Being required to appear before the Director C Being held in contempt D Being assessed a civil penalty up to $5,000 per violation
D. Being assessed a civil penalty up to $5,000 per violation **The circuit court may impose a civil penalty up to $50,000 for each violation.
How often does a producer's license renew? A Annually (once a year) B Triennially (once every 3 years) C Quinquennially (once every 5 years) D Biennially (once every 2 years)
D. Biennially (once every 2 years) **Producer licenses renew biennially (every 2 years) on the anniversary of their issue date.
An insurer is permitted by law to pay commissions to each of the following, except: A P&C producer for the sale of surplus lines insurance B Licensed producer with a compensation agreement based on loss experience C Licensed producer who negotiates an insurance contract D Property and casualty producer for the sale of life insurance Oops!
D. Property and casualty producer for the sale of life insurance **Commission can only be paid to a producer duly licensed for the appropriate line.
