Chapter 1

The activity of exchanging a gift or other consideration as an inducement for the purchase of insurance is: A) A legal inducement B) A rebate C) Twisting D) An incentive

B) A rebate

Which of the following policies is covered under the Iowa Property and Casualty Insurance Guaranty Association Act? A) a life insurance policy issued by an admitted insurer B) A health insurance policy issued by a non-admitted insurer C) A property insurance policy issued by an admitted insurer D) A casualty insurance policy issued by a non-admitted insurer

C) A property insurance policy issued by an admitted insurer

Which of the following Acts was established to protect individuals from possible abuses of information contained in their credit files? A) Trade Practices Act B) Unfair Claims Settlement Act C) McCarren-Ferguson Act D) The Fair Credit Reporting Act

D) The Fair Credit Reporting Act

All of the following are true of an agency appointment EXCEPT: A) it is a written agreement between the producer and the insurance company under which the producer agrees to solicit, negotiate, and service insurance policies for compensation B) The appointing company is required to certify to the insurance division that the producer is qualified and properly trained C) The appointing company is required to certify to the insurance division that the producer has not violated any provisions of the Iowa Insurance Laws D) Individuals employed by appointed agencies may initiate sales activities upon successful completion of their state exam.

B) The appointing company is required to certify to the insurance division that the producer is qualified and properly trained

All of the following are prohibited insurance practices EXCEPT: A) Misrepresentation and defamation B) Deceptive advertising C) Direct mail marketing D) Rebates and inducements

C) Direct mail marketing

An applicant for a producer's license must be at least: A) 16 years old B) 18 years old C) 19 years old D) 21 years old

B) 18 years old

Producers are only permitted to share or split commission if: A) There is a written agreement between the two producers B) Both are licensed for the same line of authority C) The insured knows of the arrangement D) The insurance division knows of the arrangement

B) Both are licensed for the same line of authority

Which of the following activities require an individual to be licensed as a producer: A) Giving an insurance brochure to a prospect B) Signing an insurance application C) Depositing a check into the insurer's premium account D) Arranging or making meeting appointments for a licensed producer

B) Signing an insurance application

The maximum fine for failing to adhere to a cease and desist order is: A) $1,000 B) $5,000 C) $7,500 D) $10,000

D) $10,000

All of the following characterize the processing of complaints filed with the insurance division against producers and insurers EXCEPT: A) It may involve a formal hearing B) It usually is investigated by the insurance division C) The final disposition may be appealed to court having jurisdiction D) It is under the jurisdiction of the state's Attorney General

D) It is under the jurisdiction of the state's Attorney General

A producer represents: A) The insured B) The claimant C) Himself or herself D) The insurer

D) The insurer

Which of the following is NOT considered an unfair claims settlement practice? A) Misrepresenting policy provisions B) Failure to pay a claim not covered C) Failure to deny or affirm coverage or pay a claim D) Failure to promptly investigate claims

B) Failure to pay a claim not covered

All of the following are examples of unfair trade practices EXCEPT: A) Fraud B) Replacement when in the best interest of the insured and when all applicable replacement forms are completed C) illegal inducements D) Defamation

B) Replacement when in the best interest of the insured and when all applicable replacement forms are completed

Which of the following is NOT true of the Iowa Property and Casualty Guaranty Association Act? A) It ensures that policy holders may collect on losses incurred against insures who become insolvent B) Claims are covered up to $500,000 C) It covers all policyholder insured by unlicensed insurers D) A $100 deductible applies to all losses

C) It covers all policyholder insured by unlicensed insurers

All of the following applicants may be denied a producer's license EXCEPT: A) a nonresident not licensed in their state of domicile B) an individual that provides false or incomplete information on a license application C) An applicant whose letter of clearance is dated 120 days prior D) A stockbroker

D) A stockbroker

All of the following are true of the Continuing Education EXCEPT: A) A continuing education term is three years B) Producers must complete 36 credits every continuing education term C) Producers must have 3 credits in ethics every continuing education term D) Continuing education is waived for producers that have a law degree

D) Continuing education is waived for producers that have a law degree

All of the following activities would be sufficient to warrant the suspension of a producer's license EXCEPT: A) Failure to pay child support B) Failure to repay a college loan C) Failure to complete the continuing education requirements D) Failure to complete a credentialed education program

D) Failure to complete a credentialed education program

A producer licensed property and casualty insurance: A) Is exempt from continuing education if he/she functions in a management capacity B) Is required to complete 36 approved credits in property and casualty insurance C) Is required to complete 36 approved credits in life and health insurance D) May complete 36 approved credits in life, health, property, or casualty

D) May complete 36 approved credits in life, health, property, or casualty

All of the following are functions and objectives of the insurance division EXCEPT: A) To provide adequate rate levels and promote solvency B) To ensure fair and equitable treatment of the public and companies C) To ensure the public's interest is protected D) To ensure competitive rates

D) To ensure competitive rates

The practice of giving back to an insured a portion of the commissions earned on the sale of a policy is: A) Permitted under Unfair Insurance Practices Act B) A good business practices C) A rebate D) Twisting

C) A rebate

A Temporary License allows an executor or administrator of a deceased producer's estate to do all the following EXCEPT: A) Receive commissions B) Process normal correspondence C) Circumvent the normal licensing process D) Attempt to sell the agency

C) Circumvent the normal licensing process

All of the following would be considered an unfair claims practice EXCEPT: A) Failure to acknowledge written or oral communication B) Failure to deny or affirm coverage C) Dealing with the insured or claimant in good faith D) Refusing to pay claims

C) Dealing with the insured or claimant in good faith

An agreement of intimidation that results in the unreasonable restraint of trade or monopoly in the business of insurance would be considered: A) Rebating B) Twisting C) Boycott or coercion D) An illegal inducement

C) Boycott or coercion

All of the following are prohibited producers acts EXCEPT: A) securing a personal loan in excess of $250 B) Being named as a beneficiary on a customer's insurance policy C) Being named as an executor on a customer's will D) Securing a personal loan from a family member in excess of $250

D) Securing a personal loan from a family member in excess of $250

A Temporary License may be issued to approved individuals for a period of: A) 90 days with extensions up to 180 days B) 120 days with extensions up to 360 days C) Twelve months D) Unlimited time period

A) 90 days with extensions up to 180 days

Which of the following activities would require an agency employee to be licensed? A) discussing insurance in general if no recommendations are made with respect to rates B) Assisting the customer in recording information on the application C) Attaching a transaction receipt to an application D) Counseling an applicant on a product

A) discussing insurance in general if no recommendations are made with respect to rates

The Unfair Trade Practices Act: A) Advises producers and companies of fair and acceptable trade practices B) Exclusively regulates activities of producers in the excess and surplus lines business C) Regulates trade practices by defining practices that constitute unfair methods of competition and/or deceptive practice D) Only applies to life insurance companies

C) Regulates trade practices by defining practices that constitute unfair methods of competition and/or deceptive practice

An Agency License is: A) Never issued B) Only issued to agencies formed as a corporation C) Voluntary and available upon request from the insurance division D) Always issued by the Insurance Commissioner

C) Voluntary and available upon request from the insurance division

A producer must notify the insurance division of a name change within: A) 30 days B) 45 days C) 60 days D) 90 days

D) 90 days

Which of the following individuals would be required to be licensed? A) A risk manager that supervises a major corporation's insurance program B) A loss control representative that identifies hazards at the insured's business C) A premium auditor that verifies a business' payroll for insurance purposes D) An insurance consultant that receives commissions from a producer

D) An insurance consultant that receives commissions from a producer

Which of the following is NOT true of the Iowa Insurance Fraud Act? A) The insurance Fraud Bureau was formed by the insurance division to investigate fraudulent claims B) Persons are always civilly liable as the result of filing reports with law enforcement agencies C) A person commits a class "D" felony if that person attempts to defraud an insurer by presenting false written or oral statements in relation to an insurance policy D) An insurer must notify the fraud bureau within 60 days of receipt of a claim it believes to be fraudulent

D) An insurer must notify the fraud bureau within 60 days of receipt of a claim it believes to be fraudulent

Which of the following is NOT a requirement necessary to qualify as a producer in Iowa? A) Pass the exam required by statute B) Be a resident of the state of Iowa C) Be of good character and competency D) Complete a 36-hour licensing course

D) Complete a 36-hour licensing course

Which of the following would be considered an illegal inducement? A) Mailing an agency brochure to a prospective client B) Listing the insurance companies the agency represents in a letter C) Inviting prospective clients to the grand opening of the agent's new office D) Confirming future dividends in a proposal

D) Confirming future dividends in a proposal