Chapter 10

If a person accumulates more continuing education hours than is necessary to fulfill the requirements for a 2-year period, which of the following will occur?

The extra hours may be continued into the next period.

Under what circumstances can an agent's appointment be transferred to another person?

Under no circumstances

All agents licensed in this state must complete how many hours of continuing education specific to law and ethics?

4

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?

Insurance Guaranty Association

The Office of Insurance Regulation is responsible for all of the following insurer activities EXCEPT

Issue of securities

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT

Provide a 30-day advance notice to the Commissioner

In what way can an agent demonstrate a high standard of ethics?

Putting the client's best interests before their own

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it is in the best interest of the client.

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating

Who examines the books and records of insurance companies in Florida?

The Chief Financial Officer

What are the 2 offices of the Financial Services Commission?

The Office of Financial Regulation and the Office of Insurance Regulation

Which of the following entities is responsible for agent licensing and administrative supervision?

The Office of Insurance Regulation

If an agent is in the military, which of the following is true?

The agent cannot sell a policy to another active military person who is of a lower rank.

In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year?

50%

Which of the following would NOT be a violation of state insurance regulations?

Agent C uses her license to write only business other than controlled.

What is a foreign insurer?

An insurer with a home office in another state

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?

Fraternal benefit society

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity

All of following are the general qualifications for an agent's license EXCEPT

Have a high school diploma

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of

Twisting

How often must domestic insurance companies be examined by the Chief Financial Officer in Florida?

At least every 5 years

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be

Authorized.

Continuing education requirements must be met every

2 years

In order to maintain an insurance license, an agent licensed for less than 6 years will need to satisfy Florida's continuing education requirement of

24 hours every 2-year period

If a licensee changes his or her residence address, within how many days must the department be notified?

30

What term is used for replacing insurance policies for the sole purpose of making commissions?

Churning

An applicant for an insurance agent's license must

Complete a prelicensing education course

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination

Which of the following best describes an insurance company that has been formed under the laws of this state?

Domestic

Which of the following is NOT a responsibility of the Office of Insurance Regulation?

Enacting new insurance laws

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. The insurer is hoping that this advertising will help to eliminate the competition and therefore create a monopoly. Which of the following best describes this act?

Illegal

An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action?

Send a written notification to the department of insurance

An agent's appointment has been denied. Which of the following is true?

State taxes may be refunded upon a written request

Which of the following types of insurers is owned by stockholders?

Stock

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association

Which of the following is true regarding the agent's appointments?

A person may hold several appointments at one time.

Which of the following would be an example of an unfair claims settlement practice?

Failing to acknowledge a claim within 30 days

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

Which of the following activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance agent's license?

Forgery

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status.

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

No insurance policy form can be issued, delivered, or used in this state unless it has been

Filed with and approved by the Office of Insurance Regulation

If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of

Churning

Which of the following statements is INCORRECT?

Replacing insurance policies for the purpose of making commissions is legal.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums