Chapter 11 Exam - Laws and Rules

How does the Commissioner attain his position?

Appointed by the Governor

When replacing an existing life insurance policy, the replacing insurer must notify the existing insurer within

5 business days

How long must a replacing insurer maintain the records of a replacement transaction?

5 years

When a life insurance underwriter is determining insurability, it is illegal to base these decisions on

Sexual orientation

If a producer is found to be writing primary controlled business,

The commissioner will not renew license

When is it appropriate for a producers spouse to be the primary beneficiary on an applicants insurance policy?

When insurable interest exists

An producer who violates a cease and desist order may, after a hearing, be fined up to

$500

Which information is NOT included in the Colorado supplement of Benefits and Coverage form?

The insurer's prior year financials

What is the maximum amount the commissioner can fine an insurer for each violation of a cease and desist order?

$10,000

On June 1, 2004 G takes out a $20,000 whole life insurance policy with an AD &D rider. On July 15, 2005 G intentionally takes his own life. What will G's beneficiary receive as a death benefit?

$20,000

A producer that only sells insurance to family members is said to be engaging in

Controlled business

A producer license may be suspended or revoked if the producer is found to be engaging in

Misrepresentation

Which of the following is required for a life insurance lapse notice?

Reason stated why policy will lapse

In Colorado, all of the following are considered unfair trade practices EXCEPT

Replacement

If an insurer is authorized to conduct business in another state and wishes to conduct business in Colorado, it must

Receive a certificate of authority from colorado

Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of ____ from the policy's effective date?

1 year

In Colorado a life insurance applicant has ___ days after policy delivery for a full refund of premium if not satisfied for any reason

15

Renewing a producer's license requires __ hours of continued education every 2 years.

24

An insurer that terminates a producer's appointment must inform the Commissioner within how many days?

30

Which of the following is an example of defamation

A brochure including an untrue statement regarding a competitor's ability to pay claims

Which of the following statements regarding the Notice Regarding Replacement of Life Insurance is CORRECT

A copy of the notice must be signed by the the applicant and submitted with the application

When a minor is designated as the sole primary beneficiary,

A guardian will be court appointed in the event of a death claim

Which of the following potential insurance sales would be subject to replacement regulations?

A new policy that causes an existing life insurance policy to be surrendered

Which of the following statements is CORRECT regarding insurable interest in a life insurance contract?

A person is generally considered to have unlimited insurable interest in himself or herself

Which of the following is CORRECT regarding a producers fiduciary responsibility with clients funds?

A producer may never commingle personal funds with funds paid by or to a client

A life insurance applicant realized he failed to disclose material medical history and calls the producer. Any changes made to the application must be initialed by the

Applicant

When may the commissioner conduct an examination of an insurance company?

As often as deemed necessary

If an insurance company wishes to discriminate rates based on gender, it must,

Be justified by actuarial statistics

According to the Colorado Fraud Statute, all of the following must contain a warning against insurance fraud EXCEPT:

Certificate of authority

Which of the following is NOT a problem when existing life insurance is replaced with new coverage?

Comprehensive coverage may increase under the new policy

Who is not eligible to receive commissions from the sale of an insurance product?

Corporate executive

If a producer completes and insurance application, collects the initial premium, and issues the appropriate receipt,

Coverage will be contingent on the underwriting policies

From what point must the insurer pay interest on the proceeds of a death claim?

Date of death

Which of the following is an example of a misrepresentation?

Describing a universal life policy as a security

When recommending the purchase or exchange of an annuity, the producer must determine suitability of the purchase by performing all of the following EXCEPT

Determining the marital status of the applicant

Which of the following words may be used in the advertisement of life insurance or annuities ?

Guaranteed

All of the following penalties apply to anyone giving intentional false testimony during an insurance examination EXCEPT:

Guilty of a felony

Ultimately, who is responsible for a producer generated advertisement

Insurer

When a claim is denied, the insurer must

Issue a statement to the policy owner explaining the coverage, provision, or laws on which denial was based.

In addition to suspending/revoking licenses and issuing fines, the commissioner has the authority to do all of the following EXCEPT:

Issue prison sentences

In Colorado, which of the following is true regarding the commingling of an insureds funds with the funds of a producer?

It is never okay

To be valid, a group life insurance policy

May not be issued to a group formed solely for the purpose of obtaining insurance

A company that has not been authorized to operate in Colorado is known as

Nonadmitted insurer

As a condition to be approved for a loan , a creditor may require the borrower to

Obtain an insurance policy through an insurer of the borrower's preference

If a producer offers to refund part of a prospects premium in exchange for the purchase of a life insurance policy, the producer is committing the illegal act of

Rebating

Interest on life insurance proceeds is

Required if the claim was not paid within 30 days of the date insurer received the claim

Which of the following is an example of rebating?

Returning a portion of a premium as inducement to purchase insurance

Which of the following statements is true regarding the replacement of a life insurance policy in Colorado?

The replacing insurer must maintain copies of all records regarding the replacement for at least 5 years

An insurer cannot deny a claim unless

There is a reasonable explanation of the claim

If an annuity application was not taken in person, an insurer must provide the applicant a Buyers Guide

Within 5 days of the insurer receiving the application I

A fiduciary responsibility is defined as

a relationship of speciaFl trust and confidence when a person is entrusted with another's funds

Colorados replacement rules apply to all of the following types of insurance EXCEPT

Single premium whole life

G takes out a life insurance policy on October 8, 2008. On August 3,2009, Gtakes his own life. when G's beneficiary files a claim,

The claim will be denied under the suicide provision

A verbal or written statement which misleads a policy's features, benefits, or coverage is considered

Misrepresentation

All of the following are considered a form of advertisement EXCEPT

Communication or materials used within an insurers own organization

Paying insurance premiums on a more frequent basis will cause the policy to have

Higher premiums

When may a commissioner issue an emergency cease and desist order?

If there is suspicion of an unauthorized person engaging in insurance business without being licensed

Licensing is required for all of the following EXCEPT

Selling prepaid legal services

If a producer is going to deposit any premium into a bank account prior to remitting the funds to the insurer, he/she must use a

Separate insurance trust account

A producer must remit premiums to the insurer within ____ days after receipt

45

Which situation allows the producer to also be the beneficiary on a clients application for life insurance?

When insurable interest exists

Upon request, when must the Colorado Supplement to the Summary of Benefits and Coverage Form be provided?

Within 7 business days

The commissioner may issue an emergency cease and desist order without a hearing for all of the following circumstances EXCEPT

Writing controlled business

Which of the following documents are NOT required to mention the Colorado Fraud Statute

certificates of authority

Which of the following is a duty of the commissioner

Reviewing and approving license applications

The USA patriot act was signed into law as a response to

The 9/11 terrorist act

A license is deemed to be used for a controlled business if, during the immediately preceding 12 - month period,

The licensees total premiums on controlled business exceeded the total premiums on all other businesses

If a producer chooses to conduct business under an assumed name, when must notification be given to the Commissioner?

Prior to using the assumed name

Circulation of a maliciously critical statement about any insurer's financial condition to injure the insurer is called:

Defamation

Which of the following offers an insurance applicant the right to view the contract and receive a full refund?

Free look period

Employer noncontributory group life policies must allow for all of the following EXCEPT

Insured can determine the benefit amount

If an applicant for an annuity refuses to provide suitability information, the producer should

Obtain the consumers signed statement documenting his or her refusal to provide sustainability information