Chapter 5: LIFE, ACCIDENT AND HEALTH (SAME CHAPTERS)

an insurance producer is acting as a broker when he or she negotiates for an insurance contract on behalf of: A: a client B: the financial institution C: the insurer D: another insurance producer

A: a client

which of the following would be required to be licensed as an insurance producer: A: a salaried employee who advertises and solicits insurance B: a person whose activities are limited to producing insurance advertisements C: a salaried full-time employee who furnishes information for group insurance D: an insurance company director who performs executive administrative and managerial duties

A: a salaried employee who advertises and solicits insurance

the commissioner believes that a licensee has violated an insurance regulation and decides to conduct a hearing. how long of notice must the commissioner provide the licensee: A: 31 days B: 10 days C: 14 days D: 20 days

B: 10 days

if an insurer cancels an agency contract, it must notify the commissioner in writing within how many days: A: 10 B: 15 C: 20 D: 30

B: 15

what is the minimum age that an insurance producer can be licensed in New Jersey: A: 16 B: 18 C: 19 D: 21

B: 18

producer licenses are valid for: A: 1 year B: 2 years C: 5 years D: unlimited amount of time

B: 2 years

who might receive dividends from a mutual insurer: A: agents B: policyholders C: subscribers D: stockholders

B: policyholders

which of the following is NOT required information a producer must provide before soliciting insurance: A: producers name B: producers contact information C: the nature of producer's relationship with the insurer being represented D: the name of the insurer the producer represents

B: producers contact information

a participant insurance policy may do which of the following: A: pay dividends to the stock holder B: require 80% participation C: pay dividends to the policy owner D: provide group coverage

C: pay dividends to the policy owner

if a producer has been convicted of a crime, he or she must notify the commissioner within: A: 10 days B: 15 days C: 20 days D: 30 days

D: 30 days

an insurance producer is acting as a broker when he or she negotiates for an insurance contract on behalf of: A: a financial institution B: the insurer C: another insurance producer D: a client

D: a client

an insurance producer refused to comply with a subpoena. what would be the producer's penalty for this violation: A: a fine and an imprisonment B: a fine up to $10,000 C: imprisonment up to 6 months D: a fine up to $5,000

D: a fine up to $5,000

when an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. in reality, its financial health is terrible, and the company will soon have to file for bankruptcy. which of the following terms best describes the advertisement: A: defamation B: twisting C: rebating D: false financial statement

D: false financial statement

producers and insurers actions to insurance transactions, from selling insurance to processing claims are referred to as: A: producers actions B: licensee's responsibilities C: agent's authority D: insurance-related conduct

D: insurance-related conduct

all of the following are considered limited lines of authority EXCEPT: A: credit insurance B: travel insurance C: bail bonds D: surplus lines

D: surplus lines

a licensed insurance producer must notify the department of change in a mailing address within how many days and by what method: A: 5 days, by certified mail B: 30 days, by mail or electronically C: 6 months, only electronically D: 1 year, either orally or in writing

B: 30 days, by mail or electronically

which of the following would be considered and unfair claims settlement practice: A: delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation B: advising the insured that if the claim goes arbitration the insured would probably receive less than what is currently being offered C: requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim D: requesting the insured swear under oath concerning the facts of the claim

B: advising the insured that if the claim goes arbitration the insured would probably receive less than what is currently being offered

which of the following licenses is required for a surplus ;ones producer: A: life and health B: adjusters C: property and causality D: credit insurance

C: property and causality

the Paul vs Virginia case was decided in 1869. to what extent does the supreme courts's decision still apply to insurance today: A:it still stands in full. insurance is not considered to be interstate commerce, and is not subject to regulation by the federal government B: it still stands in full. insurance and securities are still regulated by two distinct agencies C: the decision has changed. insurance is considered to be interstate commerce, and subject to regulation by the federal government D: the decision has changed. insurance and securities are now regulated by the same federal agency

C: the decision has changed. insurance is considered to be interstate commerce, and subject to regulation by the federal government

what type of licensee represents the insurance company: A: agent B: broker C: consultant d: ADVISOR

A: agent

through which branch(es) of government is insurance currently regulated: A: legislative B: judicial C: executive D: all of the above

D: all of the above

which of the following is a person or organization that is allowed o write business in NJ for insurance companies that do not possess a certification of authority in NJ, if no authorization insurers in NJ offer the specific type of insurance in question: A: surplus lines agent B: insurance intermediary C: unauthorized broker D: fiduciary agent

A: surplus lines agent

what is a foreign insurer: A: an insurer with a home office in another state B: an insurer with a home office in another country C: an insurer with licensed agents doing business in other countries D: an insurer with licensed agents who are citizens in more than one country

A: an insurer with a home office in another state

a banker is ready to close on a customer's loan. the bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. this is an example of : A: coercion B: loading C: defamation D: twisting

A: coercion

if a violation of NJ insurance code were to occur, a cease and desist order and/or penalty may be issued. who may issue a cease and desist order: A: commissioner B: department of banking and insurance C: insurance company D: governor

A: commissioner

if an insurer and insured have a dispute about whether a particular loss is covered under a policy, which authority will settle the dispute: A: court system B: commissioner C: federal insurance regulation board D: consumer protection agency

A: court system

when a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. the producer could be found guilty of: A: defamation B: misrepresentation C: discrimination D: nothing, unless the remarks were in writing

A: defamation

two individuals are in the same risk and age; yet, they are charged different rates for their insurance policies due to an insignificant factor. what is this called: A: discrimination B: law of large numbers C: misrepresentation D: adverse selection

A: discrimination

applicants for surplus lines authority must fulfill all of the following requirement EXCEPT: A: hold a bind as a condition for licensure B: be a new jersey resident C: hold a property and casualty license D: pass an insurance licensing exam

A: hold a bind as a condition for licensure

an insurer devised an intimidation strategy in order to corner a large portion of the insurance market. which of the following best describes this practice: A: illegal B: a legal advertising strategy C: unfair discrimination D: defamation

A: illegal

on its advertisement, a company claims that it has funds in it possession that are, in fact not available for the payment of losses or claims. the company is guilty of: A: misrepresentation B: concealment C: unfair claim practice D: rebating

A: misrepresentation

what method do insurers use to protect themselves against catastrophic losses: A: reinsurance B: indemnity C: pro rata liability D: risk management

A: reinsurance

ti cancel an insurance producer license, the producer must: A: send the license to the insurance department and request cancellation B: visit the insurance department in person and submit cancellation paperwork C: fail to write business for 1 year or longer, which will automatically terminate the license D: complete a brief telephone interview with the insurance department and submit the required paperwork

A: send the license to the insurance department and request cancellation

a group of 4 entrepreneurs decided to open an insurance company. which of the following is true: A: all 4 members must be licensed insurance producers, regardless of whether they are involved in insurance transactions B: at least 1 member must be a licensed insurance producer C: none of the members have to be licensed as insurance producers, except for those who want to transact insurance business D: at least 2 members must be licensed insurance producers

B: at least 1 member must be a licensed insurance producer

which of the following would NOT be considered an unfair deceptive practice: A: misrepresentation B: controlled business C: rebating D: defamation

B: controlled business

which of the following tyoes of insurance would be written by limited lines agent: A: term life insurance B: credit insurance C: variable life insurance D: surplus line insurance

B: credit insurance

which of the following is NOT true regarding a certificate of authority: A: it is issued by the state department of insurance B: it is issued to group insurance participants C: it may be necessary for transacting business in a specific state D: it is equivalent to an insurance license

B: it is issued to group insurance participants

insurance is regulated: A: mostly on a federal level B: mostly on a state level C: only on the level of social medicine, which is on both state and federal levels D: evenly between state and federal levels

B: mostly on a state level

all of the following professional designations are recognized by the department as acceptable substitutes for education and examination requirements EXCEPT: A: chartered life underwriter (CLU) B: professional insurance agent (PIA) C: chartered property/casualty underwriter (CPCU) D: chartered financial consultant (ChFC)

B: professional insurance agent (PIA)

a producers license was revoked as a result of the insurance code violation. which of the following is true: A: the producer cannot apply for a license reinstatement once the license has been revoked B: the producer will have to wait 5 years before applying for license reinstatement C: the producer can apply for a new license D: the producer's license can be retuned after 1 year

B: the producer will have to wait 5 years before applying for license reinstatement

what is the maximum allowed value of gift that an agent can give to an insured without violating the regulation on rebating: A: $10 B: $50 C: $100 D: $200

C: $100

a producer received a group master policy and certificates for delivery to the insured. within how many days must the policy and certificates be delivered: A: 5 calendar days B: 10 business days C: 10 calendar days D: 5 business days

C: 10 calendar days

if a producer dies or is rendered severely disabled, an unlicensed person can contract with another insurance producer to continue their person's insurance transactions for: A: 90 days B: 100 days C: 180 days D: 365 days

C: 180 days

within how many days must a producer report claims to the insurer: A: 3 business days B: 5 calendar days C: 5 business days D: 3 calendar days

C: 5 business days

which of the following is the closest term to an authorized insurer: A: licensed B: legal C: admitted D: certified

C: admitted

when transacting business in this state an insurer formed under the laws of another country is known as a/an: A: foreign insurer B: admitted insurer C: alien insurer D: domestic insurer

C: alien insurer

all of the following could be considered rebated if offered to an insured in the sale of insurance EXCEPT: A: stocks, securities, or bonds B: an offer to share in commissions generated by the sale C: dividends from a mutual insurer D: an offer of employment

C: dividends from a mutual insurer

which of the following was created to protect policy owners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment: A: new jersey insurance solvency association B: new jersey consumer protection organization C: new jersey life and health guaranty association D: new jersey insurance consumer protectorate

C: new jersey life and health guaranty association

a certification of license status must include all of the following information EXCEPT A: types of insurance for which the licensee is authorized B: license reference number C: number of years a licensee has been in business D: licensees date of birth

C: number of years a licensee has been in business

all of the following are true regarding rebates EXCEPT: A: rebating can be anything of economic value, given as an inducement to buy B: dividends are not considered to be rebates C: rebates are allowed if it's in the best interest of the client D: rebates are only allowed if specifically stated in the policy

C: rebates are allowed if it's in the best interest of the client

if a person violates a cease and desist order, the commissioner can turn the matter over to the new jersey superior court for further legal action and can assess a fine for each violation of up to: A: $1,000 B: $3,000 C :$5,000 D: $10,000

C:$5,000

which of the following persons is required to hold a producer license: A: a person who creates insurance advertisements B: a person who administers employee benefits C: a person who administers employe benefits D: a person who negotiates insurance contracts

D: a person who negotiates insurance contracts

all of the following candidates for resident producer license may be exempted from the examination requirement EXCEPT: A: a professional who holds a certified financial planner B: a person in public employment in the insurance field whose license terminated 10 months ago C: a nonresident producer in good standing who is moving to this state D: a resident producer licensed for property and casualty insurance applying for a life insurance license

D: a resident producer licensed for property and casualty insurance applying for a life insurance license

all of the following would be considered rebating EXCEPT: A: a agent offers the use of his lake house to a client as an inducement to buy and insurance policy from him B: an agent offers to share his commission with a policy holder C: an agent offers tickets to a baseball game as an inducement to buy insurance D: an agent misrepresents policy benefits to convince a policy owner to replace policies

D: an agent misrepresents policy benefits to convince a policy owner to replace policies

to legally transact insurance in this state, an insurer must obtain which of the following: A: power of attorney B: business entity license C: certificate of insurance D: certificate of authority

D: certificate of authority

the department can run a report on a specific producer that lists his or her license information, current license status, and the types of insurance that he or she can transact. what is the name of this report: A: MIB report B: producers report C: investigative consumer report D: certification of license status report

D: certification of license status report

on a participating insurance policy issued by a mutual insurance comoany, dividends paid to policy holders are: A: paid at a fixed rate every year B: taxable as ordinary income C: guaranteed D: not taxable since the IRS treats them as a return of a portion of the premium paid

D: not taxable since the IRS treats them as a return of a portion of the premium paid

all of the following would be considered an insurance transaction EXCEPT: A: soliciting a policy B: advising a policyholder regarding a claim C: negotiating coverage D: obtaining an insurance license

D: obtaining an insurance license

which of the following insurers are owned by stock holders who have usual rights of ownership, including the right of voting: A: mutual B: reciprocal C: fraternal D: stock

D: stock

a producer'a appointment last for how long: A: 2 years B: 3 years C: 5 years D: until it is terminated

D: until it is terminated