Chapter 8 Texas Laws and Rules Pertinent to Insurance

An insured may assign up to ______ of policy ownership under an individual life insurnace policy.

100%

What is the MINIMUM benefit period that must be offered by a long-term care policy?

12 months

Every 12-months after the initial enrollment period, and HMO must hold an open enrollment period of

31 Days

In Texas, an individual life insurance policy is REQUIRED to have a grace period of

31 Days

How long can a cash surrender value payment be deferred by the insurance company under the nonforfeiture law?

6 months

A temporary agent's license issued by the commissioner of Insurance is valid for up to ____ days.

90

A certificate of _______ permits and insurance company to transact business in Texas

Authority

Which of the following is a requirement for obtaining a Texas insurance agent's license?

Be honest, trustworthy, and reliable

An Evidence of Coverage form may be issued by a Health Maintenance Organization (HMO) after being approved by the attorney general NAIC commissioner National HMO Association

Commissioner

Which of the following is NOT included in a life insurance illustration? underwriting classification upon which the illustration is based insurers name amount of death benefit company's mortality table

Company's Mortality Table

How often must an insurance agent licenses normally be renewed?

Every 2 years

An insurance company organized under New York laws and licensed to do business in Texas is considered a

Foreign company

What is an organization that solicits insurance only to its members?

Fraternal benefit society

When advertising, an insurance company MUST use its

Legal corporate name

An applicant MUST receive an Outline of Coverage when an application is taken for an

Medicare Supplement policy

Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed? *Coercion *Fraud *Misrepresentation *Sliding

Misrepresentation

Which of the following is a valid reason for an enrollee to be cancelled by a Health Maintenance Organization (HMO) plan?

Nonpayment of coverage

Who owns a stock Insurance Company?

Stockholders

An insurance agent has a fiduciary responsibility to all the following EXCEPT: applicants insureds insurers other agents

Other agents

Which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstated on the application?

Pay an amount the premiums would have purchased at the insured's actual age

Which of the following is NOT a required provision in group Life policies? Free look incontestable conversion right to loan

Right to Loan

Which of these is NOT an example of doing Insurance business?

Selling shares of stock

All of these statements about the Commissioner of Insurance are true EXCEPT the commissioner must be elected the commissioner regulates the business of insurance in this state the commissioner ensures that Texas insurance laws are executed the commissioner protects and ensures the fair treatment of consumers

The commissioner must be elected The governor appoints the commissioner to a two-year term, the commissioner is not elected.

Why would the Insurance Commissioner examine the records of an insurance company?

To determine the solvency of the company

How long does an insurance company appointment remain in force?

Until terminated

Under Texas insurance law, the term "transacting business" includes

collecting premiums

Which of the following statements about health coverage for newborns is NOT true? coverage includes treatment of genital defects coverage continues after the first 31 days upon payment of first premium coverage is limited to only congenital defects coverage begins at moment of birth

coverage is limited to only congenital defects

which of the following groups may not be insured by a group life insurance policy? Employees, supervisors, administrators, orindividuals who are related by blood

individuals who are related by blood. A group life insurance policy may not insure groups consisting exclusively of persons who are related by marriage, blood or legal adoption.

A domestic insurance company in Texas is considered a company that

is incorporated and formed in Texas

An example of rebating would be returning a portion of a premium as inducement to purchase insurance advertising cheaper insurance rates than competitors a mutual insurance company paying dividends to its policyowners an offer of rated insurance coverage

returning a portion of a premium as inducement to purchase insurance

A Medicare Supplement policy may be cancelled for which of the following reasons?

the premium has not been paid by the insured

Which of the following benefits is NOT required under a group health plan for drug and alcohol treatment? Inpatient treatment transportation to and from a treatment facility group therapy outpatient treatment

transportation to and from a treatment facility

ABC Insurance company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering

unfair methods of competition

A foreign insurance company conducting Insurance business in Texas is not subject to Texas insurance laws was formed under the laws of another state was formed under the laws of another country is only authorized to write business outside the United States

was formed under the laws of another state

In Texas, which of these statements regarding the Suicide clause is TRUE?

An insurer may not use suicide as a defense against payment after the second year

With whom may an agent split commissions?

Another agent with the same line of insurance

A plan through the marketplace may purchased by

Any legal resident (except those imprisoned)

An insurer is NOT required to provide information on fraudulent claims if requested by

An insured

An example of false advertising would be *Paid testimonials from celebrity endorsements *An insurer exaggerating its dividends in a magazine advertisement *An agent spending more than $25 on marketing gifts for a client *An insurer advertising in an insurance trade journal

An insurer exaggerating its dividends in a magazine advertisement

If an insured's age on a life insurance policy has been misstated on the life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be

An amount that the premiums paid would have purchased at the current age