insurance exam
An insured under a long-term care policy and has just been diagnosed with Multiple Sclerosis (MS). What alteration will most likely be made to the policy? A No changes will be made to the insured's coverage. B Cancellation C Limited benefits for MS-related medical costs D Waiting period before MS-related costs are covered
A No changes will be made to the insured's coverage.
A nonresident producer in Illinois just relocated to Indiana and became a resident producer in that state. What must the producer do to satisfy one of Illinois' requirements for nonresident producers? A File a change of address within 30 days B Pay a fee to the Illinois Department of Insurance C Resubmit a nonresident license application D Nothing
A. File a change of address within 30 days
Which of the following defines the term controlled business? A Insurance written on the interests of the producer who solicits a policy B Insurance policies regulated by the State Department of Insurance C Lines of authority for which a producer is licensed D Transactions that are subject to the examination by the Director
A. Insurance written on the interests of the producer who solicits a policy
According to the PPACA metal levels classification, if a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that? A Platinum B Bronze C Silver D Gold
A. Platinum
All policy applications must identify which of the following? A Producer who solicited the applicant's business B Conditions of acceptance C MIB D Director
A. Producer who solicited the applicant's business
All of the following are regulated areas of the insurance industry EXCEPT A Investments. B Commissions. C Producers. D Trade practices.
B. Commissions
ow often is a resident insurance producer required to pay license fees? A Annually B Every 2 years C Every 4 years D It's a one-time fee.
B. Every 2 years
Under normal circumstances, if an insurer adds a rider to the policy, who must sign a statement of acceptance regarding the change? A Director B Insured C Agent D A signed statement is never required.
B. Inusred
Which of the following services would NOT be included under a LHSO plan? A Prescription drugs B Emergency services C Dental care D Ambulance
B. emergency services
Which of the following would be considered an unfair claims settlement practice? A Requesting the insured swear under oath concerning the facts of the claim B The settlement of the claim is delayed for 30 days in order for the insured to conduct an investigation C A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered D Requesting the insured to submit a signed, proof of loss statement, after the insured has already verbally advised the insurer of the claim
C A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace? A A U.S. citizen who is incarcerated B A U.S. citizen living abroad C A permanent resident lawfully present in the U.S. D Someone who has Medicare coverage
C A permanent resident lawfully present in the U.S.
In the event a discontinued policy is replaced by another group policy, what costs will the prior insurer be NOT liable to pay? A Extended total disability benefits B Accrued liabilities C A small percentage of basic medical expenses after the switch has been made D A & B
C A small percentage of basic medical expenses after the switch has been made
Which of the following is generally a limited health service included under an LHSO? A Hospital services B Emergency services C Dental care services D Surgical services
C Dental care services
What is the maximum fine for a violation of a cease and desist order? A $100 B $500 C $1,000 D $5,000
C. $1,000
Hospital confinement indemnity coverage may not exclude emergency confinement in what type of facility? A State operated hospital B Any type of hospital C Mental health D Federally operated hospital
D Federally operated hospital
The purpose of the Illinois Guaranty Association is to A Encourage Life insurers to write substandard business. B Allow producers to continue to solicit insurance, even if the company they represent is financially impaired. C Protect the reputation of the Insurance Department if they issue a Certificate of Authority to a company that becomes insolvent. D Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company.
D Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company.
An enrollee's HMO coverage has been canceled. Which of the following is the most likely reason? A Excessive claims B Transferring to a more dangerous occupation C Declining health D Nonpayment of premiums
D Nonpayment of premiums
Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing? A 25% B 50% C 80% D 100%
D. 100%
A producer failed to complete the required continuing education credit hours for this compliance period, and allowed his license to lapse. Within what time period after the deadline may the license be reinstated? A 30 days B 90 days C 6 months D 12 months
D. 12 months
Illinois law requires that a licensed insurance producer notify the Director, in writing, of any change in their residential address within A 60 days. B 90 days. C 10 days. D 30 days.
D. 30 days
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 A Coercion. B Twisting. C Controlled business. D Rebating.
D. Rebating
All of the following are correct regarding misrepresentation EXCEPT A The fines for misrepresentation range from $200 up to $10,000. B Misrepresentation includes the guarantee of dividends. C Misleading advertisements are considered misrepresentations. D The fines for misrepresentation range from $50 to $1,000.
D. The fines for misrepresentation range from $50 to $1,000.
According to the prohibited policy provision, all of the following are usually excluded in health insurance policies EXCEPT A Mental or emotional disorders. B Suicide. C War. D Accidents.
D. accidents
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 Misrepresentation. B Discrimination. C Nothing, unless the remarks were in writing D Defamation.
D. defamation
With which entity must a corporation register before it will be allowed to operate as an insurance agency? A National Federation of Insurers B Federal Board of Insurance C MIB D Director
D. director
According to the Recurrent Disability Provision, disability coverages cannot be separated by more than A 6 months. B 12 months. C 24 months. D 3 months.
a. 6 months
J has a health insurance policy that terminates when she is 12 weeks pregnant. Which of the following will most likely happen? A Pregnancy benefits will be extended. B J can sue the insurer to keep the policy in force. C The original policy will be terminated, but J will be offered a limited coverage policy for a reduced rate. D The original policy will terminate, but J will be eligible for another policy without providing proof of insurability.
A Pregnancy benefits will be extended.
f the Director deems it so, why may an enrollee's HMO be cancelled? A The Director can cancel or nonrenew an HMO for any rules he/she establishes. B Only failure to pay charges for coverage C Being charged with a felony D Being an illegal alien
A The Director can cancel or nonrenew an HMO for any rules he/she establishes.
If an actuary would like to sell life insurance policies, what licensure is needed? A Producer's license for life insurance B General producer's license C Broker's license D Insurer's license
A. Producer's license for life insurance
Coverage on an insured's spouse can only be terminated for which of the following reasons? A Failure to pay the premium B Declining health C Misrepresentation of the insured's medical condition on the application D Pregnancy
A. failure to pay the premium
Can a representative of an HMO mislead an enrollee by an advertisement? A Yes, as long as it is in an unintentional method B No, no HMO or its representative may permit the use of misleading advertisements. C HMOs do not have enrollees. D Yes, as long as the HMO does not mislead
B No, no HMO or its representative may permit the use of misleading advertisements.
A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy? A Pregnancy may be covered with the insurer's special approval. B Pregnancy will be covered immediately. C Pregnancy will only be covered if additional premium is paid. D Pregnancy will not be covered as a pre-existing condition.
B Pregnancy will be covered immediately.
All of the following are true regarding rebates EXCEPT A Dividends are not considered to be rebates. B Rebates are allowed if it is in the best interest of the client. C Rebates are only allowed if specifically stated in the policy. D Rebating can be anything of monetary value given as an inducement to purchase insurance.
B Rebates are allowed if it is in the best interest of the client.
An insured is applying for a policy in order to replace an existing policy; a replacement notice must be given to and signed by the applicant unless the existing coverage is A Limited coverage. B Single premium nonrenewable. C Single premium renewable. D Limited term.
B Single premium nonrenewable.
An HMO is required to supply to the insured an evidence of coverage within how many days? A Within 60 days of enrollment B Within 30 days of enrollment and again at renewal C Immediately D Within 15 days of enrollment
B Within 30 days of enrollment and again at renewal
in all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there? A 5 B 10 C 12 D 15
B. 10
Within how many days may a person who is being examined by the Director for nonfinancial business practices request a hearing after receiving the examination report? A 3 days B 10 days C 15 days D 30 days
B. 10 days
Accidental death and dismemberment benefits must be payable after an accident if the loss occurs within A 60 days. B 90 days. C 100 days. D 30 days.
B. 90 days
If an insured is receiving a transplant, which of the following must the insurer do for the live donor? A Offer a free policy B Nothing C Provide coverage D Provide monetary compensation
C. provide coverage
Which of the following is true regarding underwriting of a limited health service organization? A It issues a Certificate of Authority to the employer. B Contracts are renewed every 2 years. C Contracts are noncancellable. D It issues evidence of coverage to each enrolled person.
D It issues evidence of coverage to each enrolled person.
If an insurer terminates coverage on an insured, what will happen to the spouse's coverage? A It will also be terminated. B It will also be terminated, but the spouse can reapply without proof of insurability. C The spouse will be offered reduced benefits with another policy. D It will remain unchanged.
D It will remain unchanged.
Long-term care partnership policies concern which of the following issues? A Coverage of business partnerships upon the death of one of the partners B Financial needs of the well spouse during a year-long period of hospitalization C Spouse coverage of a long-term care enrollee D Nursing home expense payment
D Nursing home expense payment
Which of the following may NOT be included in an insurance company's advertisement? A The policies' limitations or exclusions B The name of a specific agent C An identification of a limited policy as a limited policy D That its policies are covered by a state Guaranty Association
D That its policies are covered by a state Guaranty Association
An insurer has collected $2,000 in commissions on recently issued long-term care policies. However, in the process of policy solicitation, the insurer has violated marketing regulations for long-term care insurance. What is the maximum penalty the insurer may face? A $1,000 B $2,000 C $6,000 D $10,000
D. $10,000
Which of the following situations would describe a proper handling of premiums by a producer in this state? A. A producer is using the premiums account as a general operations account. B Fiduciary account balance is less than the amount deposited due to the number of claims. C A temporary producer is not under the obligation to hold the premiums in a fiduciary capacity. D A producer who holds premiums for 15 days establishes a Premium Fund Trust Account.
D. A producer who holds premiums for 15 days establishes a Premium Fund Trust Account.
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? A Legal, provided that the information can be verified B Illegal until endorsed by the Guaranty Association C Legal, provided that the other insurers are paid royalties for the usage of their names D Illegal under any circumstances
D. Illegal under any circumstances
Which of the following is NOT true regarding a Premium Fund Trust Account? A It is a fiduciary account. B It may be a depository for service fees and late charges. C It is established to maintain all the premiums. D It could be used as a claim payment account.
D. It could be used as a claim payment account.
Which of the following correctly describes controlled business? A Anytime more than 50% of the total premiums collected by a producer comes from themselves, his or her spouse, employer, or own business B A producer obtaining a license and never selling insurance C A producer obtaining a license for the purpose of selling to the general public D A producer obtaining a license for the purpose of selling 20% to his or herself and his or her spouse, 80% to the public
A Anytime more than 50% of the total premiums collected by a producer comes from themselves, his or her spouse, employer, or own business
Which of the following services is generally included in an LHSO? A Hospital B Pharmaceutical C Surgical D Emergency
B Pharmaceutical
Which of the following would a Traditional LTC plan NOT cover? A Rehabilitative care B Health maintenance C Intensive care unit essential costs D Preventive care
C Intensive care unit essential costs
Which of the following best describes the unfair trade practice of defamation? A Issuing false advertising material B Refusing to deal with other insurers C Making derogatory oral statements about another insurer's financial condition D Assuming the name and identity of another person
C Making derogatory oral statements about another insurer's financial condition
Which of the following best describes an HMO? A Pays for preventive care and emergency costs only B Provides only supplemental insurance but at rates lower than standard insurers C Medical organization providing care assume part of the patient's health care-related risk D Provides largely unlimited access to different healthcare providers but requires high premiums
C Medical organization providing care assume part of the patient's health care-related risk
Which of the following would be an allowable reason for an insurer to cancel or non-renew a Medicare supplement policy? A Deterioration of the health of an insured B Senile dementia C Nonpayment of the premium D Excessive claims
C Nonpayment of the premium
What consequences will occur if a producer acts without a bond that is required? A The producer will be fined $350. B The producer will be required to fulfill extra CE requirements. C The producer's license may be revoked. D The producer's license will be maintained without fee.
C The producer's license may be revoked.
In the event an insurer is found guilty of committing defamation, the insurer may be subject to the maximum penalty of A $1,000. B $5,000. C $10,000. D $20,000.
C. $10,000
Producers who broker insurance must file a bond along with the application for license. The bond must be issued in favor of the people of Illinois, and must be on a continuous form and for an amount equal to 5% of the premium brokered the previous year, NOT to exceed A $10,000 B $25,000 C $50,000 D $100,000
C. $50,000
An applicant for a fire insurance producer's license must successfully complete an approved prelicensing education course of at least A. 10 hours. B. 12.5 hours. C. 20 hours. D. 40 hours.
C. 20 hours
If an insurer plans to cancel an insured's long-term care policy because the premiums are not being paid, how much notice must be given? A 1 working week B 2 working weeks C 30 days D No notice is needed.
C. 30 days
A producer conducts business ethically and receives high praise from most customers. The producer pays all of the required license renewal fees, but receives a notice that its license has been terminated. What is the most likely reason for this? A Lack of customer volume B The company did not pass its semi-annual exam. C The license expires. D Lack of continuing education
D. Lack of continuing education
If a person applies to become a life insurance producer, what is the minimum number of hours of prelicensing education that must be completed in a classroom? A 7.5 B 10 C 12.5 D 20
a. 7.5
Which provision allows a new policyholder to examine a Medicare Supplement policy and return it for a full premium refund within 30 days if not satisfied for any reason? A Free-Look Period B Guaranteed Insurability Period C Examination Period D Grace Period
a. free-look perdiod
HIPAA applies to groups of A At least 100. B More than 2, fewer than 50. C 2 or more. D At least 10.
c. 2 or more
Before each license renewal, an insurance producer must complete at least how many hours of continuing education? A 14 B 20 C 24 D 30
c. 24
How long must an insurer keep books and records of insurance transactions in the Premium Fund Trust Account? A 3 years B 5 years C 7 years D Indefinitely
c. 7 years
Compared with how it indemnifies losses resulting from accidents, a Medicare supplement policy generally indemnifies against losses resulting from sickness A Less. B More frequently. C No differently. D More.
c. no differently
If a Medicare benefit is increased, a signed statement is required from the policyholder A Only if the premium increases in response. B Under no circumstances. C In some states other than Illinois. D On all occasions.
A Only if the premium increases in response.
A notice stating an insured's unconditional right to return his or her policy within how many days for a full refund must appear prominently on the first page of a policy? A 10 B 15 C 20 D 30
A. 10
A producer whose license is revoked or whose application for a license is denied will be ineligible to reapply for any license for at least A 3 years. B 5 years. C 1 year. D 2 years.
A. 3 years
A Medicare supplement policy CANNOT deny a claim for losses incurred more than how many months from the effective date of coverage due to a pre-existing condition? A 6 B 12 C 18 D 24
A. 6
Which of the following persons is required to hold a producer license? A A person who negotiates insurance contracts B A person who creates insurance advertisements C A person who takes messages related to claims D A person who administers employee benefits
A. A person who negotiates insurance contracts
Temporary producer license can be issued to all of the following EXCEPT A A spouse of disabled licensed producer before and after the sale of the business. B Designee of a licensed producer entering active military service. C An applicant in the process of obtaining a producer license. D A court-appointed representative of a deceased licensed producer.
A. A spouse of disabled licensed producer before and after the sale of the business.
Who must inform the Director of a producer's felony conviction? A. The producer B MIB C State police D FBI
A. the producer
Which of the following may be excluded from long-term care coverage? A Alzheimer's disease B A medical condition arising out of war C Arthritis diagnosed after the policy's effective date D Senile dementia
B A medical condition arising out of war
When must a checklist delineating policy coverages be presented to a Medicare prospect? A At the time of acceptance B At the point of sale C Within 2 weeks of policy delivery D At the time of application
B At the point of sale
Regarding Medicare, which provision discloses the insurer's right to change premiums based on the insured's age? A Automatic Premium Grade B Continuation Provision C Exclusions D Premium Provision
B Continuation Provision
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT A Coverage for preventive benefits. B Individual tax deduction for premiums paid. C Right to appeal. D No lifetime dollar limits.
B Individual tax deduction for premiums paid.
A Medicare supplement policyholder becomes eligible for Medicaid. She submits notice to her Medicare insurer after 18 days, and her policy is then suspended. Her Medicaid policy is terminated a year later. Which of the following best describes what will happen to her Medicare policy? A She will have to reapply, since the Medicaid benefits were terminated and did not merely expire. B It will automatically resume on the Medicaid termination date. C It will automatically resume after the prescribed maximum 2-year period for Medicaid. D It will not be reinstated.
B It will automatically resume on the Medicaid termination date.
A group Medicare policy is replaced with another from a different insurer. An insured's policy covered a chronic heart condition. How may the new insurer handle this same condition? A Probationary period B It will not be regarded as a pre-existing condition. C Policy exclusion D Limited benefits
B It will not be regarded as a pre-existing condition.
A producer receives notice that his license has been terminated. If the producer wants to have the charges reviewed in court, within what time period must the request be made? A 15 days B 30 days C 45 days D 60 days
B. 30 days
How long must an insurer's advertisement be kept on file? A 3 years B 4 years C 5 years D Permanently
B. 4 years
A group insurance policy was solicited by a limited insurance representative. Which of the following is true according to the disclosure regulation? A Disclosure regulation does not apply to group insurance. B The name of the representative must be displayed on each certificate of insurance. C The representative's name and signature must appear on the master policy. D Disclosure regulation does not apply to limited insurance representatives.
C The representative's name and signature must appear on the master policy.
All Illinois long-care insurance policies must provide LTC coverage for at least how many consecutive months? A 3 months B 6 months C 12 months D 24 months
C. 12 months
Which of the following offers limited health care plans, in which some of the risk of cost is assumed by the plan's providers? A HMO B Limited care C LHSO D PPO
C. LHSO
If an insurer violates a state regulation for long-term care policies, what is the maximum fine the insurer may have to pay? A $5,000 B $100,000 C 2 times the amount of the commissions paid on each policy in violation D 3 times the amount of commissions paid on each policy in violation
D 3 times the amount of commissions paid on each policy in violation
The act of rebating is considered a(n) A Felony. B Infraction. C Class A misdemeanor. D Class B misdemeanor.
D Class B misdemeanor.
Regarding Medicare, which provision discloses the insurer's right to change premiums based on the insured's age? A Exclusions B Premium Provision C Automatic Premium Grade D Continuation Provision
D Continuation Provision
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A An offer of employment. B Stocks, securities, or bonds. C An offer to share in commissions generated by the sale. D Dividends from a mutual insurer.
D Dividends from a mutual insurer.
Which of the following entities keeps a file of all of an insurer's advertisements? A Director B State government C The insurer D State Insurance Board
C. The insurer
All of the following are true regarding reinstatement of a lapsed producer license EXCEPT A A licensed insurance producer who is unable to comply with license renewal procedures due to military service may request a waiver of those procedures. B A producer's license may be reinstated within 24 months without having to pass a written exam. C A producer's license may be reinstated within 12 months without having to pass a written exam. D To reinstate a lapsed license a penalty of double the unpaid renewal fee shall be required.
B. A producer's license may be reinstated within 24 months without having to pass a written exam.
If coverage is offered as a dividend, what also must be offered as an alternative option? A Reduction in probationary periods B Cash equivalent C Reduction in premium D Alternative benefit
B. Cash equivalent
Which of the following is NOT a duty of the Director of Insurance? A Issuing Certificates of Authority B Setting premium rates C Examining authorized insurers D Enforcing the Insurance Code
B. Setting premium rates
The Director issued a written notice about a hearing for a business entity. The hearing is scheduled for May 1st. The affected business entity should receive the notice no later than A 2 weeks in advance. B April 20th. C April 1st. D 3 business days before the hearing.
B. april 20th
hich of the following entities ultimately determines if an advertisement is deceptive or confusing? A Federal Advertising Board B Director C Consumer Protection Agency D State Insurance Board
B. director
Each Medicare supplement policy must be A Guaranteed renewable and noncancellable. B Guaranteed renewable. C Extended term. D Concancellable.
B. guaranteed renewable
A nonresident licensed producer moves to Illinois and wants to obtain a license in this state. Which of the following is true regarding the licensing examination? A If the producer has been licensed for over 10 years in his home state, the examination requirement will be waived. B No examination will be required. C The producer will be required to take the Illinois licensing examination. D The producer will need to take a uniform secondary licensing examination to satisfy the Illinois examination requirement.
B. no examination will be required
The Director may refuse to issue a license if a licensee's aggregate amount of premiums on controlled business exceeded the aggregate amount of premiums on all other insurance business during A Any 1 year. B The licensing period. C 2 calendar years immediately preceding the extension date of the license. D The 6-month period immediately following the issuance or extension of the license.
C. 2 calendar years immediately preceding the extension date of the license.
No long-term policy may contain provisions that are less than A Coverage offered to standard risk insureds for a given age group. B Financially favorable to the insured. C Guaranteed renewable. D 6 months in duration.
C. Guaranteed renewable
f a licensee charges any fee separate from a commission off of the insured's premium, and if the fee exceeds 10% of the premium's value, what must the licensee obtain? A Special tax form B Premium Fund Trust form C Insured's signature D Director's permission
C. Inusreds signature
Rita bought an individual limited health care plan in Illinois in which some of the risk of her health costs was assumed by her health care provider. Which of the following plans does she have? A Limited B HMO C LHSO D PPO
C. LHSO
Which type of long-term care policy is designed to prevent people from impoverishing themselves in order for Medicaid to take over their nursing home expenses? A Elderly Assistance B Extended Care C Partnership Policy D Traditional Long-Term Care
C. Partnership policy
