Insurance Regulation
A. 5 years. Records must be kept for 5 years from date of the last examination.
For the purpose of examination by the department, insurers must keep a record of all financial files for at least A. 5 years. B. 7 years. C. 3 years. D. 4 years.
B. Fiduciary responsibility. Money collected with respect to an insurance transaction must be held in a position of trust by the agent or broker.
The requirement that agents not commingle insurance monies with their own funds is known as A. Accepted accounting principal. B. Fiduciary responsibility. C. Premium accountability. D. Express authority.
C. 8am until 9pm Permissible calling hours for telemarketers are between 8am and 9pm.
According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls? A. 7am until 7pm B. 7am until 9pm C. 8am until 9pm D. 10am until 10pm
C. File the form with the Commissioner for approval All forms, including changes to previously approved forms, must be filed with the Commissioner. The Commissioner will approve or disapprove the form. If 30 days after the form is filed no action is reported, the insurer can assume that the form is approved.
If an insurer changes a form that it uses to transact insurance, it must do which of the following? A. Submit it to the Department of Insurance so it can be kept in the insurer's official records B. Nothing, as long as the insurer has a Certificate of Qualification. C. File the form with the Commissioner for approval D. File the form with the NAIC for approval
C. Defamation. A producer or broker who makes oral or written statements intended to injure another producer or insurer is guilty of the unfair trade practice of defamation.
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. Discrimination. B. Nothing, unless the remarks were in writing C. Defamation. D. Misrepresentation.
C. Failure to promptly settle a claim when liability has been clearly established After a claim has been adjusted and is found to be covered under the policy, the insurer must pay the claim upon receipt of a signed proof of loss.
Which of the following is an example of an unfair claims settlement practice? A. Making claims payments which clearly indicate under which coverage payment has been made B. Using arbitration when the insured and insurer cannot reach agreement C. Failure to promptly settle a claim when liability has been clearly established D. Denying coverage after a reasonable investigation has been conducted
C. 24 hours each licensing period Continuing education requirements are mandated by the insurance code. Producers may carry forward excess continuing education credit hours, up to a maximum of 24, from one compliance period to the next.
Which of the following is true regarding Continuing Education required for those holding a Pennsylvania producer license? A. Continuing Education is optional B. Varies from insurer to insurer C. 24 hours each licensing period D. 12 hours each annual period
D. A salaried employee who advertises and solicits insurance A person does not require an insurance producer license if he or she only advertises without intent to solicit insurance. However, once there is solicitation, a license is required.
Which of the following would be required to be licensed as an insurance producer? A. A person whose activities are limited to producing insurance advertisements B. A salaried full-time employee who furnishes information for group insurance C. An insurance company director who performs executive, administrative and managerial duties D. A salaried employee who advertises and solicits insurance
A. The appointing insurer A fee of $15 will be billed to the insurer annually for each producer appointed during the previous year.
Who is responsible for paying producer appointment fees? A. The appointing insurer B. The Commissioner's office C. The Department of Insurance D. The producer
C. 90 Nonresident producers may become resident producers if they submit a completed application within 90 days of establishing residence in Pennsylvania with proof of licensing from their prior home state.
A licensed producer moving to Pennsylvania may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state? A. 30 B. 60 C. 90 D. 180
C. The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible. Licensees who are unable to comply with continuing education requirements as a result of military service or other extenuating circumstance may submit a request to the department after the fact. Requests must include sufficient details and supporting documentation. The department will then determine if waiving the requirements is permissible.
A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license? A. Nothing; licenses of active duty military service personnel are automatically reinstated for a full licensing term. B. The licensee must complete the continuing education requirements and pay the lapse renewal fees. Requirements cannot be waived. C. The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible. D. Nothing; the license is automatically reinstated for an additional 6 months following return from military service.
C. Be responsible for at least 25% of total commissions collected by the office that he or she manages. Those applying for a manager or exclusive general agent license must meet all of the criteria listed above except a set share of sales.
A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT A. Be found sufficiently fit, competent and reliable by the Department of Insurance. B. Have paid all applicable fees. C. Be responsible for at least 25% of total commissions collected by the office that he or she manages. D. Have an authority to act on the insurer's behalf.
B. 24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. Excess hours accumulated during the 2-year period may be carried forward only to the next 2-year period. A maximum of 24 hours may be carried forward.
A producer has successfully completed 52 hours of continuing education (CE). How many hours can the producer apply to her current reporting period, and how many hours can she carry toward the next reporting period? A. Only 24 hours of the 52 earned may applied to this reporting period. B. 24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. C. 24 hours will be applied to the current reporting period, and 28 can be applied to the period immediately following. D. 26 hours will be applied to the current reporting period, and the remaining 26 can be applied to the period immediately following.
A. Biennially. A producer's license must be renewed biennially (every 2 years).
A producer's license must be renewed A. Biennially. B. Every 3 years. C. Every 5 years. D. Annually.
A. Re-examination. Producers who knowingly violate insurance laws of this state may be punished by fines, imprisonment, and/or license suspension and revocation.
All of the following are penalties a producer may face for violating the insurance laws of this state EXCEPT A. Re-examination. B. A monetary fine. C. Imprisonment. D. License revocation.
A. Imprison the licensee. In the event of violation of Pennsylvania insurance laws, the Commissioner may deny, suspend, refuse to renew, or revoke a license, issue a civil penalty not to exceed $5,000 for each violation, issue a cease and desist order, or issue any other conditions the Commissioner deems appropriate. The Commissioner does not have the power to imprison a person.
After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT A. Imprison the licensee. B. Impose a civil penalty. C. Issue a cease and desist order. D. Suspend or revoke the license.
A. Having all employees complete continuing education courses once every 2 years. When applying for insurance producer licenses, business entities must have at least 1 designated licensee, in good standing with the Department; apply for licensure in the same lines of authority held by the designated licensees; have not committed any prohibited acts; be owned, operated, and managed by persons possessing general fitness, competence, and reliability; and pay all applicable fees.
All of the following are licensing requirements for a business entity, EXCEPT A. Having all employees complete continuing education courses once every 2 years. B. Demonstrating general fitness, competence, and reliability. C. Maintaining on staff at least 1 licensed person in good standing. D. Applying for a license in the same lines of authority as held by licensed designees.
B. Renewal examination. A producer's license may be renewed biennially. In order to renew, proper renewal forms must be submitted, accompanied by payment of the required fees, and proof of the completion of continuing education. Any producer renewing his or her license who has not previously submitted fingerprints will have to do so upon renewal. Producers do not have to take any special renewal exams.
All of the following are requirements for producer license renewal EXCEPT A. Record of fingerprints. B. Renewal examination. C. Up-to-date continuing education. D. Renewal fees.
A. An agent misrepresents policy benefits to convince a policyowner to replace policies. Rebating occurs when an insured is offered something of value in order to induce the sale of an insurance product. Both the offer and acceptance of a rebate are illegal.
All of the following would be considered rebating EXCEPT A. An agent misrepresents policy benefits to convince a policyowner to replace policies. B. An agent offers the use of his lake house to a client as an inducement to buy an insurance policy from him. C. An agent offers to share his commission with a policyholder. D. An agent offers tickets to a baseball game as an inducement to buy insurance.
D. Fair Credit Reporting Act The Fair Credit Reporting Act governs what information can be collected and how the information can be used.
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? A. Consumer Privacy Act B. Conditional receipt C. Disclosure rule D. Fair Credit Reporting Act
C. Fraud According to Title 18, Sections 1033 & 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud. This includes statements made on an application for insurance, renewal of a policy, claims for payment or benefits, premiums paid, and financial condition of an insurer.
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? A. Unfair discrimination B. Errors and omissions C. Fraud D. Defamation
D. Without receiving written consent from an insurance regulatory authority. Title 18, US Code, sections 1033-1034 makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce without receiving written consent from an insurance regulatory authority.
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce A. Under any circumstances. B. Unless they have served an appropriate prison sentence. C. Without receiving written consent from a Federal Judge. D. Without receiving written consent from an insurance regulatory authority.
D. At least 4 years A company must maintain, at its home office, a complete file of every advertisement used for a period of 4 years or until the next regular examination (whichever is longer).
For how long must a company maintain a complete file of all advertisements used? A. 90 days after the advertisement is first used B. 30 days after the advertisement expires C. No more than 3 years D. At least 4 years
C. 180 days Temporary producer licenses may be granted for 180 days.
How long does a temporary producer's license last for the surviving spouse of a deceased producer? A. 90 days B. 150 days C. 180 days D. 365 days
D. 5 days Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? A. 7 days B. 10 days C. 3 days D. 5 days
A. The change must be reported to the Commissioner. If a licensee is doing business under a fictitious name other than the name appearing on the producer license, the licensee is required to notify the commissioner in writing prior to use of the fictitious name.
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? A. The change must be reported to the Commissioner. B. The change must be reported to the Federal Producer's Directory. C. The licensee must obtain a new license. D. It is illegal to transact insurance under any name other than the one listed on the license.
B. Ancestry. The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's A. Prior insurance. B. Ancestry. C. Credit history. D. Habits.
B. 30 Every insurer authorized to transact business in Pennsylvania must notify the Insurance Department of all appointments and terminations of appointments of producers in the format and within the time frame required by the Commissioner. Termination of appointment shall be provided to the department in writing on an approved form or through an approved electronic process within 30 days following the effective date of the termination.
If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? A. 10 B. 30 C. 60 D. 90
D. $5,000 for each violation. Civil penalty for each intentional act of engaging in an unfair method of competition or practice is up to $5,000 per violation (not to exceed $50,000 in any 6-month period).
Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the Department may impose a civil penalty of A. $1,000 for each violation. B. $2,000 for each violation. C. $3,000 for each violation. D. $5,000 for each violation.
B. The customer's associates, friends, and neighbors provide the report's data. Both consumer reports and investigative consumer reports provide additional information from an outside source about a customer's character and reputation, and both types of reports are used under the Fair Credit Reporting Act. The main difference is that the information for investigative consumer reports is obtained through an investigation and interviews with associates, friends and neighbors of the consumer.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? A. The customer has no knowledge of this action. B. The customer's associates, friends, and neighbors provide the report's data. C. They provide additional information from an outside source about a particular risk. D. They provide information about a customer's character and reputation.
C. A certificate of authority Any insurance company doing business in this state must obtain a certificate of authority.
In order for a foreign insurer to do business in this state, it must apply for and obtain A. A nonresident insurer license. B. NAIC approval. C. A certificate of authority. D. A solvency certificate.
D. Representative of the consumer. Insurance producers that do not have company appointments are considered a representative of the consumer. Such producers must have a written agreement with the consumer before acting on the consumer's behalf. The agreement should specify the services to be provided and disclose any fee to be paid to the producer. This type of producer was formerly referred to as a broker.
Insurance producers that do not have company appointments are considered a/an A. Managing General Agent. B. Agent. C. Producer. D. Representative of the consumer.
C. At any time The Department may conduct an exam when it sees fit.
Insurers are required to keep records. When may the Department examine these records? A. Every year B. Every 5 years C. At any time D. Never
D. Sexual orientation It would be considered unfair discrimination to ask an applicant for their sexual orientation, as well as using sexual orientation as a rating factor to determine insurability.
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? A. Age B. Gender C. Address D. Sexual orientation
A. Promptly forwarding premiums to the insurance company Fiduciary refers to a position of trust. When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity.
Pertaining to insurance, what is the definition of a fiduciary responsibility? A. Promptly forwarding premiums to the insurance company B. Helping insureds to file claims C. Performing reviews of insured's coverage D. Offering additional coverage to clients
A. 24 credit hours All insurance producers must successfully complete a minimum of 24 credit hours of CE every 2 years, prior to license renewal.
Prior to license renewal, all insurance producers must successfully complete how many hours of continuing education? A. 24 credit hours B. 15 credit hours C. 18 credit hours D. 20 credit hours
B. Regulates consumer reports. The Federal Fair Credit Reporting Act regulates consumer reports, also known as consumer investigative reports, or credit reports.
The Federal Fair Credit Reporting Act A. Prevents money laundering. B. Regulates consumer reports. C. Protects customer privacy. D. Regulates telemarketing.
A. Telemarketers. The National Do Not Call Registry was created to allow consumers the choice to not be contacted by telemarketers.
The National Do Not Call Registry was created to regulate A. Telemarketers. B. Field underwriters. C. Insurers. D. Insurance solicitors.
C. Must be informed of the source of the report. Under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of information contained in a consumer report, the consumer must be advised and provided with the name and address of the reporting agency.
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report A. Must be advised that a copy of the report is available to anyone who requests it. B. May sue the reporting agency in order to get inaccurate data corrected. C. Must be informed of the source of the report. D. Are entitled to obtain a copy of the report from the party who ordered it.
B. Committing any misdemeanor. Only the commission of misdemeanors that involve the misuse or theft of money or property belonging to others will affect the maintenance or obtaining of an insurance producer license.
The state Insurance Code identifies all of the following as prohibited acts that can cause suspension, revocation or denial of an insurance producer license EXCEPT A. Committing a felony or its equivalent. B. Committing any misdemeanor. C. Failing to pay state income taxes. D. Failing to pay child support obligations.
C. $10,000 A penalty of up to $10,000 may be leveled for each violation of the Commissioner's cease and desist order.
What is the civil penalty for violating a cease and desist order of the Commissioner? A. $1,000 B. $5,000 C. $10,000 D. $50,000
D. $2,500 An individual who willfully violates this Act enough to constitute a general pattern or business practice will be subject to a penalty of up to $2,500.
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? A. $1,000 B. $100 per violation C. Revocation of license D. $2,500
B. 180 days. A temporary license may be issued to the surviving spouse or court-appointed personal representative of a deceased producer until such time as the business is sold or transferred. A temporary license may not exceed a period of 180 days and is not transferable.
When a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. Without passing an examination, she could qualify for a temporary license for a maximum period of A. 90 days. B. 180 days. C. 1 year. D. 2 years.
C. 30 days. When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within 30 days. Time parameters for sending notice of a change of address are established by the Insurance Code.
When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within A. 7 days. B. 15 days. C. 30 days. D. 3 days.
D. Making derogatory oral statements about another insurer's financial condition Making oral or written statements directly or indirectly which are derogatory or maliciously critical of another insurer would be an example of the unfair trade practice of defamation.
Which of the following best describes the unfair trade practice of defamation? A. Assuming the name and identity of another person B. Issuing false advertising material C. Refusing to deal with other insurers D. Making derogatory oral statements about another insurer's financial condition
A. Issue policies An insurance producer sells, solicits or negotiates contracts of insurance.
Which of the following does a producer NOT have the authority to do? A. Issue policies B. Deliver policies C. Solicit insurance contracts D. Negotiate contracts of insurance
B. The Federal Trade Commission The FTC established the do-not-call list in order to protect consumers against unwanted solicitations.
Which of the following entities established the Do-Not-Call Registry? A. The Consumer Protection Agency B. The Federal Trade Commission C. The Better Business Bureau D. The NAIC
C. Consumer report Consumer reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources.
Which of the following includes information regarding a person's credit, character, reputation, and habits? A. Insurability report B. Agent's report C. Consumer report D. Consumer history
D. Making comparisons between different policies Making accurate comparisons of policies is not illegal.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? A. Stating that the insurance policy is a share of stock B. Exaggerating the benefits provided in the policy C. Stating that the competitors will arbitrarily increase their premiums each year D. Making comparisons between different policies
C. A person who negotiates insurance contracts Persons who perform clerical tasks that are not related to soliciting or negotiating insurance contracts are not required to be licensed.
Which of the following persons is required to hold a producer license? A. A person who takes messages related to claims B. A person who administers employee benefits C. A person who negotiates insurance contracts D. A person who creates insurance advertisements
D. The Fair Credit Reporting Act The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? A. Unfair Trade Practices Law B. The Guaranty Association C. Consumer Privacy Act D. The Fair Credit Reporting Act
B. Consumer report Consumer reports include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit? A. Any federal report B. Consumer report C. Inspection report D. Agent's report
B. A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. The fee charged by the licensee must be disclosed in advance in writing to the person and must be reasonable in relationship to the services provided. Insurance producers cannot charge a fee for the completion of an application for a contract of insurance.
Which of the following statements is INCORRECT? A. A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. B. A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. C. No insurance producer may charge a fee for the completion of an application for a contract of insurance. D. The fee charged by the licensee must be disclosed in advance in writing to the person and must be reasonable in relationship to the services provided.
A. Calls based from outside of the United States Calls from outside the United States are not an exception to the National Do Not Call List.
Which of the following would NOT be considered an exception to the National Do Not Call List? A. Calls based from outside of the United States B. Calls for which the consumer has given prior written permission C. Calls which are not commercial or do not include unsolicited advertisements D. Calls by or on behalf of tax-exempt nonprofit organizations