Law Supplement Quiz
Statements about the use of the Life Insurance Cost Index must include an explanation that indices are useful only for comparing the relative costs of A) 2 or more similar policies B) life insurance and annuities C) nonrenewable term insurance D) term, whole life, and endowment policies
A
Which of the following statements regarding accelerated life insurance benefits is NOT correct? A) They may be payable to an insured who has undergone surgery for a triple heart bypass and will have to remain on medication for the remainder of his life but who can live at home and continue to work. B) They may be payable to an insured in the advanced stages of AIDS and who is expected to live no more that 1 year. C) When accelerated benefits are paid, the insurer must send a revised benefits page for the insured policy, describing the amount of remaining (unpaid) benefits D) Requesting an acceleration, the insurer must send a written statement showing the effect the payment will have on cash value, face value accumulation account, death benefit, premium, policy loans, and liens.
A
In addition to a Buyer's Guide, what must be delivered to an applicant or insured either with or before delivery of a life insurance policy? A) Copy of the company's annual report B) Policy Summary C) Statement Regarding Dividends D) Copy of the signed application
B
The life insurance replacement regulation applies to which of the following kinds of insurance? A) Group life insurance B) Credit life insurance C) Most individual life insurance policies and annuities D) Noncovertible term life insurance that expires in 5 years or less and may not be renewed
C
A medicare supplement insurance policy application was taken on March 16. The insurer issued the policy on March 28, and it was delivered to the policyowner on April 5. Under these circumstances, when does the policy's free look period end? A) March 26 B) April 15 C) April 27 D) May 5
D
When is an insurance producer exempt from the bond requirement? A) When his license applies to only one class of insurance B) After he signs a personal bond waiver C) When he holds a nonresident's license D) After certifying to the Director that he is acting solely for an insurance company that has assumed the same responsibility that a surety would assume under a bond
D
All of the following statements about rebating are correct EXCEPT A) any company or person convicted of a rebating violation will be guilty of a class B misdemeanor B) while it is unlawful for an agent to give a rebate, it is not illegal for an insured or insurance applicant to accept a rebate C) an agent or broker who is found guilty of rebating may not receive any commission for selling a policy associated with the rebate D) Paying a bonus to policyholders out of the insurance company's surplus is not classified as rebating
B
How many years must an insurance company maintain documentation of an advertisement used in promoting a life insurance policy or annuity? A) 3 B) 4 C) 5 D) 7
B
If a licensee in Illinois has been found guilty of rebating and has received the commission for the sale giving rise to the illegal rebate, this commission A) must be turned over to the Insurance Department B) may be recovered by the Insurance company C) has been earned and is retained by the licensee D) is awarded to the purchaser of the insurance product by the Insurance Department
B
If a licensee requests a hearing after an examination report, the Director will issue a written notice scheduling the hearing. Which of the following statements about the notice is NOT correct? A) The notice will state the grounds or charges for which the license was revoked or suspended B) The notice will state the possible criminal charges that may result from the licensee's actions C) The hearing date will be scheduled for between 20 and 30 days from the date of the notice D) The notice will identify the location of the hearing
B
In life, accident, and health insurance, a misrepresentation or false warranty by an insured will NOT void the policy unless A) The policy has been in force less than 1 year B) there was intent to deceive or it materially affects acceptance of the risk by the company C) the insured has more than one policy with the same company D) the insured agrees to drop the policy
B
Premium funds being held by insurance producers or registered firms must be deposited in A) state banks B) premium fund trust account C) insurance company accounts D) the insurance producer's personal savings account or firm's account for safe keeping
B
Suppose an insurer offers coverage to a small employer in Illinois. This carrier must offer coverage to A) all small employers in Illinois B) All of the employer's eligible employees and their dependents C) certain highly compensated employees of the employer only D) certain eligible classes of employees of the employer only
B
When selling a health benefit plan to a small employer, insurers must make, as part of their solicitation and sales material, a reasonable disclosure of all of the following EXCEPT A) provisions relating to policy renewability B) information relating to the insurer's claim experience C) provisions relating to pre-existing conditions D) provisions concerning the insurer's right to change premiums
B
Which of the following statements about continuing education requirements in Illinois is NOT correct? A) The license of any person who fails to meet continuing education requirements will be automatically terminated B) Only continuing education courses offered in a classroom setting are approved for credit C) All continuing education courses must be approved by the Director before they can be offered to producers for credit D) After being licensed, insurance producers must satisfactorily complete 24 hours of approved continuing education study during each compliance period
B
Which of the following statements about nonresident agents is CORRECT? A) A nonresident agent must take the Illinois licensing examination to transact insurance in Illinois B) An individual who holds a producer license in his home state and whose state accepts Illinois agents as nonresident may apply for a nonresident license in Illinois C) A nonresident agent must file an affidavit with the Insurance Department that appoints the Insurance Director of his home state as an agent for service of process in any legal proceeding D) A nonresident agent must take the same prelicensing education that resident agents complete.
B
Which of the following statements regarding long term care insurance is CORRECT? A) All policies must contain a 31-day free look provision B) coverage must be provided for at least 12 consecutive months C) the minimum rate of interest for inflation protection is 4%, compounded annually. D) Policies may exclude coverage for pre-existing conditions that were diagnosed within the previous 12 months.
B
A Medicare supplement policy is issued on May 1. Until what date may the insurer exclude coverage of pre-existing conditions, if it chooses to use the maximum time allowed under Illinois law? A) June 1 B) August 1 C) November 1 D) May 1 of the following year
C
All of the following statements regarding a life insurance policy summary are correct EXCEPT A) they must include dividend projections through at least the 20th policy year B) they must illustrate the annual premium for the policy and each optional rider for the first 5 policy years plus other target years C) they may be combined in one document with the buyer's guide D) they must include the generic name of the policy being described
C
An accident or health insurance policy may not be rescinded, except for fraud, after it has been in effect for A) 6 months B) 1 year C) 2 years D) 4 years
C
An agent whose license is revoked or whose application for a license is denied will be ineligible to reapply for any license for how many years? A) 1 B) 2 C) 3 D) 5
C
Group health insurance policies must provide extended benefits to insureds who are disabled at the time of policy discontinuance until the earliest of any of the following occurrences EXCEPT A) the end of 12 months B) the date the maximum benefit is reached C) the end of the policy's conversion period D) the end of the total disability
C
How long does an insurance producer's license remain valid in Illinois? A) for as long as the 4-year licensing period, after which it must be renewed with another round of license testing B) As long as the appointing insurance company pays the appropriate fee each January 1 C) Perpetually, as long as the fee is paid and the education requirement is met D) Until revoked by the appointing insurer
C
In the case of a deceased licensed insurance producer, the Director may extend a temporary insurance producer license to the administrator or executor for a period not to exceed a total of how many days? A) 60 B) 90 C) 180 D) 365
C
Long-term care insurance policies sold in Illinois must include a renewability provision that makes the policy A) cancellable (insurers may cancel at any time provided a minimum of 30 days' written notice is provided by the policyowner) B) renewable at the insurer's option C) guaranteed renewable (premiums may be increased) D) noncancellable (premiums cannot be increased)
C
When life insurance is replaced, the replacing insurer must do all of the following EXCEPT A) furnish applicants with a copy of the Buyer's Guide B) keep replacement notices on file for at least 3 years C) forward the Notice Regarding Proposed Replacement of Life Insurance or Annuity to the existing insurer within 30 days of receiving the replacement application D) require that agents comply with replacement regulations
C
Which of the following statements concerning grandfather individual accident and health insurance policies is CORRECT? A) They must include a provision covering pregnancy B) There must not be territorial limitations C) They may exclude podiatry care, including flat feet, fallen arches, corns or calluses. / D) They must include a provision covering eyeglasses and hearing aids for adults.
C
An agent-solicited Medicare supplement policy must contain a printed notice that the insured, if not satisfied for any reason, has how manny days after delivery in which to return the policy for a refund? A) 7 B) 10 C) 14 D) 30
D
As established by law, the fee for an insurance producer's license is A) $10 every year B) $40 every year C) $100 every 2 years D) $180 every 2 years
D
The Director will conduct examinations of companies not less frequently than every A) 2 years B) 3 years C) 4 years D) 5 years
D
The penalties for violating the laws governing the sale of Medicare supplements in Illinois can include A) Imprisonment for up to 3 years B) fines from $100 to $1000 C) fines from $250 to $2500 D) fines from $500 to $5000
D
Under Illinois law, all of the following are defined as unfair claims practices by insurance companies EXCEPT A) failing to acknowledge promptly pertinent communications concerning claims B) delaying an investigation or claim payment by requiring a duplicate verification of facts C) compelling policyowners to go to court to recover amounts due to the by offering them substantially less than the amounts recovered through litigation D) Offering payment of approved claims within 30 days after affirming liability
D
What must be delivered with a policy that is issued on a basis other than as applied for? A) Physician's report B) Notice of insureds right to cancel C) Replacement notice D) Revised Outline of Coverage
D
Which of the following is NOT included in the general powers of the Director of Insurance? A) Making rules and regulations as necessary to implement the insurance laws B) Conducting examinations as needed to determine whether a person or company has violated any insurance law or regulation C) Instituting such actions or other lawful proceedings as deemed necessary to enforce the state's insurance laws and regulations D) Developing and writing insurance education courses
D
Which of the following must a producer present to an applicant at the time of application when a life insurance policy is to be replaced? A) Insurer's statement of warranty B) Notice concerning alternatives C) Report of the Department of insurance D) Important notice regarding replacement of life insurance
D
A producer must inform the Director of any change in his residential address within how many days of the change? A) 30 B) 60 C) 90 D) 180
A
A licensed insurance producer, limited lines producer, or temporary insurance producer who is convicted of a felony must report such conviction to the Director within how many days of the judgment's entry date? A) 14 B) 21 C) 30 D) 45
C
An example of unfair discrimination is best demonstrated by which of the following situations? A) An insurer assigns a premium rating to an applicant because of studies that suggest members of the applicant's race have a shorter-than-average life expectancy. B)An insurer refuses to issue a policy to an applicant who has been treated for drug dependency on 2 separate occasions in the previous 5 years. C) An insurer assigns a premium rating to an applicant who weighs 30 pounds more than a typical person of that age and sex D) An insurer refuses to issue a policy to an applicant whose credit history suggest an inability to financially support the policy being applied for.
A
An insurer is NOT required to present an applicant with a copy of the Notice to Applicant Regarding Replacement of Accident and Health Insurance before issuing a(n) A) accident only policies B) major medical insurance C) surgical expense policies D) basic hospital policies
A
Applicants for licensing as insurance producers must meet all of the following requirements EXCEPT A) be age 21 B) be competent, trustworthy, and of good business reputation C) complete an approved prelicensing course of study D) comply with the bond requirement
A
At the time of application, all applicants for accident and health insurance except policies issued by direct response insurer must be given a(n) A) Outline of coverage B) replacement notice C) notice of disclosure D) list of exemptions
A
Funds held by an insurance producer in a fiduciary capacity A) cannot be converted to an individual's or firm's own use B) can be used as income by the producer since they result from sales C) must be held in the producer's personal account for at least 15 days D) are deemed producer funds if they are premiums collected to pay for insurance coverage
A
A temporary insurance license allows the holder to do all of the following EXCEPT A) renew insurance business sold by the deceased B) sell new insurance business C) collect premiums payable to the estate D) perform tasks incidental to insurance business in force at the time of death
B
All of the following individuals are required to become licensed or registered in order to practice in the insurance business in Illinois EXCEPT A) nonresident producers who hold the CLU designation B) salaried employees in the office of a licensed producer whose compensation does not vary by amount of premiums received C) registered firms D) employees in the office of a licensed producer whose role is to settle claims
B
Any insurance producer who violates, aids, or abets any violation of an order issued by the head of the Insurance Department may have his license suspended or revoke and be fined a maximum penalty of A) $1,000 B) $5,000 C) $10,000 D) $20,000
B
The Illinois Guaranty Fund was established to protect all of the following EXCEPT A) policyowners B) insurance companies C) annuitants D) beneficiaries
B
The Illinois insurance producer exam consists of two parts, which must be passed within ____ days of each other. A) 60 days B) 90 days C) 120 days D) 80 days
B
What is the daily fine that may be assessed against a person who disobeys a cease and desist order of the Director? A) $50 B) $100 C) $200 D) $500
B
When a Medicare supplement policyholder applies for an is entitled to Medicaid benefits, Medicare supplement policies A) provide enhanced benefits B) must provide for a suspension of benefits and premiums for up to 24 months C) are automatically cancelled D) increase dramatically in premium cost
B
Regarding company claims practices, which of the following statements is NOT correct? A) Reasonable promptness in settling claims is defined as a maximum of 15 working days from the time a communication is received from a claimant or insured B) Companies may not influence an insured to settle a disability claim on a lump-sum basis C) A company may require an insured to submit to a polygraph test as a condition for paying a claim D) If a claim remains unresolved for 30 working days from the date it is filed, the company must provide the claimant with a reasonable written explanation for the delay
C