Marketplace Part 2 (Section 3 Quiz)

All the following are true concerning conservation of a company except

$100,000 is the most that a guaranteed company will pay for a life claim (Hint in life insurance, perhaps not even that much, by limiting exposure to no more than $250,000 in death benefits)

An agent who wishes to sell certified Partnership LTC policies in California must complete at least how many hours of special training before marketing any partnership-approved policies?

16 (Hint An agent who wishes to sell certified partnership LTC policies in California must complete at least 16 hours of special training before marketing any partnership approved policies. This includes eight hours on California long-term care insurance and eight hours specifically dedicated to the California Partnership Program)

If someone has a Life Agent Combo and a Property/Casualty license, then how many CE hours would be required in the current license term?

24 hours (Hint Since this person has a Life and P/C license then they would be required to complete 24 hours per license term)

How many hours of continuing education are required per renewal for a life-only agent?

24 hours, 3 of the hours must be in ethics (Hint Life only Agents, A&H only Agents, and Life and A&H Agents must complete 24 hours of CE of which must include 3 hours of Ethics. Previously 4 hours of ethics were required)

An MGA acts as an agent and produces and underwrites gross direct written premium equal to or more than ___ % of the policyholder surplus as reported in the insurers last annual statement

5% (Hint An MGA acts as an agent and produces and underwrites gross direct written premium equal to or more than 5% of the policyholder surplus as reported in the insurers last annual statement)

Life only agents selling annuities are required to complete an ______ course before submitting their first application

8 hour (Hint Though all require a training course before submitting the first application, only Life Agents can sell annuities and are required to complete an 8 hour annuities course)

When a company, an organization or a group of affiliated organizations form a subsidiary for the purpose of having the subsidiary provide all or part of the insurance for the parent company or companies, this subsidiary is known as a:

A captive insurer (Hint This is the definition of a captive insurer)

All the following are true for continuing education requirements except

A life agent needs 48 hours of continuing education credits for the first and second licensing periods (Hint A life agent would be required to complete 24 hours of CE's per license term)

Any person to whom the commissioner has issued a seizure order and who refuses to deliver any books, records, or assets of an insurer faces:

A misdemeanor punishable by a fine up to $1,000, a year in jail or both (Hint The fine is up to $1,000 and/or 1 year imprisonment for violation of summary seizure)

Which of the following statements is true?

A person with either a Life only or A&H only, or both a Life and A&H license must complete 24 hours of CE, which includes 3 hours of Ethics prior to license renewal)

Conservation applies to

All of the above (Hint All of these refer to Conservation by the Commissioner for an insurer) Allows for rehabilitation such as reorganization, consolidation, conversion, merger, or any other action the Commissioner feels is required to return the insurer to financial stability, It refers to taking over and managing the affairs of a financially troubled insurer, Any insurer with a Certificate of Authority

In oder to qualify as a fraternal benefit society, an organization must have

All of the above (Hint Fraternal's are known for their benevolent and charitable activities, fraternal societies are nonprofit organizations that operate for the benefit of their membership. To retain their tax exempt status, fraternals must have a lodge system that include ritualistic work and operate under a representative (elected form of government))

All of the following are true concerning code and ethics except

Be truthful and inaccurate when you explain your services (Hint Be accurate about your services)

When the insurer reinsurance a contract they are referred to as the

Both of these terms (Hint An insurer that transfers a portion or all of the risk to another insurer is known as the primary or ceding insurer)

The difference between the chronic illness rider and long-term care insurance is

Both required the insured to incur long-term care expenses (Hint Benefits form a chronic illness rider are based on the insured's chronic illness condition not LTC expenses. There is no requirement for the insured to incur LTC expense or living or confinement requirements to receive benefits)

An A&H agent is entitled to transact insurance coverage for sickness, bodily injury, or accidental health and may include benefits for disability income and:

Compete 3 hours of CE in ethics and code which will be included in the 24 hours of CE required and pay a fee (Hint 3 hours of ethics and code CE must be completed every renewal period (2 years), however these are not additional hours. These hours are included in the 24 hours required and a renewal fee must be paid)

All of the following are not considered an administrator except

Contracted by an insurance company (Hint A written agreement with the insurer listing their responsibilities and compensation arrangements with the insurer)

Which of the following is not a principal part of the Gramm-Leach-Bliley Act?

Do not call provisions (Hint The GLB Act includes provisions to protect consumers personal financial information held by financial institutions. There are three principal parts to the privacy requirements The Financial Privacy Rule, Safeguards Rule and Pretexting provisions)

Which statement is false concerning interpretation of policy provisions?

Executive branch is headed by the insurance commissioner which enacts the laws (Hint The executive branch does not enact the laws but interprets them)

An individual who handles premium payments in a trust capacity is considered to be

Fiduciary (Hint When a licensee is handling premium payments they are acting in the capacity of a fiduciary)

The purpose of insurance regulations is to protect the public by all of the following except

Interpreting policy provisions (Hint Interpretation of policy provision is not a primary objective of insurance regulation)

Which is false concerning the accelerated death benefit for chronic illness rider?

It requires an A&H license to sell (Hint The accelerated death benefit for chronic illness rider requires a life agent license to sell)

A licensed producer who appoints and supervises other producers, earns a commission override on the business of those producers and has overall responsibility for producers in a given territory is considered an (a)

Managing general agent (Hint Managing General Agents (GMA) are licensees that have a written agreement with one or more insurers to manage the sale of their products in a given territory. Managing General Agents for test purpose can do anything an insurer can do. They can even negotiate reinsurance on behalf of an insurer)

What entity has been actively involved in helping insurance remain under the jurisdiction of state government by bringing uniformity through model laws for the insurance industry?

NAIC (Hint The National Association of Insurance Commissioners develops model laws, standards and guidelines for the insurance industry to protect the interest of policyowners and preserve state regulation.)

All of the following are true concerning altering disability income policies applications except

Never (Hint Alternations cannot be made to any written application for any disability policy by any person other than the applicant unless written consent is given)

Which of the following would require a Certificate of Registration to act as an Administrator in connect with collection of premiums and settling claims for life, health, or annuity coverages?

None of the above (Hint None of these would required a Certificate of Administration to act as an administrator) A union, A life Agent, A creditor on behalf of its debtors

A managing general agent with a life agent license and a written management agreement with one or more insurers is prohibited from doing which of the following?

None of these are excluded from the powers and authority given to the managing general agent (Hint A managing general agent CAN do all of these)

______ company is an unincorporated company that consists of subscribers managed by an attorney

Reciprocal Insurance (Hint A reciprocal company is an unincorporated company that consists of subscribers managed by an attorney. Participants in this pool are called subscribers or members and they share profits and losses in the same proportion as the amount of insurance purchased from the exchange by the members)

An analyst may not receive any fee not based upon a written agreement signed by the party to be charged. This agreement must include all the following except

Statement of services to be performed to which no fee will be charged (The agreement must outline the services to be performed for which a fee is to be charged and the amount of the fee)

All of the following describe an MGA EXCEPT

The legal entity which acts on behalf of, or in place of, it's principal (Hint In an agency there is a producer which is the legal entity which acts on behalf of, or in place of, it's principal)

The accelerated death benefit for chronic illness rider must disclose all of the following except

The policy or certificate is a Medicare supplement (Hint The chronic illness rider is not a Medicare supplement (policy or certificate))

A surplus lines broker is required to obtain every applicants signature on a statement that provides all of the following information except

The policy was denied by insurers licensed by the State of California (Hint The statement that must be signed is actually a warning disclosure that is in 16 pointe bold type print that includes a statement that the policy is being issued through a nonadmitted insurer, not that they were denied by a licensed (admitted) insurer in California

Aiding, assisting, or advertising for a nonadmitted is:

These statements are all correct (Hint All these statements are true) Illegal unless licensed as a surplus lines broker, is a misdemeanor, Subject to fine of $500,000 plus $100.00 for every month the licensee continues to do so

A Property and Casualty Agent is required to continue their education by completing

a total of 24 hours per license term of continuing education courses (Hint Property and Casualty agents are required to complete 24 hours of continuing education each license term)

"Paid in capital" applies to all companies except

foreign mutual (Hint "Paid-in capital" or "capital paid-in" means In the case of all other insurers except a foreign mutual insurer

All the following are examples of a pretext interview except

gathering information for underwriting (Hint Legal)

All the following are true concerning termination of license except

licensee can give up their license with a 90 day notice (Hint A licensee can send a notice of resignation and return his/her license to the Commissioner and give up his/her insurance license at any time)

All the following are fiduciary duties except

making sure your accounting is done proper in the same account, so you know what is your money and what is the company's money (Hint Never mix your money with company money)

All of the following are true except

marketing division handles selling products and the expenses of the company (Hint The actuaries must also account for the ordinary expenses of doing business)

All the following are true concerning penalties of unfair trade practices except

must be intentional (Hint can be unintentional)

All the following are true concerning ethics with senior citizens except

must give an additional 30 days more for a free look period than people who are not senior citizens (Hint 30 total days not in addition to the normal 10 days)

All the following statements are true except

nonadmitted insurers cannot write in California (Hint unless a surplus lines broker is used)

All of the following are true concerning the code except

the code is the complete guide to ethical behavior (Hint It is the guide but not the complete guide)