Module 12 Quiz Questions - Florida Statutes, Rules, Regulations Common to All Lines

All of the following statements are not correct regarding an unaffiliated agent, EXCEPT... A. Self-appointed B. Act as independent consultant for a fee C. Affiliated with only one insurer D. Continues to receive commission for sales made before being appointed as an unaffiliated agent

C. Affiliated with only one insurer

The following statements are all correct concerning a mutual insurer, EXCEPT... A. Issue participating policies B. Owned by their policyholders C. Issue dividends that are not taxable D. In business to make a profit for the policyholders

D. In business to make a profit for the policyholders

Which of the following statements is NOT correct concerning agent commissions and compensation? A. Health agents can charge a fee for providing counsel and advice to clients regarding health insurance plans B. Agents acting in the capacity of claims adjuster can be paid commission based on savings in the settlement of a loss C. Only licensed and appointed agents may receive compensation for soliciting and negotiating insurance D. Insurance agencies or agents may rebate a portion of a commission provided rebating rules are followed

B. Agents acting in the capacity of claims adjuster can be paid commission based on savings in the settlement of a loss

ABC Insurance Company was incorporated in Canada and does business in Florida. What type of insurer is ABC considered? A. Foreign B. Alien C. Domestic D. Fraternal

B. Alien

The state guaranty association is funded by... A. Assessments on policyholders in Florida B. Assessments on member insurers in Florida C. Assessments on residents of Florida D. Revenue from federal, state and local taxes

B. Assessments on member insurers in Florida

The department requires that books and records pertaining to premium payments be kept... A. Until out of business B. At least 3 years after payment of premium C. Minimum of 3 years from premium invoicing D. No records are required for premium payments

B. At least 3 years after payment of premium

All the following examples are considered examples of misrepresentation, EXCEPT... A. Stating the federal government will be responsible for paying a portion of an insurance policy premium B. Charging a fee for an additional product in addition to the cost of insurance applied for without consent of the applicant C. Convincing a client to surrender or lapse an insurance policy in order to make a sale and earn additional commission D. Leading a client to believe the financial condition of the competing agency is a little shaky

B. Charging a fee for an additional product in addition to the cost of insurance applied for without consent of the applicant

Who is responsible for unclaimed property in the State of Florida? A. Governor B. Chief Financial Officer C. Attorney General D. Commissioner of Financial Regulations

B. Chief Financial Officer

All the following are considered unfair trade practices in the insurance business, EXCEPT... A. Rebating premiums B. Comparison of policies showing which one has better benefits C. Testimonials that exaggerate a company's financial standings D. Disparaging policies or business practices of competitors

B. Comparison of policies showing which one has better benefits

An insurer is considered to be competent if they... A. Are doing business in Florida B. Hold a Certificate of Authority for Florida C. Issue insurance policies in Florida D. Hire Florida agents

B. Hold a Certificate of Authority for Florida

Which of the following situations is considered unethical? A. Agent reviews all aspects of the life insurance policy he just delivered to the client B. In soliciting life insurance, the agent tells the client that dividends are guaranteed to be issued annually C. The agent, in soliciting insurance, makes sure the application is complete and all client's questions have been properly answered before leaving D. Agent makes sure is recommendations meet the needs and best interests of his client

B. In soliciting life insurance, the agent tells the client that dividends are guaranteed to be issued annually

The Office of Insurance Regulation conducts investigations of any person they have reason to believe has violated a provision of the Insurance Code. Willful obstruction of an authorized investigation is considered a... A. Felony B. Misdemeanor C. Crime D. Obstruction

B. Misdemeanor

Leading a potential client to believe that dividends are guaranteed to be a specific amount is considered... A. Rebating B. Misrepresentation C. Coercion D. Defamation

B. Misrepresentation

Which department or office is responsible for the regulation of unauthorized entities? A. Department of Financial Services B. Office of Insurance Regulation C. Office of Financial Regulation D. Office of Insurance Oversight

B. Office of Insurance Regulation

If an agent has plead guilty or been convicted of a felony punishable by imprisonment for one year or more, they must notify the department in writing within... A. 20 days B. 30 days C. 45 days D. 60 days

B. 30 days

What is the function of the Florida Insurance Guaranty Association? A. To guarantee fairness in premium charges among all insurers B. Pay claims of insolvent insurance companies C. Guarantee uniformity in insurance policies and contracts in Florida D. Regulate guarantees in insurance company policies

B. Pay claims of insolvent insurance companies

A mutual insurance company is owned by... A. Stockholders B. Policyholders C. Employees D. Board of governors

B. Policyholders

Which of the following statements is NOT true concerning a stock insurer in Florida? A. Owned by stockholders B. Non-participating company C. Issue policy dividends on an annual basis D. Stockholders can also be policyholders

C. Issue policy dividends on an annual basis

All of the following examples would be considered "controlled business", EXCEPT... A. Corporation owned by licensee's uncle B. Partnership in which licensee is a partner C. Law firm in city in which licensee lives D. Corporation in which licensee owns stock

C. Law firm in city in which licensee lives

Exaggerating the benefits of an insurance product is called... A. Intimidation B. Coercion C. Misrepresentation D. Twisting

C. Misrepresentation

Which of the following statements in NOT correct regarding appointments? A. Appointments allow a licensed agent to transact insurance on behalf of the insurer B. An agent's license will expire after 48 months with no appointments C. Newly licensed agents must obtain their first appointment within 48 months of their next birth month D. Appointments renew every 24 months on licensee's birth month

C. Newly licensed agents must obtain their first appointment within 48 months of their next birth month

Which of the following is a major responsibility of the Office of Insurance Regulation? A. Investing violations of financial institutions inside Florida B. Formulating new insurance laws and rules C. Policing against unauthorized entities D. Setting insurance rates and designing insurance policy forms

C. Policing against unauthorized entities

What type of insurance company allows the policyholder to elect the governing body? A. Stock company B. Mutual company C. Admitted company D. Authorized company

B. Mutual company

The purpose of the insurance guaranty fund is... A. Provide protection for consumers of life insurance, health insurance, and annuity contracts against the failure of an insurer to perform its contractual obligations due to impairment of insolvency B. Provide financial protection for insurers against the failure of policyowners declaring insolvency and being unable to pay premium payments C. Provide a reinsurance fund for authorized insurers in Florida to protect against catastrophic losses or claims D. Provide the general public with an association to guarantee the ability to purchase life and health insurance at reasonable rates for those who are rated as substandard

A. Provide protection for consumers of life insurance, health insurance, and annuity contracts against the failure of an insurer to perform its contractual obligations due to impairment of insolvency

Insurance Agent, in trying to make a sale, exaggerated the benefits offered by the insurer. The agent is guilty of... A. Fraud B. Defamation C. Intimidation D. Misrepresentation

D. Misrepresentation

Unaffiliated insurance agents are appointed by... A. Insurance agencies B. Insurers C. Other agents D. Self-appointed

D. Self-appointed

A newly licensed insurance agent in Florida is required to obtain how many continuing education credits every two years? A. 24 hours B. 22 hours C. 20 hours D. 19 hours

A. 24 hours

Person just passed the Florida insurance state exam and received their insurance license. How long will they have to obtain an appointment? A. 48 months from licensing date B. 24 months from end of next birth month C. 48 months from date the licensing course was passed D. 24 months from date of hire by insurance agency

A. 48 months from licensing date

Keeping funds belonging to the insurer separate from the agent's personal accounts is... A. Agent's fiduciary responsibility B. Responsibility of insurer C. Accountability regulation D. Required for reinsurance

A. Agent's fiduciary responsibility

The Department of Financial Services has oversight on each of the following matters, EXCEPT... A. Approving and signing new insurance legislation into law B. Unclaimed property in dormant accounts of financial institutions C. Consumer complaints D. Licensing of agents, adjusters, and insurance agencies

A. Approving and signing new insurance legislation into law

The state guaranty association has the unique responsibility of... A. Assisting in the prevention of insurer insolvencies B. Issuing Certificates of Authority to admitted insurers in Florida C. Guaranteeing the fairness of insurance policy forms and rates D. Overseeing the approval process for premium financing arrangements

A. Assisting in the prevention of insurer insolvencies

Which of the following is considered an example of sliding? A. Charging the insured for an additional product without their consent B. Replacing an existing insurance policy with a new one C. Circulating malicious literature concerning another agent D. Pressuring a client to enter into a contract of insurance

A. Charging the insured for an additional product without their consent

An example of sliding is... A. Charging the insured for an additional product without their knowledge or consent B. Convincing a policyowner to surrender or lapse an insurance policy and purchase another policy with another insurance company C. Publishing an article disparaging another insurance agency D. Inducing a client to purchase an insurance product by refunding a portion of the premium amount

A. Charging the insured for an additional product without their knowledge or consent

Which of the following is NOT a required element of a legal and binding insurance contract? A. Competent parties B. Legal purposes C. Consideration D. Binder

A. Competent parties

Circulating or publishing any oral or written statement that is false or maliciously critical of any person is... A. Defamation B. Coercion C. Rebating D. Misrepresentation

A. Defamation

If an agent circulates malicious, untrue rumors about another agent, they are guilty of what unfair trade practice? A. Defamation B. Twisting C. Intimidation D. Boycotting

A. Defamation

An insurance company may be guilty of false advertising when they... A. Exaggerate the policy benefits in a brochure B. Use testimonials or endorsements by celebrities in television ads C. Advertise preferred rates to a specific class of policyowners D. State dividends are not a guarantee

A. Exaggerate the policy benefits in a brochure

An insurance company runs a newspaper ad stating "we always save you money" might be guilty of... A. False advertising B. Fraud C. Twisting D. Coercion

A. False advertising

Publishing statements which are untrue in fact or misleading about insurance policy benefits and provisions is considered... A. False advertising B. Intimidation C. Coercion D. Defamation

A. False advertising

XYZ Insurer has its home office in Georgia and conducts business in Florida. In Florida this insurer is known as... A. Foreign B. Domestic C. Regional D. Alien

A. Foreign

Which of the following is an example of rebating? A. Giving a client something of value not stated in the contract in exchange for their business B. Intimidation or unreasonable restraint in the business of insurance C. Telling an applicant an additional product is required by law conjunction with the purchase of insurance when it not required D. Making or publishing false or malicious statements calculated to injure a person

A. Giving a client something of value not stated in the contract in exchange for their business

An insurance company may reject a prospective insured's insurance application based on... A. Medical history B. Marital status C. Sex D. National origin

A. Medical history

Who is responsible for funding the insurance guarantee association? A. Member insurers B. Florida taxpayers C. Combined state and federal funds D. Insurance policyowners

A. Member insurers

Advertising that is deceptive is known as a form of... A. Misrepresentation B. Sliding C. Rebating D. Twisting

A. Misrepresentation

When a stock insurance company issues both participating and non-participating policies, it is considered to be doing business on a... A. Mixed plan B. Multiple plan C. Diverse plan D. Varied plan

A. Mixed plan

Insurance companies may not discriminate based on all the following, EXCEPT... A. Occupation B. Race C. Sex D. Marital status

A. Occupation

What is the purpose of the state guaranty fund? A. Provide protection for claims of insureds filed with insolvent insurance companies B. Guarantee policy rates and terms are uniform throughout Florida C. Oversee the standardization of insurance policy forms D. Provide oversight of the marketing and trade practices of the insurance industry

A. Provide protection for claims of insureds filed with insolvent insurance companies

Which of the following statements describes the rights of the Department of Financial Services to examine an agent's records? A. Statutes provide for the examination of agent's records at any time to discover unfair trade practices B. The records of agents are confidential between agent and client therefore not subject to examination C. Statutes do not give provide the department access to the records of licensed agents D. The department may examine the records of licensee only if there are consumer complaints against the agent

A. Statutes provide for the examination of agent's records at any time to discover unfair trade practices

A commercial insurer that is owned by its stockholders is known as a... A. Stock insurer B. Reciprocal insurer C. Mutual insurer D. Fraternal insurer

A. Stock insurer

Joe's misleading statements lead his client to terminate an existing insurance policy in order to sell a new policy with another insurer. Joe has committed what unfair practice? A. Twisting B. Churning C. Coercion D. Defamation

A. Twisting

A consumer filed a complaint with the department regarding ABC Insurer. How long does ABC have to respond to the department concerning this complaint? A. 14 days B. 20 days C. 24 days D. 30 days

B. 20 days

Records of premium payments must be kept for how long after payment... A. 2 years B. 3 years C. 4 years D. 5 years

B. 3 years

Which of the following statements concerning the insurance guaranty fund is NOT correct? A. Guaranty fund is financed by assessments levied against member insurers B. The guaranty fund does not provide any protection for the insolvency of foreign or alien insurers C. If a domestic insurer is determined to be impaired, the guaranty fund will guarantee, assume, or reinsure all covered policies of the impaired insurer D. Insurers are not allowed to advertise the guaranty association as part of solicitation or inducement to purchase in any form

B. The guaranty fund does not provide any protection for the insolvency of foreign or alien insurers

Attempting to induce a person to lapse or convert an insurance policy in order to purchase another insurance policy with a different company is... A. Churning B. Twisting C. Coercion D. Intimidation

B. Twisting

How long after the final disposition of administrative action taken against a licensee by a governmental agency relating to the business of insurance involving fraud, dishonesty, or breach of fiduciary duty does the licensee have to submit copies of the report to the department? A. Within 20 days B. Within 30 days C. Within 45 days D. Within 90 days

B. Within 30 days

When must an agent obtain their first appointment? A. Immediately once licensed B. Within 48 months of being licensed C. Within 24 months of licensee's birth month D. Within 24 months of being licensed

B. Within 48 months of being licensed

For good cause an extension for obtaining continuing education credits may be obtained not to exceed... A. 6 months B. 9 months C. 1 year D. 18 months

C. 1 year

The Department received a complaint regarding ABC Insurer from a consumer. How long will the insurer have to respond to the department regarding this complaint? A. 7 days B. 14 days C. 20 days D. 30 days

C. 20 days

ABC Insurance Agency has a change of ownership. Fingerprints of the new owners must be filed with the department within... A. Never B. 20 days C. 30 days D. 60 days

C. 30 days

When must a licensee notify the Department of a change of residence address? A. 14 days B. 21 days C. 30 days D. 45 days

C. 30 days

An agent is required to maintain copies of records, either electronic or photographic, for... A. 2 years B. 3 years C. 5 years D. 6 years

C. 5 years

A licensee cannot submit more than what percentage of premiums for controlled business within a 12-month period? A. 25% B. 40% C. 50% D. 65%

C. 50%

All of the following are correct regarding an Agent in Charge, EXCEPT... A. Agent in charge must be physically present at a branch location if there are activities requiring a licensed agent B. Name of the agent in charge and physical address must be filed with the department C. Agent must be licensed to transact all lines of insurance being handled at the agency location D. The department must be notified within 30 days of a change in the agent in charge

C. Agent must be licensed to transact all lines of insurance being handled at the agency location

Which of the following examples is considered rebating? A. Dividends issued by participating companies to their policyowners B. Reduction in premiums for a specific risk class C. Agent offering a client something of value in exchange for their insurance business D. Representing the policy to be shares of stock in the company

C. Agent offering a client something of value in exchange for their insurance business

Allainz is an insurer incorporated and with its home office in Germany. They conduct insurance business in Florida and are known as a(n)... A. Domestic insurer B. Unauthorized insurer C. Alien insurer D. Foreign insurer

C. Alien insurer

Which of the following statements is NOT true regarding commissions and compensation? A. Generally, a percentage of the initial and subsequent premiums B. Cannot be contingent upon savings effectuated in the adjustment, settlement, and payment of losses C. Cannot be rebated to a client under any circumstance D. Health agents are permitted to charge a fee for providing counsel or recommendation of health insurance benefits

C. Cannot be rebated to a client under any circumstance

What individual, who is part of the Financial Services Commission, is responsible for the supervision of the insurance industry in Florida? A. Governor B. Attorney General C. Chief Financial Officer D. Commissioner of Agriculture

C. Chief Financial Officer

Which of the following is NOT a true statement regarding commissions and compensation for services? A. First year commissions are generally a percentage of initial premium B. Must be licensed and appointed agents to solicit or negotiate insurance C. Commissions may be contingent upon savings in the adjustment of a settlement D. Health agents can charge a fee for providing advice or recommendations of health insurance

C. Commissions may be contingent upon savings in the adjustment of a settlement

Which of the following license types is NOT considered an agent? A. Life B. General lines C. Customer Representative D. Title

C. Customer Representative

Which of the following statements is NOT correct regarding continuing education? A. Newly licensed agent is required to complete 24 hours of continuing education credits B. Continuing education credits are required to be completed by the end of the agent's birth month C. For non-compliance with continuing education the department may terminate the agent's license D. For good cause the department may grant an extension up to one year for obtaining continuing education credits

C. For non-compliance with continuing education the department may terminate the agent's license

When does an agent's license expire? A. Never B. If agent does not complete the required continuing education on time every two years C. If appointments lapse and agent is not re-appointed within 48 months D. If agent fails to sell any insurance products for 48 months after licensing

C. If appointments lapse and agent is not re-appointed within 48 months

When does an insurance agent license expire in Florida? A. Every 2 years B. Every 5 years C. If not appointments for 48 months or more D. If no appointments for 24 months or more

C. If not appointments for 48 months or more

What is the purpose of the insurance guaranty fund? A. Guarantee premiums are paid to the insurer by the policyowner B. Protect consumers from fraudulent insurance sales C. Protect consumers of life, health and annuity contracts when insurers are unable to perform their contractual obligations due to impairment or insolvency D. Provide payment to insurers when policyowners are insolvent and unable to pay their premiums

C. Protect consumers of life, health and annuity contracts when insurers are unable to perform their contractual obligations due to impairment or insolvency

Insurers cannot refuse to insure individuals based on which factor... A. Age B. Health C. Race D. Occupation

C. Race

Sliding consists of all the following, EXCEPT... A. Telling an applicant that an additional product is required by law when it is not required B. Telling an applicant that an additional coverage included in the policy applied for, without an additional charge when there is additional charge C. Recommending an applicant take the policy cash values in an existing policy to purchase another investment D. Charging the applicant for an additional coverage in addition to the cost of insurance applied for without the consent of the applicant

C. Recommending an applicant take the policy cash values in an existing policy to purchase another investment

All the following are unfair claims practices, EXCEPT... A. Misrepresenting pertinent provisions related to the coverage B. Failing to act promptly regarding a claim C. Requesting additional information regarding the claim D. Not providing an explanation in writing as to the facts for a claim denial

C. Requesting additional information regarding the claim

Which of the following situations is NOT considered an unfair trade practice? A. Collecting premiums and depositing them into the agent's personal account for safe keeping B. Rebating a portion of the premium amount to the applicant in return for purchasing an insurance product C. Submitting as much controlled insurance business as non-controlled D. Charging the applicant, a fee for policy delivery

C. Submitting as much controlled insurance business as non-controlled

What is the prelicensing requirement to obtain a Life insurance license? A. 20 hours B. 24 hours C. 30 hours D. 40 hours

D. 40 hours

All the following are duties of the Office of Insurance Regulation, EXCEPT... A. Assessing insurer insolvency B. Issuing insurer certificates of authority C. Regulating premium financing arrangements D. Agent and adjuster licensing

D. Agent and adjuster licensing

Insurance companies can discriminate in the amount of benefits for policies... A. Between individuals of the same sex B. Between individuals of the same race C. Between individuals of the religion D. Between individuals of different class

D. Between individuals of different class

ABC Insurer was issued an insurance agency licensing in 2018. When will their license expire? A. Requires annual renewal B. After 3 years C. After 5 years D. In force until canceled, suspended, revoked or otherwise terminated

D. In force until canceled, suspended, revoked or otherwise terminated

Which of the following examples would NOT be considered misrepresentation? A. Representing to the applicant that the policy being applied for is actually a percentage of ownership in the insurance company B. Guaranteeing to an applicant the annual payment of dividends to policyowners of non-participating policies C. Allowing the applicant to believe that the federal government will guarantee the payment of premiums should the applicant encounter financial difficulties D. Knowingly making false and maliciously critical statements about an insurance competitor

D. Knowingly making false and maliciously critical statements about an insurance competitor

The Office of Financial Regulation is responsible for all the following, EXCEPT... A. Supervision of state financial institutions B. Investigate violations of any of Florida's financial institution's codes or rules C. Issue cease and desist orders D. Monitoring the financial condition of insurers

D. Monitoring the financial condition of insurers

A Health insurance agent submits an application for health insurance to the insurer. Once the insurer sees the applicant has inherited the sickle-cell trait they decide to approve the application but charge them a higher premium than other applicants in the same class and for the same coverage. This is considered an unfair method of competition known as... A. Defamation B. Boycott C. Intimidation D. Unfair discrimination

D. Unfair discrimination

Which of the following elements is not a requirement for a valid contract? A. Offer and acceptance B. Legal purposes C. Competent parties D. Waiver of premium

D. Waiver of premium