NC Life Insurance - NC Regulations for Life - Chapter Quiz

What is a license suspension period for a second offense of violating state rules regarding records or reports A. Up to 6 months B. Up to 1 year C. Up to 3 years D. Permanently

B. Up to 1 year For the first offense, a person may have his or her license suspended or revoked for between 1 and 6 months. For the second offense, a license may be suspended for 1 year.

Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlement contract? A. Viatical settlement effectuator B. Viatical settlement provider C. Viatical settlement purchaser D. Viatical settlement broker

B. Viatical settlement provider Viatical settlement provider means a person, other than a viator, that enters into or effectuates (makes effective)a viatical settlement contract.

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered A. Controlled business B. Adverse selection C. Discrimination D. Twisting

C. Discrimination Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination

Which of the following would be required in order to obtain a duplicate license due to a loss of the original one? A. A request to the appointing insurer B. A payment of a fine double the amount of the original application fee C. A written request to the Commissioner and payment of fees D. A written examination and payment of fees

C. A written request to the Commissioner and payment of fees The commissioner may issue a duplicate license for any lost, stolen or destroyed license once the licensee submits a written request and pays required fees.

Within how many months must a person be expected to die from sickness in order to be classified as "terminally ill"? A. 3 B. 6 C. 12 D. 24

D. 24 Terminally ill means having an illness or sickness that can reasonably be expected to result in death in 24 months or less

The Commissioner must examine every domestic insurers at least once every? A. Year B. 2 years C. 3 years D. 5 years

D. 5 years The commissioner has the power to examine and investigate the affairs of every insurer or agent doing business in this state in order to determine whether the insurance institution or agent has been engaged in a conduct in violation of the General Statutes. The examination must be conducted at least once every 5 years.

The commissioner report any violations of insurance laws and regulations to the A. Guaranty Association B. Governor C. NAIC D. Attorney General

D. Attorney General The Insurance Commissioner is required to report any violation of insurance law to the Attorney

When a producer was reviewing a potential customers 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 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.

All of the following describe the purpose of the North Carolina regulations governing the solicitation of life insurance except? A. Educate the buyer about policy protection by the Guaranty B. Require insurers to deliver information to applicants to improve their ability to select the most appropriate kind of life insurance C. Improve the buyer's understanding of the basic features of the policy D. Improve the ability of the buyer to evaluate the relative costs of similar life plans.

A. Educate the buyer about policy protection by the Guaranty The regulations of life insurance solicitation are intended to improve the buyer's knowledge and understanding of life insurance policies or plans.

In North Carolina, statutes, rules, and regulations that govern insurance companies, insurance transactions, and insurance agents are known as the A. Insurance Code B. State Constitution C. State Administrative Rules D. Code of Conduct

A. Insurance Code In North Carolina, the legislature has made and implemented state statutes which, collectively, are known as the Insurance Code

When transacting business in this state an insurer formed under the laws of another country is known as? A. Admitted insurer B. Alien insurer C. Domestic insurer D. Foreign insurer

B. Alien insurer Alien insurer is defined as an insurer formed under the laws of another country.

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment? A. Consumer Protection Agency B. Insurance Guaranty Association C. Insurance Consumer Protectorate D. Insurance Solvency Association

B. Insurance Guaranty Association Guaranty Associations are created to protect policy owners, insureds, and beneficiaries under life insurance policies, health insurance policies, annuity contracts, and supplemental contracts when insurers fail to perform contractual obligations due to financial impairment

which of the following is not a mandatory provision in a life insurance contract ? A. Misstatement of age or sex B. 31-day grace period C. 2-year incontestability period D. 5% minimum interest paid on cash value

D. 5% minimum interest paid on cash value North Carolina's life insurance mandatory provisions include a grace period of 31 days, incontestability after 2 years, except for nonpayment of premium, and misstatement of age and sex. A minimum interest of 5% on cash value is not a mandatory provision.

An insurance institution or agent that discloses information in violation of the information privacy and disclosure statutes of NC will be liable A. Any legal action brought by the client within 5 years B. The legal costs incurred by the client C. Only such damages as can be proven in a court of law D. Damages sustained by the individual to whom the information relates

D. Damages sustained by the individual to whom the information relates An insurance institution, agent, or insurance-support organization that discloses information in violation shall be liable for damages sustained by the individual to whom the information relates. No individual, however shall be entitled to a monetary award that exceeds the actual damages sustained by the individual as a result of a violation

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 When a company criticizes the financial situation of another company with the intention of injuring that company, it has committed an illegal trade practice called defamation