NJ Laws and Rules

What is the maximum fine for a producer violating a NJ insurance law for the first time?

$5,000 In NJ a producer who violates a NJ insurance law for the first time may be fined up to $5,000

The NJ Life and Health Guaranty Association protects life insurance death benefit claims up to

$500,000

In NJ, an applicant must apply for a producer license within what period of time from the date of passing the state exam

1 Year In NJ, an applicant must apply for a producer license within 1 year from the date of passing the state exam

After an annuity contract has been delivered by the producer, the free look period is a MINIMUM of

10 days, but not more than 30 days

Once an accident and health insurance policy has been in force for ____ years, the policy may not be contested by the insurer

2 An accident and health policy may not be contested by the insurance company after the policy has been in force for a Minimum of 2 years

A newborn is required to be covered for ____ days from the moment of birth

30

The producer must notify the Commissioner within ____ days of any felony or gross misdemeanor conviction

30

An example of rebating would be

A producer who shares commissions with a client

XYZ company is looking to replace their existing group health coverage with another plan. The replacing insurer is REQUIRED to

Accept all individuals eligible under the previous insurance plan

Health insurance advertisements that mention statistical information are required by NJ law to

Accurately convey all pertinent facts

Advertising material for a life insurance policy does NOT need to contain which of the following?

Agent's commission rate

Claims may be contestable for material misrepresentation for what period?

Always, if made an attempt to deceive Fraud misstatements in the application may be used to void the policy or deny any claim at any point

Which of these may not be used in a health insurance ad?

An insurance company trademark instead of the company's actual name The name of an insurance company shall be clearly identified in any advertisement

Advertising regulations exist to

Assure full and truthful disclosures to the public

How long must an insurance company keep records on life insurance replacement activity?

At least 5 years

Who would make the final determination on whether or not an insurance advertisement is misleading?

Banking and Insurance Commissioner In NJ, the Banking and Insurance Commissioner determines if a published insurance advertisement has the capacity or tendency to be misleading

The amount of Credit life insurance may at no time

Be greater than the amount of debt Credit life is written specifically to retire a loan when the debtor dies. Therefore the amount of insurance cannot exceed the debt

Replacement regulation is designed to protect

Beneficiaries The primary purpose of replacement regulation is to protect policyowners from misrepresentations and loss of benefits

Insurance licenses are intended to be issued for the purpose of authorizing the transaction for business with members of the general public and not primarily allowing someone to benefit from commissions on business which insures their personal interest. This is a description of which of the following?

Controlled Business More than 50% of a producers commission earned during any twelve month period must come from other than controlled business

Advertising regulations exist in order to

Demonstrate full and truthful disclosures to the public The purpose of Advertising regulations is to assure full and truthful disclosures to the public

Which of the following circumstances requires an individual to be a licensed producer?

Discussing premiums with a potential insured

Which of the following is NOT the duty of the Commissioner?

Establish Insurer rates

How often must an insurance producers license in NJ by renewed?

Every 2 years

A ____ Insurance company is one that was formed under the laws of a state other than NJ

Foreign

A debtor may receive Credit Life insurance in which of the following forms?

Group Term Life

A buyers guide MUST

Have its content approved by the Insurance commissioner

In order to be eligible for a non-resident producer license an individual must do which of the following?

Hold a comparable license in another state

An insurance company may ONLY pay a sales commission to

Individuals licensed by the state

In NJ, health insurance advertisements are required to contain the

Insurance company's name

An insurance producer is issued an ______ as evidence of authority

License

Which of the following is NOT contained in a certification of license status

License place of birth

An Agent is a

Licensed producer who has a written contract to represent an insurer

A producers secretary who solicits prospects on the telephone

Must be licensed as a producer

Which entity is responsible for regulating insurance advertising in NJ

NJ Department of Banking and Insurance

Reinstatement of an individual health insurance plan requires

Payment of premium and evidence of insurability required

A written statement describing the elements of a policy is called a

Policy Summary

Which of the following MUST contain a Statement of Policy cost and Benefit information?

Policy Summary

All Medicare supplement policies MUST contain which provision?

Pre-existing conditions may only be excluded for a maximum of 6 months

During the solicitation of a Life policy, when must an insurer must furnish a prospective buyer with a Buyer's Guide and a Policy Summary?

Prior to, or at the time of policy delivery

In NJ, consultants charging a fee for advice must be licensed as an

Producer

Johan the producer charged a fee to a sales prospect for analyzing insurance coverages. According to NJ law, a reasonable relationship must exist between the fee and the

Substance of the services performed

A producer has recently died and leaves behind a spouse. In order for the producer's insurance business to continue, the Department of Banking and Insurance may issue to the producer's spouse a

Temporary insurance license The spouse of a deceased producer may apply for a temporary license with the Department of Banking and Insurance to continue the producers insurance business

Which of the following is true concerning the proceeds of a life insurance policy?

There is protection of proceeds against the insured's and the beneficiary's creditors

Which of the following is MANDATORY coverage for all group health care service contracts

Treatment for alcoholism

Which of the following is an example of defamation?

Using derogatory statements about an insurance company's financial condition

Twisting is best defined as

Using misrepresentation to induce an insureds person to terminate an existing policy and purchase a new policy

Which of the following situations would be suitable for a temporary work authority?1

When an applicant passes a licensing examination and answers all background answers negatively

In the health insurance policy, when should the written notice of claim be given to the insurer?

Within 20 days after the occurrence or commencement of any loss covered by the policy

One of the roles of the Banking and Insurance Commissioner is to

establish continuing education requriements

All advertisements for health insurance hall make clear the identity of the

insurer

A buyers guide and policy summary

must be delivered with or prior to policy delivery

A Medicare Supplement policy can be cancelled by the insurer for

nonpayment An insurer can cancel a Medicare supplement plan after nonpayment

How long is the Contestable period for health insurance policies sold in NJ

2 Years

Carmens individual life insurance policy had recently lapsed. She may reinstate her policy within ____ years

3 Lapsed individual life insurance policy can be reinstated at any time within 3 years

Insurers are required to keep copies of Policy Summaries and Buyer's Guides on file for at least

3 years after documents are used

A branch office registration form is required to be filed at least ___ days before selling insurance out of that branch

30

A licensed producer is required to file notice of any change of address within how many days?

30

The replacement of an existing insurance policy requires notice that the owner can return the policy within ____ days for a full refund

30 The free-look period for a replacement policy is 30 days

When credit life or health is written, evidence of coverage (a policy or certificate of insurance) must be delivered to the debtor when the debt is incurred or within how many days?

30 Days

Within how many days must a producer notify the Department of Banking and Insurance of a change in address

30 days A producer must submit to the Department of Banking and Insurance written notification of a change of address within a MAXIMUM of 30 days after the change

An agent is required to keep replacement forms for at least _____ years

5 Replacement forms must be kept on file by the agent and insurer for a minimum of 5 years

The Commissioner may revoke a producers license if it is found that the commissions earned on "controlled business" during any 12 month period exceeded what percentage of the producers aggregate commissions on all business written

50%

NJ insurance law requires eligible individuals to make an election to continue health insurance benefits with a maximum of _____ days after coverage termination

60

Pierre the producer recieves a premium for an individual health insurance policy. Pierre MUST remit the premium to his insurer within ___ business days of reciept

7

In accordance with NJ law, a Producer must remit health insurance premiums to the insurer within what period?

7 business days

A health insurer must be provided with written proof of loss ____ days after the date of loss

90

An insured MUST submit a proof of loss on a health insurance claim within how many days after the date of loss?

90 Written proof for any loss must be given to the insurance company within 90 days

Which of the following are retained at the expense of an insurance buyer to give advice on insurance needed by the buyer

Brokers and consultants

The Department of Banking and Insurance can make information pertaining to a Producers license available through?

Certificate of License Status Report

Which of the following designations is regulated by the Department of Banking and Insurance?

Certified Insurance Counselor

In NJ, group health insurance may be offered to all of these groups EXCEPT

College Seminar participants

Which of the following may be used as continuation education credit?

Completing a CLU designation course Continuing education credits may be CLU designation courses

A producer is meeting with a client to determine whether an annuity would be suitable for purchase.

Financial Objectives When determining whether an annuity is suitable for a client, the producer should ask about financial objectives

Before conducting HIV related test, an insurer is REQUIRED to obtain written authorization from the

Proposed insured

Which of the following is the process by which one life insurance contract is terminated or changed substantially and another is written in its place

Replacement When one policy replaces another, the process is referred to as replacement