Section V: NC Statues and Regulations Pertinent To Life

How many days does a person have to request the reason for an adverse underwriting decision?

90 business days.

Which of the following would not have to comply with the Insurance Information and Privacy Protection Act?

The insurance regulators.

Which of the following statements is not true regarding adverse underwriting decisions?

The insurer can base an adverse underwriting decision solely on the basis of a previous adverse underwriting decision.

The Guaranty Association protects the policy holders of companies that become insolvent. The money used to bail out an insolvent company comes from?

The member insurers (companies).

At what time would an insured most likely be given information concerning his/her rights under the Insurance Information and Privacy Protection Act?

When the company makes an adverse determination.

The insurer cannot refuse to issue to charge a higher premium in which of the following circumstances?

A person who possesses the sickle cell anemia trait.

What is the purpose of the Insurance Information and Privacy Protection Act?

To establish standards for the collection, use and disclosure of information gathered in connection with insurance transaction by insurance institutions, insurance support organizations and agents.

What is the purpose of the Guaranty Association?

To protect the insured against an insurer's failure to perform is contractual duties.

The purpose of the replacement laws is?

To protect the interests of life insurance purchasers by establishing minimum standards of conduct.

In North Carolina, a minor over the age of _____ may make contracts of insurance?

15

The commissioner of insurance?

Approves insurance rates.

Appointments are renewed by the NC Department of Insurance how often?

Annually.

Failing to deliver a policy summary when required is considered?

Misrepresentation

If an individual sends in a written request concerning disputed information, how long does the insurance company have to report their finding to him/her?

30 business days.

Replacing life insurance policies are required to provide a free-look period of?

30 days.

When a company becomes aware that an agent is guilty of embezzlement, they must file with the commissioner a complete statement of the facts within?

30 days.

The commissioner of insurance is elected by the people of North Carolina for a term of?

4 years.

A replacement notice must be sent to the existing company within?

5 working days.

A Hearing Order issued by the commissioner requires advance notice of at least _____days.

10

Any change of residency within the state must be reported to the Department of Insurance within how many days?

10

The minimum age for an individual to be licensed is?

18.

A temporary license may be issued for a maximum of _____ days?

180

The continuing education (CE) requirements include _____ credit hours completed biennially (every 2 years)?

24

A Disclosure Authorization Form is valid for a maximum of _____ months:

30

What do you call someone who is licensed to sell only credit life, travel accident or dental insurance?

A limited representative

Which of the following would be covered by the Guaranty Association?

A supplemental policy, such as a hospital indemnity.

Which of the following actions could be completed without an insurance agent's license?

Accepting premiums and/or applications.

When does an agent have to inform someone that certain questions being asked are solely for marketing or research purposes?

Anytime he/she sells insurance.

If a replacement is, in fact, taking place, when must the agent have the applicant sign a Notice Regarding Replacement Form?

At the time of the application.

Under the Insurance Information and Privacy Protection Act, when must a prospect be notified that information will be obtained from nonpublic records?

At the time the information is gathered.

An agent's insurance license should?

Be carried with you.

Which of the following is not a requirement to be licensed in North Carolina?

Being a high school graduate.

When a life insurance policy is delivered, what must be given to the insured?

Buyer's Guide and Policy Summary

If an agent is allowed to represent one company and one company only, he/she is referred to as a?

Captive (exclusive) agent.

The commissioner may do all of the following except?

Change state insurance law at will for the good of the general public.

An individual hides known "material" facts, leading an insurance company to make a different underwriting decision than they would have had they known the truth. This is called?

Concealment

An attempt by an existing insurer to dissuade a policy owner from replacing an existing life insurance policy is called?

Conservation.

Which of the following would not constitute a replacement?

Converting Term insurance in the same company.

Which of the following is not true regarding the general rules of life insurance solicitation?

Cost indexes are only useful in comparing the relative costs of two or more policies from the same company.

Untrue statements about a competitor or his/her company is called?

Defamation.

An insurance company whose home office is located in North Carolina could be referred to as?

Domestic.

Instead of turning in premium collections for a given week, an agent uses the money to pay a few personal bills. This would be an example of?

Embezzlement/larceny.

The commissioner's power include all of the following except?

Enacting laws.

An insurance company whose home office is in another state would be called?

Foreign.

The Guaranty Association provides protection for all of the following except?

Fraternals

All of the following are examples of unfair practices except?

Furnishing required disclosure information.

All of the following are covered under the Guaranty Association except?

Group dental insurance.

A prearrangement (funeral) insurance policy is being purchased. All of the following must be disclosed at the time of application, and prior to the acceptance of the initial premium, except which?

How much the policy is actually costing the funeral home and their profits from the sale.

When is delivery of a policy summary not required?

If the policy has an equivalent level death benefit of $5,000 or less.

If the company issues a policy based on an incomplete application, and the insured suffers a loss after the policy goes into effect, the company?

Is obligated to pay full benefits.

If the insurance company is going to use information from the public records, such as DMV records, when must the Notice of Information Practices be provided by the prospect?

No later than the delivery of the policy.

The broker represents the?

Policyholder (buyer)

Using the existence of the Guaranty Association as an aid to the sale of insurance is?

Prohibited.

An insurance company can base rates on all of the following except?

Race.

If an agent offers to give the prospect part of the commission as an incentive to buy the policy, the agent is engaging in an illegal act known as?

Rebating.

Existing insurance that is dropped in order to purchase new insurance is known as?

Replacement

All statements in the applications and the policy are deemed to be?

Representations.

An agent could be personally liable for doing which of the following?

Representing an unauthorized company.

The Insurance Information and Privacy Act?

Sets up procedures for consumer reporting agencies.

Which of the following statements is correct regarding the use of the term "financial planner?"

The agent cannot represent him- or herself as one unless he/she is properly qualified

Who is protected under the Fair Credit Reporting Act?

The consumer

If the commissioner of insurance is unable to fulfill his/her term, then who appoints someone to take his place?

The governor.

Under the Fair Credit Reporting Act, the applicant does not have which of the following rights?

The right to sue companies for adverse decisions.

Whom does the agent represent?

The seller (company)

An agent may call him/herself a financial planner or investment advisor if?

The source of compensation is stated.

If an agent uses illegal tactics to persuade a prospect to drop existing insurance, then he is guilty of?

Twisting.

North Carolina's Life Insurance Replacement Regulation applies to?

Whole Life Insurance

Efforts by an insurance company to keep their policyholders from dropping insurance to buy from another company are called?

conservation.

An agent cannot use the terms "financial planner" or "investment advisor" unless?

he/she has obtained the proper credentials.

A contract whereby immediate cash is given in exchange for the transfer of a life insurance policy is called a?

viatical.