State Law questions

A licensee must report any administrative action taken against them to the Department of Financial Services within ___ days after disposition? a. 15 b. 20 c. 30 d. 60

. C A licensee must report any administrative action taken against them to the DFS within 30 days after disposition.

An insurance license may be suspended for all of the following reasons, except: a. Cheating on the licensing exam b. Failure to comply with civil, criminal, or administrative action taken by the child support enforcement program c. Violating the code of ethics as a life agent d. Failure to meet the continuing education requirements before expiration

. D Failure to meet the continuing education requirements is not grounds for suspension, especially prior to the expiration date.

An agent licensed within the past 5 years must complete ______ hours of continuing education every ______ year(s). a. 20/1 b. 24/2 c. 30/2 d. 30/3

B An agent licensed within the past 5 years must complete 24 hours of continuing education every 2 years.

A licensee must keep books, accounts, and records pertaining to premium payment for at least how many years after payment? a. 3 b. 4 c. 5 d. 6

A A licensee must preserve books, accounts, and records pertaining to premium payment for at least 3 years after payment.

As part of the code of ethics, all life insurance agents have a common obligation to work together to achieve all of the following, except: a. Presenting the facts to persuade a client's decision to select the policy with the largest commission b. Serve the best interests of the public c. Always place the policyholder's interests first d. Observe the laws governing life insurance

A All agents have a common obligation to work together serving the best interests of the public, understanding and observing the laws governing life insurance, presenting the facts essential to a client's decision accurately and completely, by being fair in all relations with colleagues and competitors and always placing the policyholder's interests first.

Which of the following is considered an agent? a. Insurance producer b. Public adjuster c. Customer service representative d. Limited customer representative

A An agent includes a general lines agent, life agent, health agent, title agent. An insurance producer is considered an agent, but NOT a customer service representative, limited customer representative, or service representative.

An insurer must file written notice of termination of an appointment to the Department within how many days after terminating the appointment? a. 30 b. 45 c. 60 d. 90

A An insurer may terminate an appointment at any time by giving 60 days' advance notice to the appointee and must file a written notice of termination of the appointment to the Department within 30 days after the termination.

Before the replacement of an annuity contract, the agent must provide information to the consumer regarding the existing contract and the recommended annuity contract to determine suitability, which is included on which of the following forms? a. Disclosure and Comparison of Annuity Contracts b. Annuity Suitability Questionnaire c. Notice Regarding Replacement d. Buyer's Guide

A Before executing a replacement of an annuity contract to a consumer, the agent or insurer must provide contract comparison information to the consumer by using form DFS-H1-1981, known as the Disclosure and Comparison of Annuity Contracts

A Certificate of Authority is issued to an insurer by the: a. CFO b. Office of Insurance Regulation c. Department of Financial Services d. Office of Financial Regulation

A Certificate of Authority authorizes an insurer to transact business in Florida and is issued by the Office of Insurance Regulation.

As part of the qualification process to become licensed in Florida, an applicant must do all of the following, except: a. Submit fingerprints to the Department of Financial Services b. Pass a written examination within 1 year of submitting an application for license c. Secure a detailed credit and character report made by an independent reporting service d. Successfully complete any required prelicensing coursework within 4 years immediately preceding the date of application

A Fingerprints must be submitted to the Department of Enforcement and the FBI, not the DFS.

Upon the death of the insured, payment of proceeds of a lump sum will be made: a. Upon receipt of proof of death and surrender of the policy b. The actual date of death listed on the death certificate c. The date any investigations by the insurance company are complete d. A date determined by a probate judge

A Payment of proceeds are made upon the receipt of proof of death and surrender of the policy.

Which of the following is not an Unfair Claims Settlement Practice? a. Settling a claim based on an application altered with the insured's consent b. Denying a claim without a reasonable investigation c. Making a misrepresentation regarding facts or policy provisions relating to coverage d. Failing to acknowledge and act promptly to communications regarding a claim

A Settling a claim based on an application altered WITH the insured's consent is not an unfair claim settlement practice. It is an unfair practice if done without the insured's consent.

Which of the following actions is the responsibility of the Office of Insurance Regulation? a. Monitoring the financial condition of all regulated insurance entities b. Licensing of insurance agents c. Overseeing banking regulations d. Providing consumer education by answering general insurance questions

A The OIR is responsible for regulating insurance companies, including monitoring the financial condition of regulated insurance entities. The DFS regulates licensing of insurance agents; the Division of Consumer Services is part of the DFS and provides consumer education; the Office of Financial Regulation oversees banking regulations.

How often may the Office of Financial Regulation make investigations? a. As often as necessary b. Every 2 years c. Every 3 years d. Every 5 years

A The Office of Financial Regulation make investigations as often as necessary to determine if a person has violated, or is about to violate, any provision of the financial institutions codes or rules.

The agent's duties regarding replacement of an existing policy include which of the following? a. Require the applicant sign a statement if the insurance will replace an existing nonconvertible and nonrenewable term policy which will expire in 5 years or less b. The agent must give the applicant copies of the Notice Regarding Replacement and all sales proposals used during the presentation c. Send a Comparative Information Form to the applicant within 5 days of the date of application d. Notify the existing insurer of the planned replacement

B A nonconvertible and nonrenewable term policy which will expire in 5 years or less is not considered replacement and it is the replacing insurer's responsibility to send a Comparative Information Form and to notify the existing insurer of the planned replacement.

Which of the following is not a requirement to obtain an insurance license in Florida? a. File a written application made under oath and signed by the applicant b. Successfully complete a minimum of 40 hours of coursework including 3 hours of ethics and instruction on unauthorized entities for each area of insurance an applicant is seeking a license for c. Include a statement on the application indicating the method used to meet any prelicensing requirements d. Pay all applicable nonrefundable fees in advance

B An applicant must complete at least 40 hours of coursework for one area of insurance (such as life-only or health-only) and 60 hours for multiple areas of insurance (life and health combined).

All of the following are examples of insurance transaction, except: a. Soliciting an interested party to purchase an insurance policy b. Creating advertising materials on behalf of the insurance company c. Taking an insurance application and collecting premium from an applicant d. Delivering an insurance contract to a policyowner

B Insurance transaction includes soliciting, negotiating, and effectuating contracts of insurance, including activities necessary to effectuate contracts. Creating advertising materials on behalf of the insurer is not considered an insurance transaction

Paying any valuable consideration or inducement to a client that is not specified in the contract is known as: a. Misrepresentation b. Rebating c. Churning d. Coercion

B It is considered unlawful rebating to pay, allow, or give an unlawful rebate of premiums payable on the contract, any special favor or benefits, or any valuable consideration or inducement that is not specified in the contract.

For purposes of administration of the Life and Health Guaranty Association, all of the following accounts must be maintained, except: a. Life insurance account b. Cash value account c. Health insurance account d. Annuities account

B The Association must maintain 3 accounts: life insurance, health insurance, and annuities. The cash value of a policy may be covered, but those funds will be held in the life insurance account

The Department of Financial Services has the authority to perform all of the following duties, except: a. Supervise agent licensing b. Determine solvency of an insurer c. Conduct an investigation regarding alleged improper conduct of a person regulated by the Department d. Require a licensing applicant's fingerprints to be checked by local and federal law enforcement agencies

B The DFS has the authority to investigate and regulate licensee's and applicants, but does not have the authority to determine insurer solvency, only the Office of Insurance Regulation has that authority.

Which state entity oversees the regulation of securities representatives and mortgage brokers within the state? a. State legislature b. Office of Financial Regulation c. Office of Insurance Regulation d. Department of Financial Services Division

B The Office of Financial Regulation is responsible for overseeing the regulation of banking, mortgage, and securities representatives in this state.

Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following? a. Sliding b. Unfair discrimination c. Fictitious grouping d. Defamation

B Unfair discrimination is knowingly making or permitting individuals of the same actuarially supportable class and equal expectation of life to be charged different rates, paid different dividends or have different terms/conditions regarding any life insurance contract.

If the Division of Consumer Services requests information from a licensee to address allegations raised from a complaint, an administrative penalty may result if the licensee fails to respond to the request in writing within ___ days of receipt. a. 10 b. 20 c. 60 d. 90

B Upon receiving a consumer complaint, the Division may request information from a person licensed or issued a certificate of authority to address the issues and allegations raised in the complaint. Failure to respond to the request in writing within 20 days of receipt may result in an administrative penalty.

A change of address must be reported to the DFS within how many days after the change? a. 15 b. 20 c. 30 d. 60

C A new residence address, principal business street address, mailing address, contact telephone numbers, including a business telephone number, or e-mail address must be reported to the Department of Financial Services within 30 days after the change

An agent who induces a client to use the cash value of an existing policy to buy an unnecessary additional policy for the purpose of generating commission is guilty of: a. Twisting b. Rebating c. Churning d. Fraud

C Churning is the practice whereby policy values, such as cash value, in an existing life insurance policy, annuity contract, and/or any riders, are used to purchase another insurance policy or annuity contract with that same insurer for the purpose of earning additional premiums, fees, commissions, or other compensation.

The Market Investigation division must examine domestic insurers at least once every: a. 2 years b. 3 years c. 5 years d. 7 years

C Each domestic insurer must be examined at least once every 5 years, but the market conduct division may examine an insurer at any time if it's in the public's best interest

All of the following statements regarding group life insurance issued in Florida are correct, except: a. There is no minimum number of lives that must be covered under a group life insurance policy b. Dependent coverage may not exceed the amount of coverage provided to the insured member or employee c. If a person insured under a policy dies during the 31-day conversion period before any individual policy has become effective, there is no death benefit payable d. Each insured must receive an individual certificate containing the group number

C If a person insured under a policy dies during the 31-day conversion period before any such individual policy has become effective, the amount of life insurance the person would have been entitled to under the individual policy will be payable as a claim under the group policy

Which of the following statements regarding unlicensed entities is NOT correct? a. A person acting as an agent for an unlicensed entity will be personally liable for any unpaid claims b. All transactions must be completed by a licensed and appointed agent in Florida c. Mail order solicitations are permitted through unlicensed entities d. Unlicensed entities are nonadmitted insurers and are not regulated by the state of Florida

C It is prohibited for unlicensed entities to solicit mail order insurance (completed without personal agents) in Florida. All transactions must be completed by a licensed and appointed agent in Florida

Charging an applicant for a specific product in addition to the cost of the insurance coverage applied for without informed consent of the applicant is called: a. Twisting b. Controlled business c. Sliding d. Defamation

C Sliding is the act of representing that a specific coverage is required by law in conjunction with the purchase of a product, which it is not, freely included in the policy when in fact there is a charge, and charging an applicant for a product in addition to the cost of the insurance applied for without informed consent of the applicant

Which state entity is responsible for issuing a Certificate of Authority for an insurance company? a. State legislature b. State judicial system c. Office of Insurance Regulation d. Department of Financial Services Division

C The Commissioner of the Office of Insurance Regulation also regulates insurance licensing, rates, policy forms, market conduct, claims, and company solvency.

An insurer must provide the life insurance Buyer's Guide and Policy Summary to every applicant: a. 14 days after the policy is delivered b. When the application is signed c. Prior to accepting the initial premium d. Within 60 days after the policy is issued

C The insurer will provide the life insurance buyer's guide and policy summary to every applicant prior to accepting the initial premium. In the case of an unconditional refund offer, it must be delivered with the policy or prior to policy delivery.

The replacing insurance company must do all of the following regarding a replacement of an existing policy, except: a. Send the applicant a completed Comparative Information Form within 5 days after the application is signed when requested b. Maintain copies of the notice, comparative information form, all sales proposals, and a replacement register for at least 3 years c. Send the existing insurer a copy of the Notice Regarding Replacement of Life Insurance within 10 days after policy delivery d. Provide a copy of the buyer's guide to the applicant prior to accepting the initial or at or prior to the policy delivery if the policy has at least a 10-day unconditional refund provision

C The replacing insurer must send the Notice to the existing insurer immediately upon receipt at its home or regional office

The insurer maintain a complete file of advertisements for a period of at least: a. 18 months b. 2 years c. 3 years d. 4 years

D All advertisements must be maintained in the file at the insurer's home office for a period of 4 years or until the filing of the next regular report or examination of the insurer, whichever is longer

New rates and forms must be filed and approved by the Office of Insurance Regulation: a. Within 30 days after delivery of the policy form b. Only if considered unfair or discriminatory c. After a subpoena is issued by the Circuit Court d. Prior to use

D All new rates and forms must be filed with and approved by the Office of Insurance Regulation prior to use. The OIR has 30 days to approve or disapprove

A licensee who is self-appointed and is in the business of analyzing policies, providing insurance advice or making specific recommendations of insurance policies for a fee is a(n): a. Agent b. Unlicensed agent c. Customer Service Representative d. Unaffiliated agent

D An unaffiliated agent is self-appointed and practices as an independent contractor who charges a fee to analyze insurance policies, provide insurance advice or counseling, and make recommendations of insurance policies. A written contract is required.

Which of the following statements is NOT correct about insurance company appointments? a. To transact insurance on behalf of an insurer, an agent must be licensed by the Department and appointed by an insurer or appointing entity b. An agent must be appointed for all lines of insurance to be transacted c. Appointments are valid for 24 months if effective in a licensee's birth month d. Appointments are subject to renewal every 48 months

D Appointments are valid for 24 months (up to 36 if effective in any month other than birth month) and renew every 24 months.

An agent may share a commission or any valuable consideration with: a. An unaffiliated agent who charges a fee to make recommendations b. A policyowner who provides referrals c. A person who is licensed and appointed by the same insurer in a different line of business d. A person who is licensed and appointed in the same line of business

D Commissions may be shared with a person who is licensed and appointed in the same line of business.

Which of the following statements regarding conversion rights of a group policy is correct? a. The individual is required to provide evidence of insurability b. All supplementary benefits provided under the group policy will remain on the individual policy c. The individual policy will not cover dependents d. The amount of coverage on the individual policy cannot exceed the amount of life insurance provided under the ceased group policy

D Group conversion will cover the individual and dependents without evidence of insurability, but will not include any supplementary benefits covered under the group policy

All of the following are agent requirements when soliciting life insurance to an applicant, except: a. Informing the applicant that he/she is acting as a life insurance agent b. Stating that policy dividends are not guaranteed c. Informing the prospective purchaser of the full name of the insurance company which the agent is representing d. Representing him/herself as an investment advisor in order to gain the applicant's trust

D Terms such as "financial planner," "investment adviser," "financial consultant," or "financial counseling" must not be used to imply that the insurance agent is generally engaged in an advisory business unless such is actually the case

Which of the following is correct regarding the Life and Health Insurance Guaranty Association: a. The purpose of the Association is to provide insurance coverage to those who are unable to obtain insurance elsewhere b. Membership to the Association is optional for insurers authorized to conduct business in Florida c. The Association is funded by the federal government d. A person cannot use the existence of the Association in an advertisement in order to sell, solicit or induce the purchase of any insurance covered by the Association

D The purpose of the Association is to protect the insured public against the failure of an insurer to perform its contractual obligations due to impairment or insolvency; membership is mandatory for insurers authorized in Florida; and the Association is funded through member dues, or assessment fees, used to carry out the duties of the Association

All of the following statements regarding life insurance policy provisions in Florida are correct, except: a. Under the beneficiary designation provision, the agent cannot be named as beneficiary unless insurable interest exists b. The grace period for a person 64 years of age or older is 51 days c. The unconditional refund period for life insurance policies must be at least 14 days d. The unconditional refund period for variable annuities must be at least 31 days

D The unconditional refund period for all annuities must be at least 21 days.