Texas Statutes and Rules Common to Life and Health Insurance
Within how many years must an agent renew an insurance license?
2
If an agent suspects that insurance fraud is being committed, within how many days must the agent notify the Insurance Fraud Unit of the Department of Insurance?
30 days
No one whose license has been revoked can receive another license in Texas for
5 years
Which of the following is NOT a possible penalty for a violation of the Insurance Code?
A fine up to $100,000
What is a foreign insurer?
An insurer with a home office in another state
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
Authorized insurer
When a producer was reviewing a potential customer's 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
Defamation
The owner of a small restaurant submits a claim to his insurer after a loss due to fire. The insurer's investigation finds a police report that shows that a fire may have been of suspicious origin. The insurer can do which of the following?
Delay an acceptance or rejection decision
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends or mutual funds
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertising
Which of the following is the closest term to an authorized insurer?
admitted
All of the following are unfair claims settlement practices EXCEPT
Suggest negotiations in settling the claim
Which members of a corporation or partnership are required to obtain an individual insurance agent's license in order for the association to be licensed?
At least one officer or partner and any other person acting as an agent
All of the following are considered unfair or deceptive acts in connection with the sale of insurance EXCEPT
Attempting to settle a claim in which liability is clear
All of the following statements apply to temporary licenses EXCEPT
They may be renewed
Which of the following persons is required to hold a producer license?
A person who negotiates insurance contracts
All of the following are requirements for an individual to be licensed EXCEPT
Provide a financial statement
How many hours of continuing education can be carried over from one licensing period to the next?
0
A temporary license holder can receive a commission from a sale made to all of the following EXCEPT
The license sister-in-law
What is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation on rebating?
$25
The Insurance Commissioner may examine the affairs of any insurer as often as necessary, but not less frequently than once every
5 years
When transacting business in this state an insurer formed under the laws of another country is known as a/an
Alien
All of the following would be considered rebating EXCEPT
An agent misrepresents policy benefits to convince a policy to buy insurance
An individual licensed as an agent must notify the Texas Department of Insurance, on a monthly basis, of all of the following EXCEPT
Any change in business name
In Texas, the state's continuing education requirement
Consists of containing 24 hours of CE each biennium
Which of the following would NOT be considered rebating?
Giving a client a $25 dollar pen with the insurers logo during the insurance application process
An applicant for a license in Texas must include a statement with his application that provides information about all the following EXCEPT
Intending to apply for another license
A license may NOT be denied, suspended, or revoked if the licensee
Submits an unsigned insurance policy application
An agent licensed in Texas is moving to Kansas. Which of the following applies?
The agent has 30 days to notify the department of Insurance of the new address
The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of an agent's license EXCEPT
The applicant has been shown to be a poor personal credit risk
An agent's license will terminate within how many days from the due date of obligatory fees and continuing education requirements?
90
All of the following must be true of an individual before a license can be issued EXCEPT that the
Applicant submitted hos or her most recent tax return to the department
The Commissioner has full power and authority to do all of the following EXCEPT
Draft insurance laws
An insurer advertises a health policy that is covered by the Life and Health Insurance Guaranty Association. The advertisement includes a short list of benefits and approximate rates. The end of the advertisement includes statement that protection is provided by the Guaranty Association. Which of the following is true?
Mentoring the Guaranty Association in advertisement is considered to be unfair trade practice
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Misrepresentation
An agent holds an insurance license in the state of Kansas and would like to transact insurance in Texas. The agent became licensed before written examinations were required. Therefore, the agent has not actually passed any kind of examination. Which of the following is true?
The written examination requirement will be waived
What is the purpose of the Life Insurance Guaranty Association?
To help protect policyowners and beneficiaries against financial loss caused by the insolvency of a insurance company
After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until it hears what the other company will pay. The insurer's action will be classified as
Unfair
An agent completed a CE course in 2019. Until what year must the agent keep the records of completion?
2023
If an agent has completed 35 hours of continuing education in one renewal period, how many CE hours will the agent have to complete in the next renewal period?
24
The Commissioner of Insurance issues a Cease and Desist Order to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?
30 days
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
Making comparisons between different polices
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?
The policy will not be affected
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits based on the insured's habits and lifestyles.
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
Discrimination
Temporary licenses issued in Texas
Expire in 90 days
Which entity has the authority to grant a temporary life insurance agent's license?
Commissioner of insurance only
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
Coercion
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client
All of the following statements about the continuing education requirement in this state are true EXCEPT
All licensed agents must comply by January 1 or even-numbered years.
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
Illegal
Which of the following is NOT true regarding a Certificate of Authority?
It is issued to group insurance partcipants
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating
An insurance agent wants for a client to replace her current annuities plan with another one. He presents the new one in an incomplete and dishonest way, which makes the new contract seem far more appealing than the original one. The policyowner ends up surrendering her original contract and replacing it with the new one. Which term best describes what the agent did?
Twisting
Who do agents represent?
insurance company
The Commissioner of Insurance issues a Cease and Desist Order and immediately receives a request for the charges to be reviewed in a hearing. Within what number of days must the hearing be held?
10
Which of the following individuals could legally receive commissions from the sale of a life insurance policy?
A licensed insurance agent
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate of Authority
Which of the following must an insurer obtain in order to transact insurance within a given state?
Certificate of authority
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of
Coercion
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Mutual
Which of the following best describes an insurance company that has been formed under the laws of this state?
Domestic
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
False advertising
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
Foreign
An agent receives an Emergency Cease and Desist Order for chronically misrepresenting his insurance policies. The agent knows that he did not commit the violations stated in the Emergency Cease and Desist Order. He wants to contest the charges in a court hearing. Which of the following is true?
The hearing must be held 10 days of receiving a request, unless both parties agree on a later date
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?
Foreign
Which of the following best describes the unfair trade practice of defamation?
Making derogatory oral statements about another insurer's financial condition