Unit 2

When applicable, all of the following forms require an applicant's signature except

an agent's report

If the first premium was not paid at the time of the application, what must the producer also collect?

A signed statement of good health

A Notice to Applicant must be issued to the consumer no later than

3 days after the report was requested

A consumer may make a written request for complete disclosure of the nature and scope of an investigative report regarding her credit history. This disclosure must be made within

5 days

Which of the following statements regarding the Fair Credit Reporting Act is true?

A Notice to Applicant is required

Which of the following situations would create a possible errors and omissions liability to the producer?

During the sale of a replacement health policy, the producer tells an applicant that the new policy will cover expenses ordinarily paid by Medicare

What kind of policy will protect an insurance agent against liability arising out of acts committed in her professional capacity?

Errors and omissions

What appears on the producer's report?

Financial Status, character, and habits

Which of the following statements regarding a conditional receipt is correct

It is given only if the initial premium has been submitted with the signed application

If a life insurance applicant is given a binding receipt, when does her coverage become effective?

On the date the receipt is given

Which of the following statements pertaining to sources of insurability information is correct?

Special questionnaires are used to obtain additional information when an extra hazard or risk may be involved

AGC Publishing applied for key-person life insurance on its chief executive officer. Which of the following parties must sign the application?

The CEO, another officer of AGC, and the agent handling the application

What is the basic source of information for life insurance underwriting and policy issue?

The application

Which of the following is an accurate statement for a producer to make regarding underwriting?

The primary source of information used in underwriting will be the application

When does a medical policy begin after giving the agent a check for the initial premium and receiving a conditional receipt?

When the insured receives the conditional receipt

If consumer information reports are obtained under false pretenses, the maximum penalty is

a $5,000 fine, imprisonment for 1 year, or both

An investigative consumer report is also called

an inspection report

The overall purpose of the USA PATRIOT Act is to

deter terrorist activity

If a premium payment has not been given with the application, the policy becomes effective only when the producer delivers the policy and

explains its provisions and obtains the initial premium and a signed statement of continued good health

Penalties for violating the Fair Credit Reporting Act include

fines, actual damages suffered by the consumer, punitive damages, and reasonable attorney's fees

The concept of agent confidentially requires all of the following practices EXCEPT

notifying the applicant of a substandard rating decision by the insurer

An agent must notify the applicant that all of the following sources will be used to assess the applicant except

personal references

An agent may do all of the following to comply with disclosure notification rules except

provide a copy of the information disclosure procedures form to the state Department of Justice

Underwriting is a process of

selecting, classifying, and rating risks

Each application for life insurance requires the signature of all of the following EXCEPT:

the beneficiary

ERISA requires that certain benefit and insurance plan information be made available to all of the following except

the state legislature

During the underwriting process, an insurer may do all of the following EXCEPT:

verify the applicant's military records, if any