4 - Agent and Agency Licensing

If selling annuities an agent is required to complete how many hours of continuing education on the subject of suitability in annuity and life insurance transactions. A) 3 hours. B) 2 hours. C) 4 hours. D) 12 hours.

A) 3 hours. A licensed agent must complete 3 hours of continuing education in the subject of suitability in annuity and life insurance transactions if they want to continue to sell annuities.

Before a licensed agent is eligible to transact insurance sales, they must be? A) Appointed by an insurance company. B) trained by an authorized insurance company. C) approved by the governor. D) assigned an insurance mentor.

A) Appointed by an insurance company. Before a licensed agent can legally transact insurance sales they must first be appointed by an insurance company.

Of the following terms, which best describes the act of replacing existing life insurance with a new life insurance policy based upon incomplete or incorrect representations? A) Twisting. B) Rebating. C) Embezzlement. D) Concealment.

A) Twisting. Twisting is a misrepresentation made by an insurance agent to induce a policyholder to lapse a policy in order to switch insurance companies.

Which activity may result in suspension or revocation of an agent's license? A) Writing primarily controlled business. B) Using the human life value approach. C) Issuing a conditional receipt. D) Changing one's business address.

A) Writing primarily controlled business. Writing primarily controlled business may result in suspension or revocation of an agent's license.

Can an agent in charge oversee multiple locations? A) Yes, but the agent in charge must be onsite during the transaction of insurance sales. B) No, agents in charge can only be assigned to one location. C) Yes, insurance transactions can take place at any location, even if the agent is not onsite. D) No, agencies can not have multiple locations.

A) Yes, but the agent in charge must be onsite during the transaction of insurance sales. Yes, but the agent in charge must be onsite during the transaction of insurance sales

Violation of the controlled business statute occurs if an agent sells most of her business to? A) employees of a business owned by her father. B) members of her civic club. C) city and county employees. D) members of the local medical society.

A) employees of a business owned by her father. Controlled business involves entering into contracts where the agent has personal influence. Generally, such business includes the agent's immediate family, company, or employees.

An agent must handle funds of a client or insurance company honestly and fairly and NOT use them for the agent's own purposes. This is called? A) fiduciary responsibility. B) suitability. C) endowment. D) legal reserve.

A) fiduciary responsibility. Fiduciary responsibility involves an agent handling funds of a client or insurance company honestly and fairly and NOT using them for the agent's own purposes.

"Controlled business" is MOST ACCURATELY described as? A) insurance placed by an agent on the agent's own life, property, or risks. B) insurance placed by an agent on the agent's neighbor's property. C) insurance placed by a general agent through a single insurance company. D) a line of insurance offered by a single insurance company.

A) insurance placed by an agent on the agent's own life, property, or risks. "Controlled business" is MOST ACCURATELY described as insurance placed by an agent on the agent's own life, property, or risks.

Agents may be found guilty of defamation if they make a false statement that is intended to? A) malign another insurance company. B) mislead a prospect about a policy's term of coverage. C) misrepresent the benefits payable under a policy. D) defraud an insured or a claimant.

A) malign another insurance company. Defamation is an unfair trade practice involving false, maliciously critical, or derogatory statements intended to injure a person or company engaged in the insurance business.

An agent must complete 24 hours of Continuing Education every. A) 4 years. B) 2 years. C) 3 years. D) 5 years.

B) 2 years. An agent must complete 24 hours of continuing education every two years in order to keep their license in good standing.

If an agent changes her residence address, she must notify the Department of Financial Services within? A) 15 days. B) 30 days. C) 60 days. D) A change of residence address does not require notification.

B) 30 days. You have 30 days to notify the Department of Financial Services after an address change.

Within how many days must a licensee notify the Department of Financial Services (DFS) of an address change? A) 10. B) 30. C) 45. D) 90.

B) 30. A licensee must notify the Department within 30 days of an address change.

Which of the following is considered an Unfair Trade Practice under Florida law? A) Abandonment. B) Coercion. C) Consequential Damage. D) Waiver.

B) Coercion. Coercion is considered an unfair trade practice under Florida law.

A licensee may NOT transact insurance business in Florida until which of the following occurs? A) The licensee becomes a resident of Florida. B) The licensee is appointed by an insurer. C) The licensee pays a $50 fee to the Chief Financial Officer. D) The licensee becomes employed by an insurer.

B) The licensee is appointed by an insurer. The licensee must first be appointed by an insurer before transacting insurance business in Florida.

Which of the following terms defines the authority given to an agent to transact business on behalf of the insurer? A) license. B) appointment. C) certificate of authority. D) insurance contract.

B) appointment. Appointment is the authorization or certification of an agent to act for or represent an insurance company.

The Department of Financial Services may deny, nonrenew, suspend, or revoke any license issued if the licensee. A) files for bankruptcy. B) is found guilty of misrepresentation. C) has failed to write any business for six months. D) has been accused of a misdemeanor involving moral turpitude.

B) is found guilty of misrepresentation. Being found guilty of misrepresentation may result in the Department of Financial Services denying, suspending, revoking, or not renewing any license.

All of the following activities could result in the suspension of an agent's license EXCEPT? A) misrepresenting the financial condition of an insurance company. B) selling any replacement policy that causes an insured to lapse an existing policy. C) attaining a license for the sole purpose of handling controlled business. D) demonstrating incompetency to transact business as an insurance agent.

B) selling any replacement policy that causes an insured to lapse an existing policy. There are requirements and procedures to be followed when a replacement policy is sold for the sole purpose of replacing an existing policy.

How many hours of continuing education must agents who have been licensed less than six years complete every two years? A) 12. B) 20. C) 24. D) 28.

C) 24. 24 hours every two years is the requirement for continuing education with agents who have been licensed less than six years.

How many hours of continuing education on the subject of suitability in annuity and life insurance transactions must an agent have in order to sell annuities? A) 0. B) 2. C) 3. D) 4.

C) 3. 3 hours of continuing education on suitability in annuity and life insurance transactions is what an agent must have in order to sell annuities.

If an agent is found guilty of a felony, he/she is required to notify the Department of Insurance within how many days? A) 45. B) 60. C) 30. D) 90.

C) 30. An agent must notify the Department of Insurance within 30 days for any felony conviction.

A licensee may have their license suspended, terminated or revoked for all of the following reason EXCEPT? A) Found guilty of a felony. B) Solicited or handled controlled business. D) Engaged in unfair acts or methods. C) Did not meet insurance sales production requirements.

C) Did not meet insurance sales production requirements. Individual insurance sales production is not regulated by the Department of Insurance.

Which of the following would be considered an unfair claim practice? A) Implementing standards for proper investigation. B) Denying a claim after reasonable investigation of the facts. C) Misrepresenting insurance policy provisions affecting a loss. D) Acting promptly on claims communication.

C) Misrepresenting insurance policy provisions affecting a loss. An unfair claim practice includes making a misrepresentation to an insured concerning the policy provisions affecting a loss.

All of the following activities may result in the revocation or suspension of an agent's license EXCEPT? A) Demonstrating incompetence or untrustworthiness. B) Attaining a license for the sole purpose of handling controlled business. C) Representing a foreign insurance company. D) Misrepresenting the financial condition of an insurance company.

C) Representing a foreign insurance company. Representing a foreign insurance company does not result in the revocation or suspension of an agent's license.

The Department of Financial Services may deny an application for license to which of the following reasons? A) The Department feels that the applicant is not responsible. B) The Department has heard that the applicant is untrustworthy. C) The Department has reasonable cause to believe that the applicant will write only controlled business. D) The Department has been told that the applicant has committed fraudulent acts.

C) The Department has reasonable cause to believe that the applicant will write only controlled business. The Department may deny an application for license if it has reasonable cause to believe that the applicant will write only controlled business.

An agent is an individual who has been authorized by an insurer to be its representative and to perform all of the following acts EXCEPT? A) solicit applications for insurance. B) collect premiums from policyowners. C) authorize payment of certain claims. D) render services to prospects.

C) authorize payment of certain claims. Agents do not authorize payment of claims.

An agent who intentionally makes an untrue or incomplete statement in the course of an insurance transaction may be guilty of? A) twisting. B) rebating. C) misrepresentation. D) coercion.

C) misrepresentation. Misrepresentation is described as making an untrue or incomplete statement in the course of an insurance transaction.

The Department of Financial Services will consider all of the following factors when determining whether an agent's home is an insurance agency EXCEPT? A) The agent advertises his/her home location in newspapers, phone books, or other ways. B) There is a sign on the house indicating there is an insurance agent there. C) The agent meets clients there D) The amount of premium revenue generated there.

D) The amount of premium revenue generated there. The Department of Financial Services does not take into consideration the amount of premium revenue generated at an agent's home when determining whether or not the home is an insurance agency.

Can an agent-in-charge have more than one location? A) No, each location must ave an agent-in-charge. B) No, agent-in-charge can only have one location. C) Yes, as long as the location was registered after January 1, 2003. D) Yes, as long as the agent-in-charge is present when insurance activity occurs.

D) Yes, as long as the agent-in-charge is present when insurance activity occurs. Yes, as long as the agent-in-charge is present when insurance activity occurs.

Rebating is allowed in Florida if the agent rebates insureds? A) based on place of residence. B) on a sliding schedule. C) on a marital status. D) in the same actuarial class.

D) in the same actuarial class. Rebating is allowed in Florida as long as it is in the same actuarial class.

Sliding consists of all of the following activities EXCEPT? A) telling an applicant that certain ancillary coverage is required by law when it is not. B) advising a client that certain ancillary coverage is included at no additional charge when such a charge is required. C) charging an applicant for ancillary coverage over the cost of coverage applied for without the applicant's consent. D) recommending that a client take cash value from a policy to make other investments.

D) recommending that a client take cash value from a policy to make other investments. The practice of "stripping" policies of their cash value to make other investments is called TWISTING.

Knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies is an example of? A) rebating. B) demation. C) intimidation. D) twisting.

D) twisting. Twisting is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies.

Agent authority can be defined as any of the following, EXCEPT? A) Apparent. B) Express. C) Principal. D) Implied.

C) Principal. Agent authority is what an agent is authorized to do on behalf of his company. The three types of agent authority include express, implied, and apparent authority.