Chapter 10 - Florida Laws and Rules Pertinent to Insurance

What is required minimum percentage of employee participation for a noncontributory health insurance plan according to Florida Law?

0% (More noncontributory group health plans require 100% participation by eligible members. Under Florida law, there is no specific minimum percentage participation for employees covered by employee group health insurance.

Which of the following employer tasks does a Professional Employer Organization normally handle?

Administration tasks

One definition of replacement is "the act of replacing an existing insurance policy with another." Replacement is

Closely regulated and requires full disclosure

Which of the following unfair trade practices involves an agent who makes malicious statements about another person's financial condition?

Defamation (An agent who makes a statement that is maliciously critical of another person's financial condition is guilty of defamation.)

S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?

Entire Contract

A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits?

Insurance

Which type of insurance company allows their policyowners to elect a governing body?

Mutual (Policyowners elect the governing bodies of mutual insurance companies.)

Which of the following professional organizations has its code of ethics incorporated into Florida law?

National Association of Insurance and Financial Advisors (NAIFA) (NAIFA is the professional organization whose code of ethics is incorporated into Florida law, and whose responsibility is to establish the activities of agents is the national Association of Insurance and Financial Advisors.)

A long-term care lapse notice must be delivered to both the applicant and

Secondary addressee (An insurer must mail a long-term care lapse notice at least 30 days prior to the effective date of cancellation to both the policyholder and a specified secondary addressee.)

An agent's license can be suspended or revoked by

writing primarily controlled business

Florida requires that coverage for newborns begins "from the moment of birth" and continues for

18 months (Newborn coverage begins "from the moment of birth" and continues for 18 months.)

In Florida, a health policy that is paid on a quarterly basis requires a grace period of

31 days (Florida law requires that the minimum grace period on a health insurance policy paid on a quarterly basis is 31 days.)

What do Dread Disease policies cover?

A specific disease or illness

What type of insurance company is domiciled in England, but conducts business in Florida?

Alien

The act of an insurance company publishing misleading information about its policy's provisions is called

False advertising (An insurance company that publishes misleading information about insurance coverage may be found guilty of false advertising.)

Who owns a stock company?

It's stockholders

Who is a mutual insurance company owned by?

Its policyholders

Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?

Limitation on pre-existing conditions foe up to 12 months (There is only a 6-month limitation on pre-existing conditions for Medicare Supplements.)

What is required in the Florida Employee Health Care Access Act?

Small group benefit plans are to be issued on a "guarantee-issue_ basis

Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA).

20 (Florida's Mini COBRA regulation entitles individuals to continue coverage for group with less than 20 full-time employees.)

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

20 days

Every resident agent must have and maintain at their place of business the usual and customary records to transactions under their license for at least how long"?

5 years (Every resident agent must have and maintain at their place of business the usual and customary records pertaining to transactions under their licence for at least 5 years following the final settlement or final adjudication of a criminal proceeding, civil litigation, or an administrative proceeding. Any person found to be in violation may be subject to a fine.)

Which of the following provisions is NOT required in HMO contracts/certificates?

7 day grace period (A grace period of no less than 10 days must be expressly included in an HMO contract. - Enrollment - Rates shall not be excessive - No pre-existing exclusions for children Required in HMO contracts/certificates)

In Florida, the underwriting and issuance of a master group health policy requires that all employees

Are eligible to participate, regardless of their individual health history (The underwriting and issuance of a mast group health policy in Florida requires that all employees or members must be eligible to participate, regardless of individual health history.)

The coordination of benefits (COB) provision exists in order to

Avoid duplication of benefits payments (Purpose of COB provision, found only in group health plans, is to avoid duplication of benefit payments.)

Which of the following is an example of an Unfair Trade Practice?

Coercion

If an agent combines premiums collected with their personal funds, they have engaged in

Commingling (This is a prohibited act, to combine premiums and personal funds.)

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as

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.)

Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency?

Florida Insurance Guaranty Fund Association

Defamation occurs when an agent makes a false statement intended to

Malign another insurer (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.)

Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?

Misrepresentation

A stock life insurance company that issues both participating and nonparticipating policies is doing business on

Mixed plan (When a stock life insurance company issues both participating and nonparticipating policies, the company is doing business on a mixed plan.)

With a medical discount plan, how often would a person generally pay a fee to get discounts on specific services?

Monthly (Pay a monthly fee to get discounts on specific services or products from a list of participating providers.)

A example of rebating would be

Offering a client something of value not stated in the contract in exchange for their business (Rebating can be defined as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract.)

Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent

Only is the child is incapable of employment and chiefly dependent on the policyowner

Which action could result in a hearing being ordered by the Department of Financial Services?

Performing insurance transactions without a license

Which of the following is NOT required in the Outline of Coverage for a health insurance policy?

Projection of the policy's future costs (- Explanation of the policy's benefits - Listing of the policy's exclusion and limitations - Explanation of the policy's renewal and cancellation provisions. These are required in the Outline of Coverage)

During the application process, the agent's primary responsibility is to

The insurance company

Who does an agent represent during the solicitation of insurance?

The insurance company (When soliciting insurance to a client, an agent represents their insurance company.)

What must an insurer obtain to conduct an HIV test?

Written consent