Chapter 11
If an insured's age was misstated on a life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be
an amount that the premiums paid would have purchased at the current age
An insurer is NOT required to provide information on fraudulent claims if requested by
an insured
A certificate of____ permits an insurance company to transact business in Texas
authority
The phrase "transacting business" includes
collecting premiums
An insurance company organized under New York laws and licensed to do business in Texas is considered a(n)
foreign company
A license may be denied, suspended, or revoked if the licensee
is found guilty of misrepresentation in obtaining the license
A domestic insurance company in Texas is considered a company that
is incorporated and formed in Texas
During a sales presentation for a participating life insurance policy, an agent MUST
make a prospect understand that dividends are NOT guaranteed
An insurance agent has a fiduciary responsibility to all of the following EXCEPT
other agents
An example of rebating would be
returning a portion of a premium as inducement to purchase insurance
To terminated an agent's appointment, an insurance company must
send termination notice to the Texas Department of Insurance
An example of an unfair claims settlement practice is
turning down a claim without providing the basis of denial
ABC Insurance Company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering
unfair methods of competition
A foreign insurance company conducting insurance business in Texas
was formed under the laws of another state
Which of the following is NOT included in a life insurance illustration?
Company's mortality table
How often must an insurance agent license normally be renewed?
Every two years
Which of these provision is NOT required in life insurance policies?
Extended Term
What is an organization that solicits insurance only to its members?
Fraternal benefit society
Which of the following groups may NOT be insured by a group life insurance policy?
Individuals who are related by blood
Credit Life insurance is
Insurance issued on a debtor to cover outstanding loan balances
When advertising, an insurance company MUST use its
Legal corporate name
Which of the following may NOT charge fees for insurance advice?
Legal reverse agents
Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?
Misrepresentation
An employee is covered under a company group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse may be insured for under this program?
$25,000
An insured may assign up to____of policy ownership under an individual life insurance policy
100%
In Texas, how long must a policy be in force before an insurance company must pay death benefits for suicide?
2 years
A new agent must complete at LEAST____hours of continuing education within 24 months of initial licensure
24
The Insurance Commissioner must give how many days notice prior to holding a hearing regarding an agent's unfair or deceptive practice?
30
In Texas, an individual life insurance policy is REQUIRED to have a grace period of
31 days
____of continuing education MUST be completed in the classroom or classroom equivalent
50%
How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law?
6 months
A temporary agent's license issued by the commissioner of insurance is valid up to____days
90
Which of the following actions does the Commissioner of Insurance NOT have the power to conduct?
Activate insurance companies' financial reverses
An example of false advertising would be
An insurer exaggerating its dividends in a magazine advertisement
In Texas, which of these statements regarding the Suicide clause is TRUE?
An insurer may not use suicide as a defense against payment after the second year
With whom may an agent legally share commissions?
Another agent with the same line of insurance
Which of the following is a requirement for obtaining a Texas insurance agent's license?
Be honest, trustworthy, and reliable
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
Coercion
B the Insurance agent tells his clients that their right may be impaired if they fail to complete a release from within a given period of time. B may be found guilty of
Coercion
Which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstate on the application?
Pay an amount the premiums would have purchased at the insured's actual age
Which of the following is NOT a required provision in group life policies ?
Right to loan
Which of these is NOT an example of doing insurance business?
Selling shares of stock
Who owns a stock insurance company?
Stockholders
All of these statements about the Commissioner of Insurance are true EXCEPT
The Commissioner must be elected
Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas?
The agent and the company
Why would the Insurance Commissioner examine the records of an insurance company?
To determine the solvency of the company
How long does an insurance company appointment remain in force?
Until terminated
What is required for an agent whose license has been revoked ?
Wait at least five years before applying for a new license.
