Chapter 11 - Laws and Rules
a foreign insurance company is defined as one that is
formed under the laws of a state other than Maryland
Under a small group health plan an insurer is required to provide a newly married employee at least ____ days to add the new spouse to the plan.
60 days enrollment period
in order to operate as a domestic insurer and insurance company must have a certificate of authority issued by the
commissioner
a temporary producer license issued by the commissioner without examination is valid for a period of no longer than
15 months
A life insurance policy becomes incontestable after it has been in force for - 30 days - 6 months - 2 years - 3 years
2 years
Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss.
20
According to the affordable care act, any plan in existence prior to which date is considered a grandfathered plan? march 23, ___ 2010 2011 2012 2013
2010
The Commissioner must examine the financial affairs of each admitted insurer operating in Maryland at least once every how many years?
5
under a small group health plan an insurer is required to provide a newly married employee at least ---- days to add the new spounse to the plan
60
Which of the following is NOT a qualification to be licensed as a producer or adjuster?
A high school diploma
Which of the following is NOT a requirement for soliciting insurance in Maryland? 1.Pass insurance examination 2.At least 21 years old 3. Good character 4.Appointed by an insurer
At least 21 years old, age requirement is 18
Which of the following basics is a producer's fiduciary responsibility?
Collecting premiums and paying them to the insurance company
Proceeds of the viatical settlement contract could be subject to the claims of Creditors Children Spouse Beneficiary
Creditors
Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Louisiana? Life Insurance Producer License Long Term Care Insurance Producer License Casualty Insurance Producer License Health Insurance Producer License
Health Insurance Producer License
When an insurance appointment with a producer is terminated, the party that must notify the producer of the termination is the - Insurer - Local agency - Commissioner - National Association of Insurance Commissioners (NAIC)
Insurer
An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of
Misrepresentation - also known as oral statements
what is the renewal date of a resident insurance producers license?
On or before the last day of the licensee's birth month
All of the following occurrences may result in license revocation except Producing an inadequate amount of new premium having been convicted of a felony forgining another's name to an application for insurance failing to meet court-ordered child support obligations
Producing an inadequate amount of new premium
A cease and desist order issued against a producer Suspends the producer's certificate or broker's license Prevents the producer from receiving commissions Prohibits a specific practice listed in the order Terminates the producer's appointment with the insurer
Prohibits a specific practice listed in the order
the branch of dentistry which deals with the replacement of missing parts is called
Prosthodontics
A producer's fiduciary responsibility includes which of the following activities? - Recording the receipt and distribution of premiums due to an insurer - Properly remunerating persons who furnish leads on prospects - Providing needed insurance to prospective insureds through any sources that are available - Guaranteeing payment to insureds for losses covered by policies that the producer sold
Recording the receipt and distribution of premiums due to an insurer
all of the following may be an unfair claims practice except
Refusing to pay persons bringing false or fraudulent claims
Crimes that involve the business of insurance and affect interstate commerce fall under US Code 1033. Any violations would be prosecuted by - The US Attorney General - The Commissioner of Insurance - The Insurance Department - The FBI
The US Attorney General
Under the Affordable Care Act, how would a grandfathered health plan lose its grandfathered status?
The insurer significantly raises co-insurance charges, deductibles, or co-payment charges
an insurance producer who replaces an existing policy by making false written or oral statements is committing the act of
Twisting
which of the following is required to be licensed as an insurance producer?
a business entity soliciting insurance
A person who, for a fee, gives advice or recommendations on benefits provided by an insurance contract is called 1.a broker 2.a producer 3.an advisor 4.a navigator
an advisor
An example of an alien insurer would be
an insurer formed according to the legal requirements of another country
All of these types of benefits can be covered by a nonprofit health service plan except dental disability income vision hospital expense
disability income
the commissioner is empowered to
enforce state laws relating to insurance
The renewability provision for an individual long-term care insurance policy must be located on the policy form's
first page
producer commissions may not be paid to
licensed producer not appointed by an insurer
A producer who is licensed in Maryland but resident in another state is called a 1. nonresident producer 2. foreign producer 3. reciprocal producer 4. limited lines producer
nonresident producer
Upon surrender of a whole life policy, which has been in force for AT LEAST 3 full years, and within 60 days after the date the premium payment is due and unpaid, the insurer will
pay a cash surrender value
an insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a
rebate - which is illegal
which of the following refers to a situation in which an insurer transfer a part of their risk to another insurer?
reinsurance
john the insurance producer has an insurance license that expires in 6 months. if he files an application for renewal before the expiration date, his license will
remain in effect until a new one is issued
as of january 1 2014 small group health insurance can be rated on the basis of
tobacco use
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as 1. twisting 2. subrogation 3. a life settlement 4.coercion
twisting
The commissioner MUST give a minimum of how many days' notice of a disciplinary hearing?
10 days
The free look period provided in a life insurance policy is usually
10 days
Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a
Unfair claim settlement practice
Proceeds payable under a life insurance contract to a policyowner in anticipation of death or upon the occurrence of specified life-threatening conditions as defined by the policy are best described as accelerated benefits expedited benefits cash surrender benefits
accelerated benefits
Viatical Settlement
allow policyholder to sell their policy for a percentage of the face amount for a cash payment
Which of the following is not considered to be an act of fraud
collecting a charge for insurance that is less than the charge applicable to that insurance
A Maryland insurance producer solicits an insurance policy. In the event of a controversy between the insured and the company, the producer is considered to represent the 1. insured 2. beneficiary 3. company 4. policyholder
company
The maryland insurance commissioner
consels and advises the governor on all matters assigned to the MD insurance adminstration
when collecting insurance premiums from a client a producer must
forward premiums to the insurer on a timely basis
what kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting order than an acute care unit of a hospital? long-term care disability income limited care special risk
long-term care
what must the company do prior to conducting an HIV related test?
obtain a written authorization from the proposed insured
The food and drug administration approves prescription drugs for treatment as stated on the drugs labeling. the prescription of a drug for treatment other than what's labeld is known as _____ use 1. illegal 2. trial 3. generic 4. off-label
off-label
under the maryland health insurance plan, comprehensive health benefits are provided to
medically uninsurable residents
the life and health guaranty corporation provide funds to carry out its powers and duties by assessing
member insurers
Any advertisement that mentions a dollar amount, period of time for which any benefit is payable, cost of policy, policy benefit, or the loss for which the benefit is payable MUST disclose 1.the date in which the advertisement was approved 2. the exceptions, reductions, and limitations affecting the basic provisions of the policy 3. how much the advertisement cost to publish 4. the person who wrote the advertisement
the exceptions, reductions, and limitations affecting the basic provisions of the policy
under the affordable care act a large employer that does not provide health insurance and owes an employer mandate penalty must pay an annual penalty, hwich is calculated by multiplying $2,000 by
the number of full time employees minus 30
Making any false statement maliciously critical of, or derogatory to, any insurer's financial condition with the intent to injure someone in the insurance business
Defamation
the commissioner must give a minimum of how many days' notice of a disciplinary hearing
10 days
an employer may qualify for health care tax credit through shop marketplace if that employer has fewar than hoe many employees?
25
A licensee who is required to take continuing education must include how many ethics coursework hours?
3
A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that These policy premiums will vanish The policy guarantees payment of these premiums The policyowner forfeits the option of paying these premiums from other sources The policyowner may need to resume premium payments depending on actual results
The policyowner may need to resume premium payments depending on actual results
an existing health benefit plan offered by a small employer may be replaced by SHOP exchange navigator only if the small employer
is eligible for a federal tax credit through the SHOP exchange
who regulates the quality of care provided by a health maintenance organization (hmo)
secretary of the Department of health and Mental Hygiene
An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of
Misrepresentation - this was a oral statements made by the producer
Lapsed life insurance policies can be reinstated at any time within
3 years
When a life insurance or annuity replacement policy is sold, the policyowner has a right to return the policy for a full refund of premium within
30 days
which of the following life events would allow an uninsured employee to qualify for special enrollment in a small employer health benefit plan
Adoption of a child
An insurance producer is BEST defined as1. a person appointed by more than one insurance company to issue policies 2. a person who has a contract with an insurance company to represent it 3. a person who places insurance with nonadmitted companies 4. an employee of an insurance company who has the authority to underwrite insurance
a person who has a contract with an insurance company to represent it
A producer may begin to solicit insurance ONLY when 1.registered for the state insurance examination 2. licensed by the state 3. appointed by an insurer 4. none of these
appointed by an insurer
the identity of the ____ must be made clear in every health insurance advertisement Governor insured insurer commissioner
insurer
An example of endodontric treatment is a
root canal
Providing incorrect, misleading, incomplete, or materially untrue information in the license application is
misrepresentation
A policy illustration given at time of sale does NOT typically include the: cash value of the policy names of the beneficiary effective interest rate for policy loans 10th and 20th year cost surrender value
names of the beneficiary
How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?
3 years
under the affordable care act which of these plans are designed to provide coverage that is actuarially equivalent to 80% of the full actuarual value of the benefits provided under the plan? Gold platinum silver bronze
Gold
ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful Insurance practice known as
Illegal inducement
Any of the following may be an unfair claims practice EXCEPT 1) Refusing to pay claims without a reasonable investigation 2) Refusing to pay persons bringing false or fraudulent claims 3) Failing to promptly provide reasonable explanation of any claim denials 4) Offering low amounts to force insureds to institute litigation
Refusing to pay persons bringing false or fraudulent claims
Which of the following is NOT a reason for the Commissioner to deny or refuse a producer license application? 1.Recently convicted of a felony 2.Engaged in fraudulent insurance practices 3.Unintentionally misrepresented a material fact on the application 4.Intentionally violated state insurance laws
Unintentionally misrepresented a material fact on the application
All of the following actions are considered rebating EXCEPT 1. sharing commissions with other licensed and appointed agents 2.refunding part of the premium as an inducement for purchase 3.offering special dividends 4. offering anything of value not specified in the policy
sharing commissions with other licensed and appointed agents
when can a life policy no longer be cancelled for nonfraudulent misstatements
2 years - the contestable policy for a life policy in maryland is 2 years
when an insurance licensee changes his or her address, they must notified?
the commissioner
In Maryland, an insurance producer cannot sell, solicit, or negotiate policies for an insurer unless there is an agreement in place between the producer and insurer. This agreement is called a(n) 1. appointment 2. license 3. binder 4. designation
appointment
In maryland, full time employee of a small employer must work an average of at least ___ per week.
30 hours
purpose of advertising regulations is to
assure full and truthfull disclosures to the public
if a producer has been engaged in an administrative action by any givernmental agency, within how many days following the final deposition must the producer report the action to the commissioner?
30 days
At minimum, a carrier is required to offer which of the following health benefit plans to small employers?
The standard plan
An insurer may pay a commission in which of the following scenarios? - To a licensed non-appointed producer who has sold, solicited, or negotiated a policy of insurance on behalf of the insurer - To an unlicensed person who has sold, solicited, or negotiated a policy of insurance on behalf of the insurer - To a licensed producer who is appointed with the insurer - When a policy is cancelled back to inception
To a licensed producer who is appointed with the insurer
