Chapter 14 Q&A

How many days' notice must the Commissioner provide before revoking an insurer's Certificate of Authority in Texas?

10 days

After passing the licensing exam in Texas, what is the maximum time an applicant has to submit an application to the Department of Insurance?

12 months

An insured should receive necessary claim forms within _____ days after notice of claim.

15

The Social Security blackout period for surviving spouses begins when the youngest child reaches age ______, and ends when the surviving spouse reaches age ______.

16/60

If a person discovers that a fraudulent insurance act has been committed in Texas, that person must file a written report with the Department's insurance fraud unit within how many days?

30

An HMO in Texas must hold an open-enrollment period at least annually for:

31 days

The Department of Insurance must examine each insurance company at least once every ______ years.

5

An individual who was denied a license in Texas must wait to reapply for a license a minimum of

5 years

An individual is eligible for a Medicare Supplement as early as age:

65

Who is not eligible for an agent license in this state?

A 17-year-old who passed the licensing exam 6 months ago. **Eligible applicants for an agent's license must be at least 18 years old.

In TX, an individual may be denied a license by the Department for all of the following reasons, except if the individual has

A license will not be denied for soliciting or writing insurance for the general public. This only applies when NOT actively engaged in soliciting or writing insurance to the general public.

In Texas, all the following are required to be included in a life insurance illustration, except:

A life insurance illustration must include the insurer's name, authorized representative of insurer or agent, proposed insured's name, age and gender, underwriting or rating classification used as the basis for the illustration, policy's generic name, company product name and policy form number, and the initial death benefit. Companies do not have specific mortality tables.

General life, accident, and health agents in Texas must complete a minimum of ______ continuing education hours per renewal period.

Agents must complete 24 continuing education hours every 2 years (per renewal period).

With respect to advertising requirements in Texas, all of the following are allowable unless the insurer

An advertisement may not include the terms savings, investment, investment plan, profit, profit sharing, interest plan, or other similar terms that imply that the product advertised is something other than life insurance or an annuity.

A license may be suspended or revoked in TX for which of the following?

An agent is actively engaged in soliciting insurance only to family members

An insurance agent does NOT owe a fiduciary duty to

An agent owes a fiduciary responsibility to its insurer, insurance applicants, insureds, but not to the Insurance Commissioner (or other agents).

Which of the following is considered false advertising?

An insurer exaggerates its dividends in statements published in a newspaper. **While all choices are considered violations, advertising only applies to untrue information placed before the public, such as in a newspaper.

A licensed life insurance agent in Texas can share commissions with which of the following?

An insurer or agent may not pay to another person, or accept from another person, a commission or other valuable consideration unless such person holds a license to act as an agent in the same line of insurance in this state. Insurance counselors cannot charge a fee and get paid commission and temporary licensees cannot get paid commission.

Which of the following statements about continuing education is true?

At least 50% of continuing education hours must be completed in a classroom or classroom equivalent setting. Licensees must complete 3 hours of ethics, 24 CE hours per person (not per license) and they must be completed BEFORE the expiration date.

A corporation applying for an agency license in Texas must meet which of the following requirements?

At least one officer or active partner must be individually licensed in the same or greater line of authority. Only the employees transacting insurance must also be individually licensed. Each business location acting under the authority of a license must be registered separately with the Department. There is no requirement for how long a business has been incorporated prior to applying for an agency license.

Which of the following is a method used by an HMO to compensate a physician or provider for providing a defined set of health care services and is based on a predetermined payment per enrollee:

Capitation

Under TX law, coverage for newborns must begin:

Coverage for newborns must begin at birth for 31 days. For coverage to continue beyond 31 days the owner must pay the premium within 31 days of birth.

Publishing or circulating information that is maliciously derogatory to the financial condition of an insurance company with the intent to injure is known as

Defamation is the publication or circulation of a statement that is false, maliciously critical of, or derogatory to the financial condition of an insurance company if it is intended to injure any individual or organization engaged in the business of insurance.

All Medicare Supplement policies must offer coverage for all of the following, except:

Disability income. **Medicare Supplement policies provide coverage for medical services from a physician or hospital. They do not provide income for losses from a disability.

Which of the following does not describe an eligible group for group life insurance in TX?

Employer groups, labor unions, government entities including dependents, and creditor groups are eligible. A group consistently exclusively of persons related by blood or marriage is not an eligible group by itself.

Under the ACA, a catastrophic plan may be purchased by any of the following, except an individual:

Enrolled in Medicaid

If an insurer requires an individual to be tested for the AIDS virus, all of the following are required, if applicable, except:

Gather statistical information that identifies the applicant to share with other insurers. **The insurer may not gather or share information that identifies the applicant.

A long-term care policy issued in Texas must, at a minimum, be offered as:

Guaranteed renewable

In TX, all the following statements about life insurance policy provisions are correct, except:

If a policy lapses due to unpaid premiums, it may only be reinstated up to 2 years after lapse. **All life insurance policies that provide nonforfeiture benefits must include a provision that states if the policy lapses due to unpaid premiums, the policy may be reinstated within 3 years.

A producer in Texas must notify the Department on a monthly basis for all the following information, except:

License expiration

A licensed agent is required to obtain which of the following before transacting insurance in Texas?

Licensed agents are not permitted to transact insurance as an agent until they have been appointed by an insurer authorized to transact insurance in this state.

An individual life insurance policy issued in TX must have a grace period of at least ______ days.

Life insurance policies must include a one-month, or 31-day grace period from the due date for the payment of each premium, except the first one, in which coverage remains in force.

What prohibited trade practice is committed if an agent provides misleading information regarding guaranteed dividends, terms, advantages, or disadvantages of a policy?

Misrepresentation involves a false statement made to a policyholder about a policy to induce the policyholder to lapse, cancel, or surrender an existing policy.

If an accelerated death benefit is in effect, how often must the insurer provide a report showing the amount paid and the amount of the remaining benefit?

Monthly

An agent's appointment

Remains in force until terminated or withdrawn by the insurer

The Guaranteed Renewable Provision states that the policy is:

Renewable with premiums that may be increased for entire classes of insureds

Which of the following is not a prohibited claims settlement practice?

Requiring a claimant's federal income tax return to settle the claim is permitted under a court order or if the claim involves a fire, lost profits, or lost income.

In a STOLI/IOLI transaction, what are the insureds basically doing?

Selling their mortality to another for up-front cash

The Texas Department of Insurance requires all licensees to

Since the relationship between licensees and the public is one of trust, the Department requires all licensees to be honest, trustworthy and reliable.

When taking an application for a Medicare Supplement policy, an agent must provide the applicant with a(n):

The Outline of Coverage must be provided to all applicants at the time of application and an acknowledgment of receipt must be obtained.

According to the ACA, which of the following is not included in a Summary of Benefits and Coverage?

The Summary of Benefits and Coverage includes the plan's benefits and services, cost-sharing provision, and coverage exceptions, exclusions, and limitations. It does not include the premium.

All the following regarding an HMO's evidence of coverage issued in TX are correct, except:

The evidence of coverage may be delivered in writing or electronically.

To terminate an agent's appointment in Texas, the insurer must

The insurer must notify the Texas Department of Insurance of the termination of appointment, which does not cancel or terminate the license.

Under Texas Nonforfeiture Law, a cash surrender payment may be deferred up to:

Under Nonforfeiture Law, the insurer reserves the right to defer payment of any cash surrender value for a period of 6 months after demand for payment and surrender of the policy.

False advertising, misrepresentation, and defamation are all examples of which of the following?

Unfair Methods of Competition

An enrollee in Texas may have coverage cancelled or nonrenewed by an HMO for which of the following?

failing to pay premiums or moving outside the service area, but not for health or lifestyle status.

In Texas, a small employer health insurer may not offer coverage to an eligible employee unless the employee has:

satisfied the applicable waiting period, which cannot exceed 90 days.