Chapter 20
ABC Insurance Company paid an insured $30,000 in lost wages, $35,000 for hospital costs, and $20,000 for physical therapy treatments. ABC later discovers this was a fraudulent claim. How much may the insured be fined?
$170,000
According to the California Insurance Code, what is the maximum penalty per violation for anyone who unwillfully commits an unfair method of competition?
$5,000
Any changes in background information that occur after a producer application has been submitted or a license has been issued MUST be reported to the Insurance Commissioner within
30 days
The free-look period for life insurance policyowners age 60 or older is
30 days
How long must life agents keep their transaction records?
5 years
What is the insurance term the State of California uses for an insurer that is eligible to transact business in this state?
Admitted
According to PPACA, what is a health benefits exchange?
An entity to which individuals and small businesses can have access to affordable health coverage
According to the California Insurance Code, which of the following is NOT an example of an insurable event?
An insured suffers a financial loss in the state lottery
Life insurance surplus must be distributed to policyowners at what frequency?
Annually
In what order are people on the MRMIP waiting list allowed to enroll?
Based on the date an individual's application is received
How is an agent's first year commission calculated for a replacement long-term policy?
Based on the difference between the new and original policy annual premiums
The California Insurance Code allows an individual how many days to cancel a life policy for a full-refund?
Between 10 and 30 days
Which of the following actions is NOT allowed by Health Insurance Counseling and Advocacy Program (HiCAP) counselors?
Charge a fee
Before an insurer is allowed to test an individual for HIV, what must be completed?
Consent form
Which entity has jurisdiction over health care coverage providers?
Department of Insurance
Failure to report background changes within 30 days as required under section 1729.2 of the California insurance code could subject a license or applicant to
Fine, suspension, and denial
What is an insurance solicitor authorized to do?
Help an agent or broker sell insurance
What prevents a life insurance policy from being rescinded by the insurer after being in force for two years?
Incontestability clause
Who does a life settlement broker represent?
Individual wanting to sell their life policy to a third party
An insurance policy issued in California may be called a comprehensive long-term care insurance policy if benefits are provided for
Institutional (nursing facilities) and home care
Which of the following is NOT protected under the California Life and Health Guarantee Association?
Insurers
Which of the following is NOT a primary objective of insurance regulation?
Interpret policy provisions
The California Insurance Code has authorized standards for names used by life insurance agents. Which of the following, if any, are automatically acceptable for Lance Manyon, a holder of the CLU designation?
Lance Manyon Insurance Services
What type of license is required for an individual who charges a fee to review an insured's existing life insurance policy?
Life and disability analyst
MRMIP stands for
Major Risk Medical Insurance Program
Both the Federal and state governments jointly finance which health insurance entitlement program?
Medi-Cal
People with low income can be provided with medical assistance through which program?
Medi-Cal
Which of the following does the California Department of Insurance (CDI) have NO jurisdiction over?
Medicare
How many "activities of daily living" must an insured be UNABLE to perform in order to meet the chronically ill requirement of a Long-Term Care policy?
Minimum of two activities of daily living
Which of the following acts is NOT a Federal offense committed by an insurance agent?
Misrepresentation on an insurance application
What is the purpose of the Pre-Existing Condition Insurance Plan (PCIP)?
PCIP was created by the PPACA for people rejected by private health insurers due to pre-existing conditions
According to the California Insurance Code, how is the word "may" interpreted?
Permissive
What does the term "illustration" mean when used in the phrase "life insurance policy illustration", according to the California Insurance Code?
Presentation of policy features that includes non-guaranteed elements
Which of the following is NOT considered to be an act of insurance solicitation?
Publishing a magazine where one of the advertisers is an insurer
The California Life and Health Insurance Guarantee Association covers all of these types of policies, EXCEPT
Self-funded plans
Which of the following does NOT have to be included on life insurance policy illustrations?
Statement that all values and benefits are guaranteed
Why is a life insurance policy's delivery date important?
The free-look period begins on the policy delivery date
Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?
Theft
What does the term "indemnity" mean as it pertains to insurance?
To make whole
Which of the following is NOT covered by the Family and Medical Leave Act (FMLA)?
Travelling overseas with a spouse
A person who asserts a right of recovery under an insurance policy is called
claimant
An agent's attempt to stop the replacement of an existing life insurance policy is known as
conservation
In California, an insurer organized under the state laws of Oregon is called a(n)
foreign insurer
According to the PPACA, the medical enrollment tier that has 80% actuarial value is called
gold
An individual who transacts life, disability, or life and accident and health insurance on behalf of an insurer is called a(n):
life agent
The cost of services charged by the Health Insurance Counseling Advocacy Program (HiCap) is
no cost
Anyone employed in California to assist an insurance agent in transacting insurance is called an insurance
solicitor
An insurer that has been found using higher rates based on race, religion, or ethnicity is said to be engaging in
unfair discrimination
Paul has an existing annuity and is sold a new one, in which the new policy holds no greater financial benefit to him than the existing contract. This is considered a(n)
unnecessary replacement
The California Insurance Code defines "policy" as a(n)
written contract
