Chapter Exam - Arkansas Laws and Rules
When an insurance company fails to provide reasonable explanations for a denial of a claim, this is called a(n)
unfair claim settlement
a producer's license CANNOT be revoked without
a hearing given to the producer
an insurer is best described as
any person, corporation, or society that writes insurance contracts
example of replacement is
cancelling term life to buy whole life
The beneficiary of any life insurance policy or annuity contract is protected from the ___ of the insured
creditors
During hearing proceedings, if a person files a waiver of immunity or privilege, and the testimony is produced before court or jury, the person loses their ___
immunity
A producer who sells insurance in Arkansas but resides in another state is called a(n)
nonresident producer
An insurance producer must notify the Commissioner within how many days of conviction of a crime
thirty (30)
a producer who sells insurance in Arkansas but resides in another state is called a(n)
Nonresident producer
which of the following basic is a producer's fiduciary responsibility?
collecting premiums and paying them to the insurance company
What is arkansas REQUIRED grace period for a life insurance contract?
31 days
temporary producer license may be issued for a period not to exceed
90 days
Anyone who willfully violates a cease and desist order from the Commissioner is subject to a fine of up to
$1,000
commissioner must give a min of how many days notice of a disciplinary hearing?
10 days
the standard free-look (right to examine) period in arkansas is
10 days
renewal period for a producer's license is a
2 year term
All insurers must be members of what organization, as a condition of their authority to transact insurance in Arkansas
Arkansas life and disability insurance guaranty association
which of the following constitutes grounds for suspending an Arkansas producer's license
Felony conviction
According to Arkansas Law, commissions may be paid to:
Licensed and duly appointed producers
What is a certificate of authority?
The license required for an insurer to conduct business in the state
the following are considered deceptive and unfair practices, and are prohibited, EXCEPT - referring to an insurance premium as an investment, deposit, or saving - making any misrepresentation or false, deceptive, or misleading statement - asking probing questions to client to determine which products may be suitable - indicating that cash or loan values are death benefits payable in addition to the insurance policy's face amount
asking probing question to client to determine which products may be suitable
which of the following is not information found in a life insurance buyer's guide?
how to take legal action against an insurance company
AR insurance department may take each of the follower action except - issue cease and desist order - impose fines - revoke license - incarceration
incarceration
What MUST the company do prior to conducting an HIV related test
obtain a written consent from the proposed insured
A life insurance policy becomes incontestable after it has been in force for
2 years
Lapsed individual life insurance may be reinstated within?
3 years
A licensed Producer must report any administrative action taken against the licensee in another jurisdiction or by another agency department in Pennsylvania within how many days of the final disposition?
30 days
Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy without needing to prove insurability?
31 days
The standard grace period for a life insurance policy sold in Arkansas is
31 days
the commissioner must examine the financial affairs of each admitted insurer operating in Arkansas at least once every how many years?
5
an insured may continue coverage under a group plan during their total disability if the premiums are paid for how long?
6 months
save on premiums, a life insurance policy can be backdated up to:
6 months
a producer who knowingly submits a FALSE statement in support of a claim may be found guilty of:
Fraud
which is the best way to describe controlled business
Policies written on people that a producer has influences over
A producer may begin to solicit insurance ONLY when
appointed by an insurer
how long must the commissioner maintain a complete record for every licensee in AR for?
as long as he deems necessary
any person who knowingly sell insurance products with a person or entity that is not licensed in Arkansas is guilty of
class D felony
making a statement that is false or maliciously critical of the financial condition of an insurer is known as
defamation
commissioner is empowered to
enforce law relating to insurance
a Fraternal benefit society has each of the following characteristics EXCEPT - incorporated - operates on a lodge system - exists for profit - exists for the benefits of its members
exist for profit
a foreign insurance company is defined as one that is:
formed under the laws of a state other than Arkansas
Maria the insurance producer completes a sale by collecting the required signatures on the applications and obtaining the initial premium. Afterwards, she deposits the checks into her personal checking account. Maria has committed what crime?
fraud
no one is allowed to act as a producer for any insurance company in Arkansas that:
is unauthorized to do business in Arkansas
The Arkansas Life and Disability Insurance Guaranty Association assures payment of benefits
liability insurance
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
providing incorrect, mislead, incomplete, or materially, untrue information in the license application is
misrepresentation
if dividends are illustrated, the advertisement MUST state that the dividends are:
not guaranteed
When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT
obtain the beneficiary's signature
suitability is best described as:
obtaining information from the applicant to determine whether an insurance or annuity product is appropriate
which one of these options is NOT consider false advertising: - publishing misleading information - deceptive data in a brochure - putting a license number on a flyer - announcing untrue facts in a flyer
putting a license number on a flyer
an insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a(n)
rebate
The promise of a discount in premium as an inducement to purchase insurance is an Unfair Trade Practice known as
rebating
a producer who shares commissions with a client may be guilty of
rebating
a producer replaced a client's insurance policy when it was not in the client's best interest. The producer could be found guilty of
twisting
which of the following is NOT a reason for commissioner to deny or refuse a producer license application? - Recently convicted of a felony - Engaged in a fraudulent insurance practices - unintentionally misrepresented a material fact on the application - intentionally violate state insurance laws
unintentionally misrepresented a material fact on the application
When can a producer share commission with another producer?
when the other producer is licensed in the same line of business
law requires that an insurer must notify the commissioner of a producer appointment termination
within 30 day s of termination