Chapter3

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A producer may be disciplined by the Commissioner for which of the following actions?

Misappropriation of premium funds Disciplinary action may be taken by the Commissioner for misappropriation of premium funds.

The _____________ of Coverage describes policy features, benefits, exclusions, and riders in a Long-Term Care policy

Outline

an individual life insurance policy can be contested by the insurer only during the first

2

A life insurance policy sold in Maryland can be cancelled for nonfraudulent misstatements for up to

2

How many days notice must the Commissioner give prior to a hearing?

10 days

Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?

Submit to the replacing insurer a list of the policies to be replaced

All of these are responsibilities of the Commissioner EXCEPT administering oaths subpoena a witness approving policy forms endorsing insurers

endorsing insurers

Replacement can be Best described as

exchanging a new policy for one already in force

A ______ insurance company is one that was formed under the laws of a state other than Maryland

foreign

A dependent child may remain on a parent's health insurance plan beyond age 26 if the child

has a mental or physical handicap and remains dependent on the parent

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 producer who is appointed with the insurer

An ____ _____ sells, solicits, or negotiates insurance contracts for compensation

insurance producer

Who is required to notify the producer in the event of appointment termination?

insurer

Kiara filled out a life insurance application and was given a policy illustration that showed future premiums being paid out of nonguaranteed values. This illustration must disclose that

may need to resume paying the premium payments depending on actual results.

as of january 1 2014 small group health insurance can be rated on the basis of

Tobacco use

A Buyer's Guide and Policy Summary

must be delivered with or prior to policy delivery

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

An insurer formed according to the legal requirements of another country is called an

alien insurer

A person who, for a fee, gives advice or recommendations on benefits provided by an insurance contract is called

an advisor

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 an

appointment

Advertising regulations exist to

assure full and truthful disclosures to the public

A domestic insurance company in Maryland MUST

be formed under Maryland insurance laws

Long-term care insurance provides

one or more diagnostic, preventative, therapeutic, rehab, maintenance, or personal care services in a setting other than an acute care unit

A producer who sells an individual life insurance policy in Maryland MUST deliver to the policyowner

policy summery & buyers guide

A _______ negotiates an insurance contract on behalf of an insurer

producer

an example of misreprensention is

providing incorrect, misleading, incomplete, or materially untrue information in the license application

all of the following actions are considered rebating except share commissions with oter licensed and appointed agents refunding part of th premium as an inducement for purchase offering special dividends offering anything of value not specified in th policy

sharing commissions with other licensed and appointed agents

A _______ company is owned by its shareholdersstock

stock

long-term care policies sold in maryland may exclude coverage related to injuries substance addictions dementia alzheimer's disease

substance addictions

A producer has recently died and leaves behind a spouse. In order for the producer's insurance business to continue, the Commissioner may issue to the producer's spouse a

temporary insurance license

A producer does NOT have a fiduciary responsibility to

the Guaranty Association

An insurance producer who replaces an existing policy by making false written or oral statements is committing the act of

twisting

The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as

twsiting

The Fair Credit Reporting Act protects consumers

with guidelines regarding credit reporting and distribution

Prior to conducting an HIV-related test, the insurer must obtain

written authorization from the proposed insured

Interest on death benefits are NOT required to be paid by an insurance company as long as proceeds are paid within ______ after the date of the death of the insured

30 days

the standard grace period for a life insurance policy sold in maryland is

30 days

In maryland, full time employee of a small employer must work an average of at least ___ per week.

30 hours

A producer MUST maintain insurance transaction records for a minimum of ____ years

5

The Commissioner must examine the financial affairs of each admitted insurer operating in Maryland at least once every how many years?

5

To be classified as a small employer, an employer must NOT have more than _________ eligible employees

50

If an insurer refuses to pay a claim, how many days must the insured wait to take legal action against a health insurer after submitting written proof of loss?

60

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

a life policy loan in maryland cannot charge a fixed rate of interest higher than

8 %

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 uninsured, eligible employee who acquires a new dependent through marriage, birth, or adoption may qualify for special enrollment in a small employer's health benefit plan)

All of the following is considered a form of advertising EXCEPT billboard announcing a new insurance product an insurer's AM best rating A radio message promoting an insurer's client satisfaction an oral presentation given by a producer

An insurer's AM Best rating

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 is required for an insurer to conduct business in this state?

Certificate of authority

ABC Corporation has a group life insurance policy that covers its employees and their dependent children. Which of the following would be considered a "dependent child"?

Child over the age of 18 years who attends an educational institution and relies on the insured employee for financial support

Who is eligible for insurance under a group policy issued to a labor union?

Every member of that union

To be classified as a small employer in Maryland, and employer must employ

2-50 employees

How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?

3

Replacement regulation is designed to protect

Policyowners from misrepresentations and loss of benefits

All of these activities require an individual to hold a producer's license EXCEPT negotiating insruance providing referrals soliciting insurnace selling insurance

Providing referrals

Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Maryland?

Health Insurance Producer License

in the state of maryland a licensed producer

a licensed producer

An insurance producer is BEST defined as1.

a person who has a contract with an insurance company to represent it

An example of rebating is

a producer who shares commissions with a client

Violations of US Code Title 18 section 1033, may result in

fine and/or imprisionment

The identity of the ____ must be made clear in every health insurance advertisement

insurer

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

Upon receiving a producer complaint, the Commissioner may immediatley

issue a cease and desist order

Each delivered life insurance policy in Maryland MUST include a

legible and brief description of the policy on the first page

commissions may only be paid to

licensedand duly appointed producers

the life and health guaranty corporation provide funds to carry out its powers and duties by assessing

member insurers

a producer's secretary who solicits prospects on the telephone

must be licensed as a producer

An advertisement for an insurance product may contain

the insurer's name

Two producers may share a commission ONLY if

they are both licensed in the same line of business

one role of the Commissioner is to

to enforce state insurance laws

Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a

unfair claim settlement practice

proof of loss on a health insurance claim must be submitted to an insurer within___days after the insured's date of loss

90

An example of fraud

A producer who knowingly submits a false statement in support of a claim

A life insurance policyowner is allowed ___ days upon policy delivery to return the policy for a full premium refund.

10

A policyowner has _____ days after policy delivery to return a major medical policy for a full refund

10

What is the MINIMUM benefit period that must be offered by a Long-Term Care Polic?

12 Months

a temporary producer license issued in maryland is valid for up to

15 month

An eligible employee can be excluded from group health coverage for up to _______ months is he/she is considered a "late enrollee".

18

A producer's license MUST be renewed every _______ years

2

Once a health insurance policy has been in force for _______ years, the policy may NOT be contested by the insurer

2

Producers must complete a total of _______ Continuing Education hours for each two-year licensing period

24

to be eligible for small employer group coverage, an employee must work an minimum of____hours in a typical week

25

A newborn is required to be covered for ______ days from the moment of birth.

31

At what age does the open enrollment period typically begin for Medicare Supplement coverage?

65

paying them to the insurance company Which of the following basics is a producer's fiduciary responsibility?

Collecting premiums and paying them to the insurance company

The ______________________ must be notified of a licensee's address change within 30 days of such change

Commissioner

Jim recently sold his whole life insurance policy under a viatical settlement contract. The proceeds of this contract could be subject to the claims of

Creditors

How often must the Commissioner examine each domestic insurance company?

Every five years

Which of the following is NOT information found in a life insurance buyer's guide? how to take legal action against an insurance company how to compare life insurance policy rates how to compare life insurance policy requirements how to determine how much life insurance to purchase

How to take legal action against an insurance company

When is an existing health insurance policy required to provide coverage for a newborn child

Immediately

An insurer is REQUIRED to offer which of the following to each long-term care applicant at the time of purchase?

Inflation protection

A Medicare Supplement policy may be cancelled by an insurer for which of the following reasons?

Material misrepresentation

Guide A producer who sells an individual life insurance policy in Maryland MUST deliver to the policyowner a

Policy Summary and Buyer's Guide

The promise of a discount in premium as an inducement to purchase insurance is an Unfair Trade Practice known as

Rebating

All of these may be an Unfair Claims Practice EXCEPT Refusing to pay claims without a reasonable investigation Refusing to pay persons bringing false or frauduent claims failing to promptly provide a reasonable explanation of any claim denial offering low amounts to force insureds to institute litigation

Refusing to pay persons bringing false or fraudulent claims

Who regulates the quality care provided by a health maintenance organization (HMO)?

Secretary of the Department of Health and Mental Hygiene

Claims for a Long-Term Care policy MUST be paid for which of the following conditions?

Senile dementia

In Maryland, a Producer may have his/her license revoked for which of the following acts?

Signing a prospect's name without their knowledge or presence

What may be the result of replacing an existing life insurance policy with a new one?

Surrender charge

Which of the following is NOT required in an order from the Commissioner?

The Governor's signature

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

The exceptions, reductions, and limitations affecting the basic provisions of the policy

A producer has committed an insurance crime that violates US Code 1033 (interstate commerce). who would be responsible for the prosecution of this crime?

US Attorney General

Which of the following is NOT a reason for the Commissioner to deny or refuse a producer license application?

Unintentionally misrepresented a material fact on the application

Terminally-ill life insurance policyowners may sell their policy at a discoun to a third party. This type of agreement is called a(n)

Viatical Settlements

A____ insurance company is one that was formed under the laws of another country outside of the U,S

alien

A separate converted policy may, at the option of the insurance company, be issued to cover a(n)

dependent

When collecting insurance premiums from a client, a producer MUST

forward premiums to the insurer on a timely basis

A producer's license may only be suspended or revoked if the producer

has been afforded a right to a hearing

A Buyer's Guide MUST

have it's content approved by the commissioner

A minor may receive a life insurance policy's death benefit ONLY

if the minor has an appointed guardian

Producer commissions may NOT be paid to

licensed producers not appointed by an insurer

What kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventative, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital?

long-term care

a viatical settlement broker may not advertise their services recommend a settlement provider to a viator charge fees make any transactions before being approved for a license

make any transactions before being approved for a license

Under the Maryland Health Insurance Plan, comprehensive health benefits are provided to

medically uninsurable residents

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

Twisting is an illegal act which involves

misrepresentation

A Medicare Supplement policy can be cancelled by the insurer for

nonpayment

When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT provide the applicant with a copy of the sales proposal submit to the producer's insurance company a copy of the signed notice regarding replacement obtain the beneficiary's signature provide the applicant with a notice regarding replacement

obtain the beneficiary's signature

the food and drug administration approves prescription drugs for treatment as stated on the drug's labeling. the description of a frug for treatments other then what's labeled is known as ___ use

off-label

XYZ corp was issued a group health policy for its employees. under this plan a

policy must be issued to XYZ, and a certificate must be issued to eac employee

The _______ is responsible for determining the appropriateness of a Medicare Supplement policy for an applicant

producer

When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer?

promptly

Which of the following is not a circumstance to which a temporary producer license can be issued? representative of a producer called to active military duty prospective producer who is waiting to take the state licensing examination a widow of a deceased producer any situation deemed by the commissioner to be in the public's best interest

prospective roducer who is waiting to take the state licensing examination

An insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a(n)

rebate

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

Twisting is

replacing an insurance policy from one insurer to another based on misrepresentationw

How long is the Contestable Period for health insurance policies sold in Maryland?

2 years

A licensee must notify the Commissioner within ___ days of any change in business address.

30

A producer must notify the Commissioner within _____ days of a felony conviction

30

If a producer has been engaged in an administrative action by any governmental agency, within how many days following the final deposition must the producer report the action to the Commissioner?

30

The Right-to-Examine period in Maryland for Long-Term Care policies is ____ days.

30

long-term care insurance and medicare supplement plans have a free-look period of _____ days

30

which of the following is not considered to be an act of fraud

Collecting a charge for insurance that is less than charge applicable to that insurance

Which of the following unfair trade practices involves a producer who makes public malicious statements about an insurer's financial condition?

Defamation

All of the following are typically included in a life insurance policy illustration EXCEPT premium of the policy names of the beneficiaries interest charged for policy loans cash surrender value in 20 years

Names of the beneficiaries

What is the required action to be taken by a Maryland licensee before operating under an assumed business name?

Notify Commissioner

coverage for newborns under a health plan must include coverage for

birth abnormalities

A long-term care policy may only exclude preexisting conditions for up to ___ months

6

a medicare supplement policy may exclude coverage for a pre existing condition for up to ___ months

6

A producer is meeting with a client to determine whether an annuity would be suitable for purchase. Which of the following topics needs to be discussed with this client?

Financial objectives

Which type of contract may NOT be issued by an insurance company? Long-term care contract Group life contract Disability income contract HMO contract

HMO contract

Which of the following is NOT a qualification to be licensed as a producer? passed the sate exam completed pre-licensing education high school diploma be 18 years of age

High School diploma

All Medicare Supplement policies MUST contain which provision

Pre-existing conditions may only be excluded from coverage for a maximum of 6 months

dependent children under a health insurance plan must provide coverage up to age

26

Maryland requires that a licensee completes ____ hours of continuing education on the subject of ethics eery reporting period

3

Tim's individual life insurance policy has just recently lapsed. His policy may be reinstated at any time within _____ years.

3

a life insurance replacement gives the policyowner the right to return the policy for a 100%refund within ___ days of policy delivery

30

within how many days must a producer report to the commissioner any administrative action made agins him

30

A producer who is licensed in Maryland but resident in another state is called a

nonresident producer

Insurance agent Kelly offers insured a $500 shopping card if they purchase an insurance product through her. What is this an example of?

rebating, which is an unfair trade practice

ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is called

reinsurance

all long-term care policy sold in north dakota are required to pay the same daily benefit amount for "at home" care as paid for

the daily amount paid for nursing home care

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 s is payable MUST disclose

the exceptions, reductions, and limitations affecting the basic provisions of the policy

a producer's renewal date for his her resident insurance license is on or before

the last day of the licensee's birth month

Mary's Medicare Supplement policy had been in effect for 12 months. She recently replaced the policy with a new one that provides better coverage. The replacing policy may only impose a ____ month time exclusion for pre-existing conditions

0

how long after its effective date will an individual life insurance policy become incontestable

2 year

Written notice of a health insurance claim should be given to the insurer within __ days after the occurrence of any loss covered by the policy.

20

Producers must complete a total of ___ Continuing Education credits for each two-year licensing period.

24

Which of the following actions by a producer would NOT result in a license suspension or revocation? Producing an inadequate amount of new premium producer demonstrates incompetency to transact business as an insurance producer producer misrepresents the terms of an existing insurance contract producer misappropriates an insured's premium payment

Producing an inadequate amount of new premium

Which of these is NOT an Unfair Claims Settlement Practice?

Providing claim payments to insureds under the guidelines of the insurance contract

the entire contract provision states that an entire contract consists of the actual policy and the

application

A producer may begin to solicit insurance ONLY when

appointed by an insurer

_____is the authority given to a producer to sell solicit or negotiate insurance on behalf of the insurer

appointment

An example of replacement is

cancelling a term life policy to buy a whole life policy

An order issued by the commissioner that prohibits a specific practice listed in the order is called a(n)

cease and desist order

to conduct insurance business in this state, an insurer must be issued a certificate of authority, the entity which issues the certificate of authority is the

commissioner

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

company

the Maryland insurance commissioner

counseis and advises the governor on all matters assigned to the maryland insurance administration

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 ___________ has the right to renew a small employer health plan

employer

how often must an insurance producers license in maryland be renewed

every two years

Recording the receipt and distribution of premiums due to an insurer is considered a producer's _________ responsibility

fiduciary

The renewability provision for an individual long-term care insurance policy must be located on the policy form's

first page

Maria the insurance producer completes a sale by collecting the required signatures on the application and obtaining the initial premium. Afterwards, she deposits the check into her personal checking account. Maria has committed what crime?

fraud

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 practice known as

illegal inducement

Benefits for a Medicare Supplement Policy

must not duplicate Medicare Benefits

during the examination of an insurer's books and records by the commissioner the insurer

must not impede the examination


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