Course 19
The cost of services charged by the Health Insurance Counseling Advocacy Program (HiCap) is -$25 per appointment -$50 per appointment -$75 per appointment -no cost
"no cost" HiCap services are mandated by Federal and State laws and are free and unbiased.
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? $65,000 $85,000 $150,000 $170,000
"$170,000". In a felony prosecution of insurance fraud for worker's compensation benefits, the fine might increase up to $170,000 or an amount that is double the value of the defrauded amount, depending on which penalty is greater.
The free-look period for life insurance policyowners age 60 or older is -10 days -15 days -30 days -60 days
"30 days" The free-look period for life insurance policies on individuals age 60 and older is 30 days in California.
Life insurance surplus must be distributed to policyowners at what frequency? -Monthly -Quarterly -Semi-annually -Annually
"Annually". Life insurance surplus must be distributed to policyowners annually in a participating policy.
When selling a long term care insurance rider to an applicant, a life agent must take into consideration all of these factors, EXCEPT -Ability to pay -Attending physician's statement -Needs of the client -Goals of the client
"Attending physician's statement". During the solicitation of a long term care insurance rider, a life agent must consider all of these EXCEPT an attending physician's statement.
The California Insurance Code requires that an insurer must have enough assets to cover its liabilities and for reinsurance of all outstanding risks. To remain solvent, it must also possess additional assets equal to what amount? -50% of its stock value -Its paid-in capital -$10,000,000 -Amount determined by the Insurance Guarantee Association
"Its paid-in capital". In order to be solvent, an insurer must not only be able to provide for its liabilities and reinsure capital risks, but must also possess additional assets equivalent to the required paid-in capital.
What type of license is required for an individual who charges a fee to review an insured's existing life insurance policy? -Adjuster -Life and disability counselor -Life and disability analyst -Life agent
"Life and disability analyst". A life and disability insurance analyst license is required to review an insured's existing life or disability policy for a fee.
An agent has advertised that the insurer to which the agent is appointed with is a member of the Insurance Guarantee Association. This agent has committed a(n) -felony -misdemeanor -unfair method of competition -unauthorized trade practice
"unfair method of competition". It is considered an unfair method of competition for an agent to advertise that the insurer to which the agent is appointed with is a member of the Insurance Guarantee Association.
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) -illegal transaction -immediate annuity -deferred annuity -unnecessary replacement
"unnecessary replacement" This is an example of unnecessary replacement.
The California Insurance Code defines "policy" as a(n) -accepted offer -promissory arrangement -written contract -written quotation
"written contract" A "policy" as described by the California Insurance Code is a written contract in which one party promises to indemnify another against loss that arises from an unknown event.
How long must a policy be in force before an insurer is prohibited from denying claims based on misstatements made on the health policy application? -1 year -2 years -3 years -4 years
"2 years". The incontestable period for a health insurance policy in California is 2 years.
According to the California Insurance Code, who is responsible for submitting a life agent's appointment? -Life agent -Commissioner -Insurer -State
"Insurer". The insurer is responsible for submitting a l'ife agent's appointment.
Both the Federal and state governments jointly finance which health insurance entitlement program? -Medi-Cal -MRMIP -Medicare -Social Security
"Medi-Cal" Medi-Cal is a health entitlement program jointly financed by the Federal and state governments.
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 -10 days -20 days -30 days -40 days
"30 days" Section 1729.2 of the California Insurance Code requires insurances producer application and licensees to notify the insurance commissioner in writing, within 30 days of changes in background information after an application has been submitted or a license has been issued.
What is an "insurance broker" according to California Insurance Code? -A person who offers or attempts to negotiate life settlement contracts between an owner and providers -A person authorized to assist a broker or agent in transacting insurance. -A person compensated for transacting insurance on behalf of another person with an insurer -A person who requires a license and charges a fee to review an insured's existing life or disability policy.
"A person compensated for transacting insurance on behalf of another person with an insurer" An insurance broker is a person compensated for transacting insurance on behalf of another person with an insurer.
Which of the following is NOT considered to be an unfair claims settlement practice? -Advising a claimant to hire an attorney -Failing to provide a reasonable basis for the denial of a claim upon request -Failing to adopt and implement reasonable standards for prompt investigation and processing of insured's claims -Misrepresenting to insureds pertinent facts or policy provisions relating to coverage at issue
"Advising a claimant to hire an attorney". Directly advising a claimant to hire an attorney is not an unfair claims settlement practice.
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 -Denial -All of these
"All of these" Failure to report background changes within 30 days as required under Section 1729.2 of the California Insurance Code could subject a licensee or applicant to formal disciplinary action, including a fine, suspension, denial, restriction, or revocation of the license.
According to PPACA, what is a health benefits exchange? -An entity to which individuals and small businesses can have access to affordable health coverage -An entity where existing policies can be converted to newer policies -An entity that provides tax credits to employers for providing health insurance to their employees -An entity that offers affordable health coverage to only those with low incomes
"An entity to which individuals and small businesses can have access to affordable health coverage". PPACA creates new entities called American Health Benefits Exchanges through which individuals, small businesses, and those who do not have access to affordable employer coverage can purchase 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 -A guest is injured by a fall from the insured's driveway -An insured is sued for unintentional slander of another person -An insured is admitted to the hospital for delivery of a newborn
"An insured suffers a financial loss in the state lottery" An insurable event can be defined as any event which may cause a loss to a person with insurable interest. A lottery or its outcome cannot be insured against.
How is an agent's first year commission calculated for a replacement long-term policy? -Based on the new policy's annual premium -Based on the original policy's annual premium -Based on the difference between the new and original policy annual premiums -The new policy's commission minus a penalty
"Based on the difference between the new and original policy annual premiums". When an agent sells a replacement long-term care policy, the agent's first year sales commission will be determined 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? -Up to 10 days -Between 15 and 20 days -Between 1 0 and 30 days -Between 30 and 45 days
"Between 10 and 30 days". Every policy of individual life insurance shall have a notice stating that after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by delivering it or mailing it to the insurer or to the agent through whom it was purchased. This period shall not be less than 10 days nor more than 30 days.
Which of the following actions is NOT allowed by Health Insurance Counseling and Advocacy Program (HiCAP) counselors? -Medical record keeping assistance -Charge a fee -Assist in policy evaluation -Assist in understanding Medicare Supplements
"Charge a fee". HI CAP (the Health Insurance Counseling & Advocacy Program) provides free and objective information and counseling about Medicare.
What prevents a life insurance policy from being rescinded by the insurer after being in force for two years? -Incontestability clause -Free-look provision -Grace period provision -Subrogation
"Incontestability clause" Insurers are prohibited from denying claims or rescinding a policy based on misstatements in a life, accident, or disability policy application after the policy has been in force for two years. The is called the incontestability clause.
Who does a life settlement broker represent? -Insurance company -Life agent -Private firm -Individual wanting to sell their life policy to a third party
"Individual wanting to sell their life policy to a third party". A life settlement broker represents the 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 -Respite care only -Home care only -Institutional (nursing facilities) and home care -Loss of life
"Institutional (nursing facilities) and home care" The California Insurance Code states that policies or certificates may be called comprehensive long term care insurance if they provide benefits for institutional (nursing facilities) and home care.
Which of the following is NOT a primary objective of insurance regulation? -Insurance Code enforcement -Licensing agents -Protect policyowners -Interpret policy provisions
"Interpret policy provisions". All of these are considered objectives of insurance regulation EXCEPT "interpret policy provisions".
jim is applying to become an insurance agent and has a past misdemeanor conviction that was later expunged due to California Penal Code 1203.4. Which of the following statements is correct? -Jim is not required to disclose the conv'iction on his insurance license application -Jim must still disclose the conviction on his insurance license application -Only convictions that have been expunged within the last 3 years need to be reported on an insurance license application -Only expunged felonies are required to be reported on an insurance license application
"Jim must still disclose the conviction on his insurance license application" Pursuant to California Penal Code Section 1203.4, you are required to report a conviction that was later expunged.
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 Insurer -Lance Manyon Best Buy Insurance Company -Lance Manyon Insurance Services -Manyon Indemnity Company
"Lance Manyon Insurance Services" If the word "Insurance" is included in the name, the California Department of Insurance then checks to make sure one of the six definitive words ("Agency," "Services," "Marketing," "Sales", "Center" or "Solutions") is also included in the name. In this instance, Lance Manyon Insurance Services would be acceptable.
According to the California Insurance Code, what term is used to describe a fact so important it could affect the policy premium? -Guarantee -Materiality -Absolute -Warranty
"Materiality". Materiality is relevant information that would probably influence an insurer's assessment of a proposed contract.
People with low income can be provided with medical assistance through which program? -Medi-Cal -Social Security -HSA -Medicare
"Medi-Cal" Medi-Cal is California's Medicaid health care program, designed to provide medical assistance to people with low incomes.
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 one activity of daily living -Minimum of two activities of daily living -Minimum of three activities of daily living -Minimum of four activities of daily living
"Minimum of two activities of daily living". To meet the chronically ill requirement of a Long-Term Care policy, an individual must be UNABLE to perform a minimum of two activities of daily living.
According to section 1729.2 of the California Insurance Code, which of these does NOT qualify as "background information"? -Misdemeanor charges filed, not resulting in a conviction -A breach of fiduciary duty -A filing of felony criminal charges in state or federal court -An administrative action regarding a professional or occupational license
"Misdemeanor charges filed, not resulting in a conviction". A misdemeanor CONVICTION would qualify as "background information".
What is required after a life agent sells an insurance policy to an applicant without being appointed by the insurer? -Notice of appointment must be submitted to the Commissioner -Notice of appointment must be submitted to the insurer -Penalty is assessed to the insurer and life agent -Application is automatically turned away
"Notice of appointment must be submitted to the Commissioner" If a life agent sells an insurance policy on behalf of an insurer without an appointment, the insurer must submit a notice of appointment to the Commissioner within 14 days.
A representation may be altered or withdrawn -anytime with the applicant's initials -anytime with the insurer's approval -only before the insurance is in effect -only after the policy has been issued
"Only before the insurance is in effect". A representation may be altered or withdrawn only before the insurance is in effect.
Which of the following is NOT an accurate description of Access for Infants and Mothers Program (AIM)? -Eligibility is based on income -Low-cost health care coverage for pregnant women -Only women who have private insurance plans with a maternity-only deductible or co payment greater than $500 are eligible -Only women who have private insurance plans with a maternity-only deductible or co payment greater than $1,500 are eligible
"Only women who have private insurance plans with a maternity-only deductible or co payment greater than $1,500 are eligible" All of these statements are true regarding the AIM Program EXCEPT "Only women who have private insurance plans with a maternity-only deductible or copayment greater than $1,500 are eligible". AIM is available to women who have private health insurance plans with a maternity-only deductible or copay greater than $500.
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 -PCIP was created by the State of California for people rejected by private health insurers due to pre-existing conditions -PCIP was created by the PPACA for low income individuals hoping to obtain health insurance -PCIP was created by the State of California for low income individuals hoping to obtain health insurance
"PCIP was created by the PPACA for people rejected by private health insurers due to pre-existing conditions". The Pre-existing Condition Insurance Plan (PCIP) is a form of health insurance coverage offered to uninsured Americans who have been unable to obtain coverage because of a pre-existing health condition.
According to the California Insurance Code, how is the word "may" interpreted? -Irrevocable -Mandatory -Voluntary -Permissive
"Permissive" When used in the California Insurance Code, the word "may" is intended to be permissive.
What does the term "illustration" mean when used in the phrase "life insurance policy illustration", according to the California Insurance Code? -Publication designed to help an applicant reach an informed decision about which coverage is appropriate -A copy of the sales materials used in an insurance transaction -A copy of the terms given for the free-look period -Presentation of policy features that includes non-guaranteed elements
"Presentation of policy features that includes non-guaranteed elements" The California Insurance Code defines "illustration" as a presentation of policy features that includes non-guaranteed elements.
Which type of jurisdiction requires an insurer to have its rates accepted by the Insurance Department prior to using them? -Prior acceptance -File and use -Prior approval -State approval
"Prior approval". A prior approval state requires that an insurance company receives approval for a new insurance rate before it is sent to the public.
Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen to her group health coverage? -She will have to purchase short-term health coverage through the State while on leave -Her coverage will be temporarily suspended while she is on leave -She continues to be enrolled during the leave -She will be forced to convert her group plan to an individual plan
"She continues to be enrolled during the leave" FMLA requires the same group health insurance benefits that would exist if the employee were not on leave.
Which of the following does NOT have to be included on life insurance policy illustrations? -Age of the insured -Name of the agent -Statement that all values and benefits are guaranteed -Name of the insurer
"Statement that all values and benefits are guaranteed" Not all benefits and values are guaranteed in life insurance policies. Some have non-guaranteed values which must be described in the illustration.
Why is a life insurance policy's delivery date important? -The probationary period begins on the policy delivery date -The elimination period begins on the policy delivery date -The free-look period begins on the policy delivery date -The grace period begins on the policy delivery date
"The free-look period begins on the policy delivery date" The California Insurance Code gives an individual between 1 0 and 30 days to return a life policy for cancellation. This free-look period begins on the policy delivery date.
All of these are reasons the Commissioner may disapprove a licensee's request to use a fictitious name EXCEPT -The name is too similar to a name already filed and in use by another licensee -The use of the name may mislead the public in any respect -The name is the licensee's actual name -The name states, infers or implies that the licensee is an insurance company
"The name is the licensee's actual name" According to the California insurance code, the commissioner can disapprove a licensee's request to use a fictitious name for all of these reasons EXCEPT "The name is the licensee's actual name".
According to PPACA, how long can an adult be covered as a dependent under their parents' insurance plan? -Up to age 18 -Up to age 21 -Up to age 26 -Up to age 30
"Up to age 26" Under PPACA, an adult child be covered by their parents' insurance coverage as a dependent until age 26.
A person who asserts a right of recovery under an insurance policy is called -tertiary -claimant -insured -agent
"claimant". As defined by the California Code of Regulations, a person who asserts a right of recovery under an insurance policy is called the claimant.
An agent's attempt to stop the replacement of an existing life insurance policy is known as -preservation -prevention -conservation -concealment
"conservation". An agent's attempt to stop the replacement of an existing life insurance policy is known as conservation.
Anyone employed in California to assist an insurance agent in transacting insurance is called an insurance -assistant -solicitor -manager -consultant
"solicitor". An insurance solicitor is a person authorized to assist a broker or agent in transacting insurance.
An insurer that has been found using higher rates based on race, religion, or ethnicity is said to be engaging in -unfair discrimination -rebating -twisting -defamation
"unfair discrimination" It is an illegal practice to unfairly discriminate against a person in any way on an insurance-related matter. An example would be charging a different rate for someone in the same actuarial class. Fair discrimination is necessary for the issuance of life insurance policies, which is based on mortality. Also, no insurer or agent may cancel or refuse to underwrite or renew a particular insurance risk based on race, color, creed, sex, sexual orientation, or blindness of an applicant or policyholder.