Florida State Licensing Exam Prep: Life & Health Insurance Agent #1-240

Advertising gifts given by an agent to a prospective client are not allowed to exceed

$25

What percentage of eligible persons must a policy cover in a noncontributory group?

100%

A person is required to be AT LEAST how old before he or she is licensed as an agent in most states?

18

If an agent has been licensed for LESS THAN six years, how many hours of continuing education must they complete every two years?

24 hours - five being in law and ethics

Agents must notify the Commissioner or Director of a change of home address within a MAXIMUM of how many days?

30

What is the maximum number of days a licensee has to notify the Department of Financial Services of a change in address?

30 days

After a group plan is terminated in Florida, how many days are the insureds guaranteed coverage?

31 days

If an insurance agent is not appointed, how long before their license is terminated?

48 months

How many hours of continuing education on the subject of law and ethics does Florida law require an insurance agent have every TWO years?

5 hours every two years

What is the maximum percentage of controlled business an agent may produce?

50%

Deceptive advertising is considered to be what?

A form of misrepresentation - false or incomplete statements during the course of an insurance transaction

What kind of insurance company solicits insurance business by mail without the assistance of a licensed agent?

Admitted mail order insurance company

Insurer can refuse to insure an individual because of

Age, Occupation, or Health Condition

Insurance companies that are organized in countries outside of the United States are referred to as

Alien companies

An agent in Florida with a nonresident insurance license must

Also hold a similar license in their state of residence

An agent may legally share commissions with only

Another agent who is licensed in the same line of business

The Financial Services Commission may hold hearings for

Any reason deemed necessary

What act is an agent NOT authorized to do on behalf of an insurer?

Authorize claim payments

What is one of many acts an agent is NOT authorized to do on behalf of an insurer?

Authorize claim payments

What can an agent provide to help a prospective client understand and purchase the most appropriate product?

Buyer's Guide

The insurer must provide a prospective buyer with

Buyer's Guide and Policy Summary

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion - unfair trade or marketing practice in which an agent makes untrue threats to a customer to motivate a sale

J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?

Coercion - unfair trade or marketing practice in which an agent makes untrue threats to a customer to motivate a sale

Rating services are designed to rate

Companies - not people

Insurance business that is written on an agent's own life, property, or interests

Controlled Business

Publishing or circulating brochures falsely criticizing the financial condition of an insurance company is known as

Defamation

Which unfair trade practice involves an agent who makes malicious statements about another person's financial condition?

Defamation

Before approving an application for a business entity acting as an agent, the Commissioner or Director must find that the business entity has

Designate an agent to be responsible for compliance with insurance laws

The Insurance Commissioner or Director may examine the records of an insurance company in order to

Determine the solvency of a company (financial strength)

An insurance company incorporated under the laws of the state in which its home office is located is called

Domestic company

In Florida, an insurer domiciled and incorporated in this state is called what?

Domestic company

The Commissioner or Director of Insurance is empowered to

Enforce state laws relating to insurance

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

Fair Credit Reporting Act

Which federal law allows an insurer to obtain an inspection report on a potential insured?

Fair Credit Reporting Act

An insurance company that exaggerates its dividends in a newspaper advertisement may be guilty of what?

False advertising

An insurance company that promises lower insurance rates than any other company may be charged with what?

False advertising

The act of an insurance company publishing misleading information about its policy's provisions is called what?

False advertising

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as

Fiduciary responsibility

Which of the following is NOT a consequence for placing business with an unauthorized insurer?

First degree misdemeanor

If an insurance company is organized under the laws of New Jersey and licensed to do business here, it is considered what in Texas?

Foreign company

An insurance company that is incorporated in New Hampshire and does business in Florida is defined in Florida as

Foreign insurer

M completes an application for health insurance, but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

Free-Look period has expired

Making malicious and false statements about an insurer, replacing an insurance policy from one insurer to another based on misrepresentation, being convicted of a felony, forging a name on an insurance application, and misrepresenting any fact about an insurance policy are all ways to

Have the agent's license suspended

Working for a foreign insurer will NOT cause an agent to

Have their license suspended

Writing primarily controlled business will cause a licensed agent to

Have their license suspended or revoked

The Commissioner or Director of Insurance may suspend, revoke, or refuse to renew the license of an agent who

Is found guilty of misrepresentation or fraud in obtaining the license

An insurance company will not compensate

Licensed agent not appointed by the company

The fund that assures policyholders payment of benefits on Life and Health policies, if the company is insolvent at the time of the claim, is called the

Life and Health Insurance Guaranty Association

The rules and regulations of the Life and Health Insurance Guaranty Association apply to

Life and Health policies issued by companies authorized in that particular state

What are some of the factors considered when the Department of Financial Services determines if an agent's home is an insurance agency?

Listing the address on the agent's business cards, business solicitation is done at this location, clients are met at this location

What is the main reason for regulating the insurance industry?

Maintain the solvency of insurance companies

An agent who tells a client that dividends are guaranteed may be guilty of

Misrepresentation - false or incomplete statements during the course of an insurance transaction

Convincing a prospective insured to buy an insurance policy based on exaggerations is called what?

Misrepresentation - false or incomplete statements during the course of an insurance transaction

During the course of an insurance transaction, if an agent makes a false or incomplete statement, he or she can be found guilty of what?

Misrepresentation - false or incomplete statements during the course of an insurance transaction

An agent's commission is

Not classified under the principal areas of Florida insurance laws

How can an agent-in-charge have more than one location?

Only if the agent-in-charge is present when insurance activity occurs

A certificate of authority does what?

Permits an insurance company to transact business in that state

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Policy was returned within the free-look period, premium will be fully refunded

No insurer shall refuse to insure an individual because of

Race

Underwriting uses inspection reports, credit reports, the MIB, but NOT a

Rating service

Offering a client something of value not stated in the contract in exchange for their business is considered to be what?

Rebating

Offering a prospective insured special dividends to induce them to complete a sale is an example of what?

Rebating

Returning a portion of a premium as an inducement to purchase insurance is an example of what?

Rebating

Sharing commissions with an agent licensed in the same line of business is NOT an example of what?

Rebating

Splitting commissions with a policyholder who has purchased additional coverage is considered what?

Rebating

Gender is used in underwriting to determine coverage and cost, but it CANNOT be used to

Reject an application

Hazardous hobbies, unfavorable weight, and high risk medical history are all basis on which insurers may

Reject an application

What type of insureds are life insurance companies NOT allowed to make policy rate discriminations against?

Religion, Marital Status, Race

Charging for an additional product without the applicant's consent is an example of what?

Sliding

What type of insureds are life insurance companies allowed to make policy rate discriminations against?

Smokers

If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in that particular state, who would be liable?

The agent and the company

It is fair to discriminate in amount of benefits for life and health policies when

The individuals are in different rate classes

In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?

The state where they are conducting business

State insurance laws specifically allow the Commissioner or Director to issue a temporary license to which the following individuals?

The surviving spouse of a deceased agent - this is to allow the surviving spouse time to take over or dissolve their deceased spouse's insurance business

An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out is an example of what?

Twisting

Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is an example of what?

Twisting

Offering different terms of coverage for policyowners in the same risk classificiation is an example of

Unfair Discrimination

Failing to accept or deny a claim within reasonable time after proof of loss is submitted is an example of what?

Unfair claim settlement practic

Attempting to settle claims on the basis of an application that was altered without the consent of the insured is an example of what?

Unfair claim settlement practice

Compelling an insured to initiate a lawsuit by offering less on an insurance claim is an example of what?

Unfair claim settlement practice

Failing to acknowledge and act promptly with respect to an insurance claim is an example of what?

Unfair claim settlement practice

Turning down a claim without providing the basis of denial is an example of what?

Unfair claim settlement practice

Comparisons showing that a policy has higher benefits is NOT an example of what?

Unfair methods of competition and deceptive practices in the business of insurance

Agreements between insurance companies not to offer coverage in a defined geographic region for three months is an example of what?

Unfair trade practices under state law

Inaccurately describing guaranteed elements of a life insurance policy is an example of what?

Unfair trade practices under state law

Using a portion of commission payments to help applicants pay for insurance they otherwise cannot afford is an example of what?

Unfair trade practices under state law

A stock life insurance company that issues both participating and nonparticipating policies is doing business on

a mixed plan

Which employer tasks does a Professional Employer Organization normally handle?

administration tasks

The Life and Health Insurance Guaranty Association is funded by

assessments on member companies

The coordination of benefits (COB) provision exists in order to

avoid duplication of benefit payments

A person who places insurance on behalf of anyone seeking insurance must

be licensed as an agent

The Commissioner or Director of Insurance has the power to

conduct examinations of insurance companies

The purpose of the Guaranty Fund is to

ensure that claims filed against insolvent insurance companies will be paid

A stock insurance company is owned by

it's stockholders

A mutual insurance company is owned by

its policyholders

Which type of insurance company allows their policyowners to elect a governing body?

mutual

An insurance broker is a representative of

the insured

According to State insurance law, while transacting insurance business, agents act as representatives of

the insurer

One of the state purposes of the Life and Health Insurance Guaranty Association is

to assist in the prevention of insurer insolvencies

A foreign insurance company is one that is incorporated

under the laws of another state