Florida Statues, Rules, and Regulations
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
Authorized insurer.
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced
Who examines the books and records of insurance companies in Florida?
The Chief Financial Officer
The Office of Insurance Regulation is responsible for all of the following insurer activities EXCEPT
Issue of securities.
Which of the following is NOT true regarding a Certificate of Authority?
It is issued to group insurance participants.
What is the major difference between a stock company and a mutual company?
Ownership
A participating insurance policy may do which of the following
Pay dividends to the policyowner
Who might receive dividends from a mutual insurer?
Policyholders
Which of the following is among the regulations set forth by the Florida Replacement Rule?
Providing a written comparison and summary statement
In what way can an agent demonstrate a high standard of ethics?
Putting the client's best interests before their own
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it is in the best interest of the client.
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating.
Which of the following insurers are owned by stockholders?
Stock
Which of the following may NOT be included in an insurance company's advertisement?
That its policies are covered by a state Guaranty Association
Which of the following is an example of a producer's fiduciary duty?
The trust that a client places in the producer in regard to handling premiums.
An agent delivers a life insurance policy to the proposed insured. The insured makes a decision not to accept the policy. The insured may return the policy for a full refund of premium within how many days?
14
ontinuing education requirements must be met every
2 years.
In order to maintain an insurance license, an agent licensed for less than 6 years will need to satisfy Florida's continuing education requirement of
24 hours every 2-year period.
All agents licensed in this state must complete how many hours of continuing education specific to law and ethics?
4
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds
$50,000
What is the maximum allowed value of promotional gifts that an agent may give to a prospective insured?
$100
If an agent does not notify the insurer of an address change, what is the maximum penalty that can be imposed for a one-time offense?
$250
Which of the following would be required to be licensed as an insurance producer?
A salaried employee who advertises and solicits insurance
Which of the following insurance products will be subject to the regulation on life insurance solicitation?
A term life policy
What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws?
Absolute
Which of the following is another term for an authorized insurer?
Admitted
Which of the following would NOT be a violation of state insurance regulations?
Agent C uses her license to write only business other than controlled.
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?
Defamation
In order for a debtor group to qualify for group life insurance, what should be the minimum number of participants joining the plan every year?
100
If a licensee changes his or her residence address, within how many days must the department be notified?
30
An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance?
30 days
In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year?
50%
What kind of policy does NOT typically require proof of insurability?
Group insurance
In insurance transactions, fiduciary responsibility means
Handling insurer funds in a trust capacity.
Under what conditions will proof of insurability NOT be required of an employee wanting to enroll in a group insurance plan?
If the employee enrolls within a certain time period
An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action?
Send a written notification to the department of insurance
An insured received a new life insurance policy 5 days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. What provision would allow the insured to return the policy for a full premium refund?
Free look
An applicant for a life agent's license may obtain a temporary license for a maximum period of
6 months.
Which of the following persons is required to hold a producer license?
A person who negotiates insurance contracts
When transacting business in this state an insurer formed under the laws of another country is known as a/an
Alien insurer.
All of the following would be considered rebating EXCEPT
An agent misrepresents policy benefits to convince a policyowner to replace policies
What is reinsurance?
An agreement between a ceding insurer an assuming insurer
What is a foreign insurer?
An insurer with a home office in another state
How often must domestic insurance companies be examined by the Chief Financial Officer in Florida?
At least every 5 years
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule
How are state Insurance Guaranty Associations funded?
By their members - authorized insurers
Which of the following must an insurer obtain in order to transact insurance within a given state?
Certificate of authority
What term is used for replacing insurance policies for the sole purpose of making commissions?
Churning
Applications to an insurer must include all of the following information, EXCEPT
Credit history report
Which of the following is NOT a responsibility of the Office of Insurance Regulation?
Enacting new insurance laws
Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?
Insurance Guaranty Association
Insurance contracts are agreements between which two parties?
Insurer and policyowner
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status.
Which statement is NOT true regarding a policy summary?
It must be combined with a sales illustration.
What are the 2 offices of the Financial Services Commission?
The Office of Financial Regulation and the Office of Insurance Regulation
Which of the following entities is responsible for agent licensing and administrative supervision?
The Office of Insurance Regulation
If an agent is in the military, which of the following is true?
The agent cannot sell a policy to another active military person who is of a lower rank.
Which of the following dates must be contained in a policy summary?
The date the summary was prepared
If a person accumulates more continuing education hours than is necessary to fulfill the requirements for a 2-year period, which of the following will occur?
The extra hours may be continued into the next period.
Which of the following is an agreement between an insured and an insurer, where the insurer agrees to indemnify the insured for specific losses in exchange for a premium?
The insurance contract
When an insurer appoints an agent,
The insurer is bound by the agent's acts.
If a life insurer holds the proceeds of any policy it issues, which of the following is true?
The proceeds may be exempt from any creditor's claims against a beneficiary other than the policy owner.
How must a replacing producer respond to an applicant wishing to replace existing life insurance?
The producer must provide the applicant with a Notice Regarding Replacement.
In accordance with the Code of Ethics, agents must provide a completed application to
The prospective insured and the insurer.
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. The insurer is hoping that this advertising will help to eliminate the competition and therefore create a monopoly. Which of the following best describes this act?
Illegal
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances
When replacing life insurance, the duties of the replacing insurance company include all of the following EXCEPT
Maintaining a copy of the Notice Regarding Replacement and all sales proposals used for at least 5 years.
Which of the following best describes the unfair trade practice of defamation?
Making derogatory oral statements about another insurer's financial condition
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Mutual
Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage?
No, the group must be formed for a purpose other than obtaining group insurance
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid.
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
Notice Regarding Replacement
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license.
Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility?
Promptly forwarding premiums to the insurance company
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
Rebating.
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised?
Replacement regulations will not apply in this situation.
Under a group plan, Certificates of Insurance must include all of the following EXCEPT
The name of the writing agent.
Which term describes the benefits of a life insurance policy that the policyowner does not automatically relinquish even if the policy lapses?
Nonforfeiture values
All advertisements are the responsibility of the
Insurer.
An applicant for an insurance agent's license must
Complete a prelicensing education course.
Which of the following authorities grants and revokes licenses?
Department of Financial Services
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
Discrimination.
Which of the following best describes an insurance company that has been formed under the laws of this state?
Domestic
Who does the secondary notice provision protect?
Elderly insureds
Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in
Expiration of the license.
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
False advertising
The requirement that agents not commingle insurance monies with their own funds is known as
Fiduciary responsibility
No insurance policy form can be issued, delivered, or used in this state unless it has been
Filed with and approved by the Office of Insurance Regulation.
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
Foreign
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?
Foreign
Which of the following activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance agent's license?
Forgery
Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?
Fraternal benefit society
When does a free-look period begin on a life insurance policy?
When the policy is delivered to the insured