L/A/H Insurance . Ch17.Life, Accident, & Health Law, Regulation and Ethics . Questions
Which branch of state government is responsible for creating state law, including insurance code? A. Legislative B. Executive C. Judicial D. Legislative & Judicial
A State law; including insurance code
Offering a leather briefcase, sporting tickets, special inside information or a portion of the policy commission would all be considered forms of: A. Unfair discrimination B. Rebating C. Twisting D. Boycott/Coercion
B
The CIC is part of which branch state of government? A. Legislative B. Executive C. Judicial D. None of the above
B
The failure to display an agent's license number on all marketing or sales literature may result in fines beginning at $200 and, for the third and subsequent offenses, not exceeding: A. $500 B. $1,000 C. $5,000 D. $10,000
B
The insurance commissioner decides to conduct a formal investigate hearing. How many days of advanced notice of the hearing must be provided for all those involved in the hearing? A. 20 B. 30 C. 60 D. 90
B
The term that best describes the life insurance death benefit, subject to conditions of contract, minus any loans and/or loan interest, is: A. Gross Premium B. Limit of Liability C. Limit of Insurability D. Inside Policy Limitations
B
What is the fine unintentionally violating the Unfair Trade Act? A. $2,500 B. $5,000 C. $10,000 D. $100,000
B
Which investment option below would an insurer be least likely to invest their assets in? A. Corporate Bonds B. Small Cap Growth Stocks C. Government Backed Mortgages D. Policy Loans
B
Which of the following terms best describes the life insurance death benefit, subject to the conditions of the contract, minus any loans and/or loan interest? A. Gross Premium B. Limit of Liability C. Limit of Insurability D. Policy Inside Limitations
B
a person who falsely signs a claim form may be guilty of: A. lying B. perjury C. Warranty D. cheating
B
The failure to display an agent's license number on all marketing or sales literature may result in fines beginning at $200 and not exceeding ______ for third and subsequent offenses. A. $500 B. $1,000 C. $5,000 D. $10,000
B 1st offense $200 2nd offense $500 3rd offense $1,000
Which statement below is NOT TRUE when discussing insurance department hearings? A. Witnesses and records can be subpoenaed. B. Testifying falsely under oath is called misrepresentation. C. 30-day notice must be provide. D. Attorneys can be present.
B perjury
According to the CIC, what is the difference between the words "shall" and "may"? A. Shall means mandatory, while may means permissive. B. Both shall and may are permissive C. Both shall and may are mandatory. D. Shall means permissive, while may means mandatory.
A
According to the California Insurance Code, which of the following actions does not fall under the definition of "transacting" Insurance? A. Receiving agent commissions B. Negotiating insurance contracts C. Soliciting insurance contracts D. Addressing matters that arise either before or after a sale is made.
A
According to the the insurance code, what is the difference between the words "Shall" and "May"? A. Shall means mandatory, while may means permissive B. Both shall and may are permissive C. Both Shall and may are mandatory D. Shall means permissive, while may means mandatory
A
An agent can submit an insurance proposal for a company that they are not appointment with. Is this statement true or false? A. True B. False
A
An agent may submit an insurance proposal for a company with which he is not appointed. Is this statement TRUE or FALSE? A. True B. False
A
How many continuing education hours is a Life agent required to complete during the first 2 years of license. A. 24 B. 30 C. 50 D. 40
A
If a permanent license is not renewed, all agent appointments will terminate. The license itself will not terminate, but will be deemed: A. Inactive B. Deactivated C. Suspended D. Unofficial
A
If a permanent license is not renewed, all agent appointments will terminate. The license itself will not terminate, but will be deemed: A. Inactive B. Deactivated C. Suspended D. Unofficial
A
If an agent submits a policy application and the policy is issued by a company the agent is not appointed with, the issuer of the policy must file an agent notice of appointment from with the CDI within: A. 2 weeks/14 days following application submission B. The 31 day grace period C. 3 weeks/21 day following application submission D. This is an unauthorized transaction, and is not allowed
A
If an agent submits a policy application and the policy is issued by a company with which the agent is not appointed, the issuer of the policy must file an agent notice of appointment form with the CDI: A. Within 2 weeks or 14 days following application submission. B. Within the 31-day grace period. C. Within 3 weeks or 21 days following application submission. D This is an unauthorized transaction and is not allowed.
A
The rules for "Paid-In Capital" or "Capital Paid In" are not the same for: A. Foreign Mutual Companies B. Domestic Mutual Companies C. Alien Mutual Companies D. Domestic Stock Companies
A
The rules for paid-in capital or capital paid in are not the same for: A. Foreign Mutual companies B. Domestic Mutual companies C. Alien Mutual companies D. Domestic Stock companies
A
What did passage of the McCarran-Ferguson Act accomplish with respect to the regulation of the insurance industry? A. It ensured continued state regulation of insurance B. It taxed insurance companies for additional federal revenue C. It deemed insurance a form of interstate commerce D. It exempted insurance from all federal government regulation and taxation
A
What is the minimum age requirement to obtain an insurance license? A. 18 B. 21 C. 30 D. There is no age requirement.
A
What is the minimum age requirement to obtain an insurance license? A. 18 B. 21 C. 30 D. There is no minimum age limitation
A
When does an agent need to inform her client of the effective date of coverage and/or the circumstances under which coverage will be effective, if such conditions exist? A. at time of policy application B. at time of policy delivery C. when the agent initially establishes the appointment D. at the time of the first medical exam.
A
Which of the following actions does not fall under the definition of transacting insurance, according to the California Insurance Code? A. Receiving agent commissions B. Negotiating insurance contracts C. Soliciting insurance contracts D. Addressing matters that arise either before or after a sale is made
A
Which of the following statements is NOT TRUE regarding insurance advertising? A. testimonials can be given by actors and are not regulated B. all advertising must be approved by the CDI prior to use C. deceptive wording is not allowed D. the full company name and address must be listed on all advertising.
A
A california insurance agent cannot sell: A. Life and Disability Insurance B. Fire & Casualty Insurance C. Health Insurance D. All of the above
A Only a life agent can sell disability and life insurance in California
In California, an insurance agent cannot sell: A. life and disability insurance. B. fire and casualty insurance. C. health insurance. D. All of the above
A Only a life agent may sell disability and life insurance in California
"Any impairment of minimum paid-in capital or capital paid in, required in the aggregate of an insurer by the provisions of this code for the class, or classes, of insurance that it transacts anywhere or the inability of the insurer to meet its financial obligations when they are due", describes which of the following terms? A. Solvent B. Insolvent C. Noncollateralized D. Unauthorized
B
Acceptable delivery modes for CA continuation Education would include all the following EXCEPT: A. classroom courses B. Self-Study C. Self-study with final exam D. Internet with final exam
B
Any impairment of minimum "paid-in capital" or "capital paid in", required in the aggregate of an insurer by the provisions of this code for the class, or classes, of insurance that it transacts anywhere or the inability of the insurer to meet its financial obligations when they are due describes which of the following terms? A. Solvent B. Insolvent C. Non-Collateralized D. Unauthorized
B
How long must an insurer maintain policy issue records? A. 1 year B. 2 years C. 3 years D. 10 years
B
Insurance department hearings are an important function of the department. Which of the following statements is FALSE regarding these hearings? A. Witnesses and records can be subpoenaed B. Testifying falsely under oath is called misrepresentation. C. A 30 day notice must be provided to the participants D. Attorneys can be present at a hearing.
B
All are true statements regarding the California Commissioner of Insurance, EXCEPT:: A. Conducts hearings to determine just cause. B. Determines insurance company reserve amounts. C. Appoints examiners. D. Is appointed by the governor.
D
A person who directly or indirectly directs the management and overall operational policy of a company, by owning ______% of the voting proxy, best describes a(n) _______________. A. 30%, shrewd investor B. 10%, influential policyowner C. 10%, controlling person D. 30%, controlling person
C
All of the following are TRUE statements with regard to license renewal, EXCEPT: A. Agent licenses are good for 2 years and expire on the last day of the issue month, every 2 years. B. Completion of CE is a requirement for license renewal. C. Agents have a 90-day grace period following their license renewal date to complete their CE. D. The CE grace period does not apply to licenses that have been suspended or revoked.
C
All the internet advertisements must include all the following EXCEPT: A. License number B. Agent state of residence and business location C. Agent social security number D. Name as it appears on the insurance license including any approved fictitious name used
C
An agent fails to display their license number properly. What penalty will be issued if this is a "first time" offense? A. $2,000 B. $500 C. $200 D. $1,000
C
An insurance license will automatically terminate upon: A. An agent becoming disabled. B. The death of the policyowner. C. The death of the agent. D. The bankruptcy of the insurance company.
C
An unfair comparison of two policies, in an attempt to replace existing coverage with new coverage, describes what term below? A. Unfair discrimination B. Rebating C. Twisting D. Boycott / Coercion
C
Each of the following statements is TRUE regarding the differences that exist between an agent and a solicitor EXCEPT: A. An agent has binding authority, whereas a solicitor does not B. Agents cannot present or act as though they are a solicitor C. Solicitors can be employed by more than one agent simultaneously. D. Solicitors can only be employed by one agent and not multiple agents at the same time.
C
Each of the following statements is TRUE regarding the differences that exist between an agent and a solicitor, EXCEPT: A. An agent has binding authority, whereas a solicitor does not. B. Agents may not pretend or act as though they are a solicitor. C. Solicitors may be employed by more than one agent simultaneously. D. Solicitors can only be employed by one agent and not multiple agents at the same time.
C
If requested by the CDI, how many days does a license have provide claim information to the department? A. 10 B. 15 C. 21 D. 31
C
Prima facie means: A. Absence of malice B. Absence of an extended time frame C. Not requiring further proof D. Absence of extenuating circumstances
C
Surplus that represents net earnings or profits after all losses and expenses are paid best describes: A. Dividends B. Reserves C. Earned Surplus D. Profit Margin
C
Surplus, that represents net earnings or profits after all loses and expenses are paid, best describes: A. Dividends B. Reserves C. Earned Surplus D. Profit Margin
C
The purpose of securing an agent's license is to ensure that she is minimally competent. The agent must also be deemed trustworthy by her appointing company. Which of the following is NOT a reason why an agent's application could be denied? A. The applicant previously assisted a fellow agent in theft (larceny) of premium. B. The applicant was previously convicted of a felony. C. The applicant was previously convicted of a misdemeanor. D. The applicant previously had her license revoked for violating an unfair trade practice
C
What is the meaning of "prima facie"? A. absence of malice B. absence of an extended time frame C. not requiring further proof D. absence of extenuating circumstances
C
What is the penalty for transacting insurance without a license in California? A. A fine of up to $50,000 B. Prison for up to 1 year C. Both (a) and (b) D. Neither (a) nor (b)
C
What is the penalty for transacting insurance without a license in California? A. a fine up to $50,000 B. Prison for up to 1 year C. Both the first choice and the second choice D. Neither the first choice nor the second choice is correct
C
What is the person called who directly or indirectly directs the management and overall operation policy of a company, by owning _____% of the voting proxy? A. 30%, shrewd investor B. 10%, influential policyowner C. 10%, controlling person D. 30%, controlling person
C
What type of insurance contract is most often serviced on a weekly basis, at home by a debit agent? A. Universal Life B. Variable Life C. Industria Life D. Ordinary Life
C
Which insurance product below would a Life Only agent NOT be able to sell? A. Life Insurance B. Endowments C. Major Medical D. Disability Income
C
Which of the following choices is INCORRECT regarding CE requirements? A. life agent is required to complete 24 hours of CE credit every 2 years B. A licenses expires every 2 years on the last day of the month in which it was issued C. 8 hours prior to selling annuities, then 8 hours every 2 years thereafter D. 3 of the 24 hours must discuss ethical conduct.
C
Which of the following is not a unfair claim practice? A. attempting to settle a legitimate claim for less than the amount listed on a contract B. Failing to affirm or deny claim payment C. denying a claim after a full and fair evaluation of the claim has been done D. Denying a claim without conducting any investigation.
C
Which of the following statements is FALSE regarding the California Insurance Commissioner and/or the insurance department? A. New insurance laws become effective January 1st of each year B. Revised, amended or new laws are created by the California state legislative body. C. Amended codes are created by the California Department of Insurance D. The primary purpose of the code is to protect the insurance buying public.
C
Which of the following statements is FALSE with regard to examinations and audits? A. Insurers must file an annual financial statement with the CDI by March 1. B. An insurer can be audited by the CDI anytime there is just cause. C. Insurance companies typically invest their assets in high-risk growth accounts in order to maximize investment returns for the company. D. The CDI will help determine the amount of overall assets that an insurer needs to keep liquid.
C
Which of the following statements regarding the CIC is NOT TRUE? A. New laws become effective January 1 of each year. B. Revised, amended, or new laws are created by the California legislative body. C. Amended codes are created by the California Department of Insurance. D. The primary purpose of the Code is to protect the insurance buying public.
C
All of the following are TRUE statements with regard to license renewal EXCEPT: A. agent licenses are good or 2 years and expire on the last day of the issue month, every 2 years B. completion of CE is a requirement for license renewal C. Agents have a 90 day "grace period" following their license renewal date to complete their CE D. The CE "grace period" does not apply to licenses that have been suspended or revoked. C
C 60 day Grace Period
Which of the following statements is NOT CORRECT? A. DBAs may be used as long as they are not misleading and are approved by the CDI B. name changes need to be submitted to the CDI, in writing, immediately C. the commissioner may deny the use of a particular name if it is misleading or it is similar to a name already in use D. an agent may use any number of DBAs, as long as they are approved by the CDI
C No more than 2 DBAs
Regarding examinations and audits, which of the following statements is FALSE? A. Insurers must file an annual financial statement with the CDI by March 1st of each year. B. An insurer can be audited by the CDI anytime there is a just cause C. Insurance companies typically invest their assets in high risk growth accounts in order to maximize investment returns for the company. D. The CDI will help determine the amount of overall assets that an insurer needs to keep liquid.
C Very conservative Investments
All of the following are reasons why an insurance license applicant may have her application for a license denied after a hearing, EXCEPT: A. She has a poor reputation. B. She has a past history of allowing employees to violate insurance law. C. She had a professional license in another field of work revoked within the last 5 years. D. She had an insurance license revoked within the last 5 years for cause.
D
A high retention of insurance business is beneficial to: A. The policyowner B. The agent C. The company D. All the above
D
A solicitor: A. may not solicit life insurance. B. may not bind coverage. C. must be licensed. D. All the above statements are true.
D
A solicitor: A. Cannot bind coverage B. Cannot Solicit Life insurance C. Must be licensed D. All the statements above are true.
D
According to the California Insurance Code, a "person" could mean: A. an individual license B. a partnership C. limited liability corporation D. All the above
D
After a hearing, a Cease-and-Desist order is placed against an agent. Which statement below is NOT CORRECT with regard to a Cease-and-Desist order? A. It is placed by the Commissioner. B. Unintentional violations may result in a fine of $5,000 per violation. C. Intentional Violations may result in a fine of $55,000 per violation. D. All of the above are true.
D
All of the following are reasons why an insurance license applicant may have this application for license denied after a hearing EXCEPT: A. the applicant has a poor reputation B. the applicant has a past history of allowing employees to violate insurance law C. the applicant had a professional license is another field of work revoked within the last 5 years D. the applicant had an insurance license revoked within the last 5 years for cause.
D
An agent, age______, with at least ______ years of license experience, will be exempt from the California CE requirement. A. 65, 30 B. 80, 30 C. 70, 25 D. 70, 30
D
John Nowitall wishes to provide insurance advice to his clients in exchange for a fee. In order to do this, John must do all of the following, EXCEPT: A. Have at least 5 years' experience as a life agent. B. Pass a state exam and apply for a life and disability analyst license. C. Provide his fee structure to the client, in advance of their meeting. D. Provide advice in writing, but only when requested by his client.
D
Jolene wishes to provide insurance advice to her clients in exchange for a fee. In order to do this, she must do all of the following EXCEPT: A. She must have at least 5 years' experience as a life agent B. She must pass a state exam and apply for a life and disability analyst license C. She must provide her fee structure to the client, in advance of their meeting D. She must provide advice in writing, but only when requested by her client
D
The CDI has jurisdiction over all of the following entities EXCEPT: A. Domestic HMO B. California Life Agents C. Major Medical plans approved band delivered in California D. Medicare
D
The CDI has jurisdiction over all of the following entities except: A. Domestic HMOs B. California life agents C. Major Medical plans approved in California D. Medicare
D
The insurance commissioner may deny a license WITHOUT conducing a hearing for which of the following situations? A. the applicant has a previous felony conviction involving a state insurance law B. the applicant has had a previous application denied for cause during the last 5 years C. the applicant has had a previous insurance license revoked within the last 5 years. D. all of the above
D
True statements regarding the differences between an agent and a broker would include all of the following EXCEPT: A. Brokers represent themselves and their clients. B. Agents legally represent the insurer. C. In California, a broker cannot transact life insurance. D. A broker is allowed to bind coverage.
D
What penalty for acting as an agent without a license? A. a fine of up to $50,000 B. Prison for up to 1 year C. Neither the first choice nor the second choice is correct. D. Both the first choice and the second choice are correct.
D
When an agent acts without a license, this is considered a misdemeanor. In addition, the individual can be penalized: A. Up to $50,000 B. With prison for up to 1 year C. Neither (a) nor (b) D. Both (a) and (b)
D
Which of the following individuals would be considered an Administrator per California law? A. an employer acting on behalf of their employees B. an insurance company, HMO, or PPO C. Life Agents D. A licensed individual hired by an insurer to assist in premium collection
D
Which of the following is a FALSE Statement concerning the CC of Insurance? A. The commissioner conducts hearings to determine B. The commissioner determines insurance company reserve amounts C. The commissioner appoints insurance examiners D. The commissioner is appointed by the governor
D
Which of the following items must an agent/producers license number be listed on? A. Policy application B. policy quotations C. business stationary D. all of the above
D
Which of the following statements is NOT CORRECT with regard to a cease-and-desist order? A. It is issued by the commissioner B. Unintentional violations of an order may result in a fine of $5,000 per violation C. Intentional violations may result in a fine of $55,000 per violation D. All the answers above are true
D
Which of the following statements is NOT Correct? A. A participating (par) company is also called a mutual company B. A non-participating company is also called a Stock Company C. A whole life contract would be categorized as an ordinary life contract. D. Industrial Life policies typically have very high death benefits and are sold to those who work in hazardous industries.
D
Which of the following statements is TRUE? A. An admitted insurer means an insurance company is licensed in all 50 states. B. Placing insurance with a surplus lines broker in California is illegal. C. Advertising for an unauthorized or non-admitted insurer is legal as long as permission from the company itself is obtained. D. In order to place business with a surplus lines broker, a thorough search of at least 3 admitted carriers must be conducted, and it must be proven that coverage could not be provided in the regular market.
D
Which of the following statements regarding the differences between an Agent and a Broker is FALSE? A. A Broker represents themselves and their client B. An Agent legally represents the insurer C. In California, a Broker cannot transact life insurance D. A broker is allowed to bind coverage
D
Which of the following statements regarding the surrender of a co-partnerhsip's license is FALSE? A. Membership change forms must be submitted, with the fee, to the CDI within 30 days of any change. B. A remaining partner may continue to act as the agency power, upon whom all notices can be served C. Should the last named partner die, the partnership will become ineffective. D. It is required that when the original partnership dissolves, the original partnership license must be returned to the CDI.
D
Which statement below describing the use of an agent's name is FALSE? A. DBAs may be used as long as they are not misleading and are approved by the CDI. B. Name changes need to be submitted to the CDI, in writing, immediately. C. The Commissioner may deny the use of a particular name if it is misleading or it is similar to a name already in use. D. An agent may use any number of DBAs, as long as they are approved by the CDI.
D
Which statement below is NOT CORRECT? A. A participating (par) company is also called a mutual company. B. A non-participating company is also called a stock company. C. A whole life contract would be categorized as an ordinary contract. D. Industrial life policies typically have very high death benefits and are sold to those who work in hazardous industries.
D
Which statement best describes the duration of an agents license? A. It is issued for 2 years B. it is issued for 3 years C. it is issued for 2 years and expires on the first day of the month in which it was issued D. it is issued for 2 years and expires on the last day of the month in which it was issued
D
Which statement regarding license surrender is incorrect? A. a license may be surrendered by delivering the license directly to the CDI B. A license may be surrendered by providing written notice to the CDI C. Should an agent die, their license automatically terminates D. Clients must be notified by the CDI if an agent surrenders their license without cause
D
Who can apply to become to insurance company? A. An individual B. A Partnership C. A limited liability trust D. All of the above
D
which of the following situations would not be considered a fraudulent insurance transaction? a. arson for profit b. filing a falsified death claim c. submission of a false disability claim d. submission of a questionable disability claim
D
Which of the following individuals would be considered an Administrator under California law? A. An employer acting on behalf of its employees B. An insurance company, HMO, or PPO C. Life agents D. A licensed individual hired by an insurer to assist in premium collection.
D By definition, an Administrator is a licensed individual who assists an insurer in premium collection.
Regarding conservation of an insurer, which statement is NOT TRUE? A. Conservation occurs when an insurer is taken over by the CDI because it has become insolvent. B. The Commissioner becomes the conservator. C. The inability of an insurer to adhere to or follow a plan established by the CDI to remedy its dire financial position would be cause for the CDI to take over an insurer. D. Conservation is primarily designed to protect the insurance company.
D Designed to protect the citizens of the state
Which item below best describes "an attachment to an insurance contract that may either expand or restrict insurance cover"? A. Policy B. Clause C. Provision D. Rider
D Or Stand Alone Product
Which of the following statements is NOT TRUE regarding the conservation of an insurer? A. Conservation occurs when an insurer is taken over by the CDI because they have become insolvent B. The commissioner becomes the conservative C. The inability of an insurer to adhere to, or follow a plan established by the CDI to remedy its dire financial position would be cause for the CDI to take over an insurer D. Conservation is primarily designed to protect the insurance company
D Protect the citizens of the state
True statements regarding the surrender of a co-partnership's license would include all the following, EXCEPT: A. Membership change forms must be submitted with fee to the CDI within 30 days of any change. B. A remaining partner may continue to act as the agency power, upon whom all notices can be served. C. Should the last named partner die, the partnership will become ineffective. D. It is required that when the original partnership dissolves, the original partnership license must be returned to the CDI.
D Returning the original license is not a requirement or a true statement.