Laws and Rules Pertinent to Insurance
In South Carolina, within how many days does the free-look provision allow the insured the right to return an individual insurance policy for full premium? 5 days 10 days 15 days 45 days
10 days
The MAXIMUM time period that an eligible employee can be excluded from coverage under a group health policy as a late enrollee is 6 months 10 months 18 months 24 months
18 months
When can a policy no longer be cancelled for nonfraudulent misstatements after its date of issue? 1 year 2 years 5 years At any time
2 years
An employer may qualify for health care tax credits through SHOP Marketplace if that employer has fewer than how many employees? 10 15 20 25
25
Which of the following is NOT an illegal inducement? Giving the insured tickets to a sporting event valued at $100 Giving the insured a return of premium in excess of $25 Giving the insured an article of merchandise printed with the producer's name costing $5 Giving the insured a free policy of insurance resulting from the sale of a related policy of insurance
Giving the insured an article of merchandise printed with the producer's name costing $5
Under the Affordable Care Act, which of these plans is designed to provide coverage that is actuarially equivalent to 80% of the full actuarial value of the benefits provided under the plan? Gold Platinum Silver Bronze
Gold
A producer offers a $50.00 handbag in exchange for the purchase of an insurance policy. The producer would be considered to have committed which prohibited sales practice? Twisting Rebating Coercion Replacement
Rebatin
An insurance producer has fiduciary responsibilities to all of the following entities EXCEPT: insurers insureds applicants the Guaranty Association
The Guaranty Association
In South Carolina, which of the following statements is TRUE regarding a licensed individual changing his or her legal name? Change of marital status has a direct impact on the status as a producer The producer is required to file a name change form on the next license renewal The producer must notify the Department upon changing his or her legal name Name changes for the purpose of marketing insurance products is prohibited
The producer must notify the Dept upon changing his or her legal name
Long-term care policies MUST pay for "at-home" care at the same daily amount as paid for adult day care paid for respite care paid for a nursing home paid for therapy
paid for a nursing home
In the State of South Carolina, the Director may issue a temporary producer license for a MAXIMUM period of 90 days 180 days 1 year 2 years
180 days
Other than for fraud, under the Time Limit on Certain Defenses Provision, a health insurance policy is incontestable after it has been in force for a period of: 1 year 2 years 3 years 4 years
2 years
Under the Time Limit on Certain Defenses Provision, a disability policy is incontestable after it has been in force for a period of 1 year 2 years 3 years 4 years
2 years
According to the Affordable Care Act, what is the maximum amount an individual can contribute to a Flexible Savings Account? $500 $1,500 $2,500 $3,500
2500
Which of the following is NOT an eligible dependent on an Accident and Health policy? 27 year old married child 25 year old married child 19 year old full time student Unmarried disabled child
27 year old married child
The Director MUST give a MINIMUM of how many days' notice of a disciplinary hearing? 10 days 30 days 60 days 90 days
30 days
What is South Carolina's REQUIRED grace period for a life insurance policy? 15 days 20 days 31 days 60 days
31 days
How many years is a producer REQUIRED to maintain transaction records of a policy? 3 years 5 years 7 years 10 years
5 years
If an insurance agent receives compensation for giving advice to a member of the public and properly documents the transaction and amount with a memo signed by the person paying the fee, a copy of the memo or contract MUST be retained by the agent for AT LEAST 1 year 3 years 5 years 7 years
5 years
The Director MUST examine domestic insurers AT LEAST once every: year 3 years 5 years 7 years
5 years
As of January 1, 2014, an employer with up to 25 full time equivalent (FTE's) with average annual wages of less than $50,000 may be eligible for a tax credit of ___ of the premiums paid by the employer. 30% 40% 50% 60%
50%
How long can an insurer exclude coverage for a preexisting condition on a Medicare Supplement Policy? 6 months 12 months 18 months 24 months
6 months
In South Carolina, what is the MAXIMUM length of time an insurer can defer payment of a cash surrender value of an annuity? 6 months 12 months 18 months 24 months
6 months
A Pre-existing Condition Provision applies to a covered person if the previous creditable coverage was continuous to a date NOT more than how many days prior to the enrollment date of the new coverage? 25 days 50 days 63 days 100 days
63 days
As classified by the Affordable Care Act (ACA), a Silver Plan offers 60% actuarial level of coverage provided 70% actuarial level of coverage provided 80% actuarial level of coverage provided 90% actuarial level of coverage provided
70%
An insured MUST submit a proof of loss on a health insurance claim within how many days after the date of loss? 30 60 90 120
90
Which of the following is NOT an example of inducement to purchase insurance? A promise of employment A gift having a value less than $25 A special favor in the payment of premiums Giving merchandise to a client with a value of $100
A gift having a value less than $25
A temporary producer license can be issued in any of the following circumstances EXCEPT surviving spouse of a producer a prospective producer who is enrolled in an insurance pre-license class designee of a producer entering active service in the armed services any circumstance the Director deems to be in the public interest
A prospective producer who is enrolled in an insurance pre-license class.
Under long-term care insurance, which of the following MUST an insurer offer to each policyowner at the time of purchase? A decrease in annual benefit levels Lifetime minimum benefit levels An inflation protection feature Minimum benefit levels
An inflation protection feature
An example of an alien insurer would be a United States-based insurer providing policies for immigrants to the United States an insurer formed according to the legal requirements of another country a Tennessee-based insurer providing insurance policies for travel to foreign countries a Virginia-based insurer that also insures people from foreign countries
An insurer formed according to the legal requirements of another country.
Under South Carolina law, what may the insurer REQUIRE to determine the exact cause of death if death appears accidental? Interview with the medical examiner Hospital examination Medical records Autopsy
Autopsy
With a scheduled dental policy, how are covered expenses paid? A coinsurance is normally applied to benefits paid A deductible must be met by the insured before benefits are paid Benefits are limited to a specific maximum dollar amount per procedure Covered expenses are fully reimbursed to the insured
Benefits are limited to a specific maximum dollar amount per procedure
How are health plans classified according to the Affordable Care Act? 1st Tier, 2nd Tier, 3rd Tier, 4th Tier Bronze, Silver, Gold, Platinum Standard, Above Average, Good, Superior Plan A, Plan B, Plan C, Plan D
Bronze, Silver, Gold, Platinum
What are the levels of coverage as defined by the Affordable Care Act? 1st, 2nd, 3rd, and 4th Bronze, Silver, Gold, and Platinum Substandard, Standard, Preferred, and Premium PPO, HMO, POS, and MET
Bronze, Silver, Gold, and Platinum
Which of the following does restorative dental treatment cover? X-rays Cleanings Dentures Crowns
Crowns
A form of medical health insurance covering the treatment and care of gum disease is called: Medicaid Major Medical Franchise health policy Dental expense insurance
Dental expense insurance
A hospital or medical expense policy will typically cover dental treatment expenses under which circumstance? After the annual limit of a dental policy's coverage is reached Dental treatment is needed to repair an injury Cosmetic dental treatment is performed If treatment is performed at a in-network provider
Dental treatment is needed to repair an injury
The responsibility for regulating the insurance continuing education requirements and approving insurance continuing education courses belongs to the Department of Insurance Federal Department of Commerce and Insurance National Association of Insurance Commissioners Continuing Education Administration Board
Department of Insurance
The insurance Director may perform all of the following duties EXCEPT develop rates for the insurers institute a criminal suit for injunctive relief conduct examinations of South Carolina licensed insurers enforce the provisions of the South Carolina Insurance Code
Develop rates for the insurers
According to the Fair Credit Reporting Act, an insurer does NOT need to inform the applicant that an investigation is being conducted discuss any credit history inconsistencies with the applicant inform the applicant about the scope of an investigation notify the applicant if an application is denied
Discuss any credit history inconsistencies with the applicant
A common exclusion or limitation on a dental policy is Endodontics Tooth extractions Flouride treatments X-rays
Endodontics
The Director is empowered to write policy forms for insurance coverages enforce state laws relating to insurance pass state laws relating to insurance set rates for insurance coverages
Enforce state laws relating to insurance
With respect to small group health benefit plans, a carrier may discontinue coverage or may refuse to renew such a plan if the employer: employ fewer than 15 full-time employees has filed for bankruptcy in the prior year has a supplemental plan with a competing carrier fails to pay the premium prior to the end of the grace period
Fails to pay the premium prior to the end of the grace period
Which of the following is an example of an Unfair Claim Settlement Practice? Failure to settle a claim based on all available information Failure to provide a reasonable basis for the denial of a claim upon request Failure to make an offer of coverage on a claim Failure to notify a claimant of her right to make claim
Failure to provide a reasonable basis for the denial of a claim upon request
According to the Affordable Care Act, any plan in existence prior to which date is considered a grandfathered plan? March 23, 2010 March 23, 2011 March 23, 2012 March 23, 2013
March 23, 2010
Mary is issued an initial producer's license on April 29, 2012. Her birthdate is March 14, 1980. When does her license renew? March 31, 2013 April 29, 2013 March 31, 2014 April 29, 2014
March 31, 2014
A policy illustration given at time of sale does NOT typically include the: cash value of the policy names of the beneficiary effective interest rate for policy loans 10th and 20th year cost surrender value
Names of the beneficiary
Which of these licensees MUST be appointed in order to conduct insurance business? Broker Adjuster Producer Consultant
Producer
The branch of dentistry which deals with the replacement of missing parts is called Endodontics Periodontics Orthodontics Prosthodontics
Prosthodontics
All of the following are Unfair Claims Settlement Practices EXCEPT misrepresenting the policy provisions relating to coverage at issue attempting to settle the claim on basis of an application altered without notice, knowledge, or consent of the insured refusing to pay a claim without conducting a reasonable investigation based on all available information providing claim payments to insureds accompanied by a statement setting forth the coverage under which payment is made
Providing claim payments to insureds accompanied by a statement setting forth the coverage under which payment is made
Which of the following is illegal discrimination? Refusing an applicant because of marital status Refusing an applicant because he or she is HIV positive Refusing an applicant because he or she is rated as a substandard risk Refusing an applicant because he or she has diabetes
Refusing an applicant because of marital status
Which of the following MUST meet South Carolina continuing education requirements? Underwriter Resident producer Limited lines producer Surplus lines broker
Resident producer
According to the Affordable Care Act, what metal tier is required to have an actuarial value of 70% with covered individuals paying 30% through deductibles, co-pays, and other cost sharing features? Bronze Plan Silver Plan Gold Plan Platinum Plan
Silver plan
In order to operate as a domestic insurer, an insurance company MUST have a certificate of authority issued by the South Carolina Department of Insurance South Carolina Department of Labor and Industry National Association of Insurance Commissioners U.S. Attorney General
South Carolina Department of Insurance
According to South Carolina insurance Code, which of the following MUST a producer do when replacing a Life Insurance policy? Notify the beneficiaries of all the policies or annuity contracts proposed to be replaced Notify the insurer whose policy is being replaced, but not the insurer replacing the policy Submit to the replacing insurer a list of all Life Insurance policies or annuity contracts proposed to be replaced Forward the signed and completed Disclosure Statement to the replacing insurer and not provide the applicant with a copy
Submit to the replacing insurer a list of all Life insurance policies or annuity contracts proposed to be replaced.
Under the Affordable Care Act, a large employer that does NOT provide health insurance and owes an employer mandate penalty MUST pay an annual penalty, which is calculated by multiplying $2,000 by the number of full time employees minus 20 the number of full time employees minus 30 the number of subsidized employees minus 10 the total number of full time employees
The # of full-time employees, minus 30
According to the South Carolina Code, when an insurance licensee changes his or her address, who MUST be notified? The National Association of Insurance Commissioners The Insurance Agents Associations The Department of Insurance The Department of Labor and Industry
The Department of Insurance
Which one of the following statements regarding an examination of an insurer's books and records by the Director is TRUE? An insurer has a right to delay an examination by the Director for a period of not more than 15 days after notification The Director only has the authority to examine domestic insurers Reports related to solicitors are not official records archived from insurance examinations The insurer must not impede an examination and is required to assist in the examination procedures
The insurer must not impede in an examination and is required to assist in the examination procedures.
Under the Affordable Care Act, how would a grandfathered health plan lose its grandfathered status? The insurer applies a lifetime dollar limit on essential health benefits The insurer does not re-apply for grandfathered status The insurer raises premiums across the board by 50% The insurer significantly raises co-insurance charges, deductibles, or co-payment charges
The insurer significantly raises co-insurance charges, deductibles, or co-payment charges
When a life insurance policy is issued to replace another life insurance policy, which of the following does NOT need to be provided to the purchaser at or before the time the policy is delivered? Disclosure Statement The replacing insurer's financial statements A policy summary A copy of the most recent buyer's guide
The replacing insurer's financial statements
When can a producer share commission with another producer? It is never a legal act When both live in South Carolina When the other producer is licensed in any line of business When the other producer is licensed in the same line of business
When the other producer is licensed in the same line of business
Group dental plans will frequently place a limit on annual benefits in order to minimize adverse selection enrollment coinsurance administrative costs
adverse selection
Which of the following is NOT covered under long-term care insurance in South Carolina? Alcohol and drug addiction Organic brain disease Alzheimer's disease AIDS
alcohol and drug addiction
Someone who sells, solicits, or negotiates insurance contracts for compensation on behalf of an insurer is called: an insurance broker an insurance producer an insurance advisor an insurance solicitor
an insurance producer
An insurance producer CANNOT act as an agent of an insurer until the insurance producer becomes: licensed designated responsible producer a member of the National Association of Insurance Commissioners (NAIC) appointed by the insurer
appointed by the insurer
Making a statement that is false or maliciously critical of the financial condition of an insurer is known as defamation coercion slander boycott
defamation
When selling an insurance policy the agent must do all of the following EXCEPT emphasize the benefits of the Guaranty Association protect any privileged or personal information about the applicant submit premiums within the normal course of business provide a notice of information practices to applicants
emphasize the benefits of the Guaranty Association
A deliberate lie by an insured to the insurer to obtain a lower premium is an example of misrepresentation concealment estoppel fraud
fraud
All of the following are subject to false advertising regulations EXCEPT gifts letters circulars statements
gifts
An insurer may refuse to issue a policy to a particular insurance applicant for a reason based solely on: medical condition race gender creed
medical condition
All Health Benefit Plans issued after January 1, 2014 must provide long-term care dental care adult vision care preventative health services
preventative health services
The PRIMARY purpose of the Fair Credit and Reporting Act is to forewarn an insurer about an applicant's recent bankruptcy protect consumers from insurers who have filed for bankruptcy protect consumers with guidelines regarding credit reporting and distribution alert insurers regarding applicants who may have poor credit histories and may be adverse risks to the company
protect consumers with guidelines regarding credit reporting and distribution
If the Director determines that an individual has engaged in an act violating state insurance laws, the Director may issue an order requiring the violator to pay restitution to his or her victims stop engaging in those acts appear before a jury of his or her peers perform community service
stop engaging in those acts
A false written or oral statement made by a producer for the purpose of replacing an existing policy to the detriment of the insured is twisting illegal inducement discrimination defamation
twisting
An indemnity plan limitation that will pay the dental bills after a small amount is paid by the insured is called a managed plan stop loss coinsurance a deductible
coinsurance
