Life Insurance Exam Prep- Ch 19
life licensee/agent
transacts life, accident & health insurance on behalf of a life or disability insurer
Access for infants & mothers program (AIM) is available to:
women who have private insurance plans w/ a maternity-only deductible or copayment greater than $500 are eligible
code of ethics
placing consumers' interests 1st, continuing edu, strict adherence to laws & regs, educating the public about insurance
incontestability clause
prevents a life insurance policy from being rescinded by the insurer after being in force for two years
CA Dept of Managed Health Care
primary regulator of issuers of all HMO, POS, and some PPO & EPO plans
insurance agent
A person authorized, by and on behalf of an insurer, to transact all classes of insurance other than life, disability, or health insurance, on behalf of an admitted insurance company.
free look period (right of return)
CA insurance code gives an individual btwn 10-30D to return a life policy for cancellation. Begins on the policy delivery date. Age 60+: 30D
period life agents keep their transaction records
5yrs
fiduciary responsibility
A fiduciary is a person or org holding the funds or property of another in trust
CA Insurance Code & CA Code of Regulations purpose:
ID many unethical & illegal practices
MRMIP
Major Risk Medical Insurance Program
PPACA
Patient Protection and Affordable Care Act
background info:
a breach of fiduciary duty, a filing of felony criminal charges in state or federal court, a misdemeanor conviction
buyer's guide
a consumer publication that describes the type of coverage being offered and provides general info to help the applicant compare diff policies & reach an informed decision about whether the proposed coverage is appropriate
according to ca insurance code, what's insurance?
a contract
insurance
a contract to indemnify against loss
materiality
a fact so important, it could affect the policy premium
"insurance broker" according to ca insurance code:
a person compensated for transacting insurance on behalf of another person w/ an insurer
representation
a statement made by the proposer to the insurer relating to a proposed risk. may pertain to both material and immaterial facts. If material, then the representation must be substantially true.
according to ca insurance code "policy is:
a written contract
rules & code of ethics that apply to insurance agents & agencies
act in a fiduciary responsibility, legal parameters of the CA Insurance Code, code of ethics
when an insurer has met the necessary qualifications to transact business in ca, they're:
admitted
an insurance company entitled to transact business in ca is an:
admitted carrier
medi-cal requirements
ages 19-64: household income up to 138% FPL, under 19: 266% FPL. Jointly financed by the Fed & State govt's
essential health benefits:
ambulatory patient services, emergency, hospital, pregnancy, maternity, newborn, mental health, substance use disorders, behavioral health, prescription drugs, rehabilitative services, laboratory services, preventative & wellness, chronic disease management, pediatric services incl oral and vision care
conservation
an agent's attempt to stop the replacement of an existing life insurance policy
according to PPACA, what's a health benefit exchange?
an entity to which individuals and small businesses can have access to affordable health coverage
admitted
an insurer who's eligible to transact business in ca
life insurance surplus must be distributed to policy owners:
annually
in what order are people on the MRMIP waiting list allowed to enroll?
based on the date an individual's app is received
How is an agent's first year commission calculated for a replacement long-term policy?
based on the diff btwn the new & original policy annual premiums
what isn't allowed by HiCAP counselors?
charging a fee
CA Insurance Code (CIC)
consists of statutes est. by the state legislature & signed into law by governor of ca. 5 divisions: General Rules Governing Insurance, Classes of Insurance, The Insurance Commissioner, Affordable Housing Entities Risk Retention Pool, and Insurance Adjusters
in a felony prosecution of insurance fraud for worker's comp benefits, the fine might increase up to:
double the value of the defrauded amount
agent ethics
fiduciary responsibility, legal parameters of the CA Insurance Code, code of ethics,
what's an insurance solicitor authorized to do?
help an agent broker or sell insurance
who does a life settlement broker represent:
individual wanting to sell their life policy to a third party
according to ca insurance code, ex's of insurable events:
injured by a fall in driveway, sued for unintentional slander, admitted to the hospital for delivery
primary objectives of insurance regulation
insurance code enforcement, licensing agents, protecting policy owners
according to ca insurance code, who's responsible for submitting a life agent's appt?
insurer
not a primary objective of insurance regulation:
interpret policy provisions
what word implies permissiveness in the CA Insurance Code?
may
ca dept of insurance (CDI) has no jurisdiction over:
medicare
CA Code of Regulations (CCR)
necessary to admin/enforce the CA Insurance Code (CIC). Consists of rules issued by the CA Insurance Commissioner.
a representation may be altered or withdrawn:
only before the insurance is in effect
life insurance policy illustration (according to CA Insurance Code)
presentation of policy features that include non-guaranteed elements
When intentional concealment is involved, what course of action is the injured party entitled to?
rescission of the contract
under the ca insurance code, a licensee's license # must be printed at what size?
same size as licensee's phone #, fax #, or address
insurance solicitation
sending out mail, giving a rate quotation, airing a tv commercial
Woman on leave under the Family & Medical Leave Act (FMLA). What happens to her group health coverage?
she continues to be enrolled during the leave
the commissioner may disapprove a licensee's request to use a fictitious name b/c:
the name is too similar to a name already filed, it may mislead the public, implies that the licensee is an insurance company
adjusted gross income (AGI)
total income for the tax year, minus allowed deductions s/a conventional IRA contributions, student loan interest, & more
an agent advertises that their insurer is part of the Insurance Guarantee Assoc. This is a:
unfair method of competition