Life- Part 2- Common to All Lines
If a Cease and Desist order is issued the Director must serve notice to the recipient of the order of a hearing to be held at a fixed time and place which A: may not be less than 20 or more than 30 days after the notice of hearing is served to the recipient B: must provide at least 10 days notice C: may not be less than 10 or more than 20 days after the notice of hearing is served to the recipient D: is of mutual agreement.
A
Written defamation is known as A: Libel B: Slander C: Rumor D: Twisting
A It is libel when unfounded written statements are made to intentionally injure the reputation of another.
If one insurance company was actively intimidating another company with the intent to drive the other company out of the market, this would be an example of an unfair trade practice known as A: restraint of trade. B: unfair discrimination. C: boycotting. D: bullying.
A. Restraint of trade, illegal under Illinois law, occurs when a company uses illegal tactics to drive a competitor either out of business or a market area.
If a producer charges a service fee in addition to being paid a commission for a sale of insurance, what is required of the producer in such an instance? A: If the total compensation will exceed 10% of the annual premium amount there must be a written disclosure document signed by the producer and the applicant for insurance. B: If the total compensation will exceed 10% of the monthly premium amount there must be a written disclosure document signed by the producer and the applicant for insurance. C: The producer must provide written disclosure to the insurance applicant. D: To report the producer's illegal activity to the Director because such a fee is illegal to collect from a prospective insured.
A. A producer is allowed to earn a fee plus a commission for the sale of insurance but in such a case, the producer must provide a written disclosure to the applicant which must be signed by both parties.
Which of the following actions on the part of a producer could lead to license denial? A: The producer signed an insurance application on behalf of the applicant with the applicant's full knowledge and verbal permission to do so. B: The producer truthfully compares the benefits of one policy against those of another in an explanation to a consumer. C: A producer is more than six months late in completing continuing education requirements. D: A producer fails to inform the Director of a residential move within 30 days.
A. A producer is never allowed to sign an insurance application on behalf of an applicant or proposed insured because such an action constitutes forgery, punishable by termination of license plus a fine.
An insurance company places funds into a producer Premium Fund Trust Account for the purpose of returning the money to an insured. Within how many days must these funds be credited to the account of the insured? A: Within 15 days. B: Within 10 days C: Within 3 days. D: Within 3 business days.
A. All credit balances from returned premiums must be credited to the insured's account within 15 days of receipt by a producer from an insurer.
If producer Y receives a $175 premium payment on behalf of insurance Company B and keeps the money instead of turning the funds over to the Company B, which of the following is TRUE? A: The law says that the premium is considered to have been received by Company B. B: Y has committed a Class A misdemeanor. C: The insurance applicant will have to pay the $175 premium again. D: Y has done nothing wrong since the amount of money involved is under $200
A. Any producer who represents an insurance company collects all premium on behalf of that company as a legal agent. This means the law considers such funds to have been received by the company (the principal) even if the producer (the agent) never forwards the money to the company but instead steals the funds.
If producer Y receives a $175 premium payment on behalf of insurance Company B and keeps the money instead of turning the funds over to the Company B, which of the following is TRUE? A: The law says that the premium is considered to have been received by Company B. B: Y has committed a Class A misdemeanor. C: The insurance applicant will have to pay the $175 premium again. D: Y has done nothing wrong since the amount of money involved is under $200.
A. Any producer who represents an insurance company collects all premium on behalf of that company as a legal agent. This means the law considers such funds to have been received by the company (the principal) even if the producer (the agent) never forwards the money to the company but instead steals the funds.
What is the smallest dollar civil penalty that will be assessed for a single act of misrepresentation? A: $200 B: $500 C: $1,000 D: $10,000
A. Civil fines for misrepresentation can range between $200 and $10,000.
An insured drops the health policy she has had for many years because producer J told her that all health conditions are covered even though that is untrue. Producer J has engaged in A: Misrepresentation B: Twisting C: False Advertising D: Defamation
A. Communicating false, untrue or misleading information to an insurance consumer by a producer is an act of misrepresentation.
All of the following are requirement to reinstate a lapsed producer license, EXCEPT: A: the continuing education requirement is waived. B: payment of a $180 penalty in addition to the regular biennial $180 fee is required. C: the producer has up to 12 months from the date of lapse to seek reinstatement. D: the producer must still comply with the continuing education requirement to renew a producer license.
A. Complying with the continuing education requirement is required in order to reinstate a lapsed producer license.
Which of the following sales is classified as controlled business? A: A producer places a one million dollar life policy on the life of his employer B: A producer places a one million dollar life policy on the life of his son C: A producer places a one million dollar life policy on the life of his niece D: A producer places a one million dollar life policy on the life of his neighbor
A. Controlled business pertains to insurance written on the life, property or risks of the producer, their spouse or their employer.
Which of the following activities does not require a producer license? A: An attorney licensed to practice law who advises his client about a life insurance matter. B: Selling life insurance. C: Soliciting the sale of a health policy. D: Explaining the difference between two different property insurance contracts to someone interested in purchasing coverage.
A. Illinois law requires a person to possess an insurance producer license in order to sell, solicit, negotiate, continue or bind insurance risks within the state. Attorneys may offer advice about matters incidental to insurance and charge for their time without a license required
Promising a prospective insured that if they buy a policy that they will become an owner of the insurer is an example of A: an unfair trade practice. B: unfair discrimination C: an unfair claims practice D: restraint of trade.
A. It is an unfair trade practice to promise or imply ownership of an insurance company based on the purchase of an insurance policy.
If a producer is found to have failed to maintain the proper surety bond due to the brokering of business, would could be the result of this failure? A: It could result in the revocation or denial of the producer's license. B: It could result in the suspension only of the producer's license. C: There is only the possibility of a fine levied in the amount of from $1,000 to $2,500. D: There is no penalty possibility in this situation.
A. Placing insurance business with an insurer without an agent contract is considered to be brokering business and a surety bond is required. Failure to maintain a bond can resulting the revocation of a producer's license.
A group health insurance policy master application must bear the name and signature of which of the following entities? A: The licensee who solicited and wrote the application. B: The Director of Insurance C: An officer of the insurance company. D: The underwriter of the policy application.
A. State law requires certain insurance applications to bear the name and signature of the soliciting producer on the application.
All of the following statements pertaining to a temporary license are true, EXCEPT: A: they survive the transfer of ownership of an insurance company who sponsored the licensee. B: the fee is $50. C: the Director may limit them in any manner in order to protect the public. D: a licensed sponsor may be required.
A. Temporary licenses automatically terminate upon the change of ownership of any company or agency that sponsors the temporary licensee.
All of the following statements regarding the 90 day temporary producer license for Producer Application are accurate, EXCEPT: A: It can be renewed one time for an additional $50 fee. B: The licensee must be preparing to pass the state exam. C: The licensee can sign applications and receive commissions. D: The holder must be in a qualified training course of an insurer under the direction of a company manager or supervisor.
A. The 90 temp license is a once in a lifetime opportunity and renewal is not allowed.
For what period of time must the fiscal or calendar year records of a Premium Fund Trust Account be kept? A: At least 7 years. B: At least 6 years. C: At least 5 years. D: At least 3 years.
A. The fiscal or calendar year records of a PFTA must be kept for AT LEAST 7 years.
Which statement that follows is most accurate pertaining to the Illinois producer ethics requirement? A: Each producer must complete a 3 credit hour ethics class within each two year renewal period. B: Each producer must complete a 3 credit hour ethics course, which may be taken either in classroom or self study format within each two year renewal period. C: Ethics is an optional course for every producer and they can take whichever number of credit hours in the topic as the see fit.. D: A 3 hour ethics course in self study format is required every calendar year to maintain a producer license.
A. The three hour ethics requirement must be completed in a classroom setting offered through a certified provider.
All of the following are qualifications that apply to a non-resident producer in Illinois, EXCEPT: A: The non-resident must be licensed in their home state for a minimum of 2 years before Illinois will grant non-resident producer status. B: The non-resident must file an affidavit naming the Director to receive service of process on the non-resident's behalf. C: There is a $250 license fee due and payable every two years. D: The non-resident producer must be in good standing in their home state with reference to their resident producer status.
A. There is no requirement that a non-resident must meet some minimum licensing experience, other than holding a license in good standing their home state prior to granting non-resident licensing status is Illinois.
A licensing candidate must have obtained a license from the Department of Insurance A: within one year from the first date of class attendance in the line of authority obtained. B: within one year from passing the state exam. C: within one year from successfully completing the prelicensing course. D: within 90 days from successfully completing the prelicensing course.
A. Once the licensing candidate first attends a prelicensing class, they must have their state producer license within one year from that date.
Producer Z engaged in an activity that injured a member of the public and the injured party has requested Z to supply the name of the company that issued Z's producer bond and to provide the number of the bond in order to make a claim. According to law, how long does Z have to provide this information upon request to the injured party? A: 3 working days B: 5 working days C: 7 days D: 30 days
A. The producer must supply the name of the surety and the bond number within 3 working days of the request being made by an injured party.
Producer J brokered $2,000,000 in insurance premiums last year. Based on this premium amount, what is the penalty (face) amount of the surety bond J is required to maintain in favor of the people of Illinois? A: $10,000 B: $50,000 C: $100,000 D: $200,000
B. A producer who is required to maintain a surety bond must hold a bond in the amount of $2,000 minimum or 5% of the previous year's brokered premiums, whichever is the greater amount up to a $50,000 penalty amount maximum. 5% of $2,000,000 equals $100,000 but the maximum bond required is $50,000.
A producer who moves from one residential address to another must report this address change within A: 15 days B: 30 days C: 60 days D: 90 days
B. All addresses changes for both residential and business licensees must be reported to the Director within 30 days of he change.
If a producer in another state wants to obtain an Illinois non-resident producer license, how does the Illinois Director know whether or not the individual actually holds a producer license, in good standing in another state? A: The Director contacts the home state of the producer to verify this fact B: The Director verifies the status of all out-of-state producers via the national producer database at NIPR.COM. C: The producers signs a legal affidavit which is accepted by all states. D: There is no method to verify such a fact.
B. All produce information is available in a National Producer Database maintained by the National Association of Insurance Commissioners at NIPR.COM.
What action must the Director take toward the subject of a completed market conduct examination? A: Allow the subject at least 30 days to request a hearing. B: Notify the person examined of the contents of a verified report before it is made public. C: Issue a final written order immediately if any code violation is found during the examination. D: Any violation will result in a civil fine ranging from $1,000 to $50,000.
B. All subjects of a market conduct examination must be notified of the contents of a written report and afforded the opportunity for hearing on the matter to object to the contents therein.
All of the following statements pertaining to a surety bond and an association are true, EXCEPT: A: Producers can meet the bond requirement with a bond in the name of an association. B: The association must be in existence for at least 7 years C: The association must have common membership. D: The association must have been formed for a purpose other than obtaining a bond.
B. An association must have been in existence for at least 5 years in order to purchase a surety bond in their own association name.
L is caught improperly using notes at her state insurance licensing examination. What action is likely if L applies for a producer license? A: Her license will be suspended upon issuance. B: Her license request will be denied. C: She will be issued a license but put on immediate probation. D: She will be arrested.
B. Any licensing candidate who is caught cheating on a state licensing exam is subject to license denial.
X who holds no insurance licensure of any kind asks his neighbor Y, if Y is happy with his property insurance on his house and that X would be happy to help Y secure a better policy at a lower cost. X A: is guilty of a felony and will go to prison for 5 or more years if convicted. B: has committed a misdemeanor violation that could result in a prison term of up to 1 year. C: is just trying to be helpful and has violated no laws in Illinois. D: can avoid any possibility of criminal prosecution as long as X does not follow through with the offer and never mentions the idea again.
B. Anyone who sells, solicits or negotiates insurance in Illinois is guilty of a Class A misdemeanor which can result in a jail sentence of up to one year. X has solicited the sale of an insurance product without a license to do so.
What is the greatest level of criminal prosecution that can result from producer rebating? A: Rebating is not a crime, it is just a licensing violation. B: Both the offer and the acceptance of a rebate is a Class B misdemeanor. C: Rebating is a Class B misdemeanor that can only be assessed against the producer, never the insurance applicant. D: Rebating is a Class 4 felony.
B. Both the producer and the client could be found guilty of a Class B misdemeanor.
Which of the following advertising concepts would violate the misrepresentation statute if an insurer engaged in such a practice? A: An insurer is not known for health policies and advertises that their new line of hospital coverages are "second to none" in the industry. B: A carrier advertises that their life insurance policies are the highest rated by the State Department of Insurance. C: A property insurer uses talking pigs in their television ads even though actual pigs cannot speak. D: A casualty insurance company proclaims that they have more reserves to handle liability claims than more than 95% of other insurers in the United States.
B. Governmental bodies or agencies do not endorse private insurance products and any such statement that they do is misrepresentation as a matter of law.
All of the following disbursements from a Premium Fund Trust Account are legally allowed, EXCEPT: A: returned premiums due to an insured. B: the payment of rent for the insurance agency. C: commissions to producers. D: bank fees.
B. Legal disbursement do not include normal overhead expenses; the PFTA may not be used a general operating account.
Which of the following period of time meets the definition of reasonable promptness as it pertains to an insurance company, under Regulation 919? A: 5 days B: 15 days C: 20 days D: 30 days
B. Reasonable promptness means 15 days from receipt of communication from a claimant or another insured.
The best definition of "rebating" is A: a producer who is sharing commission with the insurance applicant. B: when a producer offers something of value to induce a person to purchase an insurance policy. C: when a producer says something derogatory about another insurance licensed entity. D: the practice of a producer who regularly treats good clients to a free lunch.
B. Rebating takes places when a producer offers ANYTHING of value that is not part of an insurance contract as an enticement to purchase the coverage whereby the purchase would not have taken place except for the inducement.
Producer S has just collected the first year premium and an application from a client. Within how many days is S expected to turn the money over to the insurance company on whose behalf S collected the premium? A: Within 5 business days B: Within 15 days. C: Within 15 business days. D: Within 7 business days.
B. The law says that a producer who holds premiums funds in excess of 15 days without depositing them into a Premium Fund Trust Account has breached their fiduciary duty.
C is working on her continuing education credits. How many days BEFORE C's renewal date, should she complete her credits? A: It is recommended that producers complete all course work no later than the last day to renew their license B: The rule of the Department of Insurance is that producers should complete all continuing education coursework 30 days prior to their renewal date C: The rule of the Department of Insurance is that producers should complete all continuing education coursework 10 days prior to their renewal date D: The rule of the Department of Insurance is that producers should complete all continuing education coursework 14 days prior to their renewal date
B. The rule recommends 30 days be a renewal date to allow time for course reporting by providers as well as a cushion of time to deal with unforeseen problems which may arise.
L is caught improperly using notes at her state insurance licensing examination. What action is likely if L applies for a producer license? A: Her license will be suspended upon issuance. B: Her license request will be denied. C: She will be issued a license but put on immediate probation. D: She will be arrested.
B. Any licensing candidate who is caught cheating on a state licensing exam is subject to license denial.
A producer moved across town from one home to another on July 1. By what date must the producer report the move to the Director? A: By July 15 B: By July 16 C: By July 31 D: By August 31
C. A producer has 30 days in which to report to the Director a change of residential address.
When a licensed producer solicits the sale of an insurance policy, which of these actions is NOT required? A: The producer must identify themselves by name. B: The producer must disclose the name of the company for whom they are soliciting the insurance sale. C: The producer must disclose their home address upon an insurance sale solicitation D: The producer must identify the name of the firm they represent
C. A producer is not required to reveal the address at which they reside to a prospect for an insurance sale.
Which statement pertaining to license suspension, revocation or denial is NOT TRUE? A: All revoked licenses must be surrendered to the Director either by mail or in person. B: A business entity license can be revoked if a manager was aware that a producer was in engaged in a violation but did not report the activity or take corrective action. C: A license suspension cannot be less than six months nor longer than two years in durations. D: A cause for termination can be the failure of a producer to satisfactorily repay an Illinois Student Loan.
C. A producer license suspension is for a period of time deemed appropriate by the Director; there is no statutory minimum or maximum suspension period.
Producer J has just received a policy offer from an insurer on behalf of an application J recently wrote. J must deliver the policy and collect the first premium payment. Within how many days must J accomplish this action without violating fiduciary duty? A: Within 10 days B: Within 30 days C: Within 90 days D: Within 20 days
C. A producer must deliver a policy and collect the first premium within 90 days from the issuance of a policy on behalf of an insurer offering the coverage.
F had his producer's license denied upon renewal for a valid cause. When will F be eligible to apply again for a producer's license? A: 1 year B: 2 years C: 3 years D: 5 years
C. A producer who has a license denied or revoked is not eligible to apply again for at least 3 years.
How often does a resident producer license renew in Illinois and what is the fee? A: Every year for $150 B: Biennially for $250 C: Biennially for $180 D: Annually for $180
C. A resident producer license renews every two years (biennially) for $180.
What is the fee for a temporary producer license? A: $25 B: $50 C: $75 D: $100
C. All temporary licensing requires an application with a $50 fee for the temporary licensing period.
Each of the following is a requirement for a Life, Health, Property and Casualty prelicensing course, EXCEPT: A: The licensing candidate must spend 7.5 hours in class per line. B: The licensing candidate must complete a 20 hour course per line. C: An exam proctored by a course provider must be successfully passed before a prelicensing course is successfully completed. D: An exam that is graded by a course provider must be passed before a prelicensing course is successfully completed
C. Each of the four main lines of licensing authority: Life, Health, Property and casualty require 20 total course hours of which 7.5 must be classroom hours.
What type of application must be filed to obtain a business entity license? A: Producer application B: Business Agency Form C: Uniform Business Entity Application D: Assumed Name Act Form
C. Establishing a business entity requires the completion, by a resident licensed agent, of a Uniform Business Entity Application, which is available through the National Producer Database at NIPR.COM.
Once a producer license lapses, how long does the licensee have to seek reinstatement of the producer license? A: 90 days. B: 180 days C: 12 months D: There is no ability to reinstate a lapsed producer license
C. From the date of lapse a producer has 1 year to seek reinstatement of a lapsed producer license.
The Slez E insurance agency has their Premium Fund Trust Account audited by the Department of Insurance and $3,000 is missing and unaccounted for. Which of the following is the legal presumption in this scenario? A: It is deemed an accounting error which is allowed to be corrected within 3 business days of the audit. B: Restitution within 7 business days is required. C: It is presumed the licensee responsible for the money has misappropriated it. D: The account holder has 30 days to replace the money without penalty.
C. Premium Fund Trust Accounts must balance to the penny at all times and any shortfall is considered theft by the producer responsible for the fund.
If the Director discovers a person has violated the controlled business statute, which of the following may happen as a result? A: The producer will be prosecuted for a Class A misdemeanor. B: The producer will be prosecuted for committing a felony. C: The Director may not grant a renewal of producer license. D: The producer is subject to license revocation and a $100,000 maximum fine.
C. The Director may not allow the producer to renew the license.
What is the main reason for the controlled business law? A: It is designed to prevent people from writing too much insurance on their own life. B: It is meant to stop people from writing any insurance on the life, risks or property of their close friends and relatives. C: The law seeks to prevent people from becoming insurance licensed to mainly write business on certain lives, risks and property that will deprive other producer's from making a living due to unfairness. D: It is designed to assure that anyone who wants to buy insurance from themselves will be able to do so.
C. The controlled business statute is mainly designed to prevent licensing for the main purpose of depriving producers from earning a living because people are selling insurance to themselves, spouse or employers.
All of the following are general powers of the Director, EXCEPT: A: conduction an investigation to determine if an insurance law has been broken. B: create a rule to facilitate carrying out his duty under law. C: impose a jail sentence on a producer who has been found guilty of a criminal act relating to insurance. D: obtain criminal information from the State Police about a licensee.
C. The director cannot impose a jail sentence but can request that the Attorney General prosecute those who engage in illegal actions involving the sale of insurance.
If the Director sends a representative to an insurance company office to conduct a nonfinancial conduct examination, at which of the following days and times would the insurer be compelled to give the Director easy and convenient access to all the company records? A: 8 PM on a Sunday B: 2 AM Tuesday morning C: 9 AM Monday morning D: Midnight Friday evening
C. The examination law says any person being licensed must grant the Director or his/her representative access at all reasonable hours, which would include any weekday during normal business hours.
How many days prior notice of cancellation must an surety, who has issued a producer surety bond, provide to the principal of the bond? A: 10 days B: 15 days C: 30 days D: 90 days
C. The principal (producer who purchased the bond) must receive 30 days notice before a surety may cancel a surety bond.
If an insurer is approved to sell auto insurance that provides a $100 refund after one year if the insured is accident-free during the year, why is this NOT rebating? A: Because auto insurance is exempted from rebating laws B: $100 is the statutory refund limit by an insurer. C: Because the refund is part of the contract that was approved for sale by the Director. D: $200 is the statutory refund limit by an insurer and the amount shown I under this limit.
C. Value offered to induce a sale is only a rebate if it is not part of the contract of insurance, therefore in this case the $100 is part of the policy and not a rebate.
The party who is responsible for assuring that a producer surety bond is effect as required and for the correct amount is A: The agency the producer works for. B: The producer's insurance company. C: The producer. D: The Director of Insurance.
C. It is the responsibility of the individual producer to maintain the proper amount of a surety bond in effect as required.
Defamation occurs when A: a producer demonstrates that the premium rates for an insurance plan he is promoting is less expensive than the plan a competitor is promoting. B: an insurance company advertises that their industry rating is better than 99% of all other carriers in the country. C: an agency prints and distributes flyers claiming that a competitor will soon be filing bankruptcy and they are a better choice therefore with whom to do business. D: The President of a life insurance company signs off on a plan to advertise for prospects in a state his company is not licensed in.
C. Stating a licensed entity is about to be in financial trouble to induce the public to steer away from them is an act of defamation by the maker of such statements.
A producer who places insurance with an insurer, either directly or indirectly, with whom the producer does not have an agent contract A: is grounds for license revocation. B: requires a special limited license. C: requires that the producer must post a surety bond in favor of the people of Illinois. D: must pay a state fee based on volume of business placed with such an insurer.
C. A bond must be posted in favor of the people when a Producer places business either directly or indirectly with any insurer with whom they are not contracted as an agent.
A producer moved across town from one home to another on July 1. By what date must the producer report the move to the Director? A: By July 15 B: By July 16 C: By July 31 D: By August 31
C. A producer has 30 days in which to report to the Director a change of residential address.
Which of the following activities on the part of an insurance producer would likely be construed as rebating? A: A producer offers a free review of a client's life insurance portfolio. B: A producer sponsors a little league team having several children on its roster whose parents have purchased policies from the producer in the past. C: A producer offers two tickets to the Super Bowl game in exchange for the purchase of a large life insurance policy. D: A producer sends a couple of $25 gift cards to be used at a local restaurant after a married couple has purchased insurance and received their policies.
C. Rebating is exchanging something of value to help close the deal on an insurance purchase and the something of value is not part of the insurance contract. Super Bowl tickets would be considered as rebating in this case.
Once a producer has been notified that her license has been suspended by the Director, how many days does she have in which to request a hearing, in writing, from the date the Director mailed the termination notice? A: 10 days B: 15 days C: 20 days D: 30 days
D. A producer has 30 days from the date a suspension, revocation or denial notice is mailed by the Director in which to make a written demand for a hearing on the matter.
If an individual sells insurance without a license and steals premium funds collected, this person is guilty of A: no criminal act. B: behavior that will lead to the revocation of their producer license. C: A Class A misdemeanor. D: A Class 4 felony.
D. An person that sells insurance without an license and who misappropriates monies collected in connection with such a sale is guilty of a Class 4 felony.
Which of the following factors is acceptable to use on the part of an insurer in determining premium pricing in the insurance marketplace? A: Basing increased cost for a life insurance policy on total blindness. B: Basing rejection of health insurance coverage on partial blindness. C: Basing rejection of property insurance to an insured on the basis geographical location of the property. D: Charging an fifty-year old person more premium for life insurance than a thirty-year old.
D. Basing premium rates on blindness, whether partial or total or property insurance based on geography are illegal trade practices. Basing life insurance rates on the age of the insured is accepted and sound actuarial science.
What is the largest dollar civil penalty that will be assessed for a single act of defamation? A: $1,000 B: $2,500 C: $5,000 D: $10,000
D. Civil fines for defamation can range between $200 and $10,000.
Is it allowable for an insurance producer with a PFTA to co-mingle producer personal funds into a PFTA? A: Never B: Only with good cause C: Only if a shortfall would result otherwise D: Only with the written consent of the insurer on whose behalf the premium funds are being held.
D. Co-mingling the personal funds of a producer is allowed only with written consent of the company or companies whose funds are being held in the PFTA.
The annual license fee for a certified provider is A: $500 per year plus $50 for each course certified B: $2,000 C: $1,000 D: $1,000 plus $20 for each certified course renewal
D. Course providers pay $1,000 a year plus $20 per course that was certified that is being renewed.
How many total course hours are required for Accident and Health insurance prelicensing? A: 5 B: 7.5 C: 12.5 D: 20
D. Each of the four main lines of licensing authority: Life, Health, Property and casualty require 20 total course hours of which 7.5 must be classroom hours.
A producer receives a notice in the mail indicating their license has been terminated although the producer is very ethical and has never had a single complaint lodged. What is the most likely reason for the producer's license termination? A: A consumer complained. B: The producer's insurance company requested that the Director terminate the producer's license. C: Another producer filed a complaint against the producer who then had their license terminated. D: The producer failed to complete the required continuing education in a timely fashion.
D. If a producer does not complete the CE requirement, their license is automatically terminate subject to the ability to reinstate the lapsed license within 12 months at a double license fee and completed the CE requirement.
Which of the following actions could be taken against an insurance company that routinely engages in unfair trade practices? A: The company could have its certificate of authority suspended. B: The company could be assessed a civil penalty. C: The company could have its certificate of authority revoked. D: Any or all of the above.
D. Insurance companies that engage in unfair trade practices can be fined and/or have their license to do business (called a certificate of authority) suspended of revoked,
Which of the following is a prohibited investment option into which to place Premium Fund Trust Account monies? A: US government securities maturing in no longer than one year. B: A non-interest bearing bank account in an institution under the jurisdiction of Illinois courts. C: Highly rated commercial paper. D: A brokerage account in which options futures are traded.
D. PFTA money must be put in safe, secure and conservative accounts as regulated by state law which strictly prohibits placing such monies into accounts where risk to principal is great such as securities options, stock futures or purchasing equities on margin.
A Temporary License (180 days) allows the holder to engage in all of the following activities, EXCEPT: A: a surviving spouse of a producer can use the authority to help effect the sale of the insurance business. B: make certain that insureds are paying renewal premiums in a timely manner. C: ask the Director to extend the authority if an anticipated agency sale is taking longer than 180 days. D: sell a new policy to an existing client.
D. The 180 day temp license is strictly used to service existing customers and the sale, solicitation or negotiation of business is prohibited.
How many days does the Director have to issue a final written order once a hearing has been held pertaining to a market conduct examination? A: Within 20 to 30 days B: 30 days C: 60 days D: 90 days
D. The Direct has 90 days from the filing of an examination report or within 90 days after a hearing is held regarding a market conduct examination to issue a written order.
If a producer violates an insurance law and also commits a criminal action in the process, which action is the Director most likely to take against the producer? A: Revoke the producer's license and have the producer locked in jail for an amount of time prescribed by law. B: Hold a hearing to determine whether or not the Director can suspend. revoke or deny the producer's licensing authority. C: Fine the producer $100,000. D: Send the producer a revocation notice in the mail and notify the attorney general about the alleged criminal activity for possible prosecution.
D. The Director of insurance has the authority to suspend, revoke or deny a producer licensing authority subject to the right of the producer to request a hearing: the Director has no authority to imprison anyone.
All of the following are examples of unfair practices, EXCEPT: A: Misrepresentation B: Defamation C: Rebating D: A company not paying a claim when liability to do so is reasonably clear.
D. Unfair claims practices are a different category of activities from unfair trade practices.