Missed Questions
An employer who has an Open Enrollment Period four times during a policy period for group dental coverage might cause the insurer to have concerns about: A Insurable Interest B Premium Payments C Adverse Selection D Stability of Membership
C Adverse Selection Frequent Open Enrollment periods would make the insurer more exposed to immediate claims and would likely increase adverse selection.
Which of the following is NOT prohibited from disclosing personal information about a client under the Insurance Information and Privacy Protection Act of North Carolina? A Insurer B Agent C Client D Agency support personnel
C Client The client owns their information and is free to disclose it.
Generally, regulatory jurisdiction over a group insurance plan belongs to the insurance commissioner of: A The state in which the group contract was delivered to the policyowner B The state in which the initial solicitation took place C The resident state of the producer D The state where the application was completed
A The state in which the group contract was delivered to the policyowner It is generally accepted that the state in which the group contract is delivered to the policyowner has governing jurisdiction.
Attaching a(n) ___________ rider excludes coverage for a condition that would otherwise be covered. A Waiver B Impairment C Rehabilitation benefit D Lifetime benefit
B Impairment Attaching an impairment rider excludes coverage for a condition that would otherwise be covered.
___________ manufacture and sell insurance coverage in the form of policies or contracts of insurance. A Insureds B Insurers C Agencies D Producers
B Insurers Insurers manufacture and sell insurance policies through agencies and producers to applicant/insureds.
The insurable interest on one's own life is generally regarded as: A Dependent upon the insured's salary B Unlimited C Dependent upon the assets the insured owns D Based on the number of dependents the insured has
B Unlimited The insurable interest on one's own life is generally regarded as unlimited.
P wants to reinstate their health policy issued in North Carolina, and submits a reinstatement application and the required premium. According to the policy's reinstatement provision, if the insurer does not send notice of approval or denial of the application, the policy will be reinstated how many days after the insurer receives the premium? A 15 B 20 C 45 D 30
C. 45 Policies that require a reinstatement application are considered reinstated upon application approval or, if no approval or denial is provided to the policyowner, 45 days after the insurer receives the premium.
If an insured suffers a dismemberment under the AD&D policy, which of the following will provide benefit payouts to the beneficiary? A Capital sum B Principal sum C Capital funds D Principal investments
A Capital sum Dismemberment benefits payable under an AD&D policy are referred to as the capital sum.
In North Carolina, requirements for group health policies state that: A If a group policy is replaced within 15 days of being terminated, the replacing insurer must cover everyone covered under the policy being replaced B An association group must have 100 members and be in existence for at least 5 years C An employer group may cover executives only D A credit policy may never require evidence of individual insurability
A If a group policy is replaced within 15 days of being terminated, the replacing insurer must cover everyone covered under the policy being replaced If a group policy is terminated then replaced within 15 days, the new policy must cover everyone covered under the old policy. An association group must have at least 500 members, and a creditor group must receive 100 new debtors yearly. Credit policies must allow insurers to require evidence of individual insurability if fewer than 75% of new debtors become insured. An employer group must cover all employees, not just executives.
A commercial insurer who reimburses insureds for medical expenses they incur is known as what type of a provider? A Indemnity B Self-insured C Service D Practicing medical
A Indemnity Commercial insurers who reimburse the insured for medical expenses incurred are known as indemnity providers.
According to North Carolina's Insurance Information and Privacy Protection Act, an adverse underwriting decision for an individual insurance policy would include any of the following, except: A Offering to insure at a rate that is higher than standard B Policy rescission C An agent declining to make an application with the specific insurer the applicant requested D Terminating coverage on a specific policy
B Policy rescission For individually written coverage, the rescission of a policy, termination of a policy on a statewide basis, or a declination of coverage because it is not available on a statewide basis are examples of decisions that are not adverse underwriting decisions.
The __________ is the person applying for insurance coverage and is responsible for completing an application. A Insurer B Policyowner C Insured D Producer
B Policyowner The policyowner is the person applying for insurance coverage and is responsible for completing an application.
The Smith family has a $1,000 annual family deductible with a coinsurance provision of 80/20. The family's claims for the year are $200, $300, $400, $500, $300, and $300, totaling $2,000. The insurer is responsible for paying: A $1200 B $1600 C $800 D $2000
C $800 The family responsibility is the deductible ($1,000) and 20% of the balance ($200). Therefore, the insurer is responsible for paying $800.
North Carolina law requires health insurers to give policyowners how many days' notice before nonrenewing a group health policy? A 30 days B 60 days C 15 days D 45 days
D 45 days Insurers must provide at least 45 days' notice before nonrenewing a group health policy. The same notice requirement is true for changing rates on group health policies.
All of the following are characteristics of a 401(k) plan, except: A Typical investment choices for 401(k)s include mutual funds B Earnings on the investments grow tax deferred C Employees can elect to defer some of their salary into the plan on a pre-tax basis D Employers must match employee contributions
D Employers must match employee contributions Employer matching contributions are up to the employer when the plan is first put into place.
All of the following are true regarding Current Assumption Whole Life, except: A If current rates decrease, the policyowner pays reduced premiums, or the cash values will grow faster B The policy has a guaranteed minimum death benefit C The insurer may have to add a corridor of insurance protection to keep the policy from endowing D Interest rate changes affect policy premiums
A If current rates decrease, the policyowner pays reduced premiums, or the cash values will grow faster If current rates increase (not decrease), either the policyowner pays a reduced premium, or the cash value will increase at a faster rate.
Following a complaint's final disposition, each insurer or its agents in North Carolina must maintain a record of all written complaints for at least how many years? A 5 B 3 C 4 D 2
A. 5 Each insurer or its agents must maintain a record of all written complaints for at least 5 years after the complaint's final disposition or, for domestic companies, until the Commissioner adopts a final report of a general examination that contains a review of these records, whichever is later.
The person offering him/herself or another person to be insured by the contract best defines the: A Beneficiary B Applicant C Insured D Policyowner
B Applicant The applicant is the party making the application, offering him/herself or another to be insured. The applicant may possibly also be the insured and/or policyowner, but not necessarily.
Dental plans are normally written with a stated annual maximum on the number of: A Appointments that will be covered B Benefit dollars that will be paid C Teeth that will treated D Cavities that will be filled
B Benefit dollars that will be paid Dental plans normally state an annual maximum dollar benefit.
What is a material misstatement? A Stating that the proposed insured is 34 when in fact he or she is 35 B One that is beyond the applicant's knowledge and belief C Responding to a height and weight question with measurements 1 inch taller and 5 pounds lighter than is actually the case D One which would have caused the insurer to not issue the policy had it been known
D One which would have caused the insurer to not issue the policy had it been known A material misstatement is one which would have caused the insurer to not issue the policy had it been known.
Life insurers in North Carolina must provide a Buyer's Guide and policy summary to the applicant: A At the time of policy delivery B When a customer relationship is established C Prior to policy issuance D Prior to accepting the applicant's initial premium
D Prior to accepting the applicant's initial premium A Buyer's Guide and policy summary must be provided to all prospective purchasers prior to accepting the applicant's initial premium deposit and any other time at the purchaser's request.
The Unpaid Premiums Optional Uniform Provision allows an insurer to: A Charge the insured a credit charge if premiums are not paid B Charge interest on past due premiums C Cancel the policy during the grace period D Reduce the amount of a claim payment by the premium due
D Reduce the amount of a claim payment by the premium due An insurer can withhold unpaid premiums, to which it has a legal right, when paying a claim that has occurred during the grace period. Both the insurer and the insured are 'indemnified' in this manner.
An insurance professional who represents the insured is a: A Limited representative B Agent C Insurance producer D Broker
D Broker An insurance broker is a person who places insurance with an authorized insurer that has not appointed the person, and is deemed to represent an insured.
Of the following, which best describes a Straight Whole Life Policy? A Increasing premium and level death benefit for the life of the insured B Decreasing face amount and level premiums C Increasing cash value and decreasing premiums D Level guaranteed premium and face value for the life of the insured
D Level guaranteed premium and face value for the life of the insured A traditional Straight Whole Life Policy has as its primary characteristic, fixed (i.e. guaranteed) premiums and death benefit over the life of the policy. It has substantial guarantees, but virtually no flexibility.
In North Carolina, an insurer's responsibilities for utilization reviews include all of the following, except: A The review may not request information that is unnecessary to certify the health care services under review B After a retrospective review, the insurer must notify an insured and the provider of a claim denial within 5 business days C The insurer must disclose utilization review procedures to insureds D Utilization reviews must be overseen by the accounting department
D Utilization reviews must be overseen by the accounting department An insurer is required to have qualified medical professionals oversee its utilization reviews. A reviewer may request only information that is necessary to certify health care services. For retrospective reviews, notice of noncertification must be provided within 5 business days, and determinations of prospective or concurrent reviews must be provided within 3 business days. Insurers must disclose utilization review procedures to insureds.
During a solicitation for life insurance in North Carolina, Agent X gives a presentation comparing two policies. Agent X's presentation must follow all of the following rules, except: A The maximum annual premium must be shown if the insurer reserves the right to change premiums B Guaranteed and nonguaranteed benefits are not required to be shown separately C The presentation must use an appropriate interest rate D Agent X must disclose that they are acting as a life agent prior to beginning the presentation
B Guaranteed and nonguaranteed benefits are not required to be shown separately A life insurance presentation must show guaranteed and nonguaranteed benefits separately. Though they may be combined into a single sum, they must be shown as separate amounts next to the sum.
Which of the following disclosures is prohibited under the Insurance Information and Privacy Protection Act of North Carolina? A Information provided to a group policyholder for reporting claims experience B Information about an individual in connection with an insurance transaction C Information disclosed in an audit of the insurer D Information given to a medical provider in order to provide care
B Information about an individual in connection with an insurance transaction It is prohibited to disclose personal information about an individual in connection with an insurance transaction, but there are many exceptions.
All of the following are traditional whole life policy nonforfeiture values, except: A Extended term insurance B Renewable and convertible features C Cash surrender values D Reduced paid-up insurance
B Renewable and convertible features The traditional whole life policy builds nonforfeiture values, such as cash surrender values, reduced paid-up insurance, and extended term insurance.
Which of the following is covered by the Life and Health Insurance Guaranty Association of North Carolina? A Employer XYZ hires 123 Health Co. to administer its self-insured health plan for employees and 123 Health Co. becomes insolvent B O has a term life insurance contract for $300,000 on O's life, and RST Insurance becomes insolvent while O is still alive C E has submitted a claim for $500,000 of medical expenses when GHI Insurance becomes insolvent D J has an a nonguaranteed contract with LMNO Insurance, which becomes insolvent
C E has submitted a claim for $500,000 of medical expenses when GHI Insurance becomes insolvent The Association will cover medical claims against an insolvent insurer up to $500,000. Self-insurance and nonguaranteed benefits are not covered, nor are claims for which the insolvent insurer would not have been liable (a claim under O's life insurance is not valid until O dies).
According to North Carolina law, all of the following general regulations of life insurance are correct, except: A Individual life insurance policies may not contain a provision stating that the beneficiary will receive payment upon the death of anyone not specifically named in the policy B Anyone age 15 and older may enter into a life insurance contract or annuity C Life policy proceeds are not protected from creditors D Proof of loss may be satisfied by a written statement from the attending physician at the time of death
C Life policy proceeds are not protected from creditors Other than cases of fraud, life policy proceeds are protected from creditors in order to protect the rights of beneficiaries. As part of the prohibition against survivorship funds, individual life policies must name the individuals whose death will initiate benefit payments. Proof of loss may be supplied by the attending physician or a certified copy of the death certificate.
Which statement is false? A A nonoccupational policy pays for injury or illness off the job B Changes in an Accident and Health contract may be completed only with the written consent of the insurer C Mandatory Second Surgical Opinion is when the physician submits claim information prior to treatment, to determine in advance if the procedure is covered D When an insured owes back premiums but is still within the grace period, the Unpaid Premium Provision is operative for any claims submitted
C Mandatory Second Surgical Opinion is when the physician submits claim information prior to treatment, to determine in advance if the procedure is covered This describes Precertification, not Mandatory Second Surgical Opinion.
All of the following are unfair trade practices in insurance, except: A Giving shares in a corporation as inducements to purchase insurance B Making misleading representations or fraudulent comparisons of policies C Offering any rebate, discount of premium, advantage, or valuable consideration specified in the policy D Making any false statement that is maliciously critical or derogatory of any insurer's financial condition with intent to injure someone in the insurance business
C Offering any rebate, discount of premium, advantage, or valuable consideration specified in the policy Offering any rebate, discount of premium, advantage, or valuable consideration NOT specified in the policy is an unfair trade practice in insurance.
Frank has a life insurance policy in which he chooses to have the dividends increase the death benefit. Which Dividend Option did he select? A Fixed Amount B Acceleration of Endowment C Paid-Up Additions D Paid-Up Option
C Paid-Up Additions Frank's objective is to use his dividends to increase the death benefit. Paid-Up Additions purchases single premium additional permanent benefits at the insured's attained age. The additional insurance is added to the face amount and it generates cash values and dividends as if the paid-up additional benefit was part of the original policy.
All of the following are unfair claims settlement practices, except: A Compelling insureds to sue to recover amounts due by offering substantially less than the amounts typically recovered in actions brought by legal process B Making known to insureds or claimants a policy of appealing arbitration awards C Promptly explaining, based on applicable provisions or laws, a claim's denial D Not attempting in good faith to promptly, fairly, and equitably settle a claim in which liability has become reasonably clear
C Promptly explaining, based on applicable provisions or laws, a claim's denial Failing to promptly explain, based on applicable provisions or laws, a claim's denial is an unfair claims settlement practice.
The pre-existing condition exclusion period on a health policy issued in North Carolina may not exceed: A 6 months B 9 months C 3 months D 1 year
D 1 year A health policy's pre-existing condition exclusion period may not exceed 1 year, and time spent toward any pre-existing condition exclusion period under previous coverage must be credited toward the current policy.