(PA Regulations) Law Supplement Practice Exam
Medicare supplement policies must provide a free look period of at least
30 days
Producers must report any criminal charge to the Commissioner within how many days of the charge?
30 days
The law requires that licensed producers advise the Insurance Department of a change in their residential or business address within how many days of such a change?
30 days
A conversion privilege under a group health insurance plan generally must be exercised within how many days after the group coverage terminates?
31 days
Health insurance policies that provide maternity bene ts must provide for a minimum of how many hours of inpatient care following a Caesarean delivery?
96 hours
Long Life Insurance Company has been rated A+ by Best's Insurance Reports. This rating indicates that Long Life has
a superficial financial standing
In Pennsylvania, producer appointments are made by
insurers
Speci ed disease coverage in Pennsylvania must provide an overall aggregate benefit limit of at least
$5,000
In Pennsylvania, a producer's term of licensure is how long?
2 years
What is the maximum period of time within which an insurance producer can reinstate a lapsed license without having to reapply for the license?
1 year
In Pennsylvania, the free look period for all individual life insurance policies is how many days?
10 days
To be qualified for an insurance producer license in Pennsylvania, an individual applicant must have reached the age of
18
What is the maximum term of a temporary license that is issued as a result of a licensee's death?
180 days
Under Pennsylvania's life insurance disclosure requirements, all of the following elements of an insurance policy sale must be identi ed and described EXCEPT A.) the producer's commission B.) the policy's face amount C.) dividends payable D.) the policy's cash surrender value
A.) the producer's commission
All of the following statements regarding the treatment of life insurance policy loans in Pennsylvania are true EXCEPT A.) loans do not have to be made available until a policy has been in force for 3 years B.) if a policyowner fails to repay a loan within a prescribed period of time, the policy may be voided by the insurer C.) if a policy loan is outstanding at the insured's death, the insurer may deduct the outstanding amount from the death proceeds D.) insurers may charge a variable rate of interest on their policy loans
B.) if a policyowner fails to repay a loan within a prescribed period of time, the policy may be voided by the insurer
All of the following are considered unfair claim practices EXCEPT A.) misrepresenting the amount of coverage payable under the policy B.) insisting on investigating a claim based on an uncertain cause of death C.) attempting to settle a claim for less than the contract provides D.) failing to act promptly on communications regarding claims
B.) insisting on investigating a claim based on an uncertain cause of death
Anitra purchased a $300,000 universal life policy from Long Life Insurance Company. Which of the following must she be given at least once a year as long as she continues to own the policy? A.) A policy review by the producer who sold her the policy B.) A copy of Long Life's annual statement C.) A copy of Long Life's privacy statement D.) An offer to convert the policy to an annuity
C.) A copy of Long Life's privacy statement
Which of the following could be paid an insurance commission or fee? A.) Lenny, a retired insurance producer who no longer maintains a license but whose book of business generates policy renewals B.) Patricia, a employee bene ts attorney who refers a business client to a producer specializing in group insurance C.) Both A and B D.) Neither A nor B
C.) Both A and B
Which of the following life insurance prospects must be provided with a disclosure statement at the time of solicitation? A.) Arnold, who is applying for a deferred xed annuity with a $5,000 premium deposit B.) June, who has requested the conversion of her $100,000 term policy to a permanent plan, under policy's conversion option C.) Juan, who is applying for a second whole life policy with the same insurer, in the amount of $250,000 D.) Leana, who is applying for a $1,000 policy on the life of her granddaughter
C.) Juan, who is applying for a second whole life policy with the same insurer, in the amount of $250,000
Executing the insurance laws of Pennsylvania is whose responsibility?
Insurance Commissioner
An insured submits a notice of loss to his insurer, with all additional and necessary information, on January 1. As a general rule according to Pennsylvania law, by what date must the insurer complete its claims investigation?
January 31st
Tyrone applied for a life insurance policy on April 1. The application was submitted to the insurer on April 7. The company approved the application on April 30 and issued the policy on May 5. Tyrone's producer delivered the policy to his new client on May 10. When does Tyrone's free look period begin?
May 10
Licensed insurance companies are subject to examination by the Department of Insurance at least
Once every 5 years
An insurance company's license to do business in Pennsylvania is called
a certificate of authority
A health insurance policy that provides coverage for the insured's family members must provide that benefits are payable for a newly born child beginning..
at the moment of birth
By examining an insurer's records, the Insurance Commissioner assesses the company's
compliance with state laws
Any attempt by the existing insurer or its producers to dissuade a policyholder from replacing an existing insurance policy is also known as
conservation
The purpose of Pennsylvania's replacement regulations is to
ensure that policyholders are given the information they need to make informed decisions regarding such transactions
Prohibition against which of the following insurance practices extends to consumers as well as producers?
rebating
To motivate a buyer to sign an application for insurance, a producer promises a gift of 50% of the commission. This is an example of
rebating
The insurance industry in the United States primarily is regulated by
the states
The practice of using misrepresentation to induce any person to lapse, forfeit, surrender, exchange, or convert an insurance policy is also known as
twisting
Once appointed, a producer's appointment extends
until the appointment is terminated by the appointing insurer
Unless exempt, insurance producers must complete how many hours of approved continuing education courses during each 2-year license period?
24 hours
Life insurance policies must include a provision entitling insureds to a grace period for payment of premium, during which time the death bene t coverage continues in force. How long must this grace period last?
30 days (1 month)
Good Health Insurance Company's medical expense policy includes a probationary period equal to the maximum time allowed by Pennsylvania law. Which of the following statements is CORRECT? A.) No claims are payable under the policy for the first 30 days after policy issue. B.) No claims are payable under the policy for the first 30 days following every policy renewal date. C.) The insured must have been in good health for the 30 days preceding policy application. D.) The insured must have been in good health for the 30 days both preceding policy application and following policy issue.
A.) No claims are payable under the policy for the first 30 days after policy issue.
The Commissioner may deny, revoke, or suspend a producer license for any of the following EXCEPT A.) failing to meet the annual production quota as determined by the insurer B.) providing false information in a license application C.) misappropriating money being held in a duciary capacity D.) committing a felony
A.) failing to meet the annual production quota as determined by the insurer
All of the following are allowable activities for an individual who holds a temporary license EXCEPT A.) procure new business from a deceased producer's existing clients B.) renew the business of a deceased producer C.) maintain the business of a disabled producer D.) perform any acts necessary to keep a deceased producer's business going until the estate is settled
A.) procure new business from a deceased producer's existing clients
When an insurance transaction involves a replacement, a producer must do all of the following EXCEPT A.) give the applicant a notice regarding replacement of life insurance signed by the applicant and producer B.) notify the existing insurer when one of its subsidiaries is the issuer of the replacement policy C.) make a list of all of the applicant's existing life insurance policies D.) obtain a signed statement from the applicant disclosing any existing insurance policies to replace
B.) notify the existing insurer when one of its subsidiaries is the issuer of the replacement policy
Which of the following statements regarding variable life insurance in Pennsylvania is NOT correct? A.) Variable life insurance is a security. B.) The separate account that supports the policy is primarily composed of stocks and bonds. C.) Investment risk for the policy's performance is borne by the insurer. D.) All variable life policies must be led for approval with the Commissioner.
C.) Investment risk for the policy's performance is borne by the insurer.
Chris purchased a short-term disability insurance policy from Good Health Insurance Company. The policy's face page states that coverage excludes pre-existing conditions. When the policy was issued, Chris was recovering from a broken leg. A week later, Chris slipped on an icy sidewalk and broke the same leg again. How will Good Health Insurance Company likely respond to Chris's claim? A.) It will likely deny benefits since the accident was associated with a pre-existing condition. B.) It will likely pay the claim since it was associated with an accident, not an illness. C.) It will likely deny the claim, citing the probationary period exclusion. D.) It will likely deny the claim and cancel the policy, citing the probationary period exclusion.
C.) It will likely deny the claim, citing the probationary period exclusion.
On September 1, Max turned 35. Two months later, he applied for a $150,000 life insurance policy. His application was approved and a policy was issued, dated August 1. Which of the following statements is CORRECT? A.) Max lied about his age on the application and the insurer has the right to cancel the policy. B.) The insurer violated Pennsylvania's law regarding backdating of insurance policies. C.) The policy was issued appropriately. D.) The policy will be issued with a rate-up in premium.
C.) The policy was issued appropriately.
In Pennsylvania, all of the following are considered unfair trade practices EXCEPT A.) misinterpretation B.) rebating C.) replacement D.) defamation
C.) replacement
All of the following are violations of Pennsylvania insurance law EXCEPT A.) a licensed producer accepting business that was solicited by a person who is not a licensed producer B.) requiring a consumer to purchase insurance from a designated nancial institution as a condition of taking out a loan C.) a licensed producer sharing a portion of his commission with a rst-time insurance buyer D.) a licensed producer recommending the replacement of a life insurance policy for an annuity contract
D.) a licensed producer recommending the replacement of a life insurance policy for an annuity contract
The Insurance Commissioner is responsible for all of the following duties EXCEPT A.) issuing certificates of authority B.) enforcing provisions of the Insurance Code C.) conducting insurer investigations D.) enacting insurance laws
D.) enacting insurance laws
All of the following are true regarding Pennsylvania's life insurance replacement regulations EXCEPT A.) no replacement transaction can be completed unless and until the insured/applicant is provided with a written comparison of the policies' terms, conditions, and benefits B.) no replacement transaction can be completed unless and until the insured/applicant signsa statement verifying knowledge that a replacement will take place C.) no replacement transaction can be completed unless and until the insured/applicant is given a Notice Regarding Replacement of Life Insuranceby the soliciting producer D.) no replacement transaction can be completed unless the insured/applicant is provided a copy of all sales proposals or other sales material
A.) no replacement transaction can be completed unless and until the insured/applicant is provided with a written comparison of the policies' terms, conditions, and benefits
Disability income insurance policies in Pennsylvania must provide a maximum benefit period of at least
6 months
Long-term care insurance policies cannot define a pre-existing condition more narrowly than a condition for which medical advice or treatment was recommended by or received from a provider of health care services within what time period?
6 months before the effective date of an insured's coverage
Long-term care policies must have a provision regarding reinstatement that provides for which of the following? A.) Reinstatement of a lapsed policy if requested within 1 year of the lapse B.) No reinstatement of a lapsed policy for anyone over the age of 75 C.) Reinstatement of a lapsed policy if the insurer receives proof of cognitive impairment or functional incapacity of the insured D.) Automatic reinstatement of a lapsed policy regardless of the reason for the lapse if the insured is over age 80
C.) Reinstatement of a lapsed policy if the insurer receives proof of cognitive impairment or functional incapacity of the insured
All of the following people must be licensed to transact insurance business in Pennsylvania EXCEPT A.) producers who specialize in annuities B.) producers who work for more than one insurance company C.) insurance producers who hold their Chartered Life Underwriter (CLU) designation D.) the chief financial officer of an insurer who does not solicit or negotiate risks
D.) the chief financial officer of an insurer who does not solicit or negotiate risks