STUDY GUIDE QUESTIONS 8
Which of the following statements is true regarding the replacement of a life insurance policy in Colorado?
the replacing insurer must maintain copies of all records regarding the replacement for at least 5 years
An insurer cannot deny a claim unless
there is a reasonable explanation of the claim
When is it appropriate for a producers spouse to be the primary beneficiary on an applicants insurance policy?
when insurable interest exists
Which situation allows the producer to also be the beneficiary on a clients application for life insurance?
when insurable interest exists
If an annuity application was not taken in person, an insurer must provide the applicant a Buyers Guide
within 5 days of the insurer receiving the application
The commissioner may issue an emergency cease and desist order without a hearing for all of the following circumstances EXCEPT
writing controlled business
What is the maximum amount the commissioner can fine an insurer for each violation of a cease and desist order?
$10,000
On June 1, 2004 G takes out a $20,000 whole life insurance policy with an AD &D rider. On July 15, 2005 G intentionally takes his own life. What will G's beneficiary receive as a death benefit?
$20,000
An producer who violates a cease and desist order may, after a hearing, be fined up to
$500
K is an insured under a life insurance policy owned by a third party. Which of these statements is true?
K has no ownership rights
If an insurance company wishes to discriminate rates based on gender, it must?
be justified by actuarial statistics
Which of these is NOT considered to be a cost connected with an individual's death
business expenses
According to the Colorado Fraud Statute, all of the following must contain a warning against insurance fraud EXCEPT:
certificate of authority
Which of the following documents are NOT required to mention the Colorado Fraud Statute
certificates of authority
All of the following are considered a form of advertisement EXCEPT
communication or materials used within an insurers own organization
A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?
company x
Which of the following is NOT a problem when existing life insurance is replaced with new coverage?
comprehensive coverage may increase under the new policy
A producer that only sells insurance to family members is said to be engaging in
controlled business
Who is not eligible to receive commissions from the sale of an insurance product?
corporate executive
If a producer completes and insurance application, collects the initial premium, and issues the appropriate receipt?
coverage will be contingent on the underwriting policies
From what point must the insurer pay interest on the proceeds of a death claim?
date of death
Circulation of a maliciously critical statement about any insurer's financial condition to injure the insurer is called
defamation
Which of the following is an example of a misrepresentation?
describing a universal life policy as a security
When recommending the purchase or exchange of an annuity, the producer must determine suitability of the purchase by performing all of the following EXCEPT
determining the marital status of the applicant
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?
each partner must own a policy on the other partners
When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve
establishes the needs of the individual and his dependents
Which of the following offers an insurance applicant the right to view the contract and receive a full refund?
free look period
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
fund a buy-sell agreement
Which of the following words may be used in the advertisement of life insurance or annuities ?
guaranteed
All of the following penalties apply to anyone giving intentional false testimony during an insurance examination EXCEPT
guilty of felony
Paying insurance premiums on a more frequent basis will cause the policy to have
higher premiums
In life insurance, the needs approach is used mostly to establish
how much life insurance a client should apply for
How does the Commissioner attain his position?
appointed by the governor
When may the commissioner conduct an examination of an insurance company?
as often as deemed necessary
Which of the following is required for a life insurance lapse notice?
reason stated why policy will lapse
If a producer offers to refund part of a prospects premium in exchange for the purchase of a life insurance policy, the producer is committing the illegal act of
rebating
If an insurer is authorized to conduct business in another state and wishes to conduct business in Colorado, it must
receive a certificate of authority from colorado
Interest on life insurance proceeds is
required if the claim was not paid within 30 days of the date insurer received the claim
Which of the following is an example of rebating?
returning a portion of a premium as inducement to purchase insurance
Which of the following is a duty of the commissioner
reviewing and approving license applications
Which of these factors does NOT influence an applicant's need for life insurance?
self- maintenance expenses
Licensing is required for all of the following EXCEPT
selling prepaid legal services
If a producer is going to deposit any premium into a bank account prior to remitting the funds to the insurer, he/she must use a
separate insurance trust account
When a life insurance underwriter is determining insurability, it is illegal to base these decisions on
sexual orientation
Colorados replacement rules apply to all of the following types of insurance EXCEPT
single premium whole life
Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of ____ from the policy's effective date?
1 year
In Colorado a life insurance applicant has ___ days after policy delivery for a full refund of premium if not satisfied for any reason
15
Renewing a producer's license requires __ hours of continued education every 2 years
24
An insurer that terminates a producer's appointment must inform the Commissioner within how many days?
30
A producer must remit premiums to the insurer within ___ days after receipt
45
When replacing an existing life insurance policy, the replacing insurer must notify the existing insurer within
5 business days
How long must a replacing insurer maintain the records of a replacement transaction?
5 years
Three law partners form a Cross-Purchase Buy and Sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement?
6
Upon request, when must the Colorado Supplement to the Summary of Benefits and Coverage Form be provided?
7 business days
Which of the following is an example of defamation
a brochure including an untrue statement regarding a competitor's ability to pay claims
Which of the following statements regarding the Notice Regarding Replacement of Life Insurance is CORRECT
a copy of the notice must be signed by the the applicant and submitted with the application
When a minor is designated as the sole primary beneficiary,
a guardian will be court appointed in the event of a death claim
Which of the following potential insurance sales would be subject to replacement regulations?
a new policy that causes an existing life insurance policy to be surrendered
Which of the following statements is CORRECT regarding insurable interest in a life insurance contract?
a person is generally considered to have unlimited insurable interest in himself or herself
Which of the following is CORRECT regarding a producers fiduciary responsibility with clients funds?
a producer may never commingle personal funds with funds paid by or to a client
A fiduciary responsibility is defined as
a relationship of special trust and confidence when a person is entrusted with another's funds
A life insurance applicant realized he failed to disclose material medical history and calls the producer. Any changes made to the application must be initialed by the
applicant
Which of these is not a reason for purchasing life insurance on the life of a minor?
if both parents were to die, it will provide death benefits of the child
When may the commissioner conduct an examination of an insurance company?
if there is suspicion of an unauthorized person engaging in insurance business without being licensed
In a key employee life insurance policy, the third party owner can be all of the following, EXCEPT
insured
Employer noncontributory group life policies must allow for all of the following EXCEPT
insured can determine the benefit amount
Ultimately, who is responsible for a producer generated advertisement
insurer
When a claim is denied, the insurer must
issue a statement to the policy owner explaining the coverage, provision, or laws on which denial was based
In addition to suspending/revoking licenses and issuing fines, the commissioner has the authority to do all of the following EXCEPT
issue prison sentences
Which statement regarding third party ownership of a life insurance policy is true
it is used extensively in estate-planning as well as business circumstances
In Colorado, which of the following is true regarding the commingling of an insureds funds with the funds of a producer?
it'a never okay
To be valid, a group life insurance policy
may not be issued to a group formed solely for the purpose of obtaining insurance
A company that has not been authorized to operate in Colorado is known as
nonadmitted insurer
As a condition to be approved for a loan , a creditor may require the borrower to
obtain an insurance policy through an insurer of the borrower's preference
If an applicant for an annuity refuses to provide suitability information, the producer should
obtain the consumers signed statement documenting his or her refusal to provide sustainability information
If a producer chooses to conduct business under an assumed name, when must notification be given to the Commissioner?
prior to using the assumed name
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
split-dollar plan
The premiums paid by an employer for his employee's group life insurance are usually considered to be
tax-deductible to the employer
The USA patriot act was signed into law as a response to
the 9/11 terrorist act
Which statement regarding a key employee life policy is NOT true?
the beneficiary is named by the key employee
G takes out a life insurance policy on October 8, 2008. On August 3,2009, Gtakes his own life. when G's beneficiary files a claim
the claim will be denied under the suicide provision
If a producer is found to be writing primary controlled business?
the commissioner will not renew license
Which information is NOT included in the Colorado supplement of Benefits and Coverage form?
the insurer's prior year financials
A license is deemed to be used for a controlled business if, during the immediately preceding 12 - month period,
the licensees total premiums on controlled business exceeded the total premiums on all other businesses
