Texas Insurance Laws
Under the Texas code, the MAXIMUM for which a spouse may be insured in a company group life program with a $50,000 death benefit is:
$25,000
Under an individual life insurance policy, an insured may assign a MAXIMUM of what percentage of policy ownership?
100%
A Long-Term Care policy must offer a MINIMUM benefit period of how many months?
12
Insurance agent licenses normally must be renewed every
2 years
Under the Texas insurance code, an insurance company must pay death benefits for suicide if the policy has been in force for a MINIMUM of
2 years
A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license?
24
Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice?
30 days
After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12-month period?
31
An individual life insurance policy issued in Texas MUST have a grace period for premium payment of how many days?
31
What percentage of continuing education instruction MUST be completed in the classroom or classroom equivalent?
50%
Under the Nonforfeiture Law, a cash surrender value payment may be deferred by the insurance company for NO LONGER than how many months?
6
The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days?
90
Who can purchase a plan through the Marketplace?
Any legal resident except those incarcerated
An applicant for an agent's license must meet which of the following requirements?
Be honest, trustworthy, and reliable
A Health Maintenance Organization (HMO) may issue an Evidence of Coverage form after it has been approved by the
Commissioner of Insurance
Which of the following actions by an insurance company is considered an unfair claims settlement practice?
Denying an insured's claim without indicating the basis of denial under the policy
All of the following provisions must be included in life insurance policies EXCEPT Incontestability Entire Contract Extended Term Misstatement of Age
Extended Term
An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for which of the following reasons?
Failure to pay for coverage
An agent MUST do which of the following during a sales presentation for a participating life insurance policy?
Include a statement that dividends are NOT guaranteed
Which of the following BEST describes Credit Life insurance?
Insurance issued on a debtor to cover outstanding balances on installment loans
What MUST an insurance company use in its advertising?
Its true corporate name
All of the following may charge fees for insurance advice EXCEPT Legal reserve agents Financial planners Life and Health insurance counselors Managing general agents
Legal reserve agents
An agent MUST give a prospective insured an Outline of Coverage when taking an application for a
Medicare Supplement policy
A certificate of authority does which of the following?
Permits an insurance company to transact business in Texas
Group life policies MUST include all of the following provisions EXCEPT Ownership Beneficiary Designation Conversion Privilege Right to Loan Proceeds
Right to Loan Proceeds
An insurance company must do which of the following to terminate an agent's appointment?
Send notice of the termination to the Texas Department of Insurance
Under the Texas insurance code, which of the following statements about the Suicide clause is CORRECT? The Commissioner of Insurance must review insurance companies' Suicide clauses every five years for discrimination A Suicide clause must apply equally to Life and Accidental Death and Dismemberment (AD&D) policies An insurance company must actuarially justify any suicide limitation Suicide may not be a defense against payment after the second year
Suicide may not be a defense against payment after the second year
Which of the following statements is NOT CORRECT about the Commissioner of Insurance? The Commissioner must be elected in a general election The Commissioner is authorized to conduct the activities of the Texas Department of Insurance (TDI) The Commissioner may be a former employee of the Texas Department of Insurance (TDI) The Commissioner must serve as chief executive and administrator officer of the Texas Department of Insurance
The Commissioner must be elected in a general election
If an insurance company is organized under the laws of New Jersey and licensed to do business here, it is considered which of the following in Texas?
a foreign company
The Commissioner of Insurance has the power and duty to take all of the following actions EXCEPT activate insurance companies' financial reserves compute insurance companies' required financial reserves issue insurance licenses handle insurance-related consumer complaints
activate insurance companies' financial reserves
The Misstatement of Age provision requires that if the age of the insured is misstated, then any amount payable is
an amount that the premiums paid would have purchased at the current age or ages
An insurance company must provide information on fraudulent claims at the request of all of the following entities EXCEPT local law enforcement agencies the Commissioner of Insurance the Attorney General an insured
an insured
An agent may legally share commissions only with
another agent who is licensed in the same line of insurance
A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of
coercion
An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of
coercion
Under Texas insurance law, the term "transacting business" includes
collecting premiums
A life insurance illustration is NOT required to include the name of the insurer underwriting or rating classification upon which the illustration is based initial death benefit company's mortality table
company's mortality table
All of the following statements about health coverage for newborns are correct EXCEPT coverage begins and benefits are payable from the moment of birth coverage includes necessary care and treatment of congenital defects coverage during the first year is limited to congenital defects continued coverage after the first 31 days is dependent on notification
coverage during the first year is limited to congenital defects
The Insurance Commissioner may examine the records of an insurance company in order to
determine the solvency of the company
An insurance company may be judged guilty of false advertising if it
exaggerates its dividends in a newspaper advertisement
An organization that solicits insurance only among its members is known as a
fraternal benefit society
The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who
is found guilty of misrepresentation or fraud in obtaining the license
In Texas, a domestic insurance company is defined as a company that
is incorporated and formed in Texas
An agent who tells a client that dividends are guaranteed may be guilty of
misrepresentation
An insurance agent does NOT have fiduciary responsibilities to
other agents
If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely
pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age
A group life insurance policy may NOT insure groups consisting exclusively of persons who are
related by marriage, blood or legal adoption
Which of the following is an example of rebating?
returning a portion of a premium as inducement to purchase insurance
All of the following are defined as doing insurance business EXCEPT selling mutual funds taking or receiving insurance applications delivering an insurance contract to a Texas resident indirectly acting as an insurance agent
selling mutual funds
A stock insurance company is owned by it's
stockholders
If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in Texas, which of the following would be liable?
the agent and the company
Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT treatment in a certified facility transportation to and from an outpatient facility outpatient treatment through a public hospital or clinic group therapy prescribed by a physician
transportation to and from an outpatient facility
A foreign insurance company is one that is incorporated
under the laws of another state
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Texas Insurance Code covering
unfair methods of competition
Insurance company agent appointments remain in force for which of the following maximum periods of time, if any?
until terminated or withdrawn
An agent whose license has been revoked is required to
wait at least five years before applying for a new license
