2-20 Insurance Exam
Celia forgot to pay for her health insurance. On the day the payment was due, the insurer issued a 10 day notice of cancellation. 10 days later, they considered the policy cancelled. On the 12th day, Celia's payment arrived. Which statement is true? a) Celia still has insurance because she paid within the 31 day grace period b) Celia still has insurance because she paid within the 14 day grace period c) Celia does not have coverage because the insurer gave her the required notice of cancellation d) Celia does not have coverage, but she can request reinstatement within 45 days
a) Celia still has insurance because she paid within the 31 day grace period the insurer cancelled the policy prematurely; the insured has a 31 day grace period for payments
A health policy that covers basic hospitalization expenses of room & board, nursing care, laboratory fees, operating room, medical supplies, & similar items is called: a) hospitalization expense b) hospital indemnity c) surgical expense d) physicians coverage
a) hospitalization expense
A Certificate of Authority: a) is required for an insurer to transact insurance in florida b) lets policyholders know an insurer is financially sound c) is granted to an agent, giving them authority to represent the insurer d) is issued to a new agent after the pass their state exam
a) is required for an insurer to transact insurance in florida
If there is not a more specific statute for a particular type of policy, the number of days notice required for cancellation or non-renewal is probably: a) 30 b) 45 c) 55 d) 120
b) 45
A social organization that provides insurance or other benefits only to its members is called: a) fraudulent b) discriminatory c) a fraternal organization d) a risk retention group
c) a fraternal organization
What type of bond protects issuer from any loss due to lost document for which the issuer has made replacement? a) lost instrument bond b) blue sky bond c) customs bond d) irs bond
a) lost instrument bond
A bond that guarantees correction of faulty work or replacement of defective materials for a specific time, usually one year, is called a: a) maintenance bond b) supply bond c) payment bond d) none of these choices
a) maintenance bond
Under Blanket P.A.F. on coins and stamps the minimum paid per coin or stamp is: a) $1000 b) $250 c) $500 d) $10,000
b) $250
Which of the following is an example of an 'uncontrolled lines' floater? a) fine arts floater b) musical instruments floater c) gun floater d) golfer's equipment floater
c) gun floater
Frank's HO insurer went bankrupt, and Frank discovered this when his house burned down. Frank should: a) also declare bankruptcy b) sue his insurance agent c) put in a claim with the florida insurance guaranty fund and pay the $100 deductible d) find a new insurance carrier who will cover his claim after the fact
c) put in a claim with the florida insurance guaranty fund and pay the $100 deductible
Three parties to a surety bond are: a) principal, executor, surety b) obligee, principal, administrator c) surety, obligee, principal d) adjudicator, surety, obligee
c) surety, obligee, principal
The reinstatement provision in a health insurance policy issued in Florida says: a) must reinstate within 10 days of approval of application b) reinstatement automatic if company does not disapprove within 60 days c) upon reinstatement accident coverage is immediate, sickness has a 30 day waiting period d) none of these choices
d) none of these choices reinstatement is at time of approval or is automatic after 45 days if insurer fails to notify of disapproval within 45 days. upon reinstatement, accident coverage is immediate, sickness is subject to a 10 day waiting period
Under a P.A.F. all may be covered EXCEPT: a) jewelry b) musical instruments c) golfers equipment d) outboard boat and motors
d) outboard boat and motors
A health policy that reimburses insured for nonsurgical care provided by a physician, is called: a) hospitalization expense b) hospital indemnity c) surgical expense d) physicians coverage
d) physicians coverage
What is the purpose of Medicare Supplement insurance? a) cover costs not covered by federal medicare b) provide medicare to those not otherwise eligible c) provide medical insurance for welfare recipient d) none of these choices
a) cover costs not covered by federal medicare
Deceiving people for one's own material gain can be called: a) fraud b) controlled business c) coercion d) common sense
a) fraud
The Bureau of Unclaimed Property: a) is a bureau of the DFS charged with holding onto unclaimed checks, financial instruments, and other property b) is a bureau of the DBPR charged with holding onto unclaimed checks, financial instruments, and other property c) is a bureau of the OIR charged with holding onto unclaimed checks, financial instruments, and other property d) is an office of the governor, and serves as a lost and found for property other than financial instruments
a) is a bureau of the DFS charged with holding onto unclaimed checks, financial instruments, and other property
Billy is riding a motorcycle and, unfortunately, has a catastrophic accident. He is now severely disabled and unable to function on his own. The insurance that would pay for his ongoing care or placement in a facility is called: a) long term care b) medical expense c) disability income d) hospital indemnity
a) long term care
What type of coverage provides protection against catastrophic losses with a deductible, high maximum limit, and coinsurance? a) major medical b) minor miracle c) medicare supplement d) hospital indemnity
a) major medical
The Personal Articles Floater provides automatic coverage for newly acquired jewelry for: a) maximum $10,000/30 days b) maximum $2500/30 days c) maximum $10,000/90 days d) maximum $2500/90 days
a) maximum $10,000/30 days
Which of the following is NOT a responsibility of the Division of Agents and Agency Services? a) approving the issuance of licenses to insurance agents b) providing regulatory oversight to banks and financial institutions c) approving the issuance of licenses to claim adjusters d) investigating charges of unethical conduct
b) providing regulatory oversight to banks and financial institutions
To indemnify can best be described as which of the following: a) to reduce net worth b) to restore lost value c) to replace insurance coverage d) to add coverage to a policy
b) to restore lost value
To protect consumers, standards for Medicare Supplement are established by: a) congress b) department of health and rehabilitative services c) florida statutes d) department of financial services
c) florida statutes
Garage Insurance policies are a combination of which policies? a) property and auto b) auto and commercial crime c) general liability and auto d) none of these choices
c) general liability and auto
When the health insurer is required to renew the policy to a stated age but may increase the premium in the underwriting class in which insured is placed, it is called: a) optionally renewable b) conditionally renewable c) guaranteed renewable d) noncancellable
c) guaranteed renewable
All are covered by P.A.F. EXCEPT: a) jewelry b) cameras c) guns d) silverware
c) guns
Quality wihtin an object that results in the objects tending to damage or destroy itself is called: a) deterioration b) wear and tear c) inherent vice d) none of these choices
c) inherent vice
Which type of bond is required by public bodies to protect the public, guarantees compliance with law, guarantees collection of taxes? a) public official bond b) court bond c) license bond d) fiduciary bond
c) license bond
Marguerite is concerned that she might be a burden on the family one day and wants to know there is a way to pay for admission to a senior care facility. A product she might be interested in is: a) disability insurance b) health insurance c) long term care insurance d) old age insurance
c) long term care insurance
Which is the most favorable renewability provision for policyholders? a) conditionally renewable b) optionally renewable c) noncancellable d) guaranteed renewable
c) noncancellable
Under P.A.F. coverage on Fine Arts is: a) acv b) replacement cost c) valued d) 80% of market value
c) valued
An insurance company that is owned by policyholders is called a: a) stock company b) domestic company c) fraternal d) mutual company
d) mutual company
Under P.A.F. an insured has scheduled his stamp collection. Two very rare and valuable stamps have faded so badly that their value is cut in half. Former value $10,000, new value $5000. How paid? a) $10,000 b) $5000 c) must be appraised for ACV and that amount paid d) no coverage - excluded
d) no coverage - excluded
A Personal Articles Floater has a deductible of: a) $500 b) $1000 c) $250 d) no deductible
d) no deductible
When the health insurer cannot cancel the policy, cannot increase premium, and agrees to a new policy to a stated age, it is called: a) optionally renewable b) conditionally renewable c) guaranteed renewable d) noncancellable
d) noncancellable
Under P.A.F. Scheduled Coin Collection, 2 rare gold coins scheduled at $5000 each are sent by first class mail to be appraised by an expert. Lost in the mail, P.A.F. will: a) pay $10,000 b) pay $250 c) pay acv d) pay nothing
d) pay nothing
Which of the following is not a member of the Financial Service Commission of Florida? a) the attorney general b) the commissioner of agriculture c) the chief financial officer d) the insurance commissioner
d) the insurance commissioner
Under Inland Marine policies all are correct EXCEPT: a) 25% of limit for newly acquired property b) jewelry & furs - 30 days automatic coverage c) fine arts - 90 days automatic coverage d) theft coverage requires visible signs of forceful entry
d) theft coverage requires visible signs of forceful entry
Which is the grace period in health insurance policies issued in Florida? a) 31 days b) 45 days c) 60 days d) 90 days
a) 31 days
Within the first 90 days of a P&C policy, the insurer may be able to cancel with only ______ days notice (assume they are not canceling for non-payment of premium) a) 60 b) 40 c) 30 d) 20
a) 60 statutes allow for a shorter cancellation period during the first 90 days of a policy
A bond that guarantees that the bidder, if successful, will enter into contract and will satisfy future bonding requirements of that specific job is called: a) bid bond b) performance bond c) supply bond d) fiduciary bond
a) bid bond
An insurance agent who does NOT have an appointment from a Homeowners insurance carrier can: a) not legally write HO insurance b) write HO insurance as long as someone in the office is appointed for HO c) only receive HO commissions indirectly, such as by referring to another agent and receiving a shared commission d) write HO insurance if it goes along with the auto insurance for the same policyholder, and the agent also writes the auto insurance
a) not legally write HO insurance
When a health insurer may not cancel during the policy term, but has the right to non-renew the policy upon expiration, it is called: a) optionally renewable b) conditionally renewable c) guaranteed renewable d) noncancellable
a) optionally renewable
Under an Inland Marine Policy jewelry, cameras, fine arts and silverware may be written under separate policies or under: a) personal articles floater b) provisional articles floater c) appropriate articles floater d) none of these choices
a) personal articles floater
Statutory insurance policies are best defined as: a) policies such as PIP or WC for which the coverage is defined by state statutes b) rules about insurance that have been passed by the legislature c) standard policy forms such as those published by the insurance services office (ISO) d) insurance policies that insure the state statutes, in case of legislative errors and omissions
a) policies such as PIP or WC for which the coverage is defined by state statutes statutory policies (and coverages) have insuring agreements that are defined in statutes (laws) passed by the legislature
Which type of bond guarantees that the principal will uphold an oath of office and faithfully perform duties of office? a) public official bond b) court bond c) license bond d) fiduciary bond
a) public official bond
An agent who wants to keep their license but does not currently represent any insurer can: a) self-appoint b) transact at least one policy per year c) pause their license for up to 136 months d) sell their license to another person
a) self-appoint
A policy rider that pays the premium while the insured is disabled is called: a) waiver of premium b) elimination period c) grace period d) disability income
a) waiver of premium
An agent or agency charging a service fee for financing premium may not charge more than: a) $1 per payment or $12 per year b) $3 per payment or $36 per year c) $5 per payment or $60 per year d) $12.50 per payment or $150 per year
b) $3 per payment or $36 per year
In Florida, what is the minimum age for entering into (purchasing) a contract for insurance? a) 13 b) 15 c) 16 d) 18
b) 15 when people begin driving
Florida Law requires the health insurer to give how many days notice of cancellation during the policy term? a) 10 days b) 20 days c) 30 days d) 45 days
b) 20 days
A Business Auto Policy extends automatic liability coverage to trailers with a maximum load capacity of: a) 500 lbs b) 2000 lbs c) 20,000 lbs d) no automatic coverage
b) 2000 lbs
Annette let her disability insurance cancel for non-payment. She then sent a check to the insurance company asking them to reinstate the policy. Which statement is true? a) the insurer is required by law to reinstate her coverage b) 45 days after she requests reinstatement, Annette's policy is automatically reinstated if the insurer does not respond to her request c) her insurance is reinstated if it was conditionally renewable d) the insurer must respond to her request within 10 days, or the insurance will be reinstated automatically
b) 45 days after she requests reinstatement, Annette's policy is automatically reinstated if the insurer does not respond to her request if an insurer does not respond to a request for reinstatement within 45 days, the policy is automatically reinstated
Every agent transacting any insurance policy must maintain records of that policy in their office for at least: a) 3 years b) 5 years c) 10 years d) 30 days
b) 5 years
The coverage afforded by a Personal Articles Floater is: a) named peril, worldwide b) all risk, worldwide c) named peril, US and territories d) all risk, US and territories
b) all risk, worldwide
An insurance contract is: a) a necessary evil required y government in order to drive a car b) an agreement to transfer risk from one party to another for a fee c) an agreement between an insurer and the agent representing that insurer d) usually transferrable from one insurer to another
b) an agreement to transfer risk from one party to another for a fee
What type of bond is required of investment companies to protect public from misrepresentation and fraud by securities dealers? a) lost instruments bond b) blue sky bond c) customs bond d) irs bond
b) blue sky bond
When a health insurer can refuse to renew the policy only under certain conditions, it is called: a) optionally renewable b) conditionally renewable c) guaranteed renewable d) noncancellable
b) conditionally renewable
Which type pf bonds are furnished by plaintiffs and defendants to protect opposing parties from loss if one fails to show legal entitlement to the remedy sought? a) public official bond b) court bond c) license bond d) fiduciary bond
b) court bond
Jane's customer is worried that if something happened and she became unable to work, she would not have enough money to feed the kids. Jane can suggest which product to directly address this concer: a) accident insurance b) disability insurance c) long term care insurance d) business interruption insurance
b) disability insurance
A health policy that pays a flat amount per day of hospitalization, without regard to other insurance or expenses, is called: a) hospitalization expense b) hospital indemnity c) surgical expense d) physicians coverage
b) hospital indemnity
Under the Business Auto Policy, transportation expense reimbursement is: a) included for all covered autos b) included for private passenger auto only c) included for auto designated by a symbol d) not included in the policy
b) included for private passenger auto only
Some bonds have an additional party. The name of this party is: a) executor b) indemnitor c) administrator d) adjudicator
b) indemnitor
The steps to getting an insurance license are: a) meet education requirements; pass state exam; fingerprinting and background check; apply for license with OIR b) meet education requirements; pass state exam; fingerprinting and background check; apply for license with DFS c) meet education requirements; pass state exam; license issued automatically d) pass state exam; apply for license with DFS
b) meet education requirements; pass state exam; fingerprinting and background check; apply for license with DFS
The provision on a Health policy that allows the insurer to adjust the benefit payable if the insured's age or sex was misstated on the application is the: a) benefit adjustment provision b) misstatement of sex or age provision c) time limit on certain defenses provision d) grace period provision
b) misstatement of sex or age provision the misstatement of sex or age provision is an optional provision that can be attached to health insurance policies
A bond that guarantees to the obligee indemnification for any losses resulting from principal's failure to complete the job according to the terms of the contract is called: a) bid bond b) performance bond c) supply bond d) maintenance bond
b) performance bond
Tammy says her inventory was stolen by local bandits. The insurance company asks her to file a proof of loss form with supporting evidence such as receipts for the inventory, a police report, photos, video, alarm logs, or other evidence of a break-in. Tammy says she doesn't have any of those things. What is likely to happen next? a) tammy will sue the insurance company for unfair claims practices b) the insurance company will deny the claim, and she will likely win c) the insurance company will pay whatever tammy says the amount of the loss was d) the insurance company will investigate the local bandits and attempt to capture them
b) the insurance company will deny the claim, and she will likely win
Which of the following is a provision stating that after two years, the company cannot deny coverage based on misstatements in the application? a) misstatement of sex or age provision b) time limit on certain defenses provision c) grace period provision d) elimination period
b) time limit on certain defenses provision the time limit on certain defenses or 'incontestable clause' prevents the carrier from denying coverage based on misstatements in the application, once the policy has been in force for 2 years
Geoff's car lot has Garage Insurance with Section IV - Physical Damage limit of $100,000. If Geoff has a $33,000 covered loss, and his total values on hand at the time of the loss were $150,000, how much would be recovered? a) 0 b) $11,000 c) $22,000 d) $33,000
c) $22,000 $100,000/$150,000 = 10/15 = 2/3 2/3 of $33,000 is $22,000
What is the required free look for Medicare supplement and long term care (LTC) policies in Florida? a) 14 days b) 30 days for medicare supplement, 14 for LTC c) 30 days d) 14 days for medicare supplement, 30 for LTC
c) 30 days FL law requires insurers to allow 30 days for review these policies so that policyholders may decide if the policy is right for them
FIGA, the Florida Insurance Guaranty Association, is best described as: a) a group of actuaries who maintain the best algorithms b) an agent association with members who are independent agents pooling their resources and political power to act in the best interest of the insurance industry and the public c) a statutory organization that maintains a fund guaranteeing claim payments in the event that an admitted insurance carrier declares bankruptcy d) a state-owned property insurance carrier that is intended as the insurer of last resort
c) a statutory organization that maintains a fund guaranteeing claim payments in the event that an admitted insurance carrier declares bankruptcy
The Department of Agents and Agency Services regulates: a) the CFO of florida b) real estate licenses c) agents and adjusters d) insurance companies, policy forms, and rates
c) agents and adjusters
Health insurance policies exclusions include all EXCEPT: a) mental illness b) self-inflicted injury c) all dental expenses d) treatment in VA hospital
c) all dental expenses dental expenses that result from an accident are not excluded
Which of the following is regulated by the Office of Financial Regulation (OFR)? a) adjuster firms b) insurance agencies c) credit unions d) all answers are correct
c) credit unions
What type of bond guarantees that duties will be collected, reported, and paid? a) lost instruments bond b) blue sky bond c) customs bond d) irs bond
c) customs bond
Insurance that replaces income while one is unable to work is called: a) medicare supplement b) physicians coverage c) disability insurance d) none of these choices
c) disability insurance
Terry's policy covers accidents immediately, but he must wait 10 days for coverage for sickness. This is called: a) fraud b) twisting c) elimination period d) dread disease
c) elimination period
A bond used to protect against dishonesty of employees is called: a) fiduciary bond b) franchise bond c) fidelity bond d) injunction bond
c) fidelity bond
Under P.A.F. insured is showing part of his art collection at a local bank. A painting scheduled at $100,000 vanishes from bank lobby. P.A.F. pays: a) acv, but not over $100,000 b) $100,000 c) nothing d) $80,000 (80%)
c) nothing no coverage on display away from premises
Debbie has a set of three porcelain dolls insured for $6000 under a Fine Arts Floater. Each doll separately has a value of $2000. If one doll is stolen, the company will: a) pay nothing; theft is excluded b) pay $2000 c) pay $6000 & take the other pieces of the set d) pay $6000
c) pay $6000 & take the other pieces of the set under fine arts the standard agreement is for the company to pay the insured value and the insured to surrender the remaining pieces in the set
A bond that guarantees that all labor and materials for the project will be paid by the contractor upon completion of the work is called a: a) supply bond b) performance bond c) payment bond d) maintenance bond
c) payment bond
Under Florida law all standards must be met before a Medicare Supplement policy may be identified as such EXCEPT: a) policy must specify minimum limits that will fill medicare gaps b) policies must be in understandable languages c) premium refundable within 10 days of purchase d) limit on preexisting conditions cannot exceed six months
c) premium refundable within 10 days of purchase
If an insurer in florida runs out of money to pay claims, the Department of Financial Services will likely do what? a) reduce the CEO's pay b) bail the company out c) put it in receivership d) pay claims under FIGA and require the company to repay the funds with interest
c) put it in receivership
Which of the following can be accomplished using the Appraisal clause of a policy? a) determine whether the insured is legally entitled to recover damages b) bind parties to the decision of the appraised c) resolve disputes about the value of covered property d) all of these
c) resolve disputes about the value of covered property appraisal is non-bending and is used only to resolve disputes about value. arbitration is usually binding, and can also resolve disputes about whether coverage exists for an occurrence at all.
A health policy that covers physicians' fees for performing surgery, with a maximum amount payable for each procedure, is called: a) hospitalization expense b) hospital indemnity c) surgical expense d) physicians coverage
c) surgical expense
The office of Florida government that is specifically charged with approving policy forms for admitted insurance carriers is: a) the department of financial services b) the office of financial regulation c) the office of insurance regulation d) the bureau of market conduct
c) the office of insurance regulation
Sam has a Business Auto Policy with Section IV - Physical Damage written with a $250 deductible on Comprehensive and a $500 deductible on Collision. Sam runs into a tree limb destroying his windshield. If the cost to replace the windshield is $670, his policy will pay: a) 0 b) $170 c) $420 d) $670
d) $670 florida law says no deductible applies. any other glass would be subject to the comprehensive deductible.
John takes a test drive in a vehicle that belongs to Don's New Cars, Inc. John has a PAP with 50/100/25 limits and Don's Garage Liability limit is $1,000,000. If John has an at fault accident, his liability protection will be: a) garage primary/PAP excess b) garage 10/20/10/PAP excess c) garage only d) PAP only
d) PAP only garage policy excludes John if he has 10/20/10 limits or more
Under the Affordable Care Act, which is true? a) a policy cannot have a limit of less than $2,000,000 b) policies must cover disability income c) policies must cover long term care d) a policy cannot have a maximum limit for essential medical services
d) a policy cannot have a maximum limit for essential medical services
When making a claim, the policyholder will likely need to provide: a) a proof of loss form b) evidence that a loss occurred, and the values of property involved c) the time, date, and details of the loss d) all of the answer choices are correct
d) all of the answer choices are correct
Susan's health insurance specifies that she will pay 20% of her medical bills until she has paid a maximum out-of-pocket limit. Which of the following describes the cost-sharing aspect of the policy? a) co-pay b) elimination period c) deductible d) coinsurance
d) coinsurance coinsurance means the company and policyholder co-insure. hence the shared percentage of any payments
Frank Jones has an HO-5 Comprehensive Form on his home. He also has a PAF covering his stamp collection. One Tuesday he discovers that his property has been devoured by a migration of ravenous centipedes. The stamps are ruined, as are several bookshelves and books. Which of the following applies? a) covered on the HO-5 but not the PAF b) covered on the PAF but not the HO-5 c) books and shelves covered on HO-5, stamps covered on the PAF d) excluded on both policies
d) excluded on both policies damage caused by insects is an exclusion on most policies, including the Ho policies and the PAF
Whenever an agent accepts premiums, the agent is a(n): a) transactionator b) insurer c) binder d) fiduciary
d) fiduciary
Which type of bond guarantees performance and utmost good faith of a person appointed by the court such as a guardian, administrator, or executor? a) public official bond b) court bond c) license bond d) fiduciary bond
d) fiduciary bond
What provisions may be included in an Accidental Death and Dismemberment policy? i. principal sum payable upon death by accident ii. dismemberment beneits which are a percentage of the principal sum or partial benefits for such as loss of limbs iii. hospital & medical expense reimbursement iv. loss of earnings due to disability a) i, ii b) iii, iv c) i, iii, iv d) i, ii, iii, iv
d) i, ii, iii, iv
A JUA, or Joint Underwriting Association: a) is a private corporation that syndicates two or more insurance companies to minimize costs b) is a service bureau that provides underwriting services to subscribing insurance companies c) is a non-profit professional organization whose members are insurance underwriters d) is composed of all insurers writing a particular line of business in the state, and serves as a residual market
d) is composed of all insurers writing a particular line of business in the state, and serves as a residual market
All of the following are true of the Florida Surplus Lines Services Office (FSLSO) EXCEPT: a) it collects taxes and service fees related to surplus lines insurance b) it provides training and education to surplus lines agents c) it oversees the surplus lines industry in the state d) it was created by the florida cabinet
d) it was created by the florida cabinet FSLSO and its equivalent in other states was created by the state legislature
Statutes of limitations: a) ensure justice for people who have limitations b) mostly place limitations on other statutes c) limit the policy period of insurance policies d) limit the time within which a plaintiff may bring legal action
d) limit the time within which a plaintiff may bring legal action
John Doe sent in a claim for an occupational injury and for dental expenses to his health insurance company. His health insurance will pay: a) both occupational injury and dental expenses b) occupational injury only c) dental expenses only d) neither occupational injury nor dental expenses
d) neither occupational injury nor dental expenses
Margue receives her Medicare Supplement policy and begins to read it. It takes her 17 days to figure out what it all means. She finds that she does not like the policy, and she wants to return it. Margie can: a) cancel the policy, but not before the next open enrollment b) cancel the policy before the next renewal so that she doesn't have to pay the premium next year c) cancel the policy and get a pro-rata refund d) return the policy for a full refund because Florida law provides for a 30 day free look period for it supplements
d) return the policy for a full refund because Florida law provides for a 30 day free look period for medicare supplements
