Basics of Common Insurance Law
insurers
As an insurance producer, you represent:
Misleading advertising
Circulating deceptive sales material to the public is what type of Unfair Trade Practice:
An excluded claim
It is not unfair to deny a claim in which of the following situations?
Have a similar license in your home state
To obtain a producer's license as a nonresident, you must:
Travel accident
You must be licensed to sell all of the following EXCEPT:
Controlled business
An agent who procures a license for the principal purpose of obtaining insurance for themselves, for family members or employees, violates the regulations prohibiting:
Prior to use
An insurance producer using an assumed name is required to file the name with the Insurance Commissioner when?
coercion
Clark's credit union refused his application for an auto loan unless he agreed to purchase credit life insurance from them. This is an example of:
A license in this state
A foreign insurer doing business in this state must have which of the following?
agent
A person appointed by an insurer to solicit or sell insurance on their behalf in this state is known as a(n):
They do not need a Certificate of Authority in State A
All are true about "foreign" insurance companies doing business in State A EXCEPT:
prohibited
Discrimination based upon physical handicap is:
coercion
Forcing a client to buy insurance from a particular producer as a condition to a loan is defined as:
rebating
Giving a customer a stock option on the insurer's stock as inducement to buy is considered which one of the following unfair trade practices?
rebating
Giving a customer an inducement to the sale that is not stated in the policy is an unlawful practice known as:
Impose time in jail
If a producer or insurer is found to have violated an insurance law, the Commissioner may do all of the following EXCEPT:
Allowing that company to legally do business in this state
In authorizing an insurer to transact business in a state, the Commissioner/Director is:
24 credit hours every 2 years regardless of the number of licenses held
Insurance Continuing Education law most commonly requires:
Promptly
Insurers must complete claims investigations:
Defamation
Making false or malicious statements about an insurer or producer is what type of unfair trade practice:
defamation
Making false or malicious statements about persons engaged in the business of insurance that are designed to injure their reputation is an unlawful practice known as:
defamation
Making false or malicious statements about the financial condition of an insurer or agent is what type of Unfair Trade Practice:
24 hours every 2 years, of which 3 hours must be in ethics
Most commonly, the continuing education requirement entails?
Certificate of Authority
No insurer shall transact insurance in this state without a:
30 days
Producers must notify the Director of a change of address within:
Class "B" Misdemeanor
Rebating is considered to be a:
coercion
Refusing to make a loan unless the customer also buys insurance from the lender is an unfair trade practice known as:
Grant prior approval of auto insurance rates
The Commissioner does all of the following EXCEPT:
Whenever necessary
The Commissioner may examine (audit) an authorized insurer:
Placing customer or insurer funds in a Premium Fund Trust Account
The Director may deny, suspend or revoke a producer's license for all of the following reasons EXCEPT:
A producer's parents or children
The definition of "controlled" business does not include insurance written on:
18
To obtain a producer's license, an applicant must be at least age:
Pay your fees and complete the required CE hours
To renew your producer's license, you must:
A partnership of which the producer is a member
To which of the following could a producer pay part of her commission without violating any insurance regulations?
An unauthorized insurer will be held liable for all policies sold in this state
Which of the following is true regarding an unauthorized insurer?
Giving the insured a rebate
Which of the following is unlawful?
A life and health producer
Which of the following need to be licensed?
Offering a valuable consideration, other than that which is offered in the contract, as an inducement to purchase a policy
Which of the following would be considered rebating?
Offering to give part of the commission to a customer as an inducement to buy
Which of the following would be considered to be a rebate?
One formed under the laws of another country, but holding a Certificate of Authority in State B
Which of the following correctly defines an "alien" insurer doing business in State B?
Tobacco usage
Which of the following factors would be allowed in setting premiums for insurance?
The payment of a bonus out of surplus to the policyholders of a nonparticipating policy
Which of the following inducements to the sale of insurance is permitted:
Paying dividends to policyholders out of a surplus accumulated from participating policies
Which of the following is NOT considered an unfair practice?
Handling premiums
Which of the following is a producer's fiduciary duty?
Making rates
Which of the following is not one of the duties of the Commissioner?
A company employee who sells on commission
Which of the following persons would be required to hold a producer's license:
Need not be licensed
Which of the following statements concerning clerical and administration personnel who do not solicit or get commission is true?
Cannot do so without a hearing and order
Which of the following statements is correct concerning the Commissioner's authority to revoke a license?
One that can legally conduct business in the state
Which properly describes an authorized insurer?
dividends
All could be considered rebates EXCEPT:
Misstating the financial condition of an insurer or producer
An example of defamation, which is an unfair trade practice, is:
They obtain a Certificate of Authority in this state
An insurer with their home office in another state may do business in this state if:
Enforce insurance laws
The main duty of the Insurance Director/Commissioner is to:
Prepaid legal
You need a license to sell all of the following types of policies EXCEPT:
Prepaid legal
You need an insurance license to sell all EXCEPT:
Misrepresentation
Falsifying an application for insurance is:
A producer may only hold an appointment with one insurer
All are true regarding company producer appointments EXCEPT:
A producer may continue to sell for up to 12 months on an expired license
All are true regarding renewing a producer's license EXCEPT:
Projecting a dividend on a participating policy
All of the following are considered misrepresentation EXCEPT:
Fines for misrepresentation are the same across all states
All of the following are correct regarding misrepresentation EXCEPT:
Readjusting group premiums based on loss or expense experience
Which is not prohibited under unfair trade practice regulations?
The producer can get a nonresident license in all reciprocal states
Which of the following accurately describes the ability of a licensed State C resident producer to become licensed in other states?
Offering a client a multi-policy discount
All of the following would be prohibited EXCEPT:
Controlled Business
A producer who procures a license for principal purpose of obtaining insurance for herself, relatives or employees is violating the regulation prohibiting:
Controlled business
A producer who procures a license for the principal purpose of obtaining insurance for herself, her family members or employees is violating the regulations concerning:
Misrepresentation
A producer's false statement on an application regarding insurance is:
Collecting interest on customer balances held in a producer's trust account
All of the following are considered to be misuses of fiduciary funds EXCEPT:
Attaining age 21
All of the following are possible requirements for obtaining a producer's license EXCEPT:
Excess hours may never be carried over
All of the following are true about the insurance continuing education (CE) requirements in this state EXCEPT:
The insurer may require the insured to submit to a polygraph test
All of the following are true regarding claims EXCEPT:
It is considered to be rebating
All of the following are true regarding the guarantee of future dividends EXCEPT:
Life insurance policies follow this principle
All of the following are true regarding the principle of indemnity EXCEPT:
18
The minimum age requirement to qualify for a license is:
State government
The type of government primarily concerned with the regulation of insurance and insurance companies is:
Requiring claimants to submit proof of loss
Under Unfair Claims Practices regulations, all would be considered violations EXCEPT:
Commingling
Which of the following is not considered an unfair method of competition?
Selling insurance to your friends and neighbors
Which of the following is not considered controlled business?
Refusing to pay a claim after conducting a proper investigation
Which of the following would not be considered an unfair claims settlement practice?
state
Which type of government is primarily concerned with regulating insurance?
mutual
Which type of insurer may pay dividends to policyholders?
You must obtain a producer's license in all 50 states
You represent a large insurer who does business in all 50 states. All of the following are true EXCEPT:
A certificate of authority
A license for an insurance company is called which of the following?
Insurers require insured(s) to make warranties on a life and health application
All of the following are true regarding warranties and representations EXCEPT:
Auto loan companies
All of the following entities fall under the Insurance Commissioner's jurisdiction EXCEPT:
A legal representative of the insurer's holding company
All of the following may examine (audit) an insurer in this state EXCEPT:
Perfectly legal
Of $10,000 in premiums producer Smith wrote over the past year, $3,000 came from sales to a business which employs Smith's spouse. This is:
Past lawful travel experiences
Rates may be based upon all of the following factors EXCEPT:
Sexual orientation
The producer cannot ask about which of these on the application?
Protect the insurance buying public
The purpose of insurance regulations is to:
Pay a claim that occurs after the grace period has ended
Under Unfair Claims Practices regulations, when denying a claim an insurer must do all of the following EXCEPT:
They occur with such frequency as to indicate a general business practice
Unfair claims practices will be assumed to be intentional if:
coercion
When a lender requires an applicant for a loan to buy insurance from them as a condition to loan approval, it is an unfair trade practice known as:
Only if state law allows it
When can a producer keep property or funds of a customer?
Requiring insurers to maintain adequate staffing levels
Which of the following in not one of the duties of the Insurance Commissioner?
A producer's license is perpetual, subject to payment of renewal fees and continuing education
Which of the following is correct regarding a producer's license?
Paying premiums to insurer from trust account within the time period required by law
Which of the following is not a violation?
Selling insurance for an unauthorized company
Which of the following would be prohibited?
Refusing to make available coverage for persons of the same class
Which of the following would constitute unfair discrimination?
fines
Which of the following would most likely be the first penalty for acting as an "unauthorized entity"?