Ch. 10 Florida Statutes, Rules, and Regulations Common to all Lines

If a licensee changes his or her residence address, within how many days must the department be notified? A. 15 B. 30 C. 45 D. The department only needs to be notified if an individual's business address changes.

30

How often must domestic insurance companies be examined by the Chief Financial Officer in Florida? A. At least every 5 years B. Every 2 years C. Not more frequently than every 3 years D. Annually

A. At least every 5 years

Which of the following is NOT a responsibility of the Office of Insurance Regulation? A. Enacting new insurance laws B. Enforcing the Insurance Code C. Issuing certificates of authority D. Instituting legal proceedings

A. Enacting new insurance laws

What is the major difference between a stock company and a mutual company? A. Ownership B. Amount of benefits C. Number of producers D. Types of policies issued

A. Ownership

uestion 12 of 15 Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility? A. Promptly forwarding premiums to the insurance company B. Helping insureds to file claims C. Performing reviews of insured's coverage D. Offering additional coverage to insureds

A. Promptly forwarding premiums to the insurance company

What is a foreign insurer? A. An insurer with licensed agents who are citizens in more than one country B. An insurer with a home office in another state C. An insurer with a home office in another country D. An insurer with licensed agents doing business in other countries

B. An insurer with a home office in another state

What term is used for replacing insurance policies for the sole purpose of making commissions? A. Coercion B. Churning C. Misrepresentation D. Replacement

B. Churning

14 of 15 All of the following actions can be described as twisting EXCEPT A. Making an incomplete comparison between the existing and proposed policies B. Explaining to client the advantages of permanent insurance over term and suggesting changing policies C. Misrepresenting the terms and conditions of the existing policy to make the new one more attractive D. Embellishing the terms of the proposed policy in order to convince the insured to switch

B. Explaining to client the advantages of permanent insurance over term and suggesting changing policies

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment? A. Consumer Protection Agency B. Insurance Guaranty Association C. Insurance Consumer Protectorate D. Insurance Solvency Association

B. Insurance Guaranty association

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen? A. Because the insured is currently not a drug user, his policy will not be affected. B. The policy will not be affected. C. The policy will be voided. D. The insurer will sue the insured for committing fraud.

B. The policy will not be affected

An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance? A. 180 days B. 10 days C. 30 days D. 90 days

C. 30 days

Which of the following would NOT be a violation of state insurance regulations? A. Agent A uses her license to write only insurance for herself and her immediate family B. Agent B charges his clients a consulting fee, in addition to the premium for placing the policy C. Agent C uses her license to write only business other than controlled D. Agent D collects premiums due on policies and deposits the funds in his own personal account

C. Agent C uses her license to write only business other than controlled

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be A. Qualified B. Approved C. Authorized D. Certified

C. Authorized

How are state Insurance Guaranty Associations funded? A. By NAIC B. By the Government C. By their members - authorized insurers D. By the Department of Insurance

C. By their members - authorized insurers

11 of 15 When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered A. Controlled business. B. Adverse selection. C. Discrimination. D. Twisting.

C. Discrimination

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A. Stocks, securities, or bonds. B. An offer to share in commissions generated by the sale. C. Dividends from a mutual insurer. D. An offer of employment.

C. Dividends from a mutual insurer

The agent in charge of an agency must hold which of the following licenses? A. Securities B. Surplus lines C. General lines D. Limited lines

C. General lines

In which of the following situations is it legal to limit coverage based on marital status? A. Legal separation during the application process B. Divorce within the last six months of applying for insurance C. It is never legal to limit coverage based on marital status D. Excessive number of divorces, as defined by the insurance code

C. It is never legal to limit coverage based on marital status

What are the 2 offices of the Financial Services Commission? A. The Department of Insurance and the Department of Finance B. The Office of Insurance Regulation and the NAIC C. The Office of Financial Regulation and the Office of Insurance Regulation D. The Legislative Office and the State Court Office

C. The Office of Financial Regulation and the Office of Insurance Regulation

If an agent is in the military, which of the following is true? A. The agent cannot sell any policies during times of war or conflict. B. The agent cannot sell policies while on active duty. C. The agent cannot sell a policy to another active military person who is of a lower rank. D. The agent cannot sell a policy to someone outside of the military base.

C. The agent cannot sell a policy to another active military person who is of a lower rank.

In accordance with the Code of Ethics, agents must provide a completed application to A. The soliciting agent and the insured. B. The Florida Insurance Guaranty Association and the Director. C. The prospective insured and the insurer. D. The Director and the insurer.

C. The prospective insured and the insurer.

What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws? A. Voluntary B. Limited C. Civil D. Absolute

D. Absolute

An insurance producer just sold an insurance policy to his sister. What kind of business is this? A. Illegal B. Internal C. Personal D. Controlled

D. Controlled

The requirement that agents not commingle insurance monies with their own funds is known as A. Premium accountability. B. Express authority. C. Accepted accounting principal. D. Fiduciary responsibility.

D. Fiduciary responsibility

In insurance transactions, fiduciary responsibility means A. Maintaining a good credit record. B. Being liable with respect to payment of claims. C. Commingling premiums with agent's personal funds. D. Handling insurer funds in a trust capacity.

D. Handling insurer funds in a trust capacity

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? A. Reciprocal B. Nonprofit service organization C. Stock D. Mutual

D. Mutual

Which of the following entities is responsible for agent licensing and administrative supervision? A. The Office of Financial Regulation B. The Insurance Guaranty Association C. The Governor's Cabinet D. The Office of Insurance Regulation

D. Office of Insurance Regulation

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability? A. Age B. Occupation C. Address D. Sexual orientation

D. Sexual orientation

Which of the following may NOT be included in an insurance company's advertisement? A. The policies' limitations or exclusions B. The name of a specific agent C. An identification of a limited policy as a limited policy D. That its policies are covered by a state Guaranty Association

D. That its policies are covered by a state Guaranty Association

Which of the following is an agreement between an insured and an insurer, where the insurer agrees to indemnify the insured for specific losses in exchange for a premium? A. Reciprocity B. The indemnity clause C. The insurance contract D. The insurance guaranty

D. The insurance contract