Ch: 10. Insurance Regulation

which of the following types of insurance provides coverage on human lives, including benefits endowment and annuities? a) casualty b) life c) accident and health d) annuity

b) life

stock insurance companies selling all types of insurance are required to maintain a minimum of? a) $500,000 of capital stock b) $1 million of capital stock c) $3 million of capital stock d) $5 million of capital stock

b) $1 million of capital stock

In order to get a nonresident license in this state, a producer must? a) apply and pay a fee to a nonresident state that reciprocates b) pass the nonresident state exam and satisfy their continuing education requirements c) represent an agency located in this state d) surrender their license in their state of residence

a) apply and pay a fee to a nonresident state that reciprocates

whenever it appears that any person is violating an insurance law of Nebraska or any rule or regulation made by the director, what may the director issue? a) stop-action order b) cease and desist order c) suspension of power decree d) revocation of authority

b) cease and desist order

earning commissions based on transactions with a person's friends and family is called? a) personal commissions b) controlled business c) personal business d) filial commissions

b) controlled business

which of the following is not a duty of the director of the Nebraska department of insurance? a) regulate insurance rates b) develop insurance rates c) license insurance companies, agents and brokers d) enforce violations of the insurance code

b) develop insurance rates

which of the following issues a certificate of authority? a) guaranty association b) director c) governor d) state insurance board

b) director

which of the following best describes a misrepresentation? a) discriminating among individuals of the same insuring class b) issuing sales material with exaggerated statements about policy benefits c) making a deceptive untrue statement about a person engaged in the insurance business d) making a maliciously critical statement that is intended to injure another person

b) issuing sales material with exaggerated statements about policy benefits

Which act bars agents, brokers, and companies from disclosing health, financial, or other information gathered in the underwriting process about the consumer to any 3rd party without consent of the consumer? a) consumer protection of information act b) privacy of insurance consumer information act c) illegal disclosure act d) classified information protection act

b) privacy of insurance consumer information act

in comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? a) the customer has no knowledge of this action b) the customer's associates, friends, and neighbors provide the report's data c) they provide additional information from an outside source about a particular risk d) they provide information about a customer's character and reputation

b) the customer's associates, friends, and neighbors provide the report's data

a director denied a license application. 15 days later, the applicant notifies the director he wants a hearing to be conducted regarding the decision. Within how many days must the hearing be held? a) 10 b) 15 c) 20 d) 30

d) 30

an insurance company cannot transact insurance until it obtains a? a) producer's certificate b) decree of power c) license of insurance transaction d) certificate of authority

d) certificate of authority

Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) defamation b) coercion c) misrepresentation d) false advertising

d) false advertising

an insurance company assured its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? a) defamation b) unfair discrimination c) errors and omissions d) fraud

d) fraud

any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as? a) twisting b) false advertising c) coercion d) rebating

d) rebating

a producer's license is revoked for a violation of the insurance producers licensing act. The producer may also be required to pay a fine of up to? a) $1,000 b) $5,000 c) $10,000 d) $15,000

a) $1,000

in addition to any applicable denial, suspension, probation, or revocation of a license a person who violates the insurance producers licensing act may receive a fine of up to? a) $1,000 b) $2,000 c) $3,000 d) $5,000

a) $1,000

it is considered to be an unfair trade settlement practice if an insurer fails to acknowledge communications with respect to an insurance claim within? a) 15 days of receipt b) 30 days of receipt c) 60 days of receipt d) 90 days of receipt

a) 15 days of receipt

Which of the following authorities is responsible for issuing all certificates and licenses? a) insurance licensing board b) department of insurance c) director d) federal association of insurers

c) director

which of the following notifies the applicant that an investigative consumer report will be made? a) consumer report investigation notice b) disclosure of investigation notice c) notice of investigation d) fair credit reporting act disclosure

d) fair credit reporting act disclosure

how long does a typical temporary producer license last? a) 365 days b) 60 days c) 90 days d) 180 days

d) 180 days

An individual is required to have what type of license in order to sell, solicit, or negotiate insurance in the state of Nebraska a) merchant b) broker c) producer d) solicitor

c) producer

Which of the following would be considered an unfair claims settlement practice? a) requesting the insured swear under oath concerning the facts of the claim b) the settlement of the claim is delayed for 30 days in order for the insured to conduct an investigation c) a claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered d) requesting the insured to submit a signed, proof of loss statement, after the insured has already verbally advised the insurer of the claim

d) requesting the insured to submit a signed, proof of loss statement, after the insured has already verbally advised the insurer of the claim

all of the following are true regarding rebates except? a) rebates are allowed if it's in the best interest of the client b) rebates are only allowed if specifically stated in the policy c) rebating can by anything of economic value, given as an inducement to buy d) dividends are not considered to be rebates

a) rebates are allowed if it's in the best interest of the client

what is the maximum number of required continuing education requirements for a producer within a given 2-year period? a) 24 b) 36 c) 6 d) 12

a) 24

If the appointment of any insurance producer is to be terminated, the director must be notified by the insurer within how many days of that termination? a) 30 b) 5 c) 10 d) 15

a) 30

The director conducts an examination of domestic insures every? a) 5 years b) year c) 2 years d) 4 years

a) 5 years

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce? a) without receiving written consent from a federal judge b) without receiving written consent from an insurance regulatory authority c) under any circumstances d) unless they have served an appropriate prison sentence

b) without receiving written consent from an insurance regulatory authority

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of? a) twisting b) controlled business c) rebating d) coercion

c) rebating

Which of the following is an example of an unfair claims settlement practice? a) denying coverage after a reasonable investigation has been conducted b) making claims payments which clearly indicate under which coverage payment has been made c) using arbitration when the insured and insurer cannot reach agreement d) failure to promptly settle a claim when liability has been clearly established

d) failure to promptly settle a claim when liability has been clearly established

what is the maximum allowed percentage of commissions from controlled business? a) 25% b) 30% c) 50% d) 10%

b) 30%

To appoint an insurance producer as its agent, the appointing insurer must file a notice of appointment within how many days from the date the first insurance application submitted to the agent? a) 10 days b) 15 days c) 30 days d) 45 days

b) 15 days

how is the director of insurance selected for the office in this state? a) appointed by the board of directors b) appointed by the governor c) elected by the department of insurance d) elected by the federal board of insurers

b) appointed by the governor

how often must a new set of continuing education requirements be completed by resident producers? a) every 5 years b) every 10 years c) every year d) every 2 years

d) every 2 years

who has the authority to issue a cease and desist order for violations of insurance laws of Nebraska? a) the NAIC b) the director c) the governor d) the guarantee association

b) the director