Ch 11 Colorado Laws and Rules
Which of the following words may be used in the advertisement of life insurance or annuities?
Guaranteed
G takes out a life insurance policy on October 8th, 2008. On August 3, 2009, G takes his own life. When G's beneficiary files a claim,
The claim will be denied under the suicide provision
The USA Patriot act was signed into law as a response to
9/11 Terrorist Attacks
Which of the following is an example of defamation?
A brochure including an untrue statement regarding a competitor's ability to pay claims
All of the following are considered a form of advertisement EXCEPT
Communication or materials used within an insurer's own organization
Paying insurance premiums on a more frequent basis will cause the policy to have
Higher Premiums
A license is deemed to be used for controlled business if during any 12-month period...
The licensee's total premiums on controlled business exceeded the total premiums on all other business
Upon request, when must the Colorado Supplement to the Summary of Benefits and Coverage Form be provided?
Within 7 business days
To be valid, a group life insurance policy...
may not be issued to a group formed solely for the purpose of obtaining insurance
Renewing a producer's license requires __ hours of continued education every 2 years.
24
A producer must remit premiums to the insurer within ___ days after receipt.
45
When replacing an exiting life insurance policy, the replacing insurer must notify the existing insurer within ___ business days.
5 business days
How long must a replacing insurer maintain the records of a replacement transaction?
5 years
When may the Commissioner conduct an examination of an insurance company?
as often as deemed necessary
If an insurance company wishes to discriminate rates based on gender, it must
be justified by actuarial statistics
Licensing is required for all of the following except
Selling prepaid legal services
Colorado's replacement rules apply to all of the following types of insurance EXCEPT
Single premium whole life
Which situation allows the producer to also be the beneficiary on a client's application for life insurance
When insurable interest exists
If an annuity application was not taken in person, an insurer must provide the applicant a Buyer's Guide
Within 5 business days of the insurer receiving the application
A company that has not been authorized to operate in Colorado is known as
a nonadmitted insurer
Which of the following potential insurance sales would be subject to replacement regulations?
A new policy that causes an existing life insurance policy to be surrendered
If a producer offers to refund part of a prospect's premium in exchange for the purchase of a life insurance policy, the producer is committing the illegal act of
Rebating
Which of the following coverage exclusions or limitations is permitted under a long-term care policy issued in Colorado?
pre-existing conditions
In Colorado, what is required to be covered in individual and group medical expense policies?
Diabetes
As a condition to be approved for a loan, a creditor may require the borrower to
Obtain an insurance policy through an insurer of the borrower's preference.
If a producer chooses to conduct business under an assumed name, when must notification be given to the Commissioner?
Prior to using the assumed name
Which of the following is required for a life insurance Lapse Notice?
Reason stated why policy will lapse
In Colorado, all of the following are considered unfair trade practices except
Replacement
All of the following penalties apply to anyone giving intentional false testimony during an insurance examination EXCEPT
guilty of a felony
On June 1, 2004 G takes out a $20,000 Whole life insurance policy with an Accidental Death and dismemberment rider. On July 1, 2005 G intentionally overdoses on sleeping pills and takes her own life. What will G's beneficiary receive as a death benefit?
$20,000
A producer who violates a cease and desist order may, after a hearing, be fined up to $___.
$500
Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of ___ from the policy's effective date.
1 year
An insurer cannot deny a claim unless
There is a reasonable explanation of the claim
Which of the following is NOT a required provision for an accident and health policy?
Insurance with other insurers
Which of the following statements regarding the Notice Regarding Replacement of Life Insurance is CORRECT?
A copy of the notice must be signed by the applicant and submitted with the application
When a minor is designated as the sole primary beneficiary,
A guardian will be court appointed in the event of a death claim
Which of the following is CORRECT regarding a producer's fiduciary responsibility with client's funds?
A producer may never commingle personal funds with funds paid by or to a client.
A fiduciary responsibility is defined as
A relationship of special trust and confidence when a person is entrusted with another's funds
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
Adhesion
A producer that only sells insurance to family members is said to be engaging in
Controlled business
Who is not eligible to receive commissions from the sale of an insurance product?
Corporate Executive
An insurer that terminates a producer's appointment must inform the Commissioner within how many days?
30
A life insurance applicant realized he failed to disclose material history and calls the producer. Any changes made to the application must be initialed by the
Applicant
According to the Colorado Fraud Statute, all of the following must contain a warning against insurance fraud EXCEPT
Certificates of authority
Which of the following documents are not required to mention the Colorado Fraud Statute
Certificates of authority
Ultimately, who is responsible for a producer-generated advertisement?
Insurer
Which information is NOT included in the Colorado Supplement to the Summary of Benefits and Coverage form?
Insurer's prior year financials
When a claim has been denied, the insurer must
Issue a statement to the policyowner explaining the coverage, provision, or laws on which denial was based
The primary difference between the Colorado Partnership LTC policy and other LTC policies is
Medicaid asset protection
If an insurer is authorized to conduct business in another state and wishes to conduct business in Colorado, it must..
Receive a certificate of authority from Colorado
A verbal or written statement which misleads a policy's features, benefits, or coverage is considered
misrepresentation
Which of the following statement is CORRECT regarding insurable interest in a life insurance contract?
A person generally is considered to have an unlimited insurable interest in himself or herself.
Which of the following offers an insurance applicant the right to review the contract and receive a full refund?
Free-look period
If a producer is found to be writing primarily controlled business,
the Commissioner will not renew the license
In Colorado, a life insurance applicant has ___ days after policy delivery for a full refund of premium if not satisfied for any reason
15
T calls to file a claim on his health insurance policy. Within how many days must the insurer provide T's proof of loss forms?
15 days
When an employee's coverage terminates under a group health policy, the employee must be offered continuation coverage for
18 months
From what point must the insurer pay interest on the proceeds of a death claim?
Date of death
An insurer can deny a claim under a longterm care insurance policy for any material misrepresentation made by the insured if it has been in effect for
Fewer than 6 months
Which of the following is an example of a misrepresentation?
describing a universal life policy as a security
All accident and health policies issued in Colorado that provide major medical services must offer policyholders the opportunity to purchase
home health care coverage
If an applicant for an annuity refuses to provide suitability information, the producer should
obtain the consumer's signed statement documenting his or her refusal to provide suitability information
Interest on life insurance proceeds is
required if the claim was not paid within 30 days of the date insurer received the claim
If a producer is going to deposit any premium into a bank account prior to remitting the funds to the insurer, he/she must use a
separate insurance trust account
In regards to maternity care, which of the following is not required to be covered in the State of Colorado?
standard newborn circumcision
The commissioner may issue an emergency cease and desist order without a hearing for all of the following circumstances EXCEPT
Writing controlled business
In addition to suspending/revoking license and issuing fines, the Commissioner has the authority to do all of the following except
Issue prison sentences
In Colorado, which of the following is true regarding the commingling of an insured'd funds with the funds of the producer?
Its never okay
Which of the following is NOT a problem when existing life insurance is replaced with new coverage?
Comprehensive coverage may increase under the new policy
When recommending the purchase or exchange of an annuity, a producer must determine the suitability of the purchase by performing all of the following EXCEPT
Determining the marital status of the applicant
When may the commissioner issue an emergency cease and desist order?
If there is suspicion of an unauthorized person engaging in insurance business without being licensed
What is the maximum amount the Commissioner can fine an insurer for each violation of a cease and desist order?
$10,000
How does the Commissioner attain this position?
Appointed by the Governor
If a producer completes an insurance application, collects the initial premium and issues the appropriate receipt,
Coverage is contingent upon the insurer's underwriting policies
Circulation of a maliciously critical statement about an insurer's financial condition meant to damage the insurer's reputation or business is called
Defamation
Which of the following is a duty of the commissioner?
Reviewing and approving license applications
When a life insurance underwriter is determining insurability, it is illegal to base these decisions on ___.
Sexual Orientation
A health insurer may exclude medical coverage for any claims that result from
Skydiving
Which of the following is an example of rebating?
returning a portion of a premium as inducement to purchase insurance
Which of the following statements is true regarding the replacement of a life insurance policy in Colorado?
The replacing insurer must maintain copies of all records regarding replacement for at least 5 years
When is it appropriate for a producer's spouse to be the primary beneficiary on an applicant's life insurance policy?
When insurable interest exists