Chapter 10

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An insured submits a proof of loss form within 10 days of a loss. The insurer, however, does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?

Unfair claims settlement

An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as

excess

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

false advertising

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?

fraternal benefit society

All agents licensed in this state must complete how many hours of continuing education specific to law and ethics?

4

Which of the following would NOT be a violation of state insurance regulations?

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

What is reinsurance?

An agreement between a ceding insurer and assuming insurer

What is a foreign insurer?

An insurer with a home office in another state

Who examines the books and records of insurance companies in Florida?

Chief Financial Officer

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

All of the following would be considered an insurance transaction EXCEPT

Obtaining an insurance license

Which of the following entities is responsible for agent licensing and administrative supervision?

Office of Insurance Regulation

What are the 2 offices of the Financial Services Commission?

The Office of Financial Regulation and the Office of Insurance Regulation

Which of the following is an example of a producer's fiduciary duty

The trust that a client places in the producer in regard to handling premiums.

Under special circumstances, continuing education requirements may be extended beyond the 2-year period for a maximum period of

12 months

To legally transact insurance in this state, an insurer must obtain which of the following

Certificate Authority

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

Which of the following is true regarding producer appointments?

A producer may hold several appointments at one time.

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association

Which of the following is true regarding branch agency licensing?

agent in charge must be licensed

An agent transacts business for Insurer A and Insurer B, both selling life insurance, and for Insurer C, selling health insurance. How many appointments must the agent hold

Three - one for each insurer

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. The insurer is hoping that this advertising will help to eliminate the competition and therefore create a monopoly. Which of the following best describes this act?

Illegal

If an agent does not notify the insurer of an address change, what is the maximum penalty that can be imposed for a one-time offense?

$250. If the department is not notified within the required time period, a maximum fine of $250 will be imposed for the first offense; for subsequent offenses, either a minimum fine of $500 will be imposed or the agent's license will be suspended or revoked.

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

absolute

No insurance policy form can be issued, delivered, or used in this state unless it has been

Filed with and approved by the Office of Insurance Regulation.

All of following are the general qualifications for an agent's license EXCEPT

Have a high school diploma

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?

The policy will not be affected. In insurance, fraud is the intentional misrepresentation of material information that is crucial when deciding whether or not to write a contract for an applicant. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first two years of the effective policy date. In this particular instance the applicant did not commit intentional fraud.

When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT

Provide a 30-day advance notice to the commissioner

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation

Which of the following is NOT a responsibility of the Office of Insurance Regulation?

Enacting new insurance laws

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action

Send a written notification to the department of insurance


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