Chapter 11

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If an insured's age was misstated on a life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be

an amount that the premiums paid would have purchased at the current age

An insurer is NOT required to provide information on fraudulent claims if requested by

an insured

A certificate of____ permits an insurance company to transact business in Texas

authority

The phrase "transacting business" includes

collecting premiums

An insurance company organized under New York laws and licensed to do business in Texas is considered a(n)

foreign company

A license may be denied, suspended, or revoked if the licensee

is found guilty of misrepresentation in obtaining the license

A domestic insurance company in Texas is considered a company that

is incorporated and formed in Texas

During a sales presentation for a participating life insurance policy, an agent MUST

make a prospect understand that dividends are NOT guaranteed

An insurance agent has a fiduciary responsibility to all of the following EXCEPT

other agents

An example of rebating would be

returning a portion of a premium as inducement to purchase insurance

To terminated an agent's appointment, an insurance company must

send termination notice to the Texas Department of Insurance

An example of an unfair claims settlement practice is

turning down a claim without providing the basis of denial

ABC Insurance Company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering

unfair methods of competition

A foreign insurance company conducting insurance business in Texas

was formed under the laws of another state

Which of the following is NOT included in a life insurance illustration?

Company's mortality table

How often must an insurance agent license normally be renewed?

Every two years

Which of these provision is NOT required in life insurance policies?

Extended Term

What is an organization that solicits insurance only to its members?

Fraternal benefit society

Which of the following groups may NOT be insured by a group life insurance policy?

Individuals who are related by blood

Credit Life insurance is

Insurance issued on a debtor to cover outstanding loan balances

When advertising, an insurance company MUST use its

Legal corporate name

Which of the following may NOT charge fees for insurance advice?

Legal reverse agents

Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?

Misrepresentation

An employee is covered under a company group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse may be insured for under this program?

$25,000

An insured may assign up to____of policy ownership under an individual life insurance policy

100%

In Texas, how long must a policy be in force before an insurance company must pay death benefits for suicide?

2 years

A new agent must complete at LEAST____hours of continuing education within 24 months of initial licensure

24

The Insurance Commissioner must give how many days notice prior to holding a hearing regarding an agent's unfair or deceptive practice?

30

In Texas, an individual life insurance policy is REQUIRED to have a grace period of

31 days

____of continuing education MUST be completed in the classroom or classroom equivalent

50%

How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law?

6 months

A temporary agent's license issued by the commissioner of insurance is valid up to____days

90

Which of the following actions does the Commissioner of Insurance NOT have the power to conduct?

Activate insurance companies' financial reverses

An example of false advertising would be

An insurer exaggerating its dividends in a magazine advertisement

In Texas, which of these statements regarding the Suicide clause is TRUE?

An insurer may not use suicide as a defense against payment after the second year

With whom may an agent legally share commissions?

Another agent with the same line of insurance

Which of the following is a requirement for obtaining a Texas insurance agent's license?

Be honest, trustworthy, and reliable

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion

B the Insurance agent tells his clients that their right may be impaired if they fail to complete a release from within a given period of time. B may be found guilty of

Coercion

Which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstate on the application?

Pay an amount the premiums would have purchased at the insured's actual age

Which of the following is NOT a required provision in group life policies ?

Right to loan

Which of these is NOT an example of doing insurance business?

Selling shares of stock

Who owns a stock insurance company?

Stockholders

All of these statements about the Commissioner of Insurance are true EXCEPT

The Commissioner must be elected

Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas?

The agent and the company

Why would the Insurance Commissioner examine the records of an insurance company?

To determine the solvency of the company

How long does an insurance company appointment remain in force?

Until terminated

What is required for an agent whose license has been revoked ?

Wait at least five years before applying for a new license.


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