Chapter 12 Pennsylvania Laws and Rules
A Temporary license may be issued without state examination to all of the following EXCEPT Producer's spouse Executor of Producer's estate Employee of the Producer A prospective Producer who is currently enrolled in a pre-licensing insurance class
A prospective Producer who is currently enrolled in a pre-licensing insurance class
A life insurance policy becomes incontestable after it has been in force for 30 days 6 months 2 years 3 years
2 years
What is the required action to be taken by a Pennsylvania licensee before operating under an assumed business name? Notify Commissioner Notify Governor Notify the insurer where employed Obtain a permit
Notify Commissioner
When an applicant for a producer's license has a principal place of residence or business location in Pennsylvania, for licensing purposes the State of Pennsylvania is known as the territory district state registry home state
home state
A producer that willfully violates any provision of Pennsylvania Insurance law may be imposed to a maximum penalty set by the Commissioner at $1,500 per violation $3,000 per violation $5,000 per violation one year imprisonment
$5,000 per violation
Every Pennsylvania insurer, upon receiving notification of a claim, must acknowledge receipt of the notice within 10 days 15 days 30 days 45 days
10 days
The free look period provided in a life insurance policy is usually 10 days 31 days 45 days 60 days
10 days
An Accelerated Death Benefit in Pennsylvania must be at least what percentage of the total death benefit? 15% 25% 50% 75%
25%
Within how many days must a producer report to the Commissioner any charges made against him/her? 20 30 40 50
30
In Pennsylvania, what's the requirement for a minor to receive proceeds from a death benefit? 1) Has to be at least 15 years old 2) Must live in the same state as insured 3) The Commissioner must approve 4) A guardian must be appointed
A guardian must be appointed
Which prohibited act involves a producer spending a client's insurance premiums for his/her own personal use? Rebating Misrepresentation Embezzlement Defamation
Embezzlement
Agreements made by terminally ill persons to sell their life insurance policies at a discount in order to pay medical expenses are called Repurchase agreements Viatical settlements Nonforfeitures Living wills
Viatical settlements
For Pennsylvania Insurance Code violations, the Commissioner may assess a(n) prison sentence administrative penalty insurer appointment termination monetary award for pain and suffering
administrative penalty
All of these are considered a form of advertising EXCEPT an insurer's billboard an insurer's A.M. Best rating a formal sales presentation by the producer an insurer's direct mailing to a target audience
an insurer's A.M. Best rating
Commissions may be shared by a licensed Producer and family member licensed and appointed Producers a licensed Producer and prospective prospect a Producer and non-licensed employee
licensed and appointed Producers
All statements in an insurance application, in the absence of fraud, are considered exclusions warranties representations guarantees
representations
Pennsylvania law requires that an insurer must notify the Commissioner of a producer appointment termination within 30 days of termination 30 days prior to termination within 15 days of termination 15 days prior to termination
within 30 days of termination
A resident producer license requires each of the following EXCEPT Applicant receiving a passing score on state exam Satisfied prelicensing education requirements Fingerprint submission Insurer appointment
Insurer appointment
In Pennsylvania, completion of continuing education is required upon license renewal for which of the following? 1) Attorney -at-law 2) Full time active duty military 3) Licensed individuals qualified in major lines of insurance 4) Non Resident producers
Licensed individuals qualified in major lines of insurance
Which of the following constitutes grounds for suspending a Pennsylvania producer's license? Summary Action conviction Felony conviction Failure to comply with underwriting guidelines Failure to maintain insurance transaction records for at least 10 years
Felony conviction
The Pennsylvania Insurance Department is responsible for each of the following EXCEPT Insurers Producers Shareholders Approval of forms
Shareholders
Which of the following is required to maintain a Producer's license in Pennsylvania? 1) Company officer or director, whose activities are clerical or administrative 2) A salaried full-time employee, who does not sell or solicit insurance 3) Home office underwriter 4) Field underwriter, who solicits insurance and earns a commission
Field underwriter, who solicits insurance and earns a commission
Viatical settlement brokers send packets of information to potential viatees. These information packets normally include existing policy terms and which of the following? 1) Viator's medical prognosis 2) Proceeds of the settlement to be placed in a trust account 3) Executed absolute assignment 4) Brochure describing the process of viatical settlements
Viator's medical prognosis
A producer who sells insurance in Pennsylvania but resides in another state is called a(n) unauthorized producer alien producer nonresident producer authorized producer
nonresident producer
Violations of US Code Title 18 section 1033, may result in 1) Fine and/or imprisonment 2) Cease and Desist Order 3) Suspension of Producer's license 4) Loss of company appointments
Fine and/or imprisonment
In Pennsylvania, an insurance producer license can be denied for failure to pay each of the following. EXCEPT? State income tax Property tax Child support License fee
Property tax
Which of the following is the Pennsylvania Insurance Department NOT responsible for? Regulations Producers Shareholders Reinsurers
Shareholders
Which of following provisions protects a Pennsylvania policyowner from an innocent mistake made on the application over 2 years ago? Entire contract provision Nonforfeiture provision Spendthrift provision Incontestability provision
Incontestability provision
A licensed Producer must report any administrative action taken against the licensee in another jurisdiction or by another agency department in Pennsylvania within how many days of the final disposition? 10 days 30 days 60 days 90 days
30 days
A Pennsylvania temporary producer license may be issued for a period not to exceed 30 days 45 days 90 days 180 days
180 days
When an insurance company consistently fails to provide reasonable explanations for the denial of a claim, this is called a(n) breach of contract unfair claim settlement fraudulent claim practice unlawful insurance act
unfair claim settlement
Any of the following may be an unfair claims practice EXCEPT 1) Refusing to pay claims without a reasonable investigation 2) Refusing to pay persons bringing false or fraudulent claims 3) Failing to promptly provide reasonable explanation of any claim denials 4) Offering low amounts to force insureds to institute litigation
Refusing to pay persons bringing false or fraudulent claims
When collecting insurance premiums from a client, a producer MUST temporarily deposit the funds in a personal account pay the client interest on any monies held send receipt of payment to the Commissioner forward premiums to the insurer on a timely basis
forward premiums to the insurer on a timely basis
According to Pennsylvania law, which of the following is NOT considered to be personally identifiable financial information? 1) Information obtained from an insurance application 2) Consumer report information 3) Account balance information 4) Blind trust data that does not include names and addresses
Blind trust data that does not include names and addresses
In Pennsylvania, which of the following is NOT something a licensee must do to renew their insurance license? Confirm previous exam scores Submit proper paperwork Complete required continuing education Pay the proper fees
Confirm previous exam scores
For licensing purposes, if an applicant has a home or office location in the state of Pennsylvania, this would be consistent with which of the following? Territory Delivery state Home state Non-resident requirement
Home state
The Pennsylvania Department of Insurance may take each of the following actions EXCEPT 1) Issue Cease and Desist Order 2) Impose fines 3) Revoke licenses 4) Incarceration
Incarceration
When a producer offers something of value in return for the purchase of an insurance policy, which prohibited sales practice has been committed? Defamation Inducement Twisting Misrepresentation
Inducement
Viatical settlement brokers are permitted to do all of the following EXCEPT 1) Charge a fee for their services 2) Advertise the availability of viatical settlements 3) Introduce viators to settlement providers 4) Make the first transaction up to 30 days before approved for a license
Make the first transaction up to 30 days before approved for a license
During the first two years a life insurance policy is in force, the insurer may contest a policy for all of the following reasons EXCEPT Misstatement of age in the application Material misrepresentation in the application Fraud in the purchase of the policy Material concealment in the purchase of a policy
Misstatement of age in the application
Which of the following is a violation of Pennsylvania insurance law? Failure to pay insurer appointment fees Offering insurance contracts through unlicensed entities Charging policy fees Failing to notify the Commissioner of any administrative action taken against the licensee within 10 days of the final disposition of the matter
Offering insurance contracts through unlicensed entities
What is required before an insurance producer can act as a representative of an insurer? Producer needs to be certified by that insurer Producer needs to establish a sales quota Producer needs to be appointed by that insurer Producer needs to be gainfully employed by that insurer
Producer needs to be appointed by that insurer
What is the purpose of the Pennsylvania Life and Health Insurance Guaranty Association? 1) Assist an applicant choose the best insurer 2) Assist an applicant choose the right amount of coverage 3) Provide each policyowner a buyer's guide and policy summary 4) Provide policyowner protection if an insurer becomes insolvent
Provide policyowner protection if an insurer becomes insolvent
The promise of a discount in premium as an inducement to purchase insurance is an Unfair Trade Practice known as Misappropriation Misrepresentation Intimidation Rebating
Rebating
The Commissioner is responsible for all of the following EXCEPT Issue cease and desist orders Conduct hearings Regulate premium rates Recommending insurers
Recommending insurers
A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered is called Nonforfeiture Replacement Reinvestment Rollover
Replacement
In Pennsylvania, a Producer may have his/her license revoked for which of the following acts? 1) Loss of insurer appointment 2) Failing to renew license on a timely basis 3) Sharing commissions with another licensed Producer 4) Signing a prospect's name without their knowledge or presence
Signing a prospect's name without their knowledge or presence
A life insurance producer licensed in the Commonwealth of Pennsylvania is authorized to 1) Approve the payments of a claim 2) Reinstate an insurance contract after the expiration date 3) Solicit, receive and forward applications to the insurer 4) Replace a policy without notifying the insurer
Solicit, receive and forward applications to the insurer
Which of the following statements about the contestability of a life insurance policy is true? 1) The policy cannot be contested by the insurer once it is paid for and issued 2) The policy can be contested by the insurer only during the first two years of the contract 3) The policy can never be contested by the insurer 4) The policy can always be contested by the insurer
The policy can be contested by the insurer only during the first two years of the contract
A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that These policy premiums will vanish The policy guarantees payment of these premiums The policyowner forfeits the option of paying these premiums from other The policyowner may need to resume premium payments depending on actual results
The policyowner may need to resume premium payments depending on actual results