Chapter 12- Pennsylvania Laws and Rules pertinent to insurance

The free look period provided in a life insurance policy is usually A.)10 days B.) 31 days C.)45 days D.)60 days

A.)10 days

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 ? A.)Coercion B.)Defamation C.)Rebating D.)Misrepresentation

A.)Coercion

A producer is meeting with a client to determine whether an annuity would be suitable for purchase Which of the following topics needs to be discussed with the client ? A.)Financial objectives B.)Primary physician C.)Power of attorney D.)Level of education completed

A.)Financial objectives

A Buyer's Guide and Policy Summary A.)must be delivered with or prior to policy delivery B.)is not required in the state of Pennsylvania C.)must be delivered within 30 days of policy delivery D.)is only required when a binding receipt is issued

A.)must be delivered with or prior to policy delivery

After an annuity has been in force for year ( s ) , it becomes incontestable . A.)01 B.)02 C.)03 D.)04

B.)02

An Accelerated Death Benefit in Pennsylvania must be at least what percentage of the total death benefit ? A.)15 % B.)25 % C.)50 % D.)75 %

B.)25 %

Within how many days must a producer report to the Commissioner any charges made against him / her ? A.)20 B.)30 C.)40 D.)50

B.)30

Agreements made by terminally ill persons to sell their life insurance policies at a discount in order to pay medical expenses are called A.)Repurchase agreements B.)Viatical settlements C.)Nonforfeitures D.)Living wills

B.)Viatical settlements

Holding premium funds for timely submission to the insurer is an example of A.)theft B.)acting in a fiduciary capacity C.)misappropriation of funds D.)commingling

B.)acting in a fiduciary capacity

For Pennsylvania Insurance Code violations , the Commissioner may assess a ( n ) A.)prison sentence B.)administrative penalty C.) insurer appointment termination D.)monetary award for pain and suffering

B.)administrative penalty

When soliciting insurance , a producer CANNOT A.)illustrate dividends B.)emphasize Guaranty Association benefits C.)execute a conditional receipt upon receipt of premium deposit D.)disclose insurer ratings

B.)emphasize Guaranty Association benefits

The Pennsylvania Life and Health Guaranty Association protects life insurance death benefit claims up to A.)$ 500,000 B.)$ 400,000 C.)$ 300,000 D.)$ 200,000

C.)$ 300,000

Pennsylvania requires that a licensee complete____ hours of continuing education on the subject of ethics every reporting period . A.)01 B.)02 C.)03 D.)04

C.)03

In Pennsylvania , who is responsible for Continuing Education ( CE ) course content approval ? A.)Pennsylvania Department of Education B.)National Association of Insurance Commissioners ( NAIC ) C.)Commissioner D.)NIPR

C.)Commissioner

Violating Pennsylvania insurance law may result in which of the following Insurance Department actions ? A.)Loss of producer premium fund account B.)Insurer appointments terminated C.)Issuance of a cease and desist order after a hearing D.)Minimum 3 - month prison sentence

C.)Issuance of a cease and desist order after a hearing

What is required before an insurance producer can act as a representative of an insurer ? A.)Producer needs to be certified by that insurer B.)Producer needs to establish a sales quota C.)Producer needs to be appointed by that insurer D.)Producer needs to be gainfully employed by that insurer

C.)Producer needs to be appointed by that insurer

A temporary license may be issued without state examination to all of the following EXCEPT A.)Producer's spouse B.)Executor of producer's estate C.)Employee of the producer D.)A prospective producer who is currently enrolled in a pre - licensing insurance class

D.)A prospective producer who is currently enrolled in a pre - licensing insurance class

Which of the following is required for an insurer to conduct business in this state ? A.)Certificate of admission B.)Certificate of domestication C.)Certificate of authenticity D.)Certificate of authority

D.)Certificate of authority

All statements in an insurance application , in the absence of fraud , are considered A.)exclusions B.)warranties C.)representations D.)guarantees

C.)representations

A producer who sells insurance in Pennsylvania but resides in another state is called a ( n ) A.)unauthorized producer B.)alien producer C.)nonresident producer D.)authorized producer

C.)nonresident producer

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 A.)Misstatement of age in the application B.)Material misrepresentation in the application C.)Fraud in the purchase of the policy D.)Material concealment in the purchase of a policy

A.)Misstatement of age in the application

Advertising material for a life insurance policy does NOT need to contain which of the following ? A.)Producer's commission rate B.)The company's true corporate name C.)Statements that dividends are not guaranteed D.)Whether a spokesperson is paid

A.)Producer's commission rate

In the state of Pennsylvania , a licensed producer A.)represents the insurer B.)may modify insurance contracts C.)approves insurance contracts D.)represents the insured

A.)represents the insurer

Pennsylvania law requires that an insurer must notify the Commissioner of a producer appointment termination A.)within 30 days of termination B.)30 days prior to termination C.)within 15 days of termination D.)15 days prior to termination

A.)within 30 days of termination

Carole is a licensed agent who lives in Ohio and transacts insurance in Pennsylvania . In Pennsylvania , Carole is considered to be a ( n ) A.)alien producer B.)reciprocal producer C.)nonresident producer D.)foreign producer

C.)nonresident producer

Which of the following constitutes grounds for suspending a Pennsylvania producer's license ? A.)Summary Action conviction B.)Felony conviction C.)Failure to comply with underwriting guidelines D.)Failure to maintain insurance transaction records for at least 10 years

B.)Felony conviction

Any of the following may be an unfair claims practice EXCEPT A.)Refusing to pay claims without a reasonable investigation B.)Refusing to pay persons bringing false or fraudulent claims C.)Failing to promptly provide reasonable explanation of any claim denials D.)Offering low amounts to force insureds to institute litigation

B.)Refusing to pay persons bringing false or fraudulent claims

An example of an Unfair Claim Settlement Practice is A.)making it mandatory that proof of loss be provided for each claim B.)failing to provide a reasonable basis for the denial of a claim C.)upon request requiring a time limit for submitting a claim D.)paying a claim in a timely matter

B.)failing to provide a reasonable basis for the denial of a claim upon request

When an insurance company consistently fails to provide reasonable explanations for the denial of a claim , this is called a ( n ) A.)breach of contract B.)unfair claim settlement C.)fraudulent claim practice D.)unlawful insurance act

B.)unfair claim settlement

Which of the following is the Pennsylvania Insurance Department NOT responsible for ? A.)Regulations B.)Producers C.)Shareholders D.)Reinsurers

C.)Shareholders

In Pennsylvania , an insurer may backdate policy issue not more than how many months from the date of a life insurance application ? A.)One month B.)Three months C.)Six months D.)Nine months

C.)Six months

A life insurance producer licensed in the Commonwealth of Pennsylvania is authorized to A.)Approve the payments of a claim B.)Reinstate an insurance contract after the expiration date C.)Solicit , receive and orward applications to the insurer D.)Replace a policy without notifying the insurer

C.)Solicit , receive and forward applications to the insurer

The Pennsylvania Department of Insurance may take each of the following actions EXCEPT A.)Issue Cease and Desist Order B.) Impose fines C.) Revoke licenses D.)Incarceration

D.)Incarceration

Viatical settlement brokers are permitted to do all of the following EXCEPT A.)Charge a fee for their services B.)Advertise the availability of viatical settlements C.)Introduce viators to settlement providers D.)Make the first transaction up to 30 days before approved for a license

D.)Make the first transaction up to 30 days before approved for a license

The Commissioner is responsible for all of the following EXCEPT A.)Issue cease and desist orders B.)Conduct hearings C.)Regulate premium rates D.)Recommending insurers

D.)Recommending insurers

When collecting insurance premiums from a client , a producer MUST temporarily A.)deposit the funds in a personal account B.)pay the client interest on any monies held C.)send receipt of payment to the Commissioner D.)forward premiums to the insurer on a timely basis

D.)forward premiums to the insurer on a timely basis

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 A.)territory B.)district C.)state registry D.)home state

D.)home state

The Life and Health Guaranty Association provides funds to carry out its powers and duties by assessing A.)taxpayers B.) policyowners C.)beneficiaries D.)member insurers

D.)member insurers

A licensee can have his / her license denied or revoked by the Commissioner if A.)the licensee miscalculates a policy's premium B.)the licensee does not meet his / her sales quota C.)the licensee accidentally misinterprets a policy's provision D.)the licensee has committed insurance - related fraud or dishonesty

D.)the licensee has committed insurance - related fraud or dishonesty

Which of the following is an example of a producer's fiduciary duty ? A.)Recording receipt and remittance of premiums due to the insurance company B.)Determine the rate classification of the insured C.)Reviewing policy summary of benefits D.)Witnessing applicant's signature

A.)Recording receipt and remittance of premiums due to the insurance company