Chapter 14

All of the following are required to be included in a life insurance illustration

-Proposed insured's name -Rating classification upon which the illustration is based -Initial death benefit

types of insurers?

-A domestic insurer is organized under the laws of this state -An alien insurer is organized under the laws of a jurisdiction outside of the U.S. -A mutual company is owned by its policyholders

examples of transacting insurance?

-Collecting an insurance payment -Indirectly acting as an agent -Delivering an insurance contract

If an insurer requires an individual to be tested for the AIDS virus, all of the following are required, if applicable

-Notice to the proposed insured of the requirement prior to testing -Obtain notice of the requirement to test and written authorization from a parent or guardian of a proposed insured -Written authorization from the applicant on a Notice of Consent form

An individual may be denied a license by the Department for all of the following reasons

-Obtained a license by fraud or misrepresentation -Been convicted of a felony -Offered a premium rebate to an insured

All of the following regarding Evidence of Coverage are correct

-The name, address, and phone number of the HMO must be included -Approval by the Commissioner of Insurance is required before delivery -Health care services and benefits available must be stated

General life, accident, and health agents must complete a minimum of ______ continuing education hours per renewal period.

24

An agent's license expires on the _____ anniversary of the date the license was issued.

2ND

An HMO must hold an open-enrollment period at least annually for:

31 days

An individual life insurance policy must have a grace period of at least ______ days.

31 days or one full month

An individual who was denied a license must wait to reapply for a license a minimum of:

5 years

Under Nonforfeiture Law, a cash surrender payment may be deferred up to:

6 months

Who is NOT eligible for an agent license in this state?

A 17-year-old who passed the licensing exam 6 months ago -MUST BE 18

A licensed agent is required to obtain which of the following before transacting insurance in Texas?

An appointment from an insurer

A licensed life insurance agent in Texas can share commissions with which of the following?

Another licensed life insurance agent in Texas who assisted with the sale

Coverage for newborns must begin:

At birth

Which of the following statements about continuing education is true?

At least 50% of continuing education hours must be completed in a classroom or classroom equivalent setting

Which of the following is a method used by an HMO to compensate a physician or provider for providing a defined set of health care services and is based on a predetermined payment per enrollee:

Capitation

Publishing or circulating information that is maliciously derogatory to the financial condition of an insurance company with the intent to injure is known as:

Defamation

The Commissioner may examine the records of an insurance company for the purpose of:

Determining solvency

Under the ACA, a catastrophic plan may be purchased by any of the following, except an individual:

Enrolled in Medicaid

According to the Texas Insurance Code, an insurance company incorporated in New Mexico is a(n):

Foreign insurer

A long-term care policy issued in Texas must, at a minimum, be offered as:

Guaranteed renewable

A Certificate of Authority is issued to an insurer for which of the following reasons?

It certifies the insurer is authorized to transact insurance in this state

What prohibited trade practice is committed if an agent provides misleading information regarding guaranteed dividends, terms, advantages, or disadvantages of a policy?

Misrepresentation

Which type of insurance company is owned by its policyholders?

Mutual insurer

To terminate an agent's appointment, the insurer must:

Notify the Texas Department of Insurance of the termination of appointment

When taking an application for a Medicare supplement policy, an agent must provide the applicant with a(n):

Outline of Coverage

A small employer health insurer may not offer coverage to an eligible employee unless the employee has:

Satisfied the applicable waiting period

Commissions may be paid:

To a licensed agent for the sale of insurance to a non-related individual

alien insurer

organized under the laws of a jurisdiction outside the United States, whether it is admitted to do business in this state

foreign insurer

organized under the laws of another U.S. jurisdiction (i.e., another state), whether it is admitted to do business in this state

domestic insurer

organized under the laws of this state, whether it is admitted to do business in this state

A license may be suspended or revoked for which of the following?

An agent is actively engaged in soliciting insurance only to family members

Which of the following is considered false advertising?

An insurer exaggerates its dividends in statements published in a newspaper

The Texas Department of Insurance requires all licensees to:

Be honest, trustworthy, and reliable

An agent's appointment:

Remains in force until terminated or withdrawn

With respect to advertising requirements, all of the following are allowable

-Advertises preferred rates to classes of policyholders based on certain qualifications -Solicits nonpaid testimonials representing the personal opinion of the author -Uses the term "invitation to contract"

All Medicare supplement policies must offer coverage for all of the following

-Physicians' services -Hospitalization -The reasonable cost of the first 3 pints of blood

included in a Summary of Benefits and Coverage?

-Covered benefits -Limitations -Deductibles, copayments and coinsurance

eligible group for group life insurance?

-Creditor groups insuring its debtors -Labor unions that insure members actively engaged in the same occupation -An employer group with at least 2 employees covered under the policy

Which of the following is one of the Commissioner's duties?

-Examining Insurers -Issuing Certificates of Authority -Conducting investigations

Which of the following is a nonforfeiture benefit that is required to be offered in conjunction with a LTC rider?

-Extended term -Reduced paid-up -Shortened benefit period

An insurance agent owe a fiduciary duty to

-Insurers -Insurance applicants -Insureds

Duties of the Commissioner

-Issue an insurance license for a producer -Enforce state insurance laws -Handle insurance-related consumer complaints

The Commissioner is authorized to perform all of the following duties

-Issue cease and desist orders -Suspend insurance licenses for up to 1 year -Adopt reasonable rules and regulations to enforce insurance laws -Conduct investigations

Which of the following would be an eligible group for group life insurance?

-Labor unions, to insure members actively engaged in the same occupation -Creditors, in order to insure their debtors -Employers, to insure their employees

Which of the following is prohibited claims settlement practice?

-Misrepresenting a material fact to a claimant -Denying a claim without providing the basis for the denial -Refusing to pay a claim without reasonably investigating it

All of the following statements about life insurance policy provisions are correct

-Suicide may not be used as a defense to deny payment after the second year -An individual may assign up to 100% of policy ownership -if it is discovered that an insured's age is misstated at the time of a loss, the amount payable is based on the amount of coverage the premiums paid would have purchased at the correct age

Holding which of the following professional designations will exempt a person from taking the life licensing examination?

Chartered Life Underwriter (CLU)

An insurance agent does NOT owe a fiduciary duty to:

Insurance counselors

An enrollee may have coverage cancelled or nonrenewed by an HMO for which of the following?

Nonpayment of premium