chapter 5 practice test
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
An applicant for a life agents license may obtain a temporary license for a maximum period of
6 months
Who is an insurance agent?
A person authorized to sell, solicit and negotiate insurance contracts
Who must be a member of insurance guaranty associations?
All insurers authorized to write insurance within a state
Who is considered a nonresident agent?
An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state
In general, who can be excluded from producer licensing and examination requirements?
Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical)
Insurance contracts are agreement between which two parties?
Insurer and policyowner
When an insurer terminates an agents appointment, the insurer must do all of the following except
Provide a 30-day advance notice to the Commissioner.
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
Rebating
An insurance agent B likes to add additional coverage to applicants policies and charge them for such coverage without their knowledge. The agent is guilty of
Sliding
Who must be notified of a producer's change of address?
The Department of Insurance (Commissioner/Director/Superintendent)
Who is responsible for the costs associated with the examination of insurers?
The insurer who is being examined
What is the purpose of a cease and desist order?
To prevent a producer or insurer from further violating laws for transacting insurance
How often must domestic insurance companies be examined by the chief financial officer in Florida
at least every 5 years
What type of licensee represents the insured?
broker
If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?
defamation
Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?
discrimination
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
Misrepresentation
An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?
Rebating
Which of the following insurers are owned by stockholders?
stock
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Authorized or admitted
If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?
Cease and desist order
What document is required for an insurance company to transact insurance?
Certificate Authority
Who examines the books and records of insurance companies in Florida?
Chief Financial Officer
On its advertisement a company claim that it's funds in it possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Misrepresentation
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. What is the company guilty of?
Misrepresentation
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid
Who may share in the commission from the sale of a life insurance policy?
Only producers properly licensed for the type of insurance transaction
In accordance with Code Of Ethics, agents must provide a completed application to
The prospective insured and the insurer
When is controlled business legal?
When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)
Insurers are classified according to their domicile. What are the three types of insurers?
domestic, foreign, alien
The inclusion of the life and health guaranty association in an advertisement by an insurer is
forbidden
Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?
No, advertising of the existence of the guaranty association for the purposes of solicitation and sale of insurance policies by insurers is an illegal business practice.
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
false advertising
In insurance transactions, fiduciary responsibility means
Handling insurer funds in a trust capacity
