Chapter 8 Exam (health insurance NM state laws)
What is considered the purpose of the guaranty association?
"Protect insureds from insolvent insurers"
Long term care policies issued in New Mexico must provide benefits for at least
12 months
An individual must be at least ____ years old to legally enter into a life and health insurance contract
15
The maximum prison sentence given under federal law for unfair and deceptive insurance practices is
15 years
A life insurance policy in New Mexico becomes incontestable after it has been in force for
2 years
Every agent licensed in New Mexico must notify the superintendent within ___ days of any change of address
20
Written notice of a health insurance claim should be given to the insurer within __ days after the occurrence of any loss covered by the policy
20
First year commissions on Medicare supplements may not exceed
200% of the compensation paid in the second year
The grace period for a life insurance policy with an annual premium is usually
30 days
What is the length of the free-look period of a medicare supplement insurance policy?
30 days
A terminated employee has how many days upon termination to convert group life insurance coverage to an individual policy?
31 days
Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?
31 days
When family coverage is in place, newborn children are automatically covered under a medical plan for a period of at least
31 days
The superintendent must inspect the financial records of each domestic company every
5 years
A small employer in New Mexico consists of up to ___ employees
50
Agents are said to be engaged in "controlled business" if more than ___ of their total commissions is earned from such business.
50%
How long can an insurer exclude coverage for a preexisting condition on a medicare supplement policy?
6 months
A temporary license may be issued for no longer than
90 days
Long term care policies or certificates issued in New Mexico are required to have
A nonforfeiture value
An individual currently owns a long term care policy. At the time of application for similar coverage, which item must be signed by the applicant and retained by the insurer?
A replacement notice
With whom may an agent legally share commissions?
Another agent who is licensed in the same line of insurance
_____ is the authority given to an agent to sell, solicit or negotiate policies on behalf of the insurer
Appointment
Coverage for newborns a health plan must include coverage for
Birth abnormalities
In health insurance, 60 days must pass after written proof of loss has been received by an insurer before the insured may
Bring legal action against the insurer
For policyholders in the same risk classification, it is unlawful to
Charge different premiums
All of these are considered to be a violation of the federal raid and false statements act except
Claims reimbursement
A New Mexico insurance agent solicits a life insurance policy. In the event of a controversy between the insured and the company, the agent is considered to represent the
Company
An agent who publicly and erroneously announces that an insurance company is insolvent may be found guilty of
Defamation
In a speech to a local association, an agent incorrectly states that XYZ insurance company is in financial difficulty and not paying claims. The agent may be guilty of
Defamation
Making a false statement intending to malign an insurer is called
Defamation
License revocation could be the result of which of the following
Did not meet sales quota for new premium
Which provision makes the application part of the annuity contract?
Entire contract clause
How often must an insurance agent's license be renewed?
Every year
Which of these is not a characteristic of a fraternal benefit society?
Exists for profit
Which of these may encourage adverse selection in an indemnity dental plan?
Having multiple or periodic open enrollment periods
In New Mexico, a long term care policy may offer coverage
In which benefits are based on an individual's ability to perform the activities of daily living
The ____ terminates an agent's appointment
Insurer
Who is required to notify the agent in the event of appointment termination?
Insurer
According to the federal fraud and false statements act, which of these is considered to be an intentional violation?
Making false entries in a company's books
A medicare supplement policy may be cancelled by an insurer for which of the following reasons?
Material misrepresentation
All of the following are covered under most dental plans except for
Mouth cancer
When advertising a life insurance policy, an agent is required to disclose the
Name of the actual insurer
How would preventative care be encouraged in a dental plan?
No deductible on routine examinations
When an agent is determining the suitability of an annuity for a client, which of these is not usually taken into consideration?
Number of dependents
Which is an example of an unfair claims settlement practice?
Offering settlements that are far lass than the fair value to offset insurer expenses
Under the uniform mandatory provisions, a health insurer has the right to request an autopsy
Only where not prohibited by law
Most prepaid dental plans cover
Oral examinations
Renewal of small employer health insurance plans may be denied for all of the following reasons except
Overuse of physician and hospital services
Qualified long term care policies must include all of the following provisions except
Prior hospitalization
A life insurance agent is required to give a disclosure notice about information practices to an applicant or proposed insured
Prior to or at the time of signing the application
Under federal law, which of the following actions may result in a producer becoming imprisoned?
Producer embezzling funds from an insurer
Pointing out to a prospective client that the life insurance policy you are presenting is covered by the New Mexico Life and Health Insurance guaranty association is
Prohibited by law
A cease and desist order issued against an agent
Prohibits a specific practice listed in the order
A cease and desist order issued by the Superintendent against an agent
Prohibits a specific practice listed in the order
What is considered interstate travel under the federal fraud and false statements act?
Puerto Rico
The superintendent may suspend an agent's license when the agent
Rebates a portion of the commission to the insured
Twisting is
Replacing an insurance policy from one insurer to another based on misrepresentation
An example of endodontic treatment is a
Root canal
Before an insurance company may sell insurance in New Mexico, the company must
Secure a certificate of authority
Which of the following is not considered rebating?
Sharing commission with an agent licensed in the same line of business
Kiara filled out a life insurance application and was given a policy illustration that showed the future premiums being paid out of non guaranteed values. The illustration must disclose that
She may need to resume premium payments, depending on actual results
A preexisting condition is a condition for which medical advice or treatment was recommended by or received from a provider of health care service within ___ months preceding a health policy's effective date
Six
Regulations for variable insurance contracts are set by all of the following except
State attorney general's office
What may be the result of replacing an existing life insurance policy with a new one?
Surrender charge
Illustrations used in the sale of life insurance contain a statement that must be signed by
The agent
When a Medicare supplement insurance policy is being replaced, who must sign the notice of replacement?
The agent and the applicant
Under the fair credit reporting act, which statement is true?
The consumer who was investigated must be advised that credit, insurance, or employment was denied because of an unfavorable report.
All long term care policies sold in New Mexico are required to pay the same daily benefit amount for "at home" care as compared to
The daily amount paid for nursing home care
Under medicare supplement insurance, what form produced information about services, benefits, copayments, deductibles, exclusions, premiums and the insurer?
The outline of coverage
Which of the following statements about the contestability of a life insurance policy is true?
The policy can be contested by the insurer only during the first two years of the contract
When a medicare supplement policy is purchased during the open enrollment period
The policy must be issued regardless of health status
A life insurance illustration showing future premiums being paid out of non guaranteed values must disclose that
The policy owner may need to resume premium payments depending on actual results
All of the following are typically covered under dental insurance except
Treatment which began before the eligibility date
Replacing a policy when it is not in the best interest of the client is known as
Twisting
Individual health insurance policies must cover mentally and physically handicapped dependent children
Until they become self-supportive
Under what circumstances must an agent's insurance business records be provided to the New Mexico Superintendent of Insurance?
Upon request of the Superintendent
If a basic illustration is not provided, an insurer must provide a policy summary to a prospective insured at which of the following times?
When the policy is delivered
When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer?
Within 2 months
When an insured under a group life insurance plan in New Mexico elects the conversion option, the new policy is issued
Without requiring evidence of insurability
An agent's license in New Mexico must be renewed every
Year
An insurer operating in the US but headquartered outside the US is
an alien insurer
Which of the following is considered to be a prosthodontic dental procedure?
bridgework
Jerry has an indemnity plan which covers dental expenses. Typically these type of plans
cover preventative care once every six months
Which of these is typically regarded as a major treatment in an indemnity dental plan?
dentures
How often must the superintendent examine each domestic insurance company?
every 5 years
Replacement can be best described as
exchanging a new policy for one already in force
A carrier for a small group health plan may refuse to renew the plan if the employer
fails to pay the premium
Under small group health benefit plans, a carrier may discontinue coverage or may refuse to renew such a plan if the employer
fails to pay the premium prior to the end of the grace period
Which of these is not considered a preventative service in a dental plan?
fillings
The life and health insurance guaranty association is
funded by admitted insurance companies through assessments
An agents license may only be suspended or revoked if the agent
has been afforded a right to a hearing
An _____ _____ sells, solicits, or negotiates insurance contracts for compensation
insurance agent
When an insurance appointment with an agent is terminated, the party that must notify the agent of the termination is the
insurer
What kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital?
long term care
XYZ Corp was issued a group health policy for its employees. Under this plan a
policy must be issued to XYZ, and a certificate must be issued to each employee
In most dental plans, a deductible typically is not applied to
preventative and diagnostic services
A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered is called
replacement
What is the term used when exchanging a new policy for one already in force?
replacement
An example of unfair claims settlement practice is
turning down a claim without providing the basis of denial
An example of intimidation is
using threat or force to restrict fair trade in the transaction of insurance
