Chapter3
A producer may be disciplined by the Commissioner for which of the following actions?
Misappropriation of premium funds Disciplinary action may be taken by the Commissioner for misappropriation of premium funds.
The _____________ of Coverage describes policy features, benefits, exclusions, and riders in a Long-Term Care policy
Outline
an individual life insurance policy can be contested by the insurer only during the first
2
A life insurance policy sold in Maryland can be cancelled for nonfraudulent misstatements for up to
2
How many days notice must the Commissioner give prior to a hearing?
10 days
Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?
Submit to the replacing insurer a list of the policies to be replaced
All of these are responsibilities of the Commissioner EXCEPT administering oaths subpoena a witness approving policy forms endorsing insurers
endorsing insurers
Replacement can be Best described as
exchanging a new policy for one already in force
A ______ insurance company is one that was formed under the laws of a state other than Maryland
foreign
A dependent child may remain on a parent's health insurance plan beyond age 26 if the child
has a mental or physical handicap and remains dependent on the parent
At minimum, a carrier is required to offer which of the following health benefit plans to small employers?
The standard plan
An insurer may pay a commission in which of the following scenarios?
To a licensed producer who is appointed with the insurer
An ____ _____ sells, solicits, or negotiates insurance contracts for compensation
insurance producer
Who is required to notify the producer in the event of appointment termination?
insurer
Kiara filled out a life insurance application and was given a policy illustration that showed future premiums being paid out of nonguaranteed values. This illustration must disclose that
may need to resume paying the premium payments depending on actual results.
as of january 1 2014 small group health insurance can be rated on the basis of
Tobacco use
A Buyer's Guide and Policy Summary
must be delivered with or prior to policy delivery
Proceeds payable under a life insurance contract to a policyowner in anticipation of death or upon the occurrence of specified life-threatening conditions as defined by the policy are best described as:
accelerated benefits
An insurer formed according to the legal requirements of another country is called an
alien insurer
A person who, for a fee, gives advice or recommendations on benefits provided by an insurance contract is called
an advisor
In Maryland, an insurance producer cannot sell, solicit, or negotiate policies for an insurer unless there is an agreement in place between the producer and insurer. This agreement is called an
appointment
Advertising regulations exist to
assure full and truthful disclosures to the public
A domestic insurance company in Maryland MUST
be formed under Maryland insurance laws
Long-term care insurance provides
one or more diagnostic, preventative, therapeutic, rehab, maintenance, or personal care services in a setting other than an acute care unit
A producer who sells an individual life insurance policy in Maryland MUST deliver to the policyowner
policy summery & buyers guide
A _______ negotiates an insurance contract on behalf of an insurer
producer
an example of misreprensention is
providing incorrect, misleading, incomplete, or materially untrue information in the license application
all of the following actions are considered rebating except share commissions with oter licensed and appointed agents refunding part of th premium as an inducement for purchase offering special dividends offering anything of value not specified in th policy
sharing commissions with other licensed and appointed agents
A _______ company is owned by its shareholdersstock
stock
long-term care policies sold in maryland may exclude coverage related to injuries substance addictions dementia alzheimer's disease
substance addictions
A producer has recently died and leaves behind a spouse. In order for the producer's insurance business to continue, the Commissioner may issue to the producer's spouse a
temporary insurance license
A producer does NOT have a fiduciary responsibility to
the Guaranty Association
An insurance producer who replaces an existing policy by making false written or oral statements is committing the act of
twisting
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as
twsiting
The Fair Credit Reporting Act protects consumers
with guidelines regarding credit reporting and distribution
Prior to conducting an HIV-related test, the insurer must obtain
written authorization from the proposed insured
Interest on death benefits are NOT required to be paid by an insurance company as long as proceeds are paid within ______ after the date of the death of the insured
30 days
the standard grace period for a life insurance policy sold in maryland is
30 days
In maryland, full time employee of a small employer must work an average of at least ___ per week.
30 hours
A producer MUST maintain insurance transaction records for a minimum of ____ years
5
The Commissioner must examine the financial affairs of each admitted insurer operating in Maryland at least once every how many years?
5
To be classified as a small employer, an employer must NOT have more than _________ eligible employees
50
If an insurer refuses to pay a claim, how many days must the insured wait to take legal action against a health insurer after submitting written proof of loss?
60
Under a small group health plan, an insurer is required to provide a newly-married employee at least ____ days to add the new spouse to the plan
60
a life policy loan in maryland cannot charge a fixed rate of interest higher than
8 %
Which of the following life events would allow an uninsured employee to qualify for special enrollment in a small employer health benefit plan?
Adoption of a child (an uninsured, eligible employee who acquires a new dependent through marriage, birth, or adoption may qualify for special enrollment in a small employer's health benefit plan)
All of the following is considered a form of advertising EXCEPT billboard announcing a new insurance product an insurer's AM best rating A radio message promoting an insurer's client satisfaction an oral presentation given by a producer
An insurer's AM Best rating
Which of the following is NOT a requirement for soliciting insurance in Maryland? 1.Pass insurance examination 2.At least 21 years old 3 Good character 4.Appointed by an insurer
At least 21 years old, age requirement is 18
Which of the following is required for an insurer to conduct business in this state?
Certificate of authority
ABC Corporation has a group life insurance policy that covers its employees and their dependent children. Which of the following would be considered a "dependent child"?
Child over the age of 18 years who attends an educational institution and relies on the insured employee for financial support
Who is eligible for insurance under a group policy issued to a labor union?
Every member of that union
To be classified as a small employer in Maryland, and employer must employ
2-50 employees
How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?
3
Replacement regulation is designed to protect
Policyowners from misrepresentations and loss of benefits
All of these activities require an individual to hold a producer's license EXCEPT negotiating insruance providing referrals soliciting insurnace selling insurance
Providing referrals
Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Maryland?
Health Insurance Producer License
in the state of maryland a licensed producer
a licensed producer
An insurance producer is BEST defined as1.
a person who has a contract with an insurance company to represent it
An example of rebating is
a producer who shares commissions with a client
Violations of US Code Title 18 section 1033, may result in
fine and/or imprisionment
The identity of the ____ must be made clear in every health insurance advertisement
insurer
an existing health benefit plan offered by a small employer may be replaced by SHOP exchange navigator only if the small employer
is eligible for a federal tax credit through the SHOP exchange
Upon receiving a producer complaint, the Commissioner may immediatley
issue a cease and desist order
Each delivered life insurance policy in Maryland MUST include a
legible and brief description of the policy on the first page
commissions may only be paid to
licensedand duly appointed producers
the life and health guaranty corporation provide funds to carry out its powers and duties by assessing
member insurers
a producer's secretary who solicits prospects on the telephone
must be licensed as a producer
An advertisement for an insurance product may contain
the insurer's name
Two producers may share a commission ONLY if
they are both licensed in the same line of business
one role of the Commissioner is to
to enforce state insurance laws
Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a
unfair claim settlement practice
proof of loss on a health insurance claim must be submitted to an insurer within___days after the insured's date of loss
90
An example of fraud
A producer who knowingly submits a false statement in support of a claim
A life insurance policyowner is allowed ___ days upon policy delivery to return the policy for a full premium refund.
10
A policyowner has _____ days after policy delivery to return a major medical policy for a full refund
10
What is the MINIMUM benefit period that must be offered by a Long-Term Care Polic?
12 Months
a temporary producer license issued in maryland is valid for up to
15 month
An eligible employee can be excluded from group health coverage for up to _______ months is he/she is considered a "late enrollee".
18
A producer's license MUST be renewed every _______ years
2
Once a health insurance policy has been in force for _______ years, the policy may NOT be contested by the insurer
2
Producers must complete a total of _______ Continuing Education hours for each two-year licensing period
24
to be eligible for small employer group coverage, an employee must work an minimum of____hours in a typical week
25
A newborn is required to be covered for ______ days from the moment of birth.
31
At what age does the open enrollment period typically begin for Medicare Supplement coverage?
65
paying them to the insurance company Which of the following basics is a producer's fiduciary responsibility?
Collecting premiums and paying them to the insurance company
The ______________________ must be notified of a licensee's address change within 30 days of such change
Commissioner
Jim recently sold his whole life insurance policy under a viatical settlement contract. The proceeds of this contract could be subject to the claims of
Creditors
How often must the Commissioner examine each domestic insurance company?
Every five years
Which of the following is NOT information found in a life insurance buyer's guide? how to take legal action against an insurance company how to compare life insurance policy rates how to compare life insurance policy requirements how to determine how much life insurance to purchase
How to take legal action against an insurance company
When is an existing health insurance policy required to provide coverage for a newborn child
Immediately
An insurer is REQUIRED to offer which of the following to each long-term care applicant at the time of purchase?
Inflation protection
A Medicare Supplement policy may be cancelled by an insurer for which of the following reasons?
Material misrepresentation
Guide A producer who sells an individual life insurance policy in Maryland MUST deliver to the policyowner a
Policy Summary and Buyer's Guide
The promise of a discount in premium as an inducement to purchase insurance is an Unfair Trade Practice known as
Rebating
All of these may be an Unfair Claims Practice EXCEPT Refusing to pay claims without a reasonable investigation Refusing to pay persons bringing false or frauduent claims failing to promptly provide a reasonable explanation of any claim denial offering low amounts to force insureds to institute litigation
Refusing to pay persons bringing false or fraudulent claims
Who regulates the quality care provided by a health maintenance organization (HMO)?
Secretary of the Department of Health and Mental Hygiene
Claims for a Long-Term Care policy MUST be paid for which of the following conditions?
Senile dementia
In Maryland, a Producer may have his/her license revoked for which of the following acts?
Signing a prospect's name without their knowledge or presence
What may be the result of replacing an existing life insurance policy with a new one?
Surrender charge
Which of the following is NOT required in an order from the Commissioner?
The Governor's signature
Any advertisement that mentions a dollar amount, period of time for which any benefit is payable, cost of policy, policy benefit, or the loss for which the benefit is payable MUST disclose
The exceptions, reductions, and limitations affecting the basic provisions of the policy
A producer has committed an insurance crime that violates US Code 1033 (interstate commerce). who would be responsible for the prosecution of this crime?
US Attorney General
Which of the following is NOT a reason for the Commissioner to deny or refuse a producer license application?
Unintentionally misrepresented a material fact on the application
Terminally-ill life insurance policyowners may sell their policy at a discoun to a third party. This type of agreement is called a(n)
Viatical Settlements
A____ insurance company is one that was formed under the laws of another country outside of the U,S
alien
A separate converted policy may, at the option of the insurance company, be issued to cover a(n)
dependent
When collecting insurance premiums from a client, a producer MUST
forward premiums to the insurer on a timely basis
A producer's license may only be suspended or revoked if the producer
has been afforded a right to a hearing
A Buyer's Guide MUST
have it's content approved by the commissioner
A minor may receive a life insurance policy's death benefit ONLY
if the minor has an appointed guardian
Producer commissions may NOT be paid to
licensed producers not appointed by an insurer
What kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventative, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital?
long-term care
a viatical settlement broker may not advertise their services recommend a settlement provider to a viator charge fees make any transactions before being approved for a license
make any transactions before being approved for a license
Under the Maryland Health Insurance Plan, comprehensive health benefits are provided to
medically uninsurable residents
An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of
misrepresentation
Twisting is an illegal act which involves
misrepresentation
A Medicare Supplement policy can be cancelled by the insurer for
nonpayment
When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT provide the applicant with a copy of the sales proposal submit to the producer's insurance company a copy of the signed notice regarding replacement obtain the beneficiary's signature provide the applicant with a notice regarding replacement
obtain the beneficiary's signature
the food and drug administration approves prescription drugs for treatment as stated on the drug's labeling. the description of a frug for treatments other then what's labeled is known as ___ use
off-label
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 eac employee
The _______ is responsible for determining the appropriateness of a Medicare Supplement policy for an applicant
producer
When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer?
promptly
Which of the following is not a circumstance to which a temporary producer license can be issued? representative of a producer called to active military duty prospective producer who is waiting to take the state licensing examination a widow of a deceased producer any situation deemed by the commissioner to be in the public's best interest
prospective roducer who is waiting to take the state licensing examination
An insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a(n)
rebate
John the insurance producer has an insurance license that expires in 6 months. If he files an application for renewal before the expiration date, his license will
remain in effect until a new one is issued
Twisting is
replacing an insurance policy from one insurer to another based on misrepresentationw
How long is the Contestable Period for health insurance policies sold in Maryland?
2 years
A licensee must notify the Commissioner within ___ days of any change in business address.
30
A producer must notify the Commissioner within _____ days of a felony conviction
30
If a producer has been engaged in an administrative action by any governmental agency, within how many days following the final deposition must the producer report the action to the Commissioner?
30
The Right-to-Examine period in Maryland for Long-Term Care policies is ____ days.
30
long-term care insurance and medicare supplement plans have a free-look period of _____ days
30
which of the following is not considered to be an act of fraud
Collecting a charge for insurance that is less than charge applicable to that insurance
Which of the following unfair trade practices involves a producer who makes public malicious statements about an insurer's financial condition?
Defamation
All of the following are typically included in a life insurance policy illustration EXCEPT premium of the policy names of the beneficiaries interest charged for policy loans cash surrender value in 20 years
Names of the beneficiaries
What is the required action to be taken by a Maryland licensee before operating under an assumed business name?
Notify Commissioner
coverage for newborns under a health plan must include coverage for
birth abnormalities
A long-term care policy may only exclude preexisting conditions for up to ___ months
6
a medicare supplement policy may exclude coverage for a pre existing condition for up to ___ months
6
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 this client?
Financial objectives
Which type of contract may NOT be issued by an insurance company? Long-term care contract Group life contract Disability income contract HMO contract
HMO contract
Which of the following is NOT a qualification to be licensed as a producer? passed the sate exam completed pre-licensing education high school diploma be 18 years of age
High School diploma
All Medicare Supplement policies MUST contain which provision
Pre-existing conditions may only be excluded from coverage for a maximum of 6 months
dependent children under a health insurance plan must provide coverage up to age
26
Maryland requires that a licensee completes ____ hours of continuing education on the subject of ethics eery reporting period
3
Tim's individual life insurance policy has just recently lapsed. His policy may be reinstated at any time within _____ years.
3
a life insurance replacement gives the policyowner the right to return the policy for a 100%refund within ___ days of policy delivery
30
within how many days must a producer report to the commissioner any administrative action made agins him
30
A producer who is licensed in Maryland but resident in another state is called a
nonresident producer
Insurance agent Kelly offers insured a $500 shopping card if they purchase an insurance product through her. What is this an example of?
rebating, which is an unfair trade practice
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is called
reinsurance
all long-term care policy sold in north dakota are required to pay the same daily benefit amount for "at home" care as paid for
the daily amount paid for nursing home care
Any advertisement that mentions a dollar amount, period of time for which any benefit is payable, cost of policy, policy benefit, or the loss for which the benefit s is payable MUST disclose
the exceptions, reductions, and limitations affecting the basic provisions of the policy
a producer's renewal date for his her resident insurance license is on or before
the last day of the licensee's birth month
Mary's Medicare Supplement policy had been in effect for 12 months. She recently replaced the policy with a new one that provides better coverage. The replacing policy may only impose a ____ month time exclusion for pre-existing conditions
0
how long after its effective date will an individual life insurance policy become incontestable
2 year
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
Producers must complete a total of ___ Continuing Education credits for each two-year licensing period.
24
Which of the following actions by a producer would NOT result in a license suspension or revocation? Producing an inadequate amount of new premium producer demonstrates incompetency to transact business as an insurance producer producer misrepresents the terms of an existing insurance contract producer misappropriates an insured's premium payment
Producing an inadequate amount of new premium
Which of these is NOT an Unfair Claims Settlement Practice?
Providing claim payments to insureds under the guidelines of the insurance contract
the entire contract provision states that an entire contract consists of the actual policy and the
application
A producer may begin to solicit insurance ONLY when
appointed by an insurer
_____is the authority given to a producer to sell solicit or negotiate insurance on behalf of the insurer
appointment
An example of replacement is
cancelling a term life policy to buy a whole life policy
An order issued by the commissioner that prohibits a specific practice listed in the order is called a(n)
cease and desist order
to conduct insurance business in this state, an insurer must be issued a certificate of authority, the entity which issues the certificate of authority is the
commissioner
A Maryland insurance producer solicits an insurance policy. In the event of a controversy between the insured and the company, the producer is considered to represent the
company
the Maryland insurance commissioner
counseis and advises the governor on all matters assigned to the maryland insurance administration
All of these types of benefits can be covered by a nonprofit health service plan except dental disability income vision hospital expense
disability income
The ___________ has the right to renew a small employer health plan
employer
how often must an insurance producers license in maryland be renewed
every two years
Recording the receipt and distribution of premiums due to an insurer is considered a producer's _________ responsibility
fiduciary
The renewability provision for an individual long-term care insurance policy must be located on the policy form's
first page
Maria the insurance producer completes a sale by collecting the required signatures on the application and obtaining the initial premium. Afterwards, she deposits the check into her personal checking account. Maria has committed what crime?
fraud
ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful practice known as
illegal inducement
Benefits for a Medicare Supplement Policy
must not duplicate Medicare Benefits
during the examination of an insurer's books and records by the commissioner the insurer
must not impede the examination
