Colorado statutes, rules, and regulations

Question 14 of 15 To which of the following situations does the Replacement Regulation apply? ACoverage under a binding receipt issued by the same company BNonrenewable coverage expiring in 8 years CGroup life insurance DImmediate annuities purchased with proceeds from an existing policy

B.

Question 15 of 15 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. The company is guilty of ARebating. BMisrepresentation. CConcealment. DUnfair claim practice.

B.

Question 15 of 15 Which rule would apply when an applicant is going to cash in an old policy and use the funds to purchase a new policy? ADisclosure BReplacement CReinstatement DConversion

B.

Question 1 of 15 A producer wants to start using an assumed name for his business. Which of the following is required prior to the use of the name? ARegister the name with the Commissioner BInform all existing clients of the name change CApprove the name by the insurer DObtain business documentation referencing the new name

A.

Question 10 of 15 In group life policies in this state, when may the insurer use suicide as a cause of death as a defense against paying a claim? AIf the suicide occurs during the first year of coverage BUnder no circumstance CIf the insured was determined to be insane DIf the insured was determined to be sane

A.

Question 11 of 15 Insurers must screen all marketing plans to assure that an advertisement does NOT use as the name or title of any kind of an annuity contract any phrase that ADoes not include the word "annuity" unless accompanied by other clear language indicating it is an annuity. BIdentifies the name of the insurer as the underwriter for the plan and its administration. CDoes not emphasize investment or tax features to such a degree that prospective buyers believe that the contract is for anything other than insurance purposes. DPresents all material information and illustrations in an easily interpreted way.

A.

Question 13 of 15 When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered ADiscrimination. BTwisting. CControlled business. DAdverse selection.

A.

Question 15 of 15 Producers will be deemed to be using their license primarily to write controlled business if, during any 12-month period AThe total premiums on controlled business exceed the total premiums on all other business written. BThe licensees write more than 5 policies classified as controlled business. CThe licensees write more than two policies on themselves or their property. DThe total premium on controlled business equals 15% or more of the total of all premiums on business written.

A.

Question 2 of 15 Which of the following will NOT be considered unfair discrimination by insurers? ADiscriminating in benefits and coverages based on the insured's habits and lifestyle BCharging applicants with similar health histories different premiums based on their ethnicity CCancelling individual coverage based on the insured's marital status DAssigning different risk classifications to applicants based on gender identity

A.

Question 5 of 15 Producers in Colorado who intend to sell annuities are required to do which of the following? AComplete an initial 4-hour annuity training course BObtain an annuities license CNothing: the sale of annuities does not require any special education or licensing DComplete a 4-hour annuity training course annually

A.

Question 6 of 15 All of the following are considered unfair trade practices in the business of insurance EXCEPT ASharing commissions. BBoycott. CRebating. DDefamation.

A.

Question 7 of 15 As part of the continuing education (CE) requirement, what is the minimum number of hours of CE specific to annuities that must be completed for each license renewal period? A4 B6 C8 D10

A.

Question 1 of 15 Under an employer-sponsored group plan, if the insurance on a person covered under the policy ceases because of termination of employment, which of the following is true? AThe certificate owner has no further rights for coverage. BThe certificate owner is entitled to convert coverage to an individual policy without evidence of insurability. CThe group sponsor is entitled to policy's cash value. DThe insurer has the right to require evidence of insurability during the conversion period.

B.

Question 10 of 15 Which of the following is NOT considered to be a legal example of an insurable interest in Colorado? AThe insured's stepchildren BA STOLI agreement CThe spouse of the insured DA second cousin of the insured

B.

Question 11 of 15 Whenever the Commissioner issues a cease and desist order, how will that order be delivered to the person in violation? AElectronically BBy certified mail CBy regular mail DHand delivered

B.

Question 12 of 15 An insurance producer just sold an insurance policy to his sister. What kind of business is this? APersonal BControlled CIllegal DInternal

B.

Question 12 of 15 The Commissioner may revoke a producer license for all of the following reasons EXCEPT AMisrepresenting the terms of a policy. BActing in a fiduciary capacity. CAccepting business from an unlicensed person. DCommingling of funds.

B.

Question 13 of 15 At the time of application for an annuity, a producer did not provide a buyer's guide and disclosure statements to the contract owner. In this situation, the contract owner is entitled to a free-look period of at least how many days? A10 days B15 days C20 days D30 days

B.

Question 13 of 15 If the Commissioner believes a person is engaged in unfair business practices, what should the Commissioner do? ASubmit a request for action to the Governor BConduct a hearing for the person to show cause CTemporarily suspend the person's license DExamine the person's books and records

B.

Question 4 of 15 If the consumer refuses to provide relevant information requested by the insurer or producer, or fails to provide complete or accurate information, AThe insurance producer retains a personal liability to assure that a recommendation is suitable for the consumer. BAn insurance producer has no obligation to assure that a recommendation is suitable for the consumer. CThe Commissioner of Insurance must be notified and no transactions can be conducted without pre-approval. DThe insurance producer cannot be paid any commissions for the transaction.

B.

Question 4 of 15 In which of the following situations is it legal to limit coverage based on marital status? ADivorce within the last six months of applying for insurance BIt is never legal to limit coverage based on marital status. CExcessive number of divorces, as defined by the Insurance Code DLegal separation during the application process

B.

Question 4 of 15 When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of ANothing, unless the remarks were in writing BDefamation. CMisrepresentation. DDiscrimination.

B.

Question 6 of 15 All of the following could own group life insurance EXCEPT AA debtor group. BA group formed specifically to purchase insurance. CAn employer group offering covering for employees and dependents. DA labor union.

B.

Question 6 of 15 Which of the following would be considered a violation of life insurance advertising regulations? AMaking oral sales presentations BCalling a variable insurance policy an investment plan CInforming the applicant that the sole subject of the sale is insurance DNot guaranteeing dividends

B.

Question 8 of 15 If the Commissioner believes a person is engaged in unfair business practices, what should the Commissioner do? ASubmit a request for action to the Governor BConduct a hearing for the person to show cause CTemporarily suspend the person's license DExamine the person's books and records

B.

Question 9 of 15 Who is responsible for giving the Notice to the replacing insurer in a replacement life transaction? AThe existing insurer BThe producer CThe Insurance Commissioner DThe insured

B.

Question 3 of 15 An insurance producer is prohibited from charging separate fees for any of the following services EXCEPT AQuoting premiums. BFinancial planning. CExtending business hours. DMaking copies of insurance documents.

B. *Insurance producers may charge fees for specific services which are beyond the scope of services pertaining to insurance policies, including risk management services, financial planning, investment counseling, and similar.

Question 1 of 15 Which of the following is a specific service for which an insurance producer is NOT allowed to charge a fee to the applicant or policyholder? AEstate planning for which the producer does not receive a commission from the insurer BRisk management services for which the producer does not receive a commission from the insurer CQualified retirement plan design for which the producer receives a commission from the insurer DInvestment counseling for which the producer does not receive a commission from the insurer

C.

Question 11 of 15 What is a requirement for notifying the Commissioner of any change of address? AWithin 45 days, by any means of communication BWithin 15 days, in writing CWithin 30 days, in writing DWithin 10 days, by any means of communication

C.

Question 12 of 15 In which of the following situations has replacement occurred? AAn applicant buys a new policy but intends to keep the old policy in force. BAn insured terminates group life coverage in order to buy an individual whole life policy. CA policyowner borrows 25% of their cash value to buy a new policy. DAn applicant buys life insurance for the first time.

C.

Question 14 of 15 Group life insurance policies delivered in Colorado must contain all of the following provisions EXCEPT AIncontestability period of 2 years. BA copy of the application is considered part of the policy. CStatements on the applicant are considered warranties. DA grace period of 31 days.

C.

Question 2 of 15 Colorado's Insurable Interest Act allows all of the following EXCEPT AThe purchase of life insurance by a step-parent on a step-child. BViatical settlements. CStranger-originated life insurance. DThe purchase of life insurance by a business owner on a key person of the business.

C.

Question 3 of 15 Which of the following provisions prevents the insurer from denying a claim due to statements on the application after a certain period of time? AWaiver and estoppel BGrace period CIncontestability DPayment of claims

C.

Question 5 of 15 Notwithstanding any other provision of law, each insurer admitted to transact the business of life insurance in this state must pay interest on the death benefits AFrom the date of the claim. BAfter 60 days only. CFrom the date of death. DAfter 30 days only.

C.

Question 7 of 15 How often must insurance companies doing business in Colorado file financial statements with the Commissioner? AOnce a month BEvery 6 months COnce a year DEvery other year

C.

Question 7 of 15 Who notifies the replacement company regarding the replacement of a policy? AThe customer BNo one is required to do this. CThe replacing company DThe Commissioner

C.

Question 8 of 15 A policyowner plans to change insurance coverage from one insurer to another. If the insurer starts a conservation effort, the insurer is ACharging the lowest possible premium for the highest possible benefit. BDiscouraging producers from terminating their appointments. CDiscouraging policyholders from dropping existing policies. DWriting the least amount of coverage as possible in a given policy.

C.

Question 9 of 15 An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice? AUnfair Discrimination BDefamation CIllegal DA legal advertising strategy

C.

Question 9 of 15 When group life insurance policies are issued in this state by a company not organized under the laws of Colorado, they may contain which of the following provisions? AAny provisions required by the law of any adjoining state under which the company is organized. BOnly the mandatory provisions required by the National Association of Insurance Commissioners for all group insurance plans. CAny provision required by the law of the state under which the company is organized. DOnly the provisions required by the law of the state of Colorado.

C.

Question 9 of 15 Which of the following would NOT be a violation of state insurance regulations? AAgent A uses her license to write only insurance for herself and her immediate family. BAgent B charges his clients a consulting fee, in addition to the premium for placing a policy. CAgent C uses her license to write only business other than controlled. DAgent D collects premiums due on policies and deposits the funds in his own personal account.

C.

Question 10 of 15 A producer is required to remit premiums from a trust account to the insurer within how many days of receipt? A10 days B15 days C30 days D45 days

D.

Question 10 of 15 Noncompliance with the regulation regarding fees charged by producers may result in which of the following penalties? AA fine up to $25,000 per violation BImprisonment CRequiring the producer to complete continuing education on ethics DFines and license suspension or revocation

D.

Question 12 of 15 A purchaser of life insurance policy has the right to return the policy for a full refund of the premium if done within A45 days of its delivery. B20 days of its issue. C30 days of its issue. D15 days of its delivery.

D.

Question 13 of 15 Which of the following is NOT true regarding the Notice Regarding Replacement? AIt must be given out when replacing renewable term insurance. BIt requires the signatures of both the producer and the applicant. CIt must be sent along with the policy application to the new insurer. DA copy must be sent to the existing insurer.

D.

Question 14 of 15 The mixing of premiums belonging to the insurer or the insured with the producer's personal funds not related to the business is called AFraud. BRebating. CControlled business. DCommingling.

D.

Question 14 of 15 When the Commissioner believes that a person has engaged in an unfair method of competition or an unfair trade practice, before issuing a cease and desist order, the Commissioner must AContract the state governor. BSubpoena witnesses. CRevoke the person's license. DHold a hearing.

D.

Question 15 of 15 Which of the following statements about a typical suicide clause in a life insurance policy is true? ASuicide is covered for a specific period of years and excluded thereafter. BSuicide is covered as long as the policy is in force. CSuicide is excluded as long as the policy is in force. DSuicide is excluded for a specific period of years and covered thereafter.

D.

Question 2 of 15 A friend helped an insurance producer sell an insurance policy. The producer can share the commission with the friend if AThe friend is also a blood relative. BThe Commissioner gives the producer verbal permission to share. CThe producer applies for a shared commission form for that fiscal year. DThe friend is licensed in the same line of insurance.

D.

Question 3 of 15 Who has the right to assign incidents of ownership under a group life insurance policy? AThe group sponsor BThe beneficiary CThe insurer DThe individual insured

D.

Question 4 of 15 An insurer that does not pay a death benefit in a timely manner as required by state law, will be required to ACease and desist from writing new business for 30 days. BPay double benefits. CForfeit their certificate of authority. DPay to the beneficiary an interest penalty from the date of the insured's death.

D.

Question 5 of 15 All of the following are considered to be misuses of fiduciary funds EXCEPT AUsing balances in customer accounts as collateral for a loan to a producer BRemitting a return premium to an insured 31 days after the producer received it from the insurer CReflecting a premium received as a business asset on the producer's financial statement DCollecting interest on customer balances held in a producer's trust account

D.

Question 5 of 15 If the Commissioner believes that an unauthorized person is engaging in the business of insurance in violation of the provisions of the Insurance Code, creating an immediate danger to the public safety, the Commissioner may APublish a warning in an official newspaper circulated in Colorado. BNotify the National Association of Insurance Commissioners. COrder an immediate hearing to be conducted. DIssue an emergency cease and desist order.

D.

Question 6 of 15 Believing a producer has violated provisions of the Insurance Code, the Commissioner will schedule a hearing ATo revoke the producer's license. BTo prevent the producer from further violations of the law. CTo present the producer with the charges in person. DTo allow the producer to show why penalties should not be assessed.

D.

Question 7 of 15 Producers will be deemed to be using their license primarily to write controlled business if, during any 12-month period AThe licensees write more than 5 policies classified as controlled business. BThe licensees write more than two policies on themselves or their property. CThe total premium on controlled business equals 15% or more of the total of all premiums on business written. DThe total premiums on controlled business exceed the total premiums on all other business written.

D.

Question 8 of 15 A producer is required to remit premiums from a trust account to the insurer within how many days of receipt? A10 days B15 days C30 days D45 days

D.

Question 8 of 15 An insured decides to replace his life insurance policy with one offered by a new insurer. After receiving the policy, he is unsatisfied with the provisions and decides to return it. Within how many days must he return the policy to receive a full premium refund? A10 days B15 days C20 days D30 days

D.