Equitable: Life and Health

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

24

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

24 -Agents must complete 24 continuing education hours every 2 years (per renewal period).

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

31

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

31 days

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

5 years

Which of the following statements about continuing education is true? A) At least 50% of continuing education hours must be completed in a classroom or classroom equivalent setting B) Licensees must complete 24 continuing education hours for each license held C) Continuing education hours must be completed after the expiration date of the license D) Every licensee must complete 3 continuing education hours on the topic of ethics

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

An agent's appointment: A) Remains in force until terminated or withdrawn B) Can only be canceled if the agent fails to write new business C) Must be renewed before the license expires D) Is valid for a maximum of 2 years

A) Remains in force until terminated or withdrawn

An agent's appointment: A) Remains in force until terminated or withdrawn B) Can only be canceled if the agent fails to write new business C) Is valid for a maximum of 2 years D) Must be renewed before the license expires

A) Remains in force until terminated or withdrawn by the insurer

A licensed life insurance agent in Texas can share commissions with which of the following? A) A licensed property and casualty agent who referred the client B) Another licensed life insurance agent in Texas who assisted with the sale C) A person holding a temporary license D) An insurance counselor who charged a fee for recommending the policy`

B) Another licensed life insurance agent in Texas who assisted with the sale -An insurer or agent may not pay to another person, or accept from another person, a commission or other valuable consideration unless such person holds a license to act as an agent in the same line of insurance in this state. Insurance counselors cannot charge a fee and get paid commission and temporary licensees cannot get paid commission.

A corporation applying for an agency license must meet which of the following requirements? A) Only the home office of the business entity being licensed as an agency must be registered with the Department B) At least one officer or active partner are individually licensed in the same line of authority as the agency C) All employees must be licensed individually in the same line of authority as the agency D) The company must be incorporated for at least 5 years prior to applying for the license

B) At least one officer or active partner are individually licensed in the same line of authority as the agency -At least one officer or active partner must be individually licensed in the same line of authority. Only the employees transacting insurance must also be individually licensed. Each business location acting under the authority of a license must be registered separately with the Department. There is no requirement for how long a business has been incorporated prior to applying for an agency license.

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

B) Defamation

Which of the following is NOT transacting insurance? A) Collecting an insurance payment B) Selling stocks, bonds, and mutual funds C) Delivering an insurance contract D) Indirectly acting as an agent

B) Selling stocks, bonds, and mutual funds -Transacting insurance involves activities relating to the business of insurance. Stocks, bonds and mutual funds are not insurance products.

The Commissioner is authorized to perform all of the following duties, except: A) Adopt reasonable rules and regulations to enforce insurance laws B) Suspend insurance licenses for up to 5 years C) Issue cease and desist orders D) Conduct investigations

B) Suspend insurance licenses for up to 5 years -The Commissioner may suspend the license for up to 1 year.

The Texas Department of Insurance requires all licensees to:

Be honest, trustworthy, and reliable -Since the relationship between licensees and the public is one of trust, the Department requires all licensees to be honest, trustworthy and reliable.

Which of the following is considered false advertising? A) A counselor charges a fee for advice in addition to commission for the sale of a policy B) An agent misrepresents a policy provision relating to coverage at the time of issue C) An insurer exaggerates its dividends in statements published in a newspaper D) An insurance applicant misrepresents material information on an application for a license

C) An insurer exaggerates its dividends in statements published in a newspaper

A Certificate of Authority is issued to an insurer for which of the following reasons? A) It certifies the agent is authorized to transact insurance in this state B) It recognizes the insurer for excellence in handling claims C) It certifies the insurer is authorized to transact insurance in this state D) It certifies the insurer has passed a market conduct exam in this state

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

A Certificate of Authority is issued to an insurer for which of the following reasons? A) It recognizes the insurer for excellence in handling claims B) It certifies the agent is authorized to transact insurance in this state C) It certifies the insurer is authorized to transact insurance in this state D) It certifies the insurer has passed a market conduct exam in this state

C) It certifies the insurer is authorized to transact insurance in this state -The Certificate of Authority that gives the insurer approval to act as an insurer is effective until suspended or revoked.

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 -Capitation 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 and not the quantity of services actually provided.

Who is NOT eligible for an agent license in this state? A) An applicant intending to solicit insurance to the general public B) A 43-year-old who submitted the appropriate application and fees 1 month ago C) An applicant intending to be actively engaged in the business of insurance D) A 17-year-old who passed the licensing exam 6 months ago

D) A 17 year old who passed the licensing exam 6 months ago

A licensed agent is required to obtain which of the following before transacting insurance in Texas? A) A CLU designation B) A Certificate of Authority C) An insurance counselor's license D) An appointment from an insurer

D) An appointment from an insurer -Licensed agents are not permitted to transact insurance as an agent until they have been appointed by an insurer authorized to transact insurance in this state.

All of the following are required to be included in a life insurance illustration, except: A) Initial death benefit B) Rating classification upon which the illustration is based C) Proposed insured's name D) Company specific mortality tables

D) Company specific mortality tables -A life insurance illustration must include the insurer's name, authorized representative of insurer or agent, proposed insured's name, age and gender, underwriting or rating classification used as the basis for the illustration, policy's generic name, company product name and policy form number, and the initial death benefit. Companies do not have specific mortality tables.

If an insurer requires an individual to be tested for the AIDS virus, all of the following are required, if applicable, except: A) Obtain notice of the requirement to test and written authorization from a parent or guardian of a proposed insured B) Written authorization from the applicant on a Notice of Consent form C) Notice to the proposed insured of the requirement prior to testing D) Gather statistical information that identifies the applicant to share with other insurers

D) Gather statistical information that identifies the applicant to share with other insurers -The insurer may not gather or share information that identifies the applicant.

The Commissioner is authorized to perform all of the following duties, except: A) Issue cease and desist orders B) Conduct investigations C) Adopt reasonable rules and regulations to enforce insurance laws D) Suspend insurance licenses for up to 5 years

D) Suspend insurance licenses for up to 5 years -The Commissioner may suspend the license for up to 1 year.

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

Determining solvency -The primary purpose of examining the records of an insurance company is to review the financial condition of an insurer and determine solvency.

All Medicare supplement policies must offer coverage for all of the following, except: A) Hospitalization B) Physicians' services C) Disability income D) The reasonable cost of the first 3 pints of blood

Disability income -Medicare supplement policies provide coverage for medical services from a physician or hospital. They do not provide income for losses from a disability.

Under the ACA, a catastrophic plan may be purchased by any of the following, except an individual: A) Under age 30 B) Enrolled in Medicaid C) Unable to afford other coverage D) With a hardship exemption

Enrolled in medicare

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

An insurance agent does NOT owe a fiduciary duty to:

Insurance counselors -An agent owes a fiduciary responsibility to its insurer, insurance applicants, insureds, but not insurance counselors or other agents.

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

Misrepresentation -Misrepresentation involves a false statement made to a policyholder about a policy to induce the policyholder to lapse, cancel, or surrender an existing policy.

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

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

Notify the Texas Department of Insurance of the termination of appointment -The insurer must notify the Texas Department of Insurance of the termination of appointment, which does not cancel or terminate the license.

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

Satisfied the applicable waiting period -The health insurer may not offer coverage to an eligible employee until they have satisfied the applicable waiting period, which cannot exceed 90 days.

Which of the following is not a prohibited claims settlement practice? A) Requiring a claimant's income tax return while investigating a fire B) Misrepresenting a material fact to a claimant C) Refusing to pay a claim without reasonably investigating it D) Denying a claim without providing the basis for the denial

A) Requiring a claimant's income tax return while investigating a fire

A) Issue an insurance license for a producer B) Enforce state insurance laws C) Make state insurance laws D) Handle insurance-related consumer complaints

C) Make state insurance laws -The Commissioner must enforce state insurance laws, not establish them.

The Commissioner may examine the records of an insurance company for the purpose of: A) Approving coverages B) Setting rates C) Approving claims D) Determining solvency

D) Determining solvency -The primary purpose of examining the records of an insurance company is to review the financial condition of an insurer and determine solvency.

A corporation applying for an agency license must meet which of the following requirements? A) The company must be incorporated for at least 5 years prior to applying for the license B) Only the home office of the business entity being licensed as an agency must be registered with the Department C) At least one officer or active partner are individually licensed in the same line of authority as the agency D) All employees must be licensed individually in the same line of authority as the agency

C) At least one officer or active partner are individually licensed in the same line of authority as the agency

Which of the following is not a duty of the Commissioner? A) Handle insurance-related consumer complaints B) Enforce state insurance laws C) Make state insurance laws D) Issue an insurance license for a producer

C) Make state insurance laws -They enforce, not create the laws.

Under Nonforfeiture Law, a cash surrender payment may be deferred up to: A) 12 months B) 3 months C) 6 months D) 2 years

6 months -Under Nonforfeiture Law, the insurer reserves the right to defer payment of any cash surrender value for a period of 6 months after demand for payment and surrender of the policy.

Who is NOT eligible for an agent license in this state? A) A 17 year old who passed the licensing exam 6 months ago B) An applicant intending to be actively engaged in the business of insurance C) An applicant intending to solicit insurance to the general public D) A 43 year old who submitted the appropriate application and fees 1 month ago

A) A 17 year old who passed the licensing exam 6 months ago -Eligible applicants for an agent's license must be at least 18 years old.

A license may be suspended or revoked for which of the following? A) An agent is actively engaged in soliciting insurance only to family members B) An agent obtains a nonresident license in another state C) A licensed insurance counselor charges a fee to review a policy and provide advice D) A licensee completed 24 continuing education hours, including 2 hours of ethics before the expiration date

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

Which of the following is not a prohibited claims settlement practice? A) Requiring a claimant's income tax return while investigating a fire B) Denying a claim without providing the basis for the denial C) Refusing to pay a claim without reasonably investigating it D) Misrepresenting a material fact to a claimant

A) Requiring a claimant's income tax return while investigating a fire -Requiring a claimant's federal income tax return to settle the claim is permitted under a court order or if the claim involves a fire, lost profits, or lost income.

Which of the following is NOT transacting insurance? A) Selling stocks, bonds, and mutual funds B) Delivering an insurance contract C) Collecting an insurance payment D) Indirectly acting as an agent

A) Selling stocks, bonds, and mutual funds

All of the following regarding Evidence of Coverage are correct, except: A) The evidence of coverage must be delivered in writing B) Health care services and benefits available must be stated C) The name, address, and phone number of the HMO must be included D) Approval by the Commissioner of Insurance is required before delivery

A) The evidence of coverage must be delivered in writing

All of the following statements about life insurance policy provisions are correct, except: A) 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 B) If a policy lapses due to unpaid premiums, it may only be reinstated up to 2 years after lapse C) An individual may assign up to 100% of policy ownership D) Suicide may not be used as a defense to deny payment after the second year

B) If policy lapses due to unpaid premiums, it may only be reinstated up to 2 years after lapse -All life insurance policies that provide nonforfeiture benefits must include a provision that states if the policy lapses due to unpaid premiums, the policy may be reinstated within 3 years.

An individual may be denied a license by the Department for all of the following reasons, except if the individual has: A) Offered a premium rebate to an insured B) Obtained a license by fraud or misrepresentation C) Actively engaged in soliciting and writing insurance for the general public D) Been convicted of a felony

C) Actively engaged in soliciting and writing insurance for the general public -A license will not be denied for soliciting or writing insurance for the general public. This only applies when NOT actively engaged in soliciting or writing insurance to the general public.

Which of the following statements about continuing education is true? A) Continuing education hours must be completed after the expiration date of the license B) Every licensee must complete 3 continuing education hours on the topic of ethics C) At least 50% of continuing education hours must be completed in a classroom or classroom equivalent setting D) Licensees must complete 24 continuing education hours for each license held

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

When taking an application for a Medicare supplement policy, an agent must provide the applicant with a(n): A) Certificate of Authority B) Copy of the agent's insurance license C) Outline of Coverage D) Summary of Benefits

Outline of coverage -The Outline of Coverage must be provided to all applicants at the time of application and an acknowledgment of receipt must be obtained.