Exam questions
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? 7 days 10 days 31 days 60 days
10 days
To avoid violations of unfair claims settlement regulation, insures are required to acknowledge the receipt of a claim within how many days? 10 days 15 days 30 days 45 days
10 days
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan? 5 years 12 months 63 days 18 months
18 months
When a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. WIthout passing an examination, she could qualify for a temporary license for a maximum period of 90 days 180 days 1 year 2 years
180 days
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days? 80 3 20 100
20 days
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within how many days of the final disposition of the matter? 10 30 60 90
30
If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? 10 30 60 90
30 days
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? 12 months 24 months 30 months 36 months
30 months
For how long is an insurance company allowed to defer policy loan requests? 30 days 60 days 6 months 1 year
6 months
In Long-term care policies, the term "chronically ill" means an individual who is unable to perform at least 2 activities of daily living for at least?
90 days
If an insurance company offers Medicare supplement policies, it must offer which of the following plans? B-N A-D A A&B
A
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? The gap of coverage for eligibility is a period of 63 or less days An individual who was previously covered by group health insurance for 6 months is eligible An individual who has used up COBRA continuation coverage is eligible An individual who doesn't qualify for Medicare may be eligible
An individual who was previously covered by group health insurance for 6 months is eligible (requires 18 months)
Which of the following is a short term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated Annuity certain Fixed annuity Refund Life Variable annuity
Annuity certain
What type of agent authority is also called "perceived authority"
Apparent
The act of voluntarily giving up insurance by the insured is called Reinstatement Termination Cancellation Recission
Cancellation
An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision? Common Disaster Accidental Death Survivor Life Second-to die
Common Disaster
Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called
Material misrepresentations
Under which plan does preventative dental treatment not apply toward the deductible? Provisional Limited Nonscheduled Focused
Nonscheduled
All of the following are requirements for producer license renewal EXCEPT Record of fingerprints Renewal examination Up-to-date continuing education Renewal fees
Renewal examination
Insurance producers that do not have company appointments are considered a
Representative of the consumer
Insurance is the transfer of
Risk
An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? 1 month The insured would not receive any benefits 3 years 2 years
2 years
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act Unfair discrimination Errors and omissions Fraud Defamation
Fraud
During partial withdrawal from a universal life policy, which portion will be taxed? Principal Loan Interest Spouse rider
Interest
Which of the following is incorrect concerning Medicaid? It provides medical assistance to low-income people who cannot otherwise provide for themselves It pays for hospital care, outpatient care, and laboratory and X-ray services The federal government provides about 56 cents for every Medicaid dollar spent It is solely a federally administered program
It is solely a federally administered program
Which of the following is TRUE about nonforfeiture values Policyowners do not have the authority to decide how to exercise nonforfeiture values They are required by state law to be included in the policy They are optional provisions A table showing nonforfeiture values for the next 10 years must be included in the policy
They are required by state law to be included in the policy
All of the following statements describe a MEWA EXCEPT MEWA employers retain full responsibility for any unpaid claims MEWAs can be self-insured MEWAs are groups of at least 3 employers MEWAs can be sponsored by insurance companies
MEWAs are groups of at least 3 employers (2 employers)
Shorty after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free look provision applies. The insured could find that information in the? Policy application Buyers Guide Certificate of Coverage Notice Regarding Replacement
Notice Regarding Replacement
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? Corridor option Variable option Option A Option B
Option B
All of the following are true regarding rebates EXCEPT Rebates are only allowed if specifically stated in the policy rebating can be anything of monetary value given as an inducement to purchase insurance Dividends are not considered to be rebates Rebates are allowed if it is in the best interest of the client
Rebates are allowed if it is in the best interest of the client
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must Respond to the customers complaint Defend the report if the agency feels it is accurate Change the report Send an actual certified copy of the entire report to the consumer
Respond to the customers complaint
Which of the following components of dental insurance does NOT require the payment of a deductible? Orthodontic care Cosmetic dentistry Routine and preventive maintenance Routine and major restorative care
Routine and preventive maintenance
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend Joint and survivor Straight life Life income with period certain Installment refund
Straight life
All of the following are true statements regarding the accumulation at interest option EXCEPT The interest is credited at a rate specified by the policy The policyholder has the right to withdraw the accumulations at any time The interest is not taxable since it remains inside the insurance policy The annual dividend is retained by the company
The interest is not taxable since it remains inside the insurance policy
According to COBRA, what is the minimum number of employees required to constitute a large group?
100
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? 12 months 24 months 30 months 36 months
30 months
When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by
A paramedic or examining physician at the insurers expense
Long-term care policies must cover A pre-existing condition Alzheimer's disease Treatment payable by medicare Alcoholism
Alzheimer's disease
Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service Premium Cost share Copayment Deductible
Copayment
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?
Defamation
How often must the commissioner examine rating organizations Annually Every 2 years Every 3 years Every 5 years
Every 5 years
Which of the following is an eligibility requirement for all Social Security Disability Income benefits? Have attained fully insured status Be disabled for at least 1 year Have permanent kidney failure be at least age 50
Have attained fully insured status
All of the following are licensing requirements for a business entity, EXCEPT Having all employees complete continuing education courses once every 2 years Demonstrating general fitness, competence, and reliability Maintaining on staff at least 1 licensed person in good standing Applying for a license in the same lines of authority as held by licensed designees
Having all employees complete continuing education courses once every 2 years
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? Defamation Illegal A legal advertising strategy Unfair Discrimination
Illegal
In an optionally renewable policy the insurer has which of the following options Shorten the notice that the insured receives Increase premiums Increase the grace period Alter the due date so the policy can be cancelled sooner
Increase premiums
Which of the following statements concerning Medicare Part B is correct? It pays on first dollar basis It pays 100% of Medicare's standards for reasonable charges It pays for physician services, diagnostic tests, and physical therapy It is provided automatically to anyone who qualifies for part A
It pays for physician services, diagnostic tests, and physical therapy
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report
Which of the following best describes gross annual premium Expense premium Net premium plus expenses Annual Loading basic insurance rate plus commissions
Net premium plus expenses
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance Omissions of material fact on insurance application are fraud False statements about financial condition of an insurer are unlawful Statements made with the intent to deceive are unlawful Only written statements can be considered fraud
Only written statements can be considered fraud
Which document helps ensure that full and fair disclosure is provided to the recipient of policy? Policy summary statute of limitations outline of coverage benefit limitations
Outline of Coverage
Which authority monitors the financial strength of insurers
The Department of Insurance
Who is responsible for paying a producer appointment fees The Department of Insurance The producer The appointing insurer The commissioners office
The appointing insurer
According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means
The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party
Which of the following statements concerning group health insurance is CORRECT Under group insurance, the insurer may reject certain individuals from coverage The employer is the policyholder Only the employer receives a certificate of insurance Each employee receives a policy
The employer is the policyholder
If another governmental agency takes action against a licensee, whose responsibility is it to report the action The licensee The department of Insurance The judge The person/entity requesting the action
The licensee
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue to receiving 2/3 of the benefit paid when both beneficiaries were alive
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? Rebating Twisting Switching False advertising
Twisting
What is the civil penalty for violating a cease and desist order of the Commissioner $1,000 $5,000 $10,000 $50,000
$10,000
An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has an appendectomy and files the claims to both insurers. Neither company is notified in advance that the insurer has other coverage. What should each insurer pay?
A proportioned amount
All of the following are correct about the required provisions of health insurance policy EXCEPT A reinstated policy immediate coverage for an illness Proof of loss forms must be sent to the insured within 15 days of notice of claim A grace period of 31 days is found in an annual pay policy The entire contract clause means the signed application, polucy, endorsements and attachments constitute the entire contract
A reinstated policy immediate coverage for an illness (only immediate for accidents) (for sickness after 10 days)
Which of the following is NOT covered under a long-term care policy Adult day care Hospice care Home health care Acute care in a hospital
Acute care in a hospital
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued? Adjust the claim benefit to reflect the insured true age Deny any claims and cancel the policy Deny paying a claim based on misrepresentation Pay the full amount of a claim because the contestable period has ended
Adjust the claim benefit to reflect the insured true age
In which Medicare supplemental policies are the core benefits found? Plans A and B only Plan A only Plans A-D only All plans
All plans
Health Insurance policies providing maternity benefits must also provide coverage for postpartum inpatient hospital care. How much coverage must be provided for delivery by Caesarean section No more than 1 week At least 96 hours At least 1 week No more than 48 hours
At least 96 hours
A policy which covers medical costs related to a specific condition is called a Condition-specific policy specific condition policy limited coverage policy Dread disease policy
Dread Disease Policy
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
Which of the following statements is true regarding coinsurance? The larger the percentage that is paid by the insured, the higher the required premium will be The smaller the percentage that is paid by the insured, the lower the required premium will be The smaller the percentage that is paid by the insured, the more consistent the required premium will be The larger the percentage that is paid by the insured, the lower the required premium will be
The larger the percentage that is paid by the insured, the lower the required premium will be
Which of the following is considered a qualifying event under COBRA Marriage Relocation Promotion Divorce
divorce
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
entire contract clause
In an Adjustable Life Policy all of the following can be changed by the policy owner EXCEPT The amount of insurance The type of investment THe length of coverage The premium
The type of investment
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? 3 days 5 days 10 days 14 days
3 days
According to the Time Limit on Certain Defenses provision, the insured cannot void the policy for any misstatements on the application (except for fraud) if the policy was in force for what time period? 3 years 7 years 90 days 1 year
3 years
Which of the following is NOT an enrollment period for Medicare Part A applicants? General enrollment Automatic enrollment Initial enrollment Special enrollment
Automatic enrollment
Which of the following hospice expenses would NOT be covered in a cost-containment setting? Antibiotics Tylenol Morphine Special hospital bed
Antibiotics
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change? Cost of Living Rider Value adjustment rider Return of premium rider Inflation Rider
Cost of Living Rider
Which of the following would NOT be considered an exception to the Nation Do Not Call Registry Calls based from outside the US Calls for which the consumer has given prior written permission Calls which are not commercial or do not include unsolicited advertisements Calls by or on behalf of tax-exempt nonprofit organizations
Calls based from outside the US
What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur?
Conditionally renewable
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the Eligibility clause consideration clause insuring clause pre-existing condition clause
Consideration Clause
Which of the following is NOT a cost-saving service in a medical plan Risk sharing Denial of coverage Preventive care Second surgical opinions
Denial of coverage
With regards to premium rates, which of the following statements is NOT true? After a premium rate is filed, the insurer must wait 30 days or until approval is received from the commissioner before using the new rate. If a premium rate is disapproved. the commissioner must hold a hearing if requested by the insurer. The commissioner sets all insurance premium rates used in Pennsylvania. Pennsylvania is a "prior approval" state in that premiums rates must be filed with the insurance department and approved by the commissioner.
The Commissioner sets all insurance premium rates used in Pennsylvania
Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the department may impose a civil penalty of $1,000 for each violation $2,000 for each violation $3,000 for each violation $5,000 for each violation
$5,000 for each violation
HIPAA applies to groups of a) At least 10. b) At least 100. c) More than 2, fewer than 50. d) 2 or more.
2 or more
Which of the following is true regarding Continuing Education required for those holding a Pennsylvania producer license? Continuing Education is optional Varies from insurer to insurer 24 hours each licensing period 12 hours each annual period
24 hours each licensing period
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? Childrens rider Additional insured rider Family term rider Spouse rider
Family Term Rider
Which of the following entities has the authority to make changes to an insurance policy Producer Insurers executive officer Department of Insurance Broker
Insurer's executive officer
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT The payments are not guaranteed for life the insurer determines the amount for each payment It is a life contingency option It will pay the benefit for a designated period of time
It is a life contingency option
In a disability income policy, all of the following are considered presumptive disabilities EXCEPT Loss of two limbs Loss of speech Loss of an eye Loss of hearing
Loss of an eye
All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT MIB reports contain previous insurance information Insurers may not refuse to accept an application solet due to information in an MIB report MIB reports are based upon information supplied by doctors and hospitals MIB information is reported to the underwriters in coded form
MIB reports are based upon information supplied by doctors and hospitals
Fred and Jody are covered under a group health insurance plan at his place of employment. When Jody gave birth to their first child, what must he do in order to have coverage for their child?
Notify the insurer within 31 days in order for coverage to continue without evidence of insurability
A 55-year old employee has worked part time for his new employer for 3 months now, but has not been offered health insurance, What factor has limited the employees eligibility? Number of hours worked per week The total amount of time worked for the company Age Income
Number of hours worked per week
When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable it is called Pro-rata coverage Overinsurance Double indemnity coverage Fraternal coverage
Overinsurance
In the case of producer solicitation, at what point must a long term care shoppers guide must be presented to the applicant At the time of policy delivery Prior to the time of application At the time of application Between the completion of the application and the delivery of the policy
Prior to the time of application
The Gramm-Leach-Bliley Act was passed to Allow insurance companies access to medical information for underwriting purposes Protect private customer information filed with a financial institution Define insurance as interstate commerce Allow customers access to credit and private consumer reports
Protect private customer information filed with a financial institution
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 Twisting False advertising Coercion
Rebating
When the insured initiates the cancellation of a policy, the unearned premium will be refunded on a(n) Extended term basis Pro rata basis Per occurrence basis Short rate basis
Short rate basis
An applicant has a history of heart disease in the family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this? Specified coverage Single Indemnity protection Term Health coverage Comprehensive care coverage
Specified coverage
Which of the following is true about the requirements regarding HIV exams Prior informed oral consent is required from the applicant HIV exams may not be used as a basis for underwriting The applicant must give prior informed written consent Results may be disclosed to the agent and the underwriter
The applicant must give prior informed written consent
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? The change must be reported to the Commissioner The change must be reported to the Federal Producers Directory The licensee must obtain a new license It is illegal to transact insurance under any name other then the one listed on the license
The change must be reported to the Commissioner
Which of the following is a key distinction between variable whole life and variable universal life products? Variable whole life has a guaranteed death benefit Variable Universal life is regulated solely through FINRA Variable whole life allows policy loans from the cash value Variable universal life has a fixed premium
Variable whole life has a guaranteed death benefit