Excel Solutions Chapter 11 Exam- New Jersey Laws and Rules Pertinent to Insurance

What is the maximum fine for a producer violating a New Jersey insurance law for the first time? $2,000 $3,000 $4,000 $5,000

$5,000

Which of the following is the financial penalty for a violation of a cease and desist order? $2,000 $5,000 $10,000 $25,000

$5,000 (A violation of a cease and desist order will result in a penalty of up to $5,000)

After an annuity contract has been delivered by the producer, the free look period is MINIMUM of? 10 days, but not more than 30 days 20 days, but not more than 30 days 7 days 15 days

10 days, but not more than 30 days

Nina just passed her New Jersey insurance licensing examination. She is REQUIRED to apply for a producer's license within ___ months? 6 9 12 15

12 Months

A branch office registration form is required to be filled out at least ___ days before selling insurance out of that branch? 7 days 10 days 15 days 30 days

30 days

When credit life or health is written, evidence of coverage (a policy or certificate of insurance) must be delivered to the debtor when the debt is incurred or within how many days? 20 days 60 days 10 days 30 days

30 days (The individual policy or group certificate shall be delivered to the insured at the time of the effective date or no later than 30 days from the date of indebtedness)

Within how many days must a producer notify the Department of Banking and Insurance of a change in address? 10 days 20 days 30 days 40 days

30 days (This is the MAXIMUM amount of time a producer has to notify a change in their adress)

Replacement forms MUST be kept on file by the agent for a MINIMUM of how many years? 1 3 5 7

5 Years

Which of these is NOT considered a from of life insurance advertisement? Billboard announcing a new insurance product Sales presentation materials Brochures handed out at a promotional event Buyer's Guide

A buyer's Guide

Advertising material for a life insurance policy does NOT need to contain which of the following? Agent's commission rate The company's true cooperate name Statements that dividends are not guaranteed Whether a spokesperson is paid

Agent's commission rate

How long must an insurance company keep records on life insurance replacement activity? At least four years At least 5 years At least 6 years At least 7 years

At least 5 years

Which of the following are retained at the expense of an insurance buyer to give advice on insurance needed by the buyer? Brokers and consultants Insurance Prospectors Third-party administrators Agents

Brokers and consultants (Brokers and consultants are retained at the expense of an insurance buyer to give advice on insurance needed by the buyer. They are generally responsible for dealing with the insurer and explaining the coverages and terms of the policy to the buyer)

The Department of Banking and Insurance can make information pertaining to a Producer's license, available through? Disclosure of non-public information Temporary license Temporary Work Authority Certificate of License Status Report

Certificate of License Status Report

The Commissioner issues a subpoena to a producer. The producer decides not to respond. Which course of action must be taken by the Commissioner? Commissioner must terminate the producer's appointment Commissioner must reissue another subpoena Commissioner may impose an administrative penalty Commissioner may incarcerate the producer

Commissioner may impose an administrative penalty

A Buyer's Guide MUST? Include a copy of the sales presentation Contain content approved by the commissioner Contain a copy of the producer's license Explain specific policy values

Contain content approved by the commissioner

The New Jersey Life and Health Insurance Guaranty Association is? An entity that assists in underwriting large insurance policies Funded by assessments on member companies Funded by the state government Administered by the Federal Government

Funded by assessments on member companies

A debtor may receive Credit Life insurance in which of the following forms? Universal Life Endowment Group Whole Life Group Term Life

Group Term Life (Credit Life Insurance may be issued to a borrower in the form of Group Term Life)

A Buyer's Guide MUST? Display year-by-year cash surrender values Have it's content approved by the Insurance Commissioner Include the name of the Insurance Commissioner Explain the company's specific underwriting procedures

Have it's content approved by the Insurance Commissioner

Maria the agent would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisement? Her home address Her name The annuity's guaranteed interest rate The Commissioners name

Her name

Which of the following is NOT a duty of the Commissioner? Establish insurer rates Conduct investigations Issue subpoenas Administer oaths

Establish insurer rates (The commissioner has authority to take all of these actions except establishing the insurers rates)

After advertisements are last used, insurers are required to keep copies of the ad on file for how many years? Two years Three years Four years Five years

Five years

A(n)___ insurance company is one that was formed under the laws of a state other than New Jersey? Alien Foreign Reciprocal Domestic

Foreign

An insurance producer is issued a(n) ___ as evidence of authority? Authorization License Warrant Bond

License

An insurance company may ONLY pay a sales commission to? Individuals who are residents of this state for at least 5 years Individuals who are registered with the NAIC Individuals licensed by the state Individuals who are gainfully employed by that insurance company

Individuals licensed by the state

The law that established insurance transaction should be regulated by the states is called the McCarran-Ferguson Act McCain-Feingold Act Fair Credit Reporting Act Paul vs Virginia

McCarran-Ferguson Act (Stated that continued regulations of insurance by individual states was in the public interest)

A producer who intentionally makes an untrue or incomplete statement in the course of an insurance transaction may be guilty of? Twisting Rebating Misrepresentation Coercion

Misrepresentation

A producer's secretary who solicits prospects on the telephone? Is an example of the illegal act called twisting Must be bonded through the state Must be licensed as a producer Is not required to be licensed as a producer

Must be licensed as a producer

Jay the producer is giving insurance advice regarding a prospect's existing coverage. If Jay were to receive a fee for this advice (in addition to his commission), he MUST? Provide the prospect with his insurer's AM Best rating Offer a reduction in premium to the prospect in exchange for the fee Obtain a signed memorandum from the prospect acknowledging the amount of compensation Give 25% of the fee back to the prospect if the policy is issued

Obtain a signed memorandum from the prospect acknowledging the amount of compensation

A written statement describing the elements of a policy is called a? Buyer's Guide Policy Summary Policy Guide Buyer's Summary

Policy Summary

Which of the following MUST contain a "Statement of Policy Cost and Benefit Information"? Policy summary Insurer company's AM best rating Buyer's guide Insurance company's advertisements related to this coverage

Policy summary

Replacement regulation is designed to protect? Beneficiaries Policyowners from misrepresentations and loss of benefits Existing producers Insurance companies

Policyowners from misrepresentations and loss of benefits

An insurance consultant is BEST defined as a(n)? Producer who charges fees for advice Producer who introduces a policyowner to a 3rd party for a potential sale of a life insurance policy Consultant who gives motivation seminars to an insurer's sales team Individual who underwrites insurance policies

Producer who charges fees for advice

Before conducting an HIV related test, an insurer is REQUIRED to obtain written authorization from? Proposed insured Beneficiary Proposed Insured's primary physician Department of Health

Proposed insured

What is the process for a producer voluntarily terminating his/her license? Returning his/her license to the Banking and Insurance Department Scheduling a hearing with the Commissioner Notify the insurer within 6 months of the last insurance transaction Stop generating insurance transactions for 3 months

Returning his/her license to the Banking and Insurance Department

Johan the producer charged a fee to a sales prospect for analyzing insurance coverages. According to New Jersey law, a reasonable relationship must exist between the fee and the? Substance of the services performed Distance traveled by the producer for the appointment Producer's number of years licensed Producer's sales commissions for the year

Substance of the services performed

A producer has recently died and leaves behind a spouse. In order for the producer's insurance business to continue, the Department of Banking and Insurance may issue to the producer's spouse a(n)? Permanent insurance license Temporary insurance license Interim insurance license Supplementary insurance license

Temporary insurance license (The spouse of a deceased producer may apply for a temporary license with the Department of Banking and Insurance to continue the producer's insurance business)

The death benefit of Credit Life and Health Insurance is paid to whom? Beneficiary of policyholder's choosing The creditor The policyowner The insured

The creditor

Twisting is best defined as? Using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy Sharing commissions with another producer Inducing an insurance sale by offering something of value Forcing a loan applicant to use a specific insurer as a condition for the loan

Using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy