Florida Laws and Rules Pertinent to Insurance

In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the

Florida Replacement Rule

The financial services commission may hold hearing...

For any reason deemed necessary

An insurance company that is incorporated in New Hampshire and does business in Florida is defined in Florida as...

Foreign insurer

According to Florida law, an additional lapse notice must be issued after the standard grace period has expired for policyowners age

64 years or older

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as

"fiduciary responsibility". Fiduciary responsibility involves an agent handling funds of a client or insurance company honestly and fairly, and not using them for the agent's own purposes.

In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies? Optometrists Pediatricians Dentists Naturopaths

-Naturopaths -Health insurance policies in Florida must cover payment to all of these practitioners EXCEPT naturopaths.

What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law?

0%

What do families pay that are covered by the Florida Healthy Kids Corporation?

A portion of the premium

Which of the following is the best description of 'insurer'?

Any person, corporation, association, or society that writes insurance contracts

The Life and Health Insurance Guaranty Association is funded by ...

Assessments on member companies

One of the stated purposes of the Life and Health Insurance Guaranty Association is ...

Assist in the prevention of insurer insolvencies

When is a Group Health policy required to provide coverage for a newborn child?

At the moment of birth

All of the following constitute an unfair trade practice under State law EXCEPT...

Attempting to replace coverage written by another agent within one year of its issue date

it is fair to discriminate in the amount of benefits for life and health policies...

Between individuals of different classes

Defamation is BEST described as publishing or circulating which of the following types of information?

Brochures falsely criticizing the financial condition of an insurance company

Which required disclosure helps a buyer choose the amount and type of insurance to buy, and how to save money by comparing the cost of similar policies?

Buyer's Guide

In Florida, an insurer domiciled and incorporated in this state is called...

Domestic company

An agent MUST give a prospective insured an Outline of Coverage when taking an application for a

Medicare supplement policy

Which action could result in a hearing being ordered by the Department of Financial Services?

Performing insurance transactions without a license

An outline of coverage must for a Medicare Supplement policy MUST be given to the applicant at which of the following times?

The Time of the application

If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in Texas, which of the following would be liable?

The agent and the company

Stock Insurance Company

is owned exclusively by its shareholders

An example of an unfair claims settlement practice is

turning down a claim without providing the basis of denial

An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed ...

twistingTwisting is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies.

An agent's license can be suspended or revoked by

writing primarily controlled business

Which of the following is NOT a consequence for placing business with an unauthorized insurer?*Third degree felony *First degree misdemeanor * Insurance license revoked *Responsible for unpaid claims

"First degree misdemeanor". All of these are possible consequences for placing business with an unauthorized insurer EXCEPT the conviction of a first degree misdemeanor.

A life policy loan in Florida cannot charge a fixed rate of interest higher than

10%

A long-term care policy must offer a MINIMUM benefit period of how many months?

12

The minimum age at which a person can sign a life insurance application is

15 years

A person is required to be AT LEAST how old before her or she licensed as an agent in most states?

18

Florida requires that coverage for newborns begins "from the moment of birth" and continues for

18 months

In Florida, most life insurance policies have a contest ability period of

2 years

In Florida, most life insurance policies have a contestability period of

2 years

An insurance company can contest a life insurance contract due to application fraud within

2 years There is a 2 year time limit for an insurer to contest a life insurance contract due to application fraud.

Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA).

20

Eligibility for coverage under the Florida Healthy kids Corporation requires a family to be within ___ of the federal poverty level.

200%

Agents that have been licensed for less than six years must complete __ hours of continuing education every two years.

24

Individual medicare Supplements policies must allow an insured a MINIMUM of how many days after policy delivery to return the policy and receive a refund of premium?

30

Insurance agents must notify the Commissioner (or Director) of a change of home address within a MAXIMUS of how many days?

30

Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund?

30

Within how many days must a licensee notify the Department of Financial Survives of a change in address?

30

In Florida, a health policy that is paid on a quarterly basic requires a grace period of

31 Days

The conversion period for a terminated employee to convert group life coverage to an individual plan is ...

31 Days

A group plan was recently terminated. In Florida how many days are covered individuals guaranteed coverage after a group plan's termination?

31 days

A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time?

48 months

The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond...

6 months

An individual covered under a Group Life insurance policy is considered to be a(n)

A certificate holder

State insurance laws specifically allow the Commissioner (or Director) to issue a temporary license to which of the following individuals?

A surviving spouse of a deceased agent

Replacement is involved in all of the following situations EXCEPT when

A term policy is converted to a permanent plan with the same insurance company

Which of the following employer tasks does a Professional Employer Organization normally handle?

Administration tasks

J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken?

All of the employees must be notified of the cancellation either by the insurance company or through J An insurer must notify each certificate holder (employee) when the master policy has expired or is being cancelled. The insurer may take such action through the policyholder (employer).

All of the following provisions are required in a group life policy except...

An accidental death and dismemberment provision

Which of the following is considered to be misrepresentation?

An agent guaranteeing a policy's dividends

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT...

An agent's commission

Which of the following situations does NOT apply to the Florida Replacement Rule? *An existing policy is reissued with a reduction in cash value *A new policy is issued while an existing one is surrendered *An existing policy is subject to extensive borrowing * An existing policyholder purchases an additional policy from the same insurer

An existing policyholder purchases an additional policy from the same insurer Florida's Replacement Rule applies to all of these situations EXCEPT "An existing policyholder purchases an additional policy from the same insurer".

Which of the following actions by an insurance company is an unfair claims practice?

Attempting to settle claims on the basis of an application that was altered without the consent of the insured

Which of the following acts is an agent NOT authorized to do on behalf of an insurer?

Authorize claim payments". Agents do not authorize payment of claims.

All of the following are Nonforfeiture Options Except -cash surrender option -extended term option -reduced paid-up option -Automatic premium loan option

Automatic premium loan option

The insurer must provide a prospective buyer with a(n)

Buyer's Guide and Policy Summary

Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?

Buyer's guide

The Bureau of Unclaimed Property is overseen by the

Chief Financial Officer

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion

J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?

Coercion

Which of the following areas of state regulation is NOT protected by the savings clause in ERISA?Insurance Commerce Banking Securities

Commerce

All of the following statements about health coverage for newborns are correct except...

Coverage during the first year is limited to congenital defects

Which two entities regulate variable annuities?

Department of Financial Services and the Securities Exchange Commission.

Before approving an application for a business entity acting as an agent, the commissioner (or Director) must find that the business entity has...

Designate an agent to be responsible for compliance with insurance laws

The Insurance Commissioner (or Director) may examine the records of an insurance company in order to...

Determine the solvency of the company

Under a Long Term Care policy, which of the following is considered an activity of daily living?

Dressing

The commissioner (or director) of insurance is empowered to ...

Enforce state laws relating to insurance

The purpose of the Guaranty Fund is to ...

Ensure that claims filed against insolvent companies will be paid

S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?

Entire Contract

The life insurance and annuity replacement regulation defines replacement as ...

Exchanging an existing policy for a new policy

All of the following provisions must be included in life insurance policies EXCEPT ...

Extended term

Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called

Fraternal life insurance organizations

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

Free-look period has expired

Which of the following employees may NOT be excluded from a group life plan?

Full-time employees after the probationary period

An insurance company may NOT reject a prospective insured's insurance application on the basic of which of the following factors?

Gender

The commissioner (or director) of insurance may suspend, revoke, or refuse to renew the license of an agent who...

If found guilty of misrepresentation or fraud in obtaining the license

What percentage of eligible persons must a policy cover in a noncontributory group?

In a noncontributory group, the policy must cover 100% of eligible persons.

A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits?

Insurance

What would be an accurate definition of "controlled business"?

Insurance business that is written on the agent's own life, property, or interests

Which of the following situations are NOT subject to Florida life insurance laws? - Insurance companies' day-to-day operations - Insurance companies' life policy replacement requirements - Insurance companies' setting of life insurance policy rates -Insurance companies' guidelines for paying a life insurance claim

Insurance companies' day-to-day operations Florida life insurance laws apply to all of these situations EXCEPT "Insurance companies' day-to-day operations".

which of the following best describe credit life insurance?

Insurance issued on a debtor to cover outstanding balance on installment loans

If an agent would like to sell Variable annuities, which state examination must the agent pass?

Life and Variable contracts

Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?

Limitation on Preexisting conditions for up to 12 months.

According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase?

Marital status

An agent who tells a client that dividends are guaranteed may be guilty of ...

Misrepresentation

Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock?

Misrepresentation

Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?

Misrepresentation

Under an Individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured?

Monthly

What are adjustable rates for life policy loans in Florida based on?

Moody's corporate bond index

Which type of insurance company allows their policyowners to elect a governing body?

Mutual

When an existing life insurance policy is being reissued with a reduction in cash value, the agent must sign the...

Notice regarding replacement of life insurance or annuity

Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy?

Notice to existing and replacing insurers of intention to replace

Which entity approves the insurance policy forms used in Florida?

Office of Insurance Regulation (OIR)

Replacement regulations apply to which of the following types of contracts?

Ordinary Life

K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions would the Department of Financial Services likely order K to take?

Pay monetary restitution to the client The Department of Financial Services may order the agent to pay monetary restitution to the client.

Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against?

People that smoke

A certificate of authority does which of the following?

Permits an insurance company to transact business in that state

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Policy was returned within the free-look period, premium will be refunded

Which of the following is NOT required in the Outline of Coverage for a health insurance policy?

Projection of the policy's future costs

No insurer shall refuse to insure an individual because of

Race

All of these are considered sources of underwriting information about an applicant EXCEPT

Rating Services

Group life policies MUST include all of the following provisions EXCEPT

Right to loan proceeds

Which of these is NOT a legal entity for selling life insurance in Florida?

Risk management advisers

All of the following are defined as doing insurance business EXCEPT... - Selling mutual funds -taking or receiving insurance applications - Delivering and insurance contract to a client - Indirectly acting as an insurance agent

Selling mutual funds

Which of the following is NOT considered rebating?* Sharing commissions with an agent licensed in the same line of business* Returning premium to a client as an inducement for purchasing a policy* Giving something of value to an insured in exchange for their business* Offering special dividends

Sharing commissions with an agent licensed in the same line of business

What is required in the Florida Employee Health Care Access Act?

Small group benefit plans are to be issued on a "guarantee-issue" basis

Which action by an insurance agent is considered rebating?

Splitting commissions with a policyholder who has purchased additional coverage

An agent selling Medicare Supplement policies must provide every applicant with a(n)

Suitability form

Which of the following statements regarding nonresident insurance agent is CORRECT?

The agent must hold a similar license in their state of residence

Which of the following parties must provide an insured with proper disclosure concerning the replacement of an insurance company?

The agent who sells the new insurance policy

Which of the following factors is NOT considered when the Department of Financial Services determines if an agent's home is an insurance agency?

The amount of premium collected at this location

Which of the following is a standard provision of the conversion privileges in a Group Life policy?

The correct answer is "Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis". Conversion at regular rates on an attained-age basis without a medical exam is a standard provision for conversion privileges in Group Life policies.

According to Florida law, group life insurance conversion privileges must NOT

The correct answer is "require evidence of insurability". Florida's insurance law that governs group life insurance conversion privileges provides that the individual policies do not require evidence of insurability.

According to State insurance law, while transacting insurance business, agents act as representatives of ...

The insurer

Disclosure standards require that which of the following be delivered with a Medicare Supplement policy?

The outline of coverage

The free-look provision of any health policy begins the date...

The policy is delivered to the insured

The Replacement of Life Insurance and Annuities regulation is designed to protect the interest of...

The policy owner

When replacing or exchanging an annuity, the agent must disclose to the annuitant ..

The possible tax ramifications as a result of the transaction

According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? *The handicapped child has reached the limiting age *The premiums for the handicapped child are not paid *The handicapped child becomes a full-time student *The family moves outside the provider network

The premiums for the handicapped child are not paid Under a Family Health policy issued in Florida, a handicapped child must continue to be covered in all of these situations EXCEPT when premium payments cease to be paid.

Which of the following statements is CORRECT if an insured converts his life policy to Paid-Up insurance and buys new insurance ...

The transaction is considered replacement

Inducing or attempting or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is...

Twisting

Which of the following is considered an accurate statement of an unfair trade practice?

Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company

A written agreement to provide a Life Insurance Policy holder immediate cash in exchange for the sale a(n) trader of a Life insurance policy Is a.

Viatical Settlement

A life insurance policy owner may sell their policy to a(n) ____ in order to receive a percentage of the policy's face value.

Viatical settlement provider

According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with

a Buyer's Guide and Policy Summary

In Florida, deceptive advertising is considered to be

a form of misrepresentation

In Florida, the underwriting and issuance of a master group health policy requires that all employees

are eligible to participate, regardless of their individual health history

A variable life insurance agent must be licensed and appointed as a life and variable contract agent, as well as a(n)

broker dealer An agent marketing variable life insurance must be licensed and appointed as a life and variable contract agent and a broker dealer.

An example of sliding would be

charging for an additional product without the applicant's consentSliding involves selling additional coverage to an insurance applicant who doesn't want or need it. An agent will often "slide" this additional coverage in without the customer's knowledge or consent.

Which of the following is an example of an Unfair trade practice?

coercion

An applicant who pays the initial premium at the time of application is typically given a(n)

conditional receipt A conditional receipt is normally given to an applicant who pays the initial premium at the time of application.

Florida's 14-day free-look period for life insurance policies begins at the

date of delivery

An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ____ company.

domestic

Individual life insurance proceeds are exempt from creditor's claims when they are payable to any of the following entities EXCEPT the insured's...

estate

An example of an unfair claims practice would be

failing to effectuate prompt, fair, and equitable settlements of a claim

The act of an insurance company publishing misleading information about its policy's provisions is called

false advertising

The Florida Employee Health Care Access Act was established to make

group health insurance available to employers with up to 50 employees

Which policy is EXEMPT from replacement regulations?

group life policy

Insurers/agents must, in Florida, offer and issue all small employer health plans on _____ basis:

guaranteed-issue

Which of the following statements is CORRECT about the replacement of one insurance policy with another?

it is strictly regulated and requires full disclosure by both the agent and the replacing insurance company.

Convincing a prospective insured to buy an insurance policy based on exaggerations is called

misrepresentation

During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of

misrepresentation

K made a fraudulent statement on her health insurance policy application. In the event of a claim on this policy, the insurance company is required to pay

nothing

In Florida, agents are allowed to engage in rebating if

offered to all insureds in the same actuarial class

An example of rebating would be

offering a client something of value not stated in the contract in exchange for their businessRebating can be defined as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract.

Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract

once each year A variable annuity policyholder must be informed at least once each year of the accumulated value of the contract during the premium payment period.

Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent

only if the child is incapable of employment and chiefly dependent on the policy owner

Under a life insurance policy, the ___ has the authority to name the beneficiary

owner

If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely ...

pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age

The fundamental reason for regulation of insurance is to:

protect consumers

Which of the following is an example of rebating?

returning a portion of a premium as inducement to purchase insurance

A long-term care lapse notice must be delivered to both the applicant and

secondary addressee

A stock insurance company is owned by ...

stockholders

According to Florida's life insurance replacement laws, a policyowner must be provided with a written Comparison and Summary Statement when it's requested by

the policyowner

Association Plans that are designed to provide health benefits to their members are regulated by the state because

they are insured by an authorized insurer

Group Life policies in Florida are required to contain a conversion privilege that allows for conversion

to an individual policy for a stated period of time

T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert

to an individual policy upon employment termination

Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.

5

What is the maximum percentage of controlled business an agent may produce?

50%

If an insurance company is organized under the laws of New Jersey and licensed to do business here, it is considered which of the following in Texas?

A foreign company

Which of the following individuals must be licensed as an agent?

A person who places insurance on behalf of anyone seeking insurance

An insurance company may be judged guilty of false advertising if...

Exaggerates its dividends in a newspaper advertisement

The following acts are examples of unfair methods of competition and deceptive practices in the business of insurance EXCEPT the use of

Comparisons showering that a policy has higher benefits

The Commissioner (or Director) of insurance has the power to ...

Conduct examinations of insurance companies

Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as

Defamation

Which of the following unfair trade practices involves an agent who makes malicious statements about another person's financial condition?

Defamation

Which of the following actions by an insurance company is considered an unfair claims settlement practice?

Denying an insured's claim without indicating the basic of denial under the policy

Which of the following is an unfair claims practice?

Failing to effectuate prompt, fair, and equitable settlements of claims

An insurance company that promises lower insurance rates than any other company in the country may be charged with...

False advertising

An insurance broker is a representative of ...

Insured

According to Florida law, which of the following statements accurately describes an admitted mail order insurance company

It may solicit insurance business by mail without the assistance of a licensed agent

Who is a mutual insurance company owned by?

Its policyholders

An insurance company may compensate all of the following people EXCEPT...

Licensed agent not appointed by the company

The rules and regulations of the Life and Health Insurance Guaranty Association apply to ...

Life and Health Policies issued by companies authorized in that particular state

What is the main reason for regulating the insurance industry?

Maintain the solvency of insurance companies

Which of the following professional organizations has its code of ethics incorporated into Florida law?

National Association of Insurance and Financial Advisors (NAIFA)The professional organization whose code of ethics is incorporated into Florida law, and whose responsibility is to establish the activities of agents is the National Association of Insurance and Financial Advisors.

Which of the following is NOT an unfair claim settlement practice?

Needing written documentation of claim details

In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?

The correct answer is "The state where they are conducting business". Domestic, foreign, or alien companies must be authorized by each state where they conduct business.

A stock life insurance company that issues both participating and nonparticipating policies is doing business on

The correct answer is "a mixed plan". When a stock life insurance company issues both participating and nonparticipating policies, the company is doing business on a mixed plan.

In Florida, an element of an insurance transaction would be

The correct answer is "issuing an insurance contract". The issuance of an insurance contract is considered to be an element of an insurance transaction.

The fund that assures policyholders payment of benefits on Life and Health Policies, if the company is insolvent at the time of the claim, is called the ...

The life and health insurance guaranty association

A foreign insurance company is one that is incorporated ...

Under the laws of another state

Which of the following activities will NOT result in the suspension of an agent's license?

Working for a foreign insurer

All of the following will result in the suspension of an agent's license EXCEPT

acting with fiduciary responsibility

Insurance companies that are organized in countries outside the United States are referred to as

alien

An example of an unfair trade practice is

an agent making a material misrepresentation to the insured

An agent may legally share commissions only with

another agent who is licensed in the same line of insurance

The coordination of benefits (COB) provision exists in order to...

avoid duplication of benefit payments The purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments.