INS. LAW

25. All of the following are valid reasons for denial, suspension or revocation of a producer's license EXCEPT: A. Providing inaccurate information on the application B. Selling 25% controlled business C. Misappropriation of insurance premiums D. Financial irresponsibility

B. Selling 25% controlled business

16. The maximum combination of deductible and co-payments paid for the receipt of basic health care services provided by an HMO cannot exceed which of the following? A. $1,000 per person per year B. The annual maximum out-of-pocket expenses of a high deductible health plan under Federal Law C. $5,000 per family per year D. $500 per person per year

B. The annual maximum out-of-pocket expenses of a high deductible health plan under Federal Law

4. Of the following which would be an allowable reason for cancellation of an HMO contract? A. Insured is sick B. Insured has filed a grievance C. Nonpayment of premium D. Insured has had too many claims

C. Nonpayment of premium

36. Proper disclosures must be made when selling insurance. All of the following would be required EXCEPT: A. The policy must identify the name of the producer B. The policy must identify the name of the firm C. The policy must contain the signature of the producer who solicited the policy D. The policy must contain the cell phone of the producer

C. The policy must contain the signature of the producer who solicited the policy

23. Producers are required to keep records related to completion of continuing education for how many years? A. One year B. Two years C. Three years D. Four years

C. Three years

Solicitations regulations do not apply to the following types of life insurance EXCEPT: A. Group life B. Annuities C. Variable life D. Whole life

D. Whole life

Items required to be on the basic illustration include all of the following EXCEPT: A. Name of insurer B. Age, name and gender of the producer C. Guaranteed death benefit D. Date the illustration was prepared

B. Age, name and gender of the producer Explanation: A basic illustration must include the age, name and gender of the applicant, not the producer.

47. All of the following are prohibited practices EXCEPT: A. Boycott B. Coercion C. Denial of a claim after a reasonable investigation D. Intimidation

C. Denial of a claim after a reasonable investigation

7. All of the following are required to be covered by an HMO contract EXCEPT: A. Maternity care B. Breast reconstruction after mastectomy C. Baseline mammogram for women ages 35 to 39, and annually for women 40 and older D. 30 days of inpatient care for drug addiction

D. 30 days of inpatient care for drug addiction

All of the following persons would be required to be licensed EXCEPT: A. A person negotiating insurance B. A person soliciting insurance C. A person selling insurance D. A clerical person that receives premiums but is not paid any incentive for such receipt

D. A clerical person that receives premiums but is not paid any incentive for such receipt Explanation: Soliciting, negotiating or selling insurance requires a license. A clerical person that receives premiums but is not paid any incentive for such receipt does not need to be licensed.

3. All of the following are required provisions in an HMO contract EXCEPT: A. A 10 day free look B. A grace period of 10 days on a group policy C. A grace period of a minimum of 31 days on an individual policy D. An unlimited deductible

D. An unlimited deductible

9. All of the following are required to hold an Illinois producer's license EXCEPT: A. Be age 18 B. Be an Illinois resident C. Be a good person D. Be licensed in another state

D. Be licensed in another state

Producers are required to keep records related to completion of continuing education for how many years? A. Four years B. Two years C. One year D. Three years

D. Three years

16. All of the following are requirements for obtaining a resident producer's license EXCEPT: A. 18 years of age or older B. Complete pre-license training C. Pass examination D. Pay a licensing fee of $50

B. Complete pre-license training

Which of the following is true regarding viatical settlement contracts? A. Contracts filled with the Director are considered approved immediately B. These contracts must be filed with and approved by the Director prior to use C. Contracts should be vague and misleading D. Contracts must explain that there are no alternatives to viatical settlements

B. These contracts must be filed with and approved by the Director prior to use Explanation: Viatical settlement contracts may not be used unless they have been filed with and approved by the Director. Contracts filed and not disapproved within 60 days of filing are deemed approved. Contracts may not be vague and misleading. Viatical settlement providers must make appropriate disclosures which include possible alternatives to viatical settlements, such as accelerated benefits offered by the insurer.

An employer has decided to replace the company group health policy with a new insurer. The employer has received a notice of discontinuation from the current insurer. The employer is required to give this notice to employees within how many working days of receipt from the insurer? A. 25 B. 3 C. 10 D. 20

C. 10 Explanation: In a situation where an employer has decided to replace the company group health policy with a new insurer, the employer must provide notice of discontinuation to its employees within 10 working days after receipt of the notice of discontinuation from the current insurer.

8. To be licensed as an insurance producer in this state you must be what age? A. No age requirement B. 16 years old C. 18 years old D. 21 years old

C. 18 years old

5. Producer's selling HMO policies are required to hold which license type? A. Life insurance B. Variable life C. Health insurance D. Casualty Insurance

C. Health insurance

A limited lines producer's license is good for how long before renewal? A. Two years B. 180 days C. One year D. Three years

C. One year

48. The Illinois Insurance Guaranty Fund covers insurance policies of insolvent insurers so long as the policies involved are which of the following kind? A. Life B. Accident C. Health D. Fire and Casualty

D. Fire and Casualty

All of the following are true about the coverage provided by the Illinois Insurance Guaranty Fund EXCEPT: A. Coverage is unlimited B. Unearned premium claims and refunds are covered if over $100 up to $10,000 C. Workers Compensation claims are paid without limit D. Claims are covered up to $500,000 or the policy limit, whichever is less

A. Coverage is unlimited Explanation: A general statement that coverage provided by the Illinois Insurance Guaranty Fund is unlimited would be incorrect. Only Workers Compensation claims are paid without limit. All other claims are paid up to $500,000 or the policy limit, whichever is less, and unearned premium claims and refunds are paid if over $100 up to $10,000.

10. Pre-licensing training requirements for a major line of insurance, such as Life Ins, require how many hours or Pre-licensing training? A. 10 hours B. 20 hours C. 30 hours D. 24 hours

B. 20 hours

19. All of the following would be exempt from the producer licensing requirements EXCEPT: A. An officer of an insurer who does not receive commissions B. A customer service representative who discusses policies C. Agency supervisor, whose actions do not include selling insurance D. Underwriters

B. A customer service representative who discusses policies

Violation of the suitability requirements in the sale of variable life insurance shall be considered to be which of the following? A. A form of misrepresentation B. An unfair trade practice and evidence of incompetence or un-trustworthiness in the conduct of insurance business C. A form of controlled business D. A form of rebating

B. An unfair trade practice and evidence of incompetence or un-trustworthiness in the conduct of insurance business Explanation: Violation of the suitability requirements in the sale of variable life insurance shall be considered to be an unfair trade practice and evidence of incompetence or un-trustworthiness in the conduct of insurance business.

All of the following are considered prohibited discrimination EXCEPT: A. Distinctions based upon handicaps or disabilities B. Charging a women less for life insurance than a man C. Distinctions based upon blindness D. Denial of a health insurance applicant because they are a member of the United States Military

B. Charging a women less for life insurance than a ma Explanation: Prohibited discrimination includes distinctions based upon handicaps, disabilities, or blindness, as well as denial of a life insurance applicant because they are a member of the United States Military. Insurers are allowed to charge women less than men for life insurance because it is justified by actuarial statistics that women live longer.

11. A limited lines producer license may be procured if you will be selling which of the following types of insurance? A. Whole life insurance B. Industrial life insurance C. Endowment D. Term insurance

B. Industrial life insurance

42. Which of the following properly describes a rebate? A. Requiring an insured to buy insurance from you as a condition to a loan B. Selling insurance primarily to yourself, your family and your friends C. Returning part of your commission to your client, as an inducement to buy D. Misrepresenting policy provisions or coverages at issue

C. Returning part of your commission to your client, as an inducement to buy

A producer is required to maintain a Premium Fund Trust Account anytime they will be holding client's premiums how many days? A. 30 days B. 45 days C. 90 days D. 15 days

D. 15 days Explanation: Any time a producer will be holding clients' funds for 15 days or more, such producer is required to maintain a Premium Fund Trust Account for the depositing of clients' premiums. This fund must be maintained at an Illinois based financial institution.

50. All of the following are true regarding reinstatement of a lapsed producer license EXCEPT: A. A producer's license may be reinstated within 12 months without having to pass a written exam B. To reinstate a lapsed license a penalty of double the unpaid renewal fee shall be required C. A licensed insurance producer who is unable to comply with license renewal procedures due to military service may request a waiver of those procedures D. A producer's license may be reinstated within 24 months without having to pass a written exam

D. A producer's license may be reinstated within 24 months without having to pass a written exam

37. Persons found to have violated the marketing practices regulations may be subject to all of the following EXCEPT: A. License suspension B. Fines C. Jail time D. Loss of driver's license

D. Loss of driver's license

Producers are allowed, by law, to hold client premiums for no more than how many days? A. 90 days B. 15 days C. 45 days D. 30 days

A. 90 days Explanation: If an insurance company allows their producer to collect premiums on its behalf, the producer may hold the funds for no more than 90 days.

Required provisions in an HMO contract include all of the following EXCEPT: A. Chiropractic care B. Preventive care that is age appropriate C. Emergency services D. 10 days of inpatient care for drug or alcohol addiction, and 20 outpatient visits per year

A. Chiropractic care

The Illinois Insurance Guaranty Fund covers insurance policies of insolvent insurers so long as the policies involved are which of the following kind? A. Fire and Casualty B. Life C. Accident D. Health

A. Fire and Casualty Explanation: The Illinois Insurance Guaranty Fund covers all of the kinds of insurance written on a direct basis which are included in Class 2 (Casualty, Fidelity and Surety) and Class 3 (Fire and Marine).

29. Fiduciary responsibilities apply in which of the following situations? A. Handling client premiums B. Selling insurance C. Soliciting insurance D. Binding coverage

A. Handling client premiums

All of the following are required minimum standards for Medicare Supplements EXCEPT: A. Maximum pre-existing condition clause of 12 months B. Maximum probationary period of six months C. Non-duplication of coverage already provided by Medicare D. A 30-day free look

A. Maximum pre-existing condition clause of 12 months Explanation: All Medicare Supplement policies must contain a 30-day free look, a 6-month probationary period, and a 6-month pre-existing condition clause. Policies may not duplicate coverage already provided by Medicare.

All of the following are required when selling a Medicare Supplement, EXCEPT: A. The only allowable reason for non-renewal is the health of the insured B. The Medicare Supplement must allow for up to a 24-month suspension of benefits should the insured become eligible for Medicaid C. The policy must be guaranteed renewable D. An Outline of Coverage must be given at time of application

A. The only allowable reason for non-renewal is the health of the insured Explanation: Medicare Supplements must be guaranteed renewable. Insurers may not cancel or non-renew based on the individual's health status.

The Buyer's Guide is required to be given out when? A. Policy delivery B. Before accepting the client's initial premium C. At policy delivery D. At time of application

B. Before accepting the client's initial premium Explanation: Insurers must provide applicants with a copy of the Buyer's Guide before accepting the initial premium. The Buyer's Guide is designed to explain the three basic types of life insurance (whole life, endowment and term) and how to use the cost indexes.

All of the following are prohibited reasons for an insurer to deny coverage to a dependent EXCEPT: A. The child was born out of wedlock B. The additional premium owed for the child's coverage was not paid C. The child is not claimed as a dependent on the parent's taxes D. The child does not reside with the parent

B. The additional premium owed for the child's coverage was not paid Explanation: An insurer may deny coverage to a dependent if an additional premium was required for the child's coverage, but it was not paid.

When an individual is a beneficiary of a long-term care partnership program certified policy, which of the following is true regarding the assets that the individual may retain under Medicaid? A. The amount of assets the individual may have and still qualify for Medicaid is decreased by $5 for each $1 of benefit paid under the individual's long-term care partnership program certified insurance policy B. The amount of assets the individual may have and still qualify for Medicaid is increased by $1 for each $1 of benefit paid under the individual's long-term care partnership program certified insurance policy C. The amount of assets the individual may have and still qualify for Medicaid is increased by $5 for each $1 of benefit paid under the individual's long-term care partnership program certified insurance policy D. The amount of assets the individual may have and still qualify for Medicaid is decreased by $1 for each $1 of benefit paid under the individual's long-term care partnership program certified insurance policy

B. The amount of assets the individual may have and still qualify for Medicaid is increased by $1 for each $1 of benefit paid under the individual's long-term care partnership program certified insurance policy Explanation: If an individual is a beneficiary of a long-term care partnership program certified policy, the total assets an individual owns and may retain under Medicaid and still qualify for benefits under Medicaid at the time the individual applies for long-term care benefits are increased by $1 for each $1 of benefit paid out under the individual's long-term care partnership program certified insurance policy.

Under HIPAA law all of the following are correct concerning group coverage of maternity, adopted children and newborns EXCEPT: A. Newborn children must be added to the parent's policy within 30 days of birth and a premium paid, if owed B. Maternity may not be treated as a pre-existing condition C. Adopted children are never eligible to be covered as dependents D. Infants must be covered from the moment of birth

C. Adopted children are never eligible to be covered as dependents Explanation: Under HIPAA, a group health plan may not treat pregnancy as a pre-existing condition, infants must be covered from the moment of birth (they must be added to the policy within 30 days of birth for coverage to continue beyond the first 30 days of life). Adopted children, or children placed for adoption, cannot be subject to a pre-existing condition exclusion, as long as they are under age 18 and who, within 30 days of being adopted or placed for adoption, are covered under creditable coverage.

Records related to replacement transactions must be kept on file for a period of how many years? A. Five years B. Two years C, Three years D, Ten years

C. Three years

Producer's are required to notify the Division of Insurance of an address change within how many days? A. 60 days B. 90 days C. Immediately D. 30 days

D. 30 days

All of the following are correct about the complaint system that the HMO is required to maintain EXCEPT: A. Enrollees must be allowed, at any time, to file a complain against the HMO or producer with the Department of Insurance B. Complaints must be responded to within 21 days from when the notice is sent to the company or producer C. HMOs must promptly handle all complaints D. Complaints must be responded to within 30 days

D. Complaints must be responded to within 30 days Explanation: All HMOs must have procedures in place for the prompt handling of complaints. Enrollees may, at any time, file a complaint against the HMO or producer with the Department of Insurance. Such complaint must be responded to within 21 days from when the notice is sent to the company or producer. Failure to respond may subject the insurer or producer to further regulatory penalty.

Fiduciary responsibilities apply in which of the following situations? A. Selling insurance B. Soliciting insurance C. Binding coverage D. Handling client premiums

D. Handling client premiums

All of the following are true concerning HMOs in Illinois EXCEPT: A. HMOs can require that the insured see a primary care physician prior to a specialist B. HMOs are required to hold a Certificate of Insurance from the Division of Insurance C. People insured by an HMO are commonly called subscribers or enrollees D. The HMO is not required to maintain a system for the handling of grievances

D. The HMO is not required to maintain a system for the handling of grievances Explanation: Grievance procedures allow HMOs a system of handling complaints. All grievances must be kept on file for a period of no less than three years after the grievance is resolved. HMOs are required to have a grievance committee, and all grievances must be heard and resolved within 60 days of receipt.

A producer's licensing fee is how much? A. $180 every two years B. $50 every two years C. $50 annually D. $250 every two years

A. $180 every two years

Once an insurer has pulled out of the group health market in Illinois they are barred from re-entry for how many years? A. 5 years B. 3 years C. 2 years D. 10 years

A. 5 years

6. Producer licenses are good for what period of time before renewal is required? A. Two years B. Four years C. One year D. Three year

A. Two years

13. Producer's are required to notify the Division of Insurance of an address change within how many days? A. 60 days B. 30 days C. 90 days D. Immediately

B. 30 days

33. Records related to the Premium Fund Trust Account must be kept for how long? A. 5 years B. 7 years C. 2 years D. 3 years

B. 7 years

Who is responsible for the adequacy and fairness of advertisements? A. Producer B. Insurer C. Applicant D. Insured

B. Insurer

14. Contracts sold by LHSOs include all of the following EXCEPT: A. Dental care B. Vision care C. Medical expense D. Pediatric care

C. Medical expense

14. Temporary licenses may be issued to surviving spouses under certain circumstances. These licenses are good for how many days? A. 60 days B. 30 days C. 90 days D. 180 days

D. 180 days

1. All of the following are true concerning HMOs in Illinois EXCEPT: A. HMOs are required to hold a Certificate of Insurance from the Division of Insurance B. HMOs can require that the insured see a primary care physician prior to a specialist C. People insured by an HMO are commonly called subscribers or enrollees D. The HMO is not required to maintain a system for the handling of grievances

D. The HMO is not required to maintain a system for the handling of grievances

A totally disabled employee finds his group HMO policy is being discontinued by his employer. The insurer must allow an extension of benefits for this employee for a reasonable period of time. A reasonable period of time in this situation would be the earlier of the end of total disability or: A. 12 months B. 90 days C. Three years D. 9 months

A. 12 months Explanation: If a group health insurance policy is discontinued and an employee covered by the group is totally disabled at the time of discontinuance, the policy must provide a reasonable extension of benefits for the earlier of 12 months, or the end of total disability.

40. Insurers that approve claims must offer payment within how many days? A. 30 days B. 15 days C. 45 days D. 90 days

A. 30 days

31. Producers are allowed, by law, to hold client premiums for no more than how many days? A. 90 days B. 30 days C. 15 days D. 45 days

A. 90 days

All of the following must be found on advertisements EXCEPT: A. The insurance producer's name, home address, and cell phone B. All exclusion, limitations and reductions in coverage must be clearly disclosed C. The pre-existing clause and probationary period must be fully explained D. Rules regarding renewability, cancelability, and termination

A. The insurance producer's name, home address, and cell phone Explanation: The insurance producer's name, home address, and cell phone number would not be mentioned in an advertisement. It's the insurer's name that must appear in all of its advertisements.

All of the following are true regarding reinstatement of a lapsed producer license EXCEPT: A. A producer's license may be reinstated within 12 months without having to pass a written exam B. A licensed insurance producer who is unable to comply with license renewal procedures due to military service may request a waiver of those procedures C. To reinstate a lapsed license a penalty of double the unpaid renewal fee shall be required D. A producer's license may be reinstated within 24 months without having to pass a written exam

D. A producer's license may be reinstated within 24 months without having to pass a written exam Explanation: A producer who allows their license to lapse may, within 12 months after the due date of the renewal fee, be issued a license without the necessity of passing a written examination. A penalty in the amount of double the unpaid renewal fee shall be required after the due date. A producer who is unable to comply with license renewal procedures due to military service may request a waiver.

Replacement rules would apply when replacing all of the following policies EXCEPT: A. 20-year level term B. Whole life C. Endowment D. Nonconvertible term that expires in five years or less and cannot be renewed

D. Nonconvertible term that expires in five years or less and cannot be renewed Explanation: Replacing a nonconvertible term policy that expires in five years or less and cannot be renewed does not require following replacement rules. Neither does replacing group life, group annuity, or credit life. Replacing whole life, endowment or a 20-year level term does.

15. Of the following persons which one would be required to hold a producer's license? A. An officer of an insurer who does not receive commissions B. A trainer at an insurance company who does not sell insurance C. Underwriter D. Person soliciting policies of insurance

D. Person soliciting policies of insurance

The effective date for accelerated benefits resulting from accidents shall be when? A. After a 6-month probationary period B. After a 30-day waiting period C. After a 90-day waiting period D. Policy effective date

D. Policy effective date Explanation: The effective date for accelerated benefits resulting from accidents shall be the policy effective date.

All of the following are true regarding rebates EXCEPT: A. Rebating can be anything of economic value, given as an inducement to buy B. Rebates are only allowed if specifically stated in the policy C. Dividends are not considered to be rebates D. Rebates are always allowed

D. Rebates are always allowed Explanation: A rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Remember, insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.

39. All of the following are prohibited under Illinois law EXCEPT: A. Offering a claimant less than they are owed, or would win in a court of law B. Engaging in activities that result in excessive complaints filed by consumers C. Failing to provide claimants necessary claims forms within 15 working days of request D. Stating which section the payment or denial of a claim is based upon

D. Stating which section the payment or denial of a claim is based upon

26. Which of the following is correct regarding the Director's ability to revoke or suspend a producer's license? A. The producer may lose their license without a hearing B. The producer may not lose their license for conviction of any felony C. The producer must be given the reason, in writing for the non-renewal, suspension, or denial of a license, and has the right to request a hearing within 30 days D. The producer will not lose a license for failure to repay student loans owed to the Illinois Student Assistance Commission

D. The producer will not lose a license for failure to repay student loans owed to the Illinois Student Assistance Commission

2. An HMO is required to supply to the insured an evidence of coverage within how many days? A. Immediately B. Within 60 days of enrollment C. Within 15 days of enrollment D. Within 30 days of enrollment and again at renewal

D. Within 30 days of enrollment and again at renewal

7. Upon passing one section of the licensing exam the second part must be passed immediately, or no later than within how many days? B. That day C. Two years D. Within 90 days of the first

D. Within 90 days of the first

28. All of the following are true about license denial, suspension or revocation EXCEPT: A. A suspended, denied or revoked license must be surrendered to the Director B. You can lose your license for forging another signature C. Failing to pay child support or state income taxes is grounds for loss of license D. You may still sell insurance on a suspended license for 180 days

D. You may still sell insurance on a suspended license for 180 days

24. Which of the following correctly describes controlled business? A. Obtaining your license for the purpose of selling to the general public B. Obtaining your license for the purpose of selling 20% to yourself and your spouse, 80% to the public C. Anytime more than 50% of the total premiums collected by a producer comes from themselves, their spouse, employer, or own business D. Obtaining your license and never selling insurance

C. Anytime more than 50% of the total premiums collected by a producer comes from themselves, their spouse, employer, or own business

6. All of the following are prohibited practices for an HMO EXCEPT: A. Denying coverage for an adopted child B. Failing to cover a newborn child from the moment of birth C. Denying coverage for non-emergency transportation D. Denying coverage for emergency transportation by ambulance

C. Denying coverage for non-emergency transportation

34. In which of the following situations would you be allowed to split your commission with someone else? A. If they receive their license before the policy is issued B. If they are properly licensed at the time of the sale C. If they receive their producer license within 30 days of the sale D. If they receive their producer license within one year

B. If they are properly licensed at the time of the sale

3. All of the following are duties of the Insurance Director EXCEPT: A. Make rules as necessary B. Grant Certificates of Authority C. Sentence criminals to jail D. Levy fines

C. Sentence criminals to jail

The requirements to hold a nonresident producer license include all of the following EXCEPT: A. Be age 18 B. Pay licensing fees C. Be a part-time resident of Illinois D. Hold same license in home state

C. Be a part-time resident of Illinois

All of the following would be considered unfair marketing practices EXCEPT: A. Failing to settle claims where liability has become clear B. Requiring proof of loss be filed C. Misrepresenting policy provisions or coverages at issue D. Failing to promptly investigate claims

B. Requiring proof of loss be filed Explanation: Misrepresenting policy provisions or coverages at issue, failing to promptly investigate claims, and failing to settle claims where liability has become clear are all examples of unfair marketing practices. Requiring proof of loss be filed is perfectly legal as insurers need a proof that a claim has occurred before they pay out benefits.

Which of the following is the correct definition of partial disability, as allowed by Illinois law? A. The inability to perform any job B. The ability to perform one or more, but not all, of the major duties of your employment C. The inability for perform 15% of your job D. The inability to perform your job

B. The ability to perform one or more, but not all, of the major duties of your employment Explanation: Partial disability is defined in relation to the insured's ability to perform one or more, but not all, of the major duties of their employment or occupation. It may be related to the insured's ability to perform a percentage of the normal time worked.

21. All of the following are true about the completion of pre-licensing training EXCEPT: A. The completion is good for one year B. You must go to a lecture class to complete a portion of the training C. You may complete your training through lecture course, home study or online D. Your license must be renewed within one year of a lapse or you will be required to retake pre-licensing courses and the examination

C. You may complete your training through lecture course, home study or online

10. All of the following must be covered by an HMO contract EXCEPT: A. Costs related to the examination of sexual assault or abuse victims B. Costs related to organ transplants C. Blood transfusions D. Organ transplants deemed experimental by the Federal Department of Health and Human Services

D. Organ transplants deemed experimental by the Federal Department of Health and Human Services

Penalties for violation of the rules related to Medicare Supplements may be which of the following? A. Civil fines of $200 up to $1,500 B. Civil fines of $500 to $5,000 for each offense C. Civil fines of no more than $2,500 D. Civil fines of up to $1,000

B. Civil fines of $500 to $5,000 for each offense Explanation: Penalties for violation of Medicare Supplement provisions may include civil fines of $500 to $5,000 for each offense.

44. Which of the following would not be considered a rebate under Illinois law? A. Returning part of your commission to your client B. Offering a child passenger restraint system or discount on the purchase of such system C. Giving your client tickets to a sporting event, if they buy a policy from you D. Taking your client to lunch, only if they buy a policy from you

B. Offering a child passenger restraint system or discount on the purchase of such system

Pre-licensing training requirements for a major line of insurance, such as Life insurance, require how many hours of pre-licensing training? A. 10 hours B. 24 hours C. 30 hours D. 20 hours

D. 20 hours

1. Which of the following is true about how the Insurance Director gets into office? A. Elected by the people B. Appointed by the Governor C. Elected by the Governor D. Appointed by the Senate

B. Appointed by the Governor

11. All of the following are allowed by an HMO EXCEPT: A. Denial of an applicant simply because such applicant has a fibro-cystic breast condition B. Requirement that the insured remain in network C. Solicit enrollees D. Cancellation of a contract due to fraud or material misrepresentation

A. Denial of an applicant simply because such applicant has a fibro-cystic breast condition

As a producer selling Medicare Supplements all of the following are required conduct EXCEPT: A. Partially disclose the applicant's medical history on the application B. Determine which policy is suitable for the client C. Clearly identify themselves as insurance producers and the company they represent D. Complete, in duplicate, a Policy Checklist disclosing what Medicare pays, the Supplement pays and what the insured is responsible for

A. Partially disclose the applicant's medical history on the application Explanation: Insurance producers who sell Medicare Supplements must clearly identify themselves as insurance producers and the company that they represent, provide the full name and address of the company that is issuing the policy, determine which policy is suitable for the applicant, fully disclose the applicant's medical history on the application, and complete a Policy Checklist (in duplicate).

15. Which of the following would be prohibited by an LHSO? A. Requiring a provider, as a condition to acceptance into the network, to purchase more ophthalmic goods or services, including eye glasses, than are purchased by plan enrollees B. Resolving complaints promptly C. Providing the enrollee with an evidence of coverage D. Soliciting business in a fair manner

A. Requiring a provider, as a condition to acceptance into the network, to purchase more ophthalmic goods or services, including eye glasses, than are purchased by plan enrollees

If a Group long-term care policy is canceled, for any other reason than non-payment of premium, which of the following statements is true? A. The persons insured under such group must be allowed to, regardless of health, enroll in an individual long-term care policy B. Dependents do not have to be covered on the individual policy C. The persons insured under such group may, after a physical exam, qualify for an individual policy D. Application for an individual policy must be done within six months of cancellation

A. The persons insured under such group must be allowed to, regardless of health, enroll in an individual long-term care policy Explanation: Group LTC policies that are canceled for any reason, other than non-payment of premium, must allow those insured under the group policy to apply for a comparable individual policy, guaranteed issue. Application for such policy must be made within 31 days of termination of the group, premium must be reflective of the insured's original age, no new probationary periods may apply, and dependents on group LTC policies must be allowed to continue benefits upon payment of premiums.

13. Producers selling LHSOs (Limited Health Service Organization contracts) must hold which type of license? A. A life license B. A health license C. A limited lines license D. A temporary license

B. A health license

An individual policy sold in Illinois is allowed to exclude coverage for all of the following EXCEPT: A. Treatment for alcoholism B. Complications of pregnancy C. Treatment provided in a rest home D. Treatment of drug addiction

B. Complications of pregnancy Explanation: Under Illinois law an individual policy may exclude coverage for treatment provided in a rest home, home for the aged, facility for the treatment of alcoholism, care and treatment of mental disease and disorders, custodial or educational care, and facility for the treatment of drug addiction. Complications of pregnancy must be covered by all individual policies, just like any other sickness. Remember, the Illinois insurance examination does not reference the Affordable Care Act. The outline only includes Illinois insurance law. Under the ACA there are different rules. The ACA rules will not be on your test in Illinois.

46. Which of the following correctly defines defamation? A. Offering an inducement to buy B. False or malicious statements made about an insurance company or producer, circulated to injure their reputation C. Misrepresenting policy provisions D. Basing a denial of a claim upon an application which was altered

B. False or malicious statements made about an insurance company or producer, circulated to injure their reputation

18. All of the following are true about the bond requirements in the state of Illinois EXCEPT: A. The amount of the bond must be $2,500 or 5% of the premiums collected in the previous year B. Insurance producers with insurance companies that take responsibility for their actions are still required to post a bond C. Maintaining a bond or appointing insurance company is a requirement to holding a producer's license D. The maximum the bond would have to be is $50,000

B. Insurance producers with insurance companies that take responsibility for their actions are still required to post a bond

When must the producer deliver the Important Notice Regarding Replacement of Life Insurance? A. Policy delivery B. No later than the time of application C. Underwriting acceptance D. Within three days of application

B. No later than the time of application Explanation: One of the duties of insurance producers is to deliver the Notice Regarding Replacement of Life Insurance no later than the time of application.

Which of the following is the correct definition of total disability, as allowed by Illinois law? A. The inability for perform 15% of your job B. The inability to perform your job, or one that you are qualified for by training, experience or knowledge C. The ability to perform one or more, but not all, of the major duties of your employment D. The inability to perform any job

B. The inability to perform your job, or one that you are qualified for by training, experience or knowledge Explanation: Total disability is the insured's inability to engage in any employment or occupation that they are reasonably expected to engage in based upon their training, education, experience and knowledge.

41. All of the following are legal regarding a claim submission EXCEPT: A. The insurer may require the insured to submit proof of loss B. The insurer may require the insured to submit to a polygraph test as a condition to payment C. The insurer may deny a claim after conducting a reasonable investigation D. The insurer may not require both notice of claim and proof of loss, if such forms would be duplicating information thereby delaying the processing of the claim

B. The insurer may require the insured to submit to a polygraph test as a condition to payment

All of the following are correct regarding a long-term care policy in this state EXCEPT: A. LTC applicants must be given the option of purchasing inflation protection B. The policy may condition coverage upon prior hospitalization C. The policy may have a maximum probationary period of six months D. A "tax-qualified" LTC policy must include non-forfeiture options

B. The policy may condition coverage upon prior hospitalization Explanation: Benefits of a long-term care policy may not be conditioned on prior hospitalization.

22. The continuing education requirement for Illinois is which of the following? A. 15 hours per line of authority B. 45 hours per person C. 24 hours per person, every two years D. 15 hours per person, every two years

C. 24 hours per person, every two years

35. Producers convicted of a felony must notify the Director within how many days? A. 10 days B. 15 days C. 30 days D. 45 days

C. 30 days

All of the following are considered prohibited discrimination EXCEPT: A. Distinctions based upon handicaps or disabilities B. Denial of a life insurance applicant because they are a member of the United States Military C. Charging a women less than a man for life insurance D. Distinctions based upon blindness

C. Charging a women less than a man for life insurance Explanation: Prohibited discrimination includes distinctions based upon handicaps, disabilities, or blindness, as well as denial of a life insurance applicant because they are a member of the United States Military. Insurers are allowed to charge women less than men for life insurance because it is justified by actuarial statistics that women live longer.

Which of the following is correct regarding a long-term care policy sold in this state? A. It must cover acute care B. It must have a 45-day free look C. It must provide a minimum of 12 months of coverage in either a skilled nursing facility or the insured's home D. It may have a 12-month probationary period

C. It must provide a minimum of 12 months of coverage in either a skilled nursing facility or the insured's home Explanation: Long-term care policies must have a 30-day free look, a 6-month probationary period, and a 6-month pre-existing condition clause. They also must provide a minimum of 12 months of coverage in either a skilled nursing facility or the insured's home. Long-term care policies do not cover acute care.

All of the following are true about the illustration regulations EXCEPT: A. The illustration must be the same as the death benefit applied for B. The illustration must be signed by the applicant and the producer no later than policy delivery C. Records related to illustration selling must be kept on file for three years from the date of issuance D. A copy of the illustration must be left with the applicant and also attached to the application

C. Records related to illustration selling must be kept on file for three years from the date of issuance Explanation: Records related to illustration selling must be kept on file by the insurer until three years after the policy is no longer in force, not three years from the date of issuance.

45. All of the following are correct regarding misrepresentation EXCEPT: A. Misrepresentation includes the guarantee of dividends B. Misleading advertisements are considered misrepresentations C. The fines for misrepresentation range from $50 to $1,000 D. The fines for misrepresentation range from $200 up to $10,000

C. The fines for misrepresentation range from $50 to $1,000

Which of the following statements is false? A. Testimonials must be genuine and accurately reproduced B. Fines for violation of the advertising rules shall be up to $1,000 and or license suspension or revocation C. When the term non-medical is used in and advertisement there are no additional disclosure rules D. Comparisons must be fair and accurate

C. When the term non-medical is used in and advertisement there are no additional disclosure rules Explanation: When the terms non-medical or no medical exam required are used to describe a policy that is not a guaranteed issue one, the advertisement must contain an explanation that the issuance of such policy may depend upon the answers to health questions.

All of the following are true about license denial, suspension or revocation EXCEPT: A. You can lose your license for forging another signature B. A suspended, denied or revoked license must be surrendered to the Director C. You may still sell insurance on a suspended license for 180 days D. Failing to pay child support or state income taxes is grounds for loss of license

C. You may still sell insurance on a suspended license for 180 days Explanation: Persons whose license has been denied, suspended or revoked are barred from engaging in the insurance industry.

Which of the following would be considered an unfair practice? A. Denying issuance of a policy solely based upon an applicant's past lawful travel or future lawful travel plans B. Charging a blind person with a hazardous hobby a higher premium than a sighted person C. Charging a woman less for life insurance than a man D. Charging a woman more for health insurance than a man

A. Denying issuance of a policy solely based upon an applicant's past lawful travel or future lawful travel plans Explanation: It is unfair to surcharge an applicant, fail to renew, or deny coverage to an applicant solely due to the person's past lawful travel experiences.

4. All of the following are true regarding the Insurance Director's Market Conduct Examination authority EXCEPT: A. He has the power to request statements be made under oath B. He may only examine admitted companies once every five years C. He may examine all books and records of an insurance company or producer D. Failure to cooperate with a market conduct exam may subject such person to a fine not to exceed $2,000

B. He may only examine admitted companies once every five years

Contracts sold by LHSOs include all of the following EXCEPT: A. Vision care B. Home health care C. Dental care D. Podiatric care

B. Home health care Explanation: LHSOs may offer coverage for services related to ambulance, dental, vision care, pharmaceutical and podiatric (foot) care. An LHSO does not offer coverage for home health care.

The maximum combination of deductible and copayments paid for the receipt of basic health care services provided by an HMO cannot exceed which of the following? A. $1,000 per person per year B. The annual maximum out-of-pocket expenses of a high deductible health plan under Federal Law C. $5,000 per family per year D. $500 per person per year

B. The annual maximum out-of-pocket expenses of a high deductible health plan under Federal Law Explanation: No combination of deductibles and copayments paid for the receipt of basic health care services may exceed the IRS annual maximum out-of-pocket expenses of a high deductible health plan under Federal Law.

Lawful withdrawals from a Premium Fund Trust Account include all of the following EXCEPT: A. Interest earned B. Policy refunds C. Claims payments D. Commissions

C. Claims payments Explanation: All funds held in a Premium Fund Trust Account are considered fiduciary funds until lawfully withdrawn. Lawful withdrawals include interest earned by such account, which may be kept by the producer, commissions, policy refunds, or premiums due to other licensees or insurance companies. Claims payments are not paid out of a PFTA.

Which of the following would be considered an unfair practice? A. Charging a blind person with a hazardous hobby a higher premium than a sighted person B. Charging a woman less for life insurance than a man C. Denying issuance of a policy solely based upon an applicant's past lawful travel or future lawful travel plans D. Charging a married woman more for life insurance than a single woman

C. Denying issuance of a policy solely based upon an applicant's past lawful travel or future lawful travel plans Explanation: It is unfair to surcharge an applicant, fail to renew, or deny coverage to an applicant solely due to the person's past lawful travel experiences.

The continuing education requirement for Illinois is which of the following? A. 45 hours per person B. 15 hours per line of authority C. 15 hours per person, every two years D. 24 hours per person, every two years

D. 24 hours per person, every two years Explanation: Producers must complete 24 hours of continuing education at least one month prior to their license renewal date, 3 of which must be in ethics. The continuing education requirement is per person, not per line of authority.

2. The main duty of the Insurance Director is what? A. Write insurance laws B. Encourage unfair discrimination C. Set insurance rates D. Enforce insurance laws

D. Enforce insurance laws

All of the following are true about the Outline of Coverage for a long-term care policy EXCEPT: A. The Outline must disclose the major benefits offered B. The Outline must describe the relationship between cost of care and policy benefits C. The Outline must be given out at the time of initial solicitation D. The Outline is an optional disclosure document

D. The Outline is an optional disclosure document Explanation: The Outline of Coverage is a required disclosure document, which must be given out at the time of initial solicitation of a long-term care policy.

27. If a producer's license is denied, suspended or revoked he/she may not reapply for licensure for a period of how long? A. One year B. Two years C. Four years D. Three years

D. Three years