Insurance Chapter 5 Question

how many continuing education hours are required in ethics? 1. 1 2. 3 3. 5 4. 10

3

rebating is an unfair trade practice and is regulated by law. all of the following would be considered to be rebating EXCEPT 1. agent offers tickets to a baseball game as an inducement to buy insurance 2. agent misrepresents policy benefits to convince a policyowner to replace policies 3. agent offers the use of his lake house to person as an inducement to buy 4. agent offers to share his commission with a policyholder

agent misrepresents policy benefits to convince a policyowner to replace policies

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 1. nothing, unless the remarks were in writing 2. defamation 3. misrepresentation 4. discrimination

defamation

in life insurance, producers are permitted to share to split commissions providing 1. the insurance department knows of the arrangement 2. there is a written agreement between the producers 3. both are properly licensed for the line of insurance 4. the insured knows and agrees to the arrangement

both are properly licensed for the line of insurance

an agent offers his client free tickets to a sporting even in exchange for the purchase of an insurance policy. the agent is guilty of 1. twisting 2. controlled business 3. rebating 4. coercion

rebating

a nonadmitted insurer who provides insurance coverages that are not available from an admitted insurer is called 1. capitol stock insurer 2. reciprocal insurer 3. surplus lines insurer 4. assessment mutual insurer

surplus lines insurer

which of the following is an example of a producer being involved in an unfair trade practice of rebating 1. tell a client that his first premium will be waived if he purchased the insurance policy today 2. inducing the insured to drop a policy in favor of another one when it's not in the insured's best interest

tell a client that his first premium will be waived if he purchased the insurance policy today

when might a commissioner issue a cease and desist order? 1. when the commissioner has reason to believe a person is about to violate a provision of the code 2. when a company has refused coverage to more that 30 percent of applicants 3. when a company's underwriting process continually turns up negative information 4. when an agent has written more than 100 policies in a 6-month period

when the commissioner has reason to believe a person is about to violate a provision of the code

circulating deceptive sale material to the public is what type of unfair trade practice? 1. false advertising 2. defamation 3. coercion 4. misrepresentation

false advertising

the commissioner will adopt a system of examination necessary for the administration of insurance and insurance-related laws. examiners may not be appointed if they, at the time of examination 1. policyowners of the company being examined 2. claimants under a policy issued by the company being examined 3. affiliated with the management or owns a monetary interest in any person being examined 4. any of the above

are affiliated with the management or owns a monetary interest in any person being examined

an insured purchased an insurance policy 5 years ago. last year, she received a dividend check from the insurance company that was not taxable. this year, she did not receive a check from the insurer. from what type of insurer did the insured purchase the policy? 1. reciprocal 2. nonprofit service organization 3. stock 4. mutual

mutual

an authorized foreign or alien insurer requesting a name change must give the commissioner how much notice? 1. 15 days 2. name changes are not approved for foreign or alien insurers 3. 60 days 4. 30 days

30 days

forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as 1. defamation 2. coercion 3. rebating 4. misleading advertising

coercion

when a commissioner suspects that someone has engaged in deceptive acts, the commissioner will give that person a statement of charges and notice of hearing to be held within 1. 20 days 2. 5 days 3. 10 days 4. 15 days

15 days

when the commissioner suspects that anyone has engaged in deceptive acts, the commissioner will give that person a statement of charges and notice of hearing to be held within 1. 15 days 2. 20 days 3. 5 days 4. 10 days

15 days

when doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer? 1. alien 2. nonadmitted 3. foreign 4. domestic

foreign

the commissioner has the authority to do anything of the following EXCEPT 1. designate a place and time for a hearing 2. levy a fine for a violation of the insurance code 3. issue a notice of a hearing to a person violating 4. make a hearing open to the public

levy a fine for a violation of the insurance code

if an insurer becomes insolvent, which entity would pay benefits to policyholders 1. the insurance guaranty association 2. nobody 3. federal reserve fund 4. naic

the insurance guaranty association

for how long are licensees required to keep records of continuing education completion? 1. 2 years 2. 3 years 3. 4 years 4. 5 years

4 years

when an insurance agency published an advertising brochure. it emphasized the company's financial stability and sound business practices. in reality, its financial health is terrible, and the company will soon have to file for bankruptcy. which of the following terms best describes the advertisement? 1. twisting 2. rebating 3. false financial statement 4. defamation

false financial statement

every year, the commissioner submits to the Hawaii legislature a report that contains all of the following EXCEPT 1. complaints made to the commissioner 2. a list of all new licensees and analysis of insurance contracts they transacted 3. the condition of all insurers authorized to do business in Hawaii during the preceding year 4. the extent of compliance and noncompliance by each insurer with insurance regulations

a list of all new licensees and analysis of insurance contracts they transacted

which of the following is an example of an unfair claims settlement practice? 1. using arbitration when the insured and insurer cannot reach agreement 2. failure to promptly settle a claim when liability has been clearly established 3. deny coverage after a reasonable investigation has been conducted 4. making claims payments which clearly indicate under which coverage payment has been made

failure to promptly settle a claim when liability has been clearly established

in which of the following situations is it legal to limit coverage based on marital status? 1. it is never legal to limit coverage based on marital status 2. excessive number of divorces, as defined by the insurance code 3. legal separation during the application process 4. divorce within the last six months of applying for insurance

it is never legal to limit coverage based on marital status

which of the following will NOT be considered unfair discrimination by insurers? 1. assigning different risk classifications to applicants based on gender identity 2. discriminating in benefits and coverages based on the insured's habits and lifestyle 3. charging applicants with similar health histories different premiums based on their ethnicity 4. canceling individual coverage based on the insured's marital status

discriminating in benefits and coverages based on the insured's habits and lifestyle

all of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT 1. an offer of employment 2. stocks, securities, or bonds 3. an offer to share in commissions generated by the sale 4. dividends from a mutual insurer

dividends from a mutual insurer

which of the following best describes the unfair trade practice of defamation? 1. refusing to deal with other insurers 2. making derogatory oral statements about another insurer's financial condition 3. assuming the name and identity of another person 4. issuing false advertising material

making derogatory oral statements about another insurer's financial condition

during a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. this describes 1. twisting 2. coercion 3. misrepresentation 4. defamation

misrepresentation

if an insurer terminates the appointment, employment, contract or other business relationship, with a producer, he/she must notify the commissioner within 1. 25 days 2. 30 days 3. 15 days 4. 20 days

30 days

which of the following individuals could qualify for a temporary insurance license? 1. retired producer 2. employee of a deceased producer 3. designee of a producer who is called to active military service 4. deceased producer's brother who is employed by the department of insurance

designee of a producer who is called to active military service

in Hawaii, a person who intentionally violates any insurance rule or statute is subject to a penalty of 1. between $150 and $12,000 per violation or imprisonment of not more than 1 year, or both 2. between $500 and $11,000 per violation or imprisonment of not more than 1 year, or both 3. between $100 and $10,000 per violation or imprisonment of not more than 1 year, or both 4. between $1000 and $10,000 per violation or imprisonment of not more than 1 year, or both

between $100 and $10,000 per violation or imprisonment of not more than 1 year, or both

which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? 1. slandering 2. defamation 3. undercutting 4. twisting

defamation

an insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. which of the following best describes this act? 1. legal, providing that the information can be verified 2. illegal until endorsed by the guaranty association 3. legal, provided that the other insurers are paid royalties for the usage of their names 4. illegal under any circumstances

illegal under any circumstances

giving a client an inducement to a sale not stated in the policy is an unlawful practice known as 1. twisting 2. unlawful distribution of dividends 3. coercion 4. rebating

rebating

which of the following would be considered an unfair claims settlement practice? 1. requesting the insured swear under oath concerning the facts of the claim 2. the settlement of the claim is delayed for 30 days in order for the insured to conduct an investigation 3. a claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered 4. requesting the insured to submit a signed, proof of loss statement, after the insured has already verbally advised the insurer of the claim

a claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

the purpose of the insurance guaranty association is to 1. help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company 2. encourage insurers to write substandard business 3. allow producers to continue to solicit insurance, even if the company they represent is financial impaired 4. protect the reputation of the insurance department if they issue a certificate of authority to a company that becomes insolvent

help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company

which of the following best describes a misrepresentation? 1. making a maliciously critical statement that is intended to injure another person 2. discriminating among individuals of the same insuring class 3. issuing sales material with exaggerated statements about policy benefits 4. making a deceptive or untrue statement about a person engaged in the insurance business

issuing sales material with exaggerated statements about policy benefits

which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? 1. making comparisons between different policies 2. stating that the insurance policy is a share of stock 3. exaggerating the benefits provided in the policy 4. stating that the competitors arbitrary increase their premiums each year

making comparisons between different policies

hawaii insurance guaranty association is obligated to pay covered claims only if under the amount of 1. $250000 2. $300000 3. $1000000 4. $100000

$300000

an insurer must appoint a licensee before he/she is authorized to transact insurance business. the insurer must file a notice of appointment within 1. 15 days from the date of application 2. 15 days from the date of the first insurance application is submitted 3. 5 days from the date of the insurance application is submitted 4. 10 days from the date of application

15 days from the date of the first insurance application is submitted

insurance transaction records must be maintained for at least 1. 1 year 2. 2 years 3. 3 years 4. 5 years

5 years

all of the following are true regarding rebates EXCEPT 1. dividends are not considered to be rebates 2. rebates are allowed if it's in the best interest of the client 3. rebates are only allowed if specifically stated in the policy 4. rebating can be anything of economic value, given as an inducement to buy

rebates are allowed if it's in the best interest of the client

which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting 1. fraternal 2. stock 3. mutual 4. reciprocal

stock

an insurance company has published a brochure that inaccurately portrays the advantages or a particular insurance policy. what is this example of? 1. twisting 2. defamation 3. false advertising 4. unfair claims

false advertising

which of the following is a characteristic of a reciprocal insurance exchange? 1. normally write all lines of insurance 2. stock holders share in any profits 3. issues nonassessable policies 4. the chief administrator of the insurer is called an "attorney-in-fact"

the chief administrator of the insurer is called an "attorney-in-fact"

a producer holds a life and accident and health or sickness insurance and a property insurance license. how many hours of continuing education must the producer complete every license renewal period 1. 12 2. 18 3. 20 4. 24

24

all of the following could be grounds for license suspension or revocation EXCEPT 1. failing to pay federal income taxes 2. having a record of a misdemeanor unrelated to insurance 3. improper handling of insurance premiums 4. accepting insurance business from a unlicensed person

having a record of a misdemeanor unrelated to insurance

two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. what is this called? 1. law of large numbers 2. misrepresentation 3. adverse selection 4. discrimination

discrimination

an insurer devises intimidation strategy in order to corner a large portion of the insurance market. which of the following best describes this practice? 1. unfair discrimination 2. defamation 3. illegal 4. legal advertising strategy

illegal

a nonresident producer or broker is authorized to insure a subject of insurance located in Hawaii only under which of the following conditions? 1. prior to issuance of license, the producer or broker takes and passes an examination given by the commissioner 2. prior to issuance of license, the producer or broker provides a written statement from the insurance supervisory public officer of his or her resident state, confirming they are concurrently licensed in that state 3. insurance written in Hawaii must be place through a licensed general producer of an authorized insurer 4. all of the above

all of the above