life and health chapter 10

an agent completed an continuing education course in 2022. until what year must the agent keep the records of completion?

2027 (four years from the date of the course completion)

what percentage of continuing education hours must be in a classroom setting?

50%

the commissioner of insurance issues a cease and desist order to an agent. if the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?

60 days

an agent's license will terminate within how many days from the due date of obligatory fees and continuing education requirements?

90

what are the most common penalties for violation of insurance statues?

a cease and desist order, a fine and license suspension or revocation

which of the following is NOT a possible penalty for a violation of the Insurance Code?

a fine up to $100,000

which of the following occupations would NOT directly help to qualify someone for the office of Commissioner of Insurance?

insurance agent

what is controlled business

insurance on the producer's own life or property, or the lives and property of the producer's family or business associates

who owns stock companies?

stockholders

who is responsible for the costs associated with the examination of insurers?

the insurer who is being examined

a temporary license holder can receive a commission from a sale made to all of the following except

the license holder's sister-in-law

who is an insurance agent?

a person authorized to sell, solicit, and negotiate insurance contracts

an agent licensed in texas is moving to kansas. which of the following applies?

agent has 30 days to notify the Department of Insurance of the new address

who must be a member of the insurance guaranty associations?

all insurers authorized to write insurance within a state

who is considered a nonresident agent?

an agent who resided and is licensed in another state, but who is authorized to transact insurance in this state

who is considered a nonresident?

an agent who resides in another state, but is licensed to write insurance in texas

which members of a corporation or partnership are required to obtain an individual insurance agent's license in order for the association to be licensed?

at least one officer or partner and any other person acting as an agent

if an insurer holds a certificate of authority, it is known as what type of insurer?

authorized or admitted

if an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

authorized or admitted

what type of licensee represents the insured?

broker

if the commissioner/superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

cease and desist order

what document is required for an insurance company to transact insurance?

certificate of authority

forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

coercion

when an individual obtains an insurance license for the primary purpose of writing insurance on themselves, or for members of their immediate family, or business, this is called

controlled business

an insurance professional advises a client regarding the benefits of her life insurance policy, in exchange for a fee. what is the best term to describe this type of insurance professional?

counselor

if a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

defamation

two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. what is this called?

discrimination

which of the following is NOT considered rebating?

giving a client a $25 pen with the insurers logo during the insurance application process

an insurer published intimidating brochures that portray the insurer's competition as financially and professionally unstable. which of the following best describes this act?

illegal under any circumstances

in general, who can be excluded from producer licensing and examination requirements?

insurance company officers, directors, or any other employee who do not transact insurance and who do not receive commissions for their services

in the agent/insurer relationship, who is considered the principal?

insurer

which of the following is not true regarding a certificate of authority?

it is issued to group insurance participants

on its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of claims or losses. what is the company guilty of?

misrepresentation

what illegal act does the producer commit when the producer represents a policy in a more favorable light than the policy really is?

misrepresentation

can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?

no, advertising the existence of the guaranty association for the purpose of solicitation and sale of insurance policies by insurers is an illegal business practice

who can usually be granted a temporary license?

producers spouse or designee in case the licensed producer dies or becomes disabled

what is the maximum penalty fine amount that the commissioner can impose?

$25,000

if an agent has completed 35 hours of continuing education in one renewal period, how many CE hours will the agent have to complete in the next renewal period?

24 hours

what is the minimum percentage of a licensee's total volume of premiums in a calendar year that must come from business other than controlled business?

25%

if a notice of claim is submitted to an insurer, and the insurer suspects arson is involved how long does the insurer have to accept or reject the claim?

30 days

the insurance commissioner may examine the affairs of any insurer as often as necessary, but not less frequently than once every

5 years

which entity has the authority to grant temporary insurance agent's license?

commissioner of insurance

what are producers required to do in order to renew their license?

complete continuing education hours and pay a renewal fee

when twin brothers applied for life insurance from Company A, the company found that while neither of the used tobacco and both had a very similar lifestyle, once of the twins was in a much stronger financial position. because of this, the company charged him a higher rate for his insurance. this practice is called?

discrimination

which of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

dividends from a mutual insurer

insurers are classified according to their domicile. what are the three types of insurers?

domestic, foreign, and alien

for what reason can a temporary license be issued?

for continuation of business in case the licensed producer dies or becomes disabled

when doing business in this state, an insurance company that is formed under the laws of another state is what type of insurer?

foreign

in which of the following situations is it legal to limit coverage based on martial status?

it is never legal to limit coverage based on martial status

on a participating insurance policy by a mutual insurance company, dividends paid to policyholders are

not taxable since the IRS treats them as a return of a portion of the premium paid

who may share in the commission from the sale of a life insurance policy?

only producers properly licensed for the type of insurance transaction

a participating insurance policy may do which of the following?

pay dividends to the policyowner

who might receive dividends from a mutual insurer

policyholders (a mutual insurer has no stock, and is owned by the policyholders. since they may receive a dividend, such policies are known as participating policies. dividends received by policyholders of a mutual insurer are not taxable)

all of the following are true regarding rebates EXCEPT

rebates are allowed if its in the best interest of the client

an agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. what is the agent guilty of?

rebating

all of the following are unfair claims settlement practices EXCEPT

suggesting negotiations in settling the claims

what type of licensee represents the insurance company?

the agent

who must be notified of a producer's change of address?

the department of insurance (commissioner)

who is responsible for the contents of insurance advertisements?

the insurance company

to whom may a certificate of authority be issued?

to an insurer authorized to transact business in this state

what is the purpose of a cease and desist order?

to prevent a producer or insurer from further violating laws for transacting insurance

what is the purpose of insurance guaranty associations?

to protect policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers

what type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another?

twisting

when is controlled business legal?

when the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)

when can the Commissioner or director examine insurers?

whenever deemed necessary, but at least once every few years