Life exam 5
Insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss?
15 - When any company under any insurance policy requires a written proof of loss after notice of the loss has been given by the insured or beneficiary, the company must furnish a blank form within 15 days.
In North Carolina, the Commissioner serves a term of how many years?
4 years - The Commissioner is elected to office for a 4-year term.
Any person who violates a cease and desist order of the Commissioner pertaining to consumer information privacy may be sub, which of the following penalties?
A monetary fine up to $10,000 for each violation - Violations of the cease and desist order pertaining to consumer information privacy will result in a monetary fine of not more than $10,000 for each violation.
When transacting business in this state an insurer formed under the laws of another country is known as a/an
Alien insurer- alien insurer is defined as an insurer formed under the laws of another country
Which of the following must an insurer obtain in order to transact insurance within a given state?
Certificate of authority. - All insurers (domestic, foreign, or alien) must obtain a certificate of authority before transacting insurance within a given state.
When an insurer requires a written proof of loss after notice of such loss has been given by the insured or beneficiary, the company must
Furnish a blank form to be used for that purpose - When any company under any insurance policy requires a written proof of loss after notice of such loss has been given the insured or beneficiary, the compawy or its representative must furnish a blank form to be used for that purpose.
What does the Guaranty Association guard against?
Insurer insolvency - All admitted insurers must be a member of the Insurance Guaranty Association as a condition of their license. The Insurance Guaranty Association is in existence to protect policyowners and beneficiaries against losses caused by the insolvency of an insurance company.
What is the main purpose of the Life and Health Insurance Guaranty Association?
Protect consumers against isolvent insurers - Correct! The Insurance Guaranty Association is in existence to protect policy owners and beneficiaries against losses caused by the insolvency of an insurance company.
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client. - 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. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule - anytime a new policy is issued that replaces or modifies existing insurance, a replacement form must be submitted to the ceding company
All of the following are considered unfair trade practices in the business of insurance EXCEPT
Sharing commissions. - Sharing commissions is allowed as long as both producers are properly licensed. All other choices are unfair trade practices.
An insured has submitted a fraudulent claim on a health insurance policy 1 year after the policy issue. The insurer paid the claim, but a year later discovered that the claim was fraudulent. The insured was convicted of a felony. Which of the following statements is true regarding the payment of claim?
The insured may be ordered to pay restitution (i.e., pay the amount of claim back to the insurer). - Any person who intends to defraud an insurer, upon discovery and conviction, may be ordered to pay restitution (aka pay back what was paid out based on a fraudulent claim).
Under which of the following circumstances would a pretext interview be permissible?
The insurer suspects criminal activity and fraud - a pretext interview may be used to obtain information from a person for the purpose of investigating a claim where, based upon specific information available for review by the Commissioner, there is a reasonable basis for suspecting criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with the claim.
The Commissioner is empowered to examine the records of any person transacting insurance in the State as an agency, an agent or broker of record. If the Commissioner does examine a person, the expense of that examination will be paid by
The person examined. - The person examined will pay any expenses incurred due to examination by the Commissioner.
Which of the following acts would be grounds for a person's license suspension, revocation, or refusal to renew?
an agent fails to pay state income tax - Failure to pay state income tax is a violation subject to license suspension or revocation; all the other examples are not.