Life: Illinois statutes and regulations common to all lines

An insurance company that routinely ignores all letters and phone calls from the insured's that have filed claims is A. Saving money and improving the bottom line. B. Avoiding a lot of nuisance claims C. Guilty of an unfair claims settlement practice. D. Avoiding a lot of paperwork hassles

C. Guilty of an unfair claims settlement practice

The director regulates insurance rates through detailed rate reviews. The director will prohibit insurance rates that are a. Excessive b. Inadequate c. Unfairly discriminatory d. Any of the above

d. Any of the above The director does not set the rates to be changed for insurance. However, the director can disapprove any rate filed that is excessive, in adequate, or unfairly discriminatory.

Which of the following defines the term "controlled business"? A. Insurance written on the interests of the producer or his/her spouse B. Insurance policies regulated by the state department of insurance C. Lines of authority for which a producer is licensed D. Company transactions that are under the examination by the director

A. Insurance written on the interests of the producer or his/her spouse In this state, controlled business is defined as the insurance written on the interests of the licensee him/herself and his/her property or risks; or the licensees employers or own business' life, property or risks

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

A. The producers license may be reinstated within 24 months without having to pass a written exam.

How long must an insurer keep the books and records of insurance transactions in the Premium Fund Trust Account A. 3 years B. 5 years C. 7 years D. Indefinitely

C. 7 years

What consequences will occur if a producer ask without a bond that is required? A. The producer will be find $350. B. The producer will be required to for fill extra CE requirements. C. The producers license may be revoked. D. The producers license will be maintained without fees.

C. The producer's license may be revoked

Which of the following is correct regarding the director's ability to revoke or suspend a producers license? A. The producer will not lose a license for failure to repay student loans over to the Illinois student assistance commission. B. The producer may lose their license without a hearing. C. The producer may not lose their license for conviction of a felony. D. 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

What is the resident producer license fee payable once every two years? a. $100 b. $180 c. $50 d. $250

b. $180 Is payable once every two years for resident insurance producer license

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

A. Person soliciting policies of insurance

A non-resident licensed producer moved to Illinois and wants to obtain a license in this state. Which of the following is true regarding the licensing examination? A. The producer will need to take a uniform secondary licensing examination to satisfy the Illinois examination requirement. B. If the producer has been licensed for over 10 years in his own state, the examination requirement will be waived. C. No examination will be required. D. The producer will be required to take the Illinois licensing examination

C. No examination will be required.

A producer failed to complete the required continuing education credit hours for this compliance., And allowed his license to lapse. Within what time. After the deadline may the license be reinstated? a. 30 days B. 90 days C. 6 months D. 12 months

D. 12 months An insurance producer who allows his license to lapse can be issued a license without having to pass a written exam if he renews it within 12 months after the renewal fee was due.

Which of the following is an example of a producer being involved in an unfair trade practices of rebating? A. Telling a client that his first premium will be waived if he purchased the insurance policy today B. Inducing the insured to drop a policy in favor of another one when it's not in the insured's best interest C. Charging a client a higher premium for the same policy as another client in the same ensuring class D. Making deceptive statements about a competitor

A. Telling a client that his first premium will be waived if he purchased the insurance policy today Rebating is defined as offering any inducement in the sale of insurance products that is not specified in the policy, inducing money, reductions in commissions, promises, and personal services. Both the offer and acceptance of a rebate are illegal

If a person applies to become a life insurance producer, what is the minimum number of hours of pre-licensing education that must be completed in a classroom? A. 7.5 B. 10 C. 12.5 D. 20

A. 7.5 A pre-licensing course is required for those who wish to become producers. A total of 20 hours a pre-licensing education is required for insurance producers, 7.5 of which must be completed in a classroom setting

All policy applications must identify which of the following? A. Licensee which solicited the applicant's business B. Conditions of acceptance C. MIB D. Director

A. Licensee which solicited the applicant's business All policies must identify the licensee or firm that solicited the business. Applications for individual life, accident and health or group coverages must bear the name and signature of the licensee who solicited and wrote the application.

The director and forms a producer that it's license has been terminated and immediately received a request for the charges to be renewed in court. Within what maximum number of days must to here and be held? A. 14 B. 30 C. 60 D. 90

B. 30 If the producer wants to contest or renew the charges in court, the request must be made within 30 days of the order. After the director receives the request, hearing must occur within 20 to 30 days

A producer receives notice that his license has been terminated. If the producer wants to have the changes reviewed in court, within what. Must the request be made? A. 15 days B. 30 days C. 45 days D. 60 days

B. 30 days

All of the following are regulated areas of the insurance industry EXCEPT A. investments B. Commissions C. Producers D. Trade practices

B. Commissions The director of insurance is charged by the Insurance Code to regulate the business of insurance in the state. Commissions, however, are negotiated between the insurer and the producer.

Who must inform the director of a producers felony conviction? A. FBI B. The producer C. MIB D. State police

B. The producer A producer who is convicted of a felony must report the conviction to the director within 30 days.

What is the maximum fine for a violation of the cease and desist order? A. $100 B. $500 C. $1000 D. $5000

C. $1000 Any person who violates a cease and desist order is subject to a fine up to $1000, which may be recovered in a civil action, for each violation. The director also has the power to revoke or suspend any license or certificate of authority for such violation.

The director of refuse to issue a license if a licensee's aggregate amount of premiums on controlled business exceeds the aggregate amount of premiums on all other insurance business during A. Any 1 year B. The licensing period C. 2 calendar years immediately preceding the extension date of the license D. The 6 month. Immediately following the issuance or extension of the license

C. 2 calendar years immediately preceding the extension date of the license An insurance license is not intended to be used to earn commissions on a personal insurance needs, or those of family members, or business associates only. An insurance producer license may be refused if the director has reasonable cause to believe that the aggregate amount of premiums on controlled business exceeded the aggregate amount of premiums on controlled business during either 2 calendar years immediately preceding the extension date of the license, or the 12 month period Immediately following the insurance or extension of the license.

An applicant for a fire insurance producers license must successfully complete and approved pre-licensing education course for at least A. 10 hours B. 12.5 hours C. 20 hours D. 40 hours

C. 20 hours Unless exempt, those applying for a fire insurance producers license must first complete an approved course of study of at least 20 hours before they can submit their application to the director to take the licensing exam.

The necessary qualifications for obtaining a producer's license in Illinois includes all the following EXCEPT A. Have a completed and approved pre-licensing course. B. Have a good business reputation C. Be at least 21 years of age D. Be considered competent and trustworthy

C. At least 21 years of age

If a licensee charges any fee separate from a commission off of the insured's premium, and if the fee exceeds 10% of the premiums value, what must the licensee obtain? A. Special tax form B. Premium Fund trust form C. Insured's signature D. Directors permission

C. Insured's signature If the combined compensation or fees exceeds 10% of the premium amount, the disclosure must also include the signature of the consumer.

Which of the following is NOT True regarding a premium find a trust account? A. It may be depository for service fees and late charges. B. It is established to maintain all the premiums. C. It could be used as a claim payment account. D. It is a fiduciary account.

C. It could be used as a claim payment account. PFTA cannot be used as a general operation or a claim payment account. It is a fiduciary account into which all collected premiums or other monies, such as service fees, later charges and inspection fees must be deposited.

The director suspend a producer's license. Which of the following occupations would the producer serve during the suspension? A. Insurance counselor B. Insurance producer C. Insurance underwriter D. None of the above

D. None of the above A person whose license is revoked or whose application is denied is ineligible to apply for any license as an insurance producer for 3 years after the revocation or denial, nor may such person be employed, contracted, or engaged in any insurance related capacity during the time of the revocation, suspension, or denial is in effect.

Which of the following criminal activities would warrant rejection, revocation, or suspension of an insurance producer's license? a. Public drunkenness b. Forgery c. speeding in an automobile d. trespassing through a neighbors yard

b. Forgery Upon conviction of a felony, a producer's license will be revoked by the director.

Which of the following is an example of an unfair claims settlement practice? A. Failure to promptly settle a claim when a liability has been clearly established B. Denying coverage after reasonable investigation has been conducted C. Making claims payments which clearly indicate under which coverage payment has been made D. Using arbitration when the insured and insurer cannot reach agreement

A. failure to promptly steadily claim when liability has been clearly established

In the event a licensed producer dies, a temporary license will be issued to the deceased producers representative. This temporary license will allow the license to perform all of the following acts EXCEPT A. Service existing policies B. Solicit insurance C. Renew policies D. Collect premiums due

B. Solicit insurance The purpose of a temporary license is to allow the business of the deceased to continue until it can be sold, transferred, or another person be properly licensed.

What's of the following situations would describe a proper handling of premiums by producer in this state? A. A temporary producer is not under the obligation to hold premiums in a fiduciary capacity. B. A producer who hold premiums for 15 days establishes a premium fund trust account. C. A producer is using the premiums account as a general operations account. D. Fiduciary account balance is less than the amount deposited due to the number of the claims

B. A producer who holds premiums for 15 days establishes a premium fund trust account. Minimum standards for proper handling of premiums and other monies received an insurance transactions apply to all persons transacting insurance in the state of Illinois, including non-resident in temporary producers. Licensees who hold any premiums for 15 days or more before remitting it to the insurance, or who deposit premiums into financial institution account, must establish a fiduciary premium fun trust account, into which all collected premiums will be deposited minimum standards for proper handling of premiums and other monies received in insurance transactions applied to all persons transacting insurance in the state of Illinois, including non-resident and temporary producers. Licensees who hold any premiums for 15 days or more before remitting it to the insured, or who deposit premiums into financial institution account, must establish a fiduciary premium bond trust account, into which all collected premiums will be deposited.

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

B. Anytime more than 50% of the total premiums collected by a producer comes from themselves, his or her spouse, employer, or own business Producers must obtain licensure for the purpose of selling insurance to the general public, not controlled business. Controlled business includes selling insurance to oneself, his or her spouse, employer, and/or own business. Anytime controlled business is greater than 50% of the total premiums collected by the producer, a violation has occurred.

Which of the following best describes the unfair trade practices of defamation? A. Refusing to deal with other insurers. B. making derogatory oral statements about another insurer's financial condition. C. Assuming the name and identity of another person. D. Issuing false advertising materials

B. Making derogatory oral statements about another insurer's financial condition. Making oral or written statements directly or indirectly which are derogatory or maliciously critical of another insurer would be an example of the unfair trade practices of defamation.

Rebating is an unfair trade practices and is regulated by law. All of the following would be considered rebating EXCEPT A. An agent offers the use of his lake house to person as an inducement to buy. B. An agent offered to share his commission with the policyholder. C. An agent offers tickets to a baseball game as an inducement to buy insurance. D. An agent misrepresents policy benefits to convince a policyowner to replace policies.

D. An agent misrepresents policy benefits to convince a policyowner to replace policies. Using misrepresentation to convince a person to cancel an existing policy and buy a new one is called "twisting"

A group life insurance policy was solicited by a limited insurance representative. Which of the following is true according to the disclosure regulations? A. Disclosure regulations does not apply to limited insurance representatives B. Disclosure regulations does not apply to group insurance C. The name of the representative must be displayed on each certificate of insurance. D. The representatives name and signature must appear on the master policy.

D. The representatives name and signature must appear on the master policy. Any policy solicitation which involves an insurance producer, limited insurance representative, or temporary insurance producer must identify the name of the producer, representative, or firm on the policy.

Before each license for new well, and insurance producer must complete at least how many course study hours? A. 14 B. 20 C. 24 D. 30

C. 24 Before each license renewal, and insurance producer must satisfactorily complete at least 24 hours of course study in accordance with rules prescribed by the director. At least 3 of those hours must be an ethics