NC Life Insurance Chapter 8

The Commissioner may issue a temporary insurance producer license for a period not to exceed:

180 days

Applicants for a resident agent license must complete how many hours of prelicensing education per license?

20 hours

A company incorporated or organized under the laws of any jurisdiction outside of the United States is:

An Alien Company

Unless a business entity pays the renewal fee, the business entity license expires each year on:

April 1 A business entity license expires on April 1 of each year unless the business entity pays the renewal fee.

Insurers must submit renewals of agent appointments to the Commissioner by:

April 1 of each year

All of the following are considered privileged information, EXCEPT:

Information that relates to Credit information "Privileged information" means any individually identifiable information that relates to a claim for insurance benefits or a civil or criminal proceeding involving an individual, and is collected in connection with or in reasonable anticipation of a claim for insurance benefits or civil or criminal proceeding involving an individual.

If an applicant has not fully met the requirements for licensing, who issues the denial?

The Commissioner

Could an agent duly licensed in North Carolina sell life insurance on an American military base in Germany?

Yes, if the Commissioner issues a Restricted License The Commissioner may issue a restricted license for this purpose.

What is the annual fee for an individual agent appointment?

$10

If the Commissioner finds a person has intentionally misstated financial information, what is the maximum penalty?

$10,000 If any person in any financial or other statement intentionally misstates information, that person making oath to or subscribing the statement, the entity on whose behalf the person made the oath or subscribed the statement is subject to a fine imposed by the court of not less than $2,000, nor more than $10,000.

Insurers may refuse to insure someone for which of the following reasons?

Hobbies No insurer will refuse to insure or refuse to continue to insure an individual, limit the amount, extent, or kind of coverage available to an individual, or charge an individual a different rate for the same coverage, solely because of blindness or partial blindness or deafness or partial deafness. No insurer will refuse to insure or refuse to continue to insure an individual; limit the amount, extent, or kind of coverage available to an individual; or charge an individual a different rate for the same coverage, because of the race, color, or national or ethnic origin of that individual. Insurers would not have to insure someone who participates in dangerous hobbies such as skydiving.

An agent who gives a prospective client a flat screen TV as an incentive to purchase an insurance policy is engaging in what unfair trade practice?

Rebating Rebating is any inducement to contract that is not specifically stated in the contract.

Boycott, coercion and intimidation are all types of:

Unfair Trade Practices

Which of the following is NOT a duty of the Commissioner?

Write Insurance laws

If the Commissioner finds a person has committed an act that is in violation of an insurance law, what is the minimum penalty?

$100 If the Commissioner finds a person has committed an act that is in violation of an insurance law or regulation, the Commissioner may, in addition to or instead of suspending or revoking the license or certification, order the payment of a monetary penalty. If the Commissioner orders the payment of a monetary penalty, the penalty will be at least $100, but no more than $1,000.

A person who acquires items dishonestly is guilty of a Class H felony if the value of the money, goods, property, services, or other thing of value is less than:

$100,000 If the value of the money, goods, property, services, chose in action, or other thing of value is less than $100,000, the person committing the violation is a Class H felony.

If the Commissioner revokes a license, how much time does the person have to request a review?

30 days If the Commissioner suspends or revokes a license, in order for the person to be entitled to a review of the Commissioner's action, the applicant must make a written demand upon the Commissioner for a review within at least 30 days after service of the notification upon the applicant.

A lender engaged in making or servicing real estate mortgage loans will accept as evidence of insurance a temporary written contract of insurance on a maximum of how many family residences?

4 A lender engaged in making or servicing real estate mortgage or deed of trust loans on 1 to 4 family residences will accept as evidence of insurance a temporary written contract of insurance and issued by any duly licensed insurance agent, broker, or insurance company.

A nonresident licensee does not need to complete any prelicensing requirements if they had a license in their home state within the previous:

90 days A nonresident licensee does not need to complete any prelicensing requirements or take and pass the licensing exam in North Carolina if he has taken and passed a licensing exam for the same types of insurance in his home state per licensure. This exemption is only available if the application is received within 90 days after the cancellation of the applicant's previous license and the applicant's home state certifies that, at the time of cancellation, the applicant was in good standing.

What is an unlicensed person permitted to receive for policy referral if no specific terms were discussed?

A Commission An unlicensed person is permitted to receive a commission for policy referral, as long as the unlicensed person does not discuss any specific terms relating to the insurance policy with the referred person.

Who are the members of the North Carolina Life and Health Insurance Guaranty Association?

All insurers in NC All member insurers must be and remain members of the North Carolina Life and Health Insurance Guaranty Association as a condition of their authority to transact insurance in North Carolina.

Which of the following is a referral to a licensed insurance agent or broker that includes a discussion of specific insurance policy terms and conditions?

All of the above Negotiate, Sell, & Solicit

In North Carolina, "home state" means which of the following?

Any U.S. state, the District of Columbia or any U.S. territory "Home state" means any state or territory of the United States and the District of Columbia in which an insurance producer maintains their principal place of residence or principal place of business and is licensed to act as an insurance producer.

The proceeds of forfeitures will be remitted to the:

Civil Penalty and Forfeiture Fund The proceeds of forfeitures will be remitted to the Civil Penalty and Forfeiture Fund.

Any officer who makes fraudulent statements regarding Fraternal Benefit Societies is guilty of a:

Class 1 Misdemeanor Any person, officer, member, or examining physician of any society authorized to do business who knowingly or willfully makes any false or fraudulent statements or representations in or with reference to any application for membership, or for the purpose of obtaining money from or benefit in any society transacting business will be guilty of a Class 1 misdemeanor.

Of the following, which is the only type of insurance advertisements that would be allowed?

Hard to follow A person may not make, publish or circulate an advertisement, announcement, or statement containing a statement with respect to the business of insurance, which is untrue, deceptive, or misleading.

Concerning an individual in connection with an insurance transaction involving an application for insurance, no insurance institution, agent, or insurance support organization may prepare or request a/an:

Investigative Consumer Report

If Maurice has a producer license and works on behalf of an insurer, which of the following most accurately describes his position?

Maurice is an Agent An agent is a producer who works on behalf of an insurer.

A fraternal benefit society may provide all of the following benefits, EXCEPT:

Mortgage benefits A fraternal benefit society may provide death, endowment, annuity, and disability benefits as part of its contractual benefits.

Who created the "Uniform Application"?

NAIC "Uniform Application" means the current version of the NAIC Uniform Application for resident and nonresident producer licensing.

The acronym NAIC stands for:

National Association of Insurance Commissioners

All of the following are considered unfair trade practices, EXCEPT:

Offering policyholders bonuses out of surplus accumulated from nonparticipating insurance. It is illegal to rebate premiums or offer special favors, dividend advantages, or any other benefits not specified in the contract to induce people to purchase life insurance or annuities. However, it is not considered rebating to pay policyowners fair and equitable bonuses or to reduce their premiums out of surplus accumulated from nonparticipating insurance.

When an applicant for an insurance producer license furnishes a complete set of fingerprints, they are sent to the:

State Bureau of Investigation An applicant for an insurance producer license must furnish a complete set of fingerprints, certified by an authorized law enforcement officer. The fingerprints are then sent to the State Bureau of Investigation for a search of the applicant's criminal history record.

Any person who unknowingly sells insurance in North Carolina for an unauthorized insurer is:

Strictly liable for any losses or unpaid claims. Any person or entity who solicits, negotiates, or sells insurance or acts as a third party administrator in North Carolina for an unauthorized insurer is the representative of that insurer and will be strictly liable for any losses or unpaid claims.

Who is the chief officer of the Insurance Department

The Commissioner The chief officer of the Insurance Department is the Commissioner of Insurance.

Who does the Commissioner appoint to recommend reasonable rules?

The Life and Health Insurance Advisory Committee The Commissioner shall appoint one advisory committee for fire and casualty insurance licensees and one advisory committee for life and health insurance licensees. The advisory committees shall recommend reasonable rules to the Commissioner.

Inducing a policyholder to switch insurance companies without regard to bad consequences is:

Twisting Twisting is knowingly making misleading representations or incomplete or fraudulent comparisons of insurance policies in order to induce a person to lapse, forfeit, surrender, terminate, retain, assign, or convert a policy in order to sell a policy for another company.

An applicant for a resident agent license in both life and health must complete how many hours of prelicensing education?

40 hours

The North Carolina Life and Health Guaranty Association exercises its powers through the:

Board of Directors The North Carolina Life and Health Guaranty Association shall perform its functions under the Plan and shall exercise its powers through the Board of Directors.

Any agent who makes a false or fraudulent statement on a policy of insurance is guilty of a:

Class 1 Misdemeanor If any agent or other person knowingly or willfully makes any false or fraudulent statement or representation in or with reference to any application for insurance, for the purpose of obtaining premium from any company engaged in the business of insurance in North Carolina, he will be guilty of a Class 1 misdemeanor.

Subtly suggesting to recommend a client for membership to a selective country club if the person purchases a particular policy is an illegal practice called:

Coercion Coercion generally manipulates through the prospect of something desirable, such as an agent's subtly suggested offer to recommend the prospective client for membership in a selective club if the person purchases a particular policy.