Nebraska Law Quiz
The free-look period for individual accident and health policies is A) 10 days B) 30 days C) 15 days D) 25 days
10 days Explanation A policyowner may return an individual health or accident policy within 10 days after its delivery for a full refund for any reason.
The maximum fine for each flagrant violation of the Unfair Trade Practices Act is A) 20000 B) 15000 C) 10000 D) 25000
15000 Explanation The Director may order fines for violations of the Unfair Trade Practices Act. Fines are no more than $1,000 for each violation, not to exceed a maximum of $30,000. However, if the violation was committed flagrantly in conscious disregard for the lay, the maximum fine of each violation is $15,000 to a total maximum of $150,000.
How old must applicants for a producer's license be? A) 21 years old. B) 16 years old. C) 17 years old. D) 18 years old.
18 years old. Explanation An applicant for an insurance producer's license must be at least 18 years old and must not have committed an act that is grounds for license denial, suspension, or revocation. An applicant must also complete the required prelicensing courses, file an application with the appropriate license fee, and pass the state licensing exam.
A temporary license is good for up to: A) 120 days. B) 180 days. C) 60 days. D) 90 days.
180 days. Explanation A temporary insurance license is valid for up to 180 days and may not continue after the owner or the personal representative disposes of the business. The Director may require that a licensed producer or insurer act as a sponsor of and assume responsibility for all acts of the temporary licensee.
An employer group health plan must insure at least how many employees? A) 10 B) 2 C) 15 D) 25
2 Explanation A group policy issued to an employer must insure at least two employees. The term employees may also include retired employees.
Producers licensed in life, accident, or health insurance must take how many hours of continuing education courses in these lines every 2-year compliance period? A) 21 hours B) 24 hours C) 18 hours D) 26 hours
21 hours Explanation To maintain and improve the quality of insurance services provided to the public, the Nebraska Insurance Code requires producers licensed in life, accident, or health insurance to complete six hours of continuing education in these lines during each 2-year period. In addition to these requirements, licensees must complete 3 hours of continuing education in industry ethics.
The free-look (right to return) period for a Medicare supplement policy is A) 30 days B) 45 days C) 10 days D) 25 days
30 days Explanation All group and individual policies must have a notice prominently printed on the face page of the policy stating that the policyholder may return the policy within 30 days of delivery for a refund if not satisfied for any reason.
How long is the free-look period for long-term care policies? A) 25 days B) 10 days C) 30 days D) 45 days
30 days Explanation Long-term care policies must provide applicants a free-look period (also known as right to return period), within 30 days of delivery for a premium refund.
Medicare supplement policies may be returned within how many days for a full refund if the purchaser is not satisfied for any reason? A) 10 days. B) 30 days. C) 14 days. D) 21 days.
30 days. Explanation All group and individual Medicare supplement policies must have a 30-day free-look period during which the policy may be returned for a full refund if the purchaser is not satisfied for any reason. Every policy must have a notice prominently printed on its face page highlighting this provision.
Basic coverage for the treatment of alcoholism includes how many days of hospital inpatient coverage during any 365-day benefit period? A) 30 days. B) 14 days. C) 60 days. D) 21 days.
30 days. Explanation Basic coverage for the treatment of alcoholism consists of primary treatment of no less than 30 days of inpatient coverage in any 365-day benefit period. There must be at least two independent treatment periods available during the policy's lifetime. Basic coverage also includes 60 outpatient treatment visits during the policy's lifetime.
If the Director of Insurance denies an application for an insurance producer's license and the applicant requests a hearing in writing, the hearing must begin within how many days from the time the Director receives the request? A) 14 days. B) 30 days. C) 10 days. D) 21 days.
30 days. Explanation If the Director denies an individual's application for a license, the Director must notify the applicant in writing of the reasons for the denial. Within 30 days of receiving such notice, the applicant may make written demand for a hearing. The hearing must begin within 30 days of the date the Director receives the request. If the Director's decision to deny a license remains unchanged after the hearing, the applicant may appeal the decision.
Within how many days must a licensee notify the Department of Insurance of any change in a home or business address? A) 45 days. B) 90 days. C) 60 days. D) 30 days.
30 days. Explanation Licensees must notify the Department within 30 days of any change in their residential or business address. A licensee who fails to provide such notice is subject to a fine of not more than $500 per violation or license suspension, or both, until the change of address is reported.
An agent's commissions for controlled business must not exceed what percentage of annual commissions to avoid the conclusive presumption that the license was obtained for the purpose of writing controlled business? A) 30%. B) 50%. C) 25%. D) 10%.
30%. Explanation Licensed insurance producers whose total commissions and underwriting fees on business written on the property, life, health, or liability of themselves, their relatives by blood or marriage, and their employers or employees exceed 10% of the total commissions or underwriting fees received during any one year will be presumed to have obtained a license for the purpose of writing controlled business. Licensed producers will be conclusively presumed to have obtained a license to write controlled business if the total commissions and fees on such business exceeds 30% of the total during any one license year.
With group health insurance, a covered dependent child who is mentally or physically handicapped may be eligible for continued coverage if proof of his incapacity and dependency is furnished to the insurer within how many days of the child's attainment of the limiting age? A) 21 days. B) 15 days. C) 31 days. D) 60 days.
31 days. Explanation Group health and accident insurance that covers unmarried, dependent children up to a limiting age must also provide that when the children reach the limiting age, continued coverage is available if they are incapable of self-sustaining employment because of mental or physical handicap and the children are chiefly dependent on the insured employee for support. However, the insured must give proof of such incapacity and dependency to the insurer within 31 days of the child reaching the limiting age to ensure continued coverage. An insurer may require proof of a child's continuing handicap no more than once a year following the 2-year period after the child reaches the limiting age.
Each domestic insurance company in Nebraska is subject to an examination by the Department of Insurance at least every: A) 3 years. B) 5 years. C) 4 years. D) 2 years.
5 years. Explanation The Department of Insurance must examine each domestic insurer at least once every 5 years to determine its financial condition and ability to meet its obligations. To protect policyholders in the state, the Department may also order an examination of any foreign or alien insurer that applies for admission or is already admitted to do business in Nebraska.
A viatical settlement broker must provide a notice stating that the viator has the right to rescind the viatical settlement contract within A) 45 days of receiving the proceeds B) 60 days of receiving the proceeds C) 60 days of executing the contract D) 90 days of executing the contract
60 days of executing the contract Explanation A consumer disclosure document must be signed by the viator and the viatical settlement broker stating that the viator has the right to rescind the viatical settlement contract within 60 days of executing the contract or 30 days of receiving the proceeds, whichever is less.
What must be given to prospects during a direct response solicitation for long-term care insurance? A) A shopper's guide B) A policy illustration C) An outline of coverage D) A thank you gift
A shopper's guide Explanation With direct response solicitations, a shopper's guide must be presented with the application.
What is the minimum age that minors may contract for life, health, or accident insurance or annuities for the benefit of themselves or their estates or for the benefit of their father, mother, husband, wife, brother, or sister? A) Age 10. B) Age 18. C) Age 16. D) Age 14.
Age 10. Explanation Minors who are ten years of age and older may contract for life or health and accident insurance or annuities for the benefit of themselves, their estates, or their father, mother, husband, wife, brother, or sister. Such minors may surrender a policy with written approval of a parent or person liable for their support.
All of the following are excluded from coverage under a long-term care insurance policy EXCEPT A) Intentionally self-inflicted injuries B) Mental or nervous disorders C) Alcoholism D) Alzheimer's disease
Alzheimer's disease Explanation Coverage may be limited or excluded for illness, treatment, mental condition or accidents for all of the following: preexisting conditions or diseases, mental or nervous disorders, illness arising out of war; intentionally self-inflicted injuries, aviation (non-fare paying passengers), alcoholism and drug addiction, treatment in a government facility where Medicare benefits are available or territorial limitations.
Which of the following is not considered unlawful and prohibited when marketing long-term care insurance? A) Consultative selling tactics B) Cold lead advertising C) Twisting D) High pressure tactics
Consultative selling tactics Explanation Twisting, high pressure tactics, misrepresentation and cold lead advertising are prohibited when marketing long-term care insurance. Consultative selling is not considered unlawful. To whom should the Director of Insurance report information about a possible violation of the dental code of ethics in connection with a prepaid dental services plan?
The head of the Department of Insurance in Nebraska is the: A) Commissioner of Insurance. B) Director of Insurance. C) Superintendent of Insurance. D) Chief of Insurance.
Director of Insurance. Explanation In Nebraska, responsibility for implementing and enforcing insurance laws lies with the Department of Insurance, which is headed by the Director of Insurance. The Director is responsible for issuing all certificates and licenses and for collecting fees and charges as specified by law. The Director also appoints a staff of actuaries and examiners.
Prepaid dental service plans must be approved by the: A) Secretary of State. B) State Medical Director. C) Director of Insurance. D) Nebraska Dental Association.
Director of Insurance. Explanation Prepaid dental service corporations are subject to examination by the Department of Insurance. They must file an annual statement showing all payments received for prepaid dental services in Nebraska.
An HMO may not use a schedule of charges for health care services until it is approved by the: A) Department of Consumer Affairs. B) Nebraska Life and Health Insurance Guaranty Association. C) Nebraska Property and Liability Insurance Guaranty Association. D) Director of Insurance.
Director of Insurance. Explanation Schedules of premium rates for enrollee coverage in an HMO for health care services may not be used until they are filed with and approved by the Director of Insurance. Similarly, amendments to any schedules must first be filed with and approved by the Director before being used.
Which of the following statements regarding Safe Harbor 401(k) Plans is CORRECT? A) The penalty for early withdrawal is 25%. B) Employees must be 25 years old to be eligible participants. C) Employers may deduct up to 25% of their contributions to the Plan. D) Contributions are included in employee taxable income.
Employers may deduct up to 25% of their contributions to the Plan. Explanation The Safe Harbor 401(k) Plan allows eligible employees to contribute a portion of their salary to a retirement plan. Employers may deduct up to 25% of their contributions and employees may exclude their contributions from taxable income. To be eligible, an employee must be at least 21 years old, have had one year of employment and worked 1,000 hours in the year since they were hired. Like many plans, withdrawal of funds prior to age 59 ½ is subject to federal income tax as well as a 10% penalty.
The life insurance solicitation regulation applies to which of the following? A) Endowment life insurance. B) Credit life insurance. C) Variable life insurance. D) Group life insurance.
Endowment life insurance. Explanation The purpose of the life insurance solicitation regulation is to require insurers to provide information to life insurance purchasers that will improve their ability to select the most appropriate policy, improve the buyer's understanding of life insurance, and evaluate the relative costs of similar plans. However, it does not apply to annuities, credit life insurance, group life insurance, policies issued in connection with pension plans subject to ERISA, or variable life insurance policies. The regulation does apply to endowment life insurance.
Which of the following terms describes an insurance company that is doing business in Nebraska but was incorporated in another state? A) Foreign company. B) Domestic company. C) Alien company. D) Chartered company.
Foreign company. Explanation An insurance company that is doing business in Nebraska but was incorporated in another state is a foreign company. A domestic company is one that has been incorporated or formed in Nebraska, whereas an alien company has been formed or incorporated under the laws of any country other than the United States.
When must individual and group health insurance policies that provide coverage for family members make payments of children's benefits effective with respect to a newborn child of the insured? A) When the child is 1 month old. B) 14 days after birth. C) 8 days after birth. D) From birth.
From birth. Explanation All individual and group health insurance policies or indemnity-type contracts that provide coverage for the insured's family members must also provide such benefits for children from the moment of birth. Policies must cover injury or sickness, including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities. Policies may require the insured to notify the insurer within 31 days after the birth of a covered child and that payment of the premium be made to have the coverage continue beyond 31 days.
The replacement regulation does NOT apply to which of the following? A) Individual annuity contracts. B) Group life insurance. C) Limited-pay life policies. D) Endowment insurance.
Group life insurance. Explanation The purpose of Nebraska's replacement regulation is to regulate the activities of insurers and insurance producers when replacing existing life insurance and annuities and to protect purchasers by establishing minimum standards for replacement transactions. It also ensures that purchasers receive information to help them make decisions in their own best interests. However, the replacement regulation does not apply to credit life insurance, group life insurance, and group annuities. It also does not apply if an insured exercises a conversion privilege or makes an application for a contractual change in an existing policy. Finally, the replacement regulation is inapplicable to proposed life insurance that is replacing life insurance under a binding or conditional receipt issued by the same company or to transactions where the replacing and existing insurer are the same.
Which of the following would NOT be included in the definition of an insurance advertisement? A) Audiovisual material. B) Radio and television scripts. C) Sales presentations. D) Medicare buyer's guide.
Medicare buyer's guide. Explanation Insurance producers and insurers doing business in Nebraska are prohibited from using insurance advertising that is materially misleading or deceptive. ""Advertisement"" includes all printed and published material, audiovisual material, and descriptive literature used in direct mail, newspapers, magazines, radio and TV scripts, billboards, sales aids of all kinds, prepared sales talks, presentations, and material used by agents, brokers, and solicitors. Medicare buyer's guides, which must be given to applicants, are not considered advertisements.
At the time of application, insurers must provide prospects for Medicare supplement policies with a copy of the: A) insurer's warranty. B) Medicare supplement buyer's guide. C) Medicare rules. D) Notice for Renewal.
Medicare supplement buyer's guide. Explanation Insurers issuing Medicare supplement policies must provide purchasers with a Medicare supplement buyer's guide entitled Guide to Health Insurance for People with Medicare, or its equivalent. Delivery of the buyer's guide is required whether or not the policy qualifies as Medicare supplement coverage and must be delivered at the time of application.
What association protects owners of life insurance policies issued by insurers who become insolvent? A) Nebraska Comprehensive Insurance Pool Act. B) Nebraska Life and Health Insurance Guaranty Association. C) Nebraska Life Insurance Pool. D) Nebraska Property and Liability Association.
Nebraska Life and Health Insurance Guaranty Association. Explanation The Nebraska Life and Health Insurance Guaranty Association protects resident policyowners, insureds, and beneficiaries from the financial dangers caused by insurers that are unable to perform their contractual obligations because of impairment or insolvency. The association is a nonprofit legal entity that helps guarantee payment of benefits and continuation of coverage, helps prevent insurer insolvency, and assesses association members for the funds needed to carry out its purposes.
Which of the following is considered to be a prepaid dental service plan? A) Plan that offers referral services, consultation, and advice in addition to dental treatment. B) Plan whereby a group of employees pays a predetermined amount to cover only dental expenses. C) Group health plan that includes coverage for dental expenses. D) Retainer contract made by a dentist with an individual patient.
Plan whereby a group of employees pays a predetermined amount to cover only dental expenses. Explanation Prepaid dental service plans are an alternative to dental benefit coverage provided by individual and group health insurance policies. However, dental services that are incidental to other lines of insurance coverage are not considered prepaid dental service plans. In addition, retainer contracts made by dentists with individual patients with fees based on estimates of the services to be provided are not prepaid dental plans. Finally, plans that provide no benefits other than consultation and advice about referral services and furnishing limited dental assistance on an informal basis, with no express contractual obligation, in the context of an employment, membership, education, or similar relationship, are not considered prepaid dental service plans.
Which of the following activities would NOT subject a licensed producer to a penalty under Nebraska law? A) Forging a person's name to an insurance application or any other document. B) Obtaining a license for the purpose of writing controlled business. C) Misrepresenting the terms of any policy to the detriment of the applicant or the insured. D) Selling a life insurance policy to an individual who already owns a current life policy.
Selling a life insurance policy to an individual who already owns a current life policy. Explanation It is illegal for an insurance producer to knowingly misrepresent relevant facts or policy provisions to the detriment of an applicant or insured. Producers are also prohibited from obtaining a license to write controlled business, and are presumed to have done so if their total commissions and underwriting fees from policies written on themselves, their relatives and their employers or employees exceed 10% of their total commissions and fees for the year. The Director can also penalize a licensee who forges a person's name on an insurance application. However, it is not illegal to sell a life insurance policy to an individual who already owns a current policy.
Medicare supplement policies may not exclude preexisting conditions for more than how many months after the effective date of coverage? A) Six months. B) Ten months. C) Three months. D) Four months.
Six months. Explanation Medicare supplement policies cannot be canceled or not renewed solely because of the insured's health status, claims experience, or health care or medical condition of an applicant who is 65 years old and enrolled in Medicare Part B. Preexisting conditions may not be excluded for more than 6 months after the effective date of coverage.
One of the prohibited provisions precludes a life insurance policy from taking effect more than how many months before the original application was made? A) Six months. B) Five months. C) Two months. D) Three months.
Six months. Explanation Nebraska law prohibits the inclusion of certain provisions in life insurance policies. For example, a policy cannot contain a provision that lets a policy take effect more than six months before the original application was made. In addition, a policy cannot exclude or restrict liability in the event of suicide if it occurs more than two years after the policy date. Provisions for coupons or other evidence of indebtedness that are used to reduce the premiums on the policy or to buy additional insurance are also prohibited.
What is the minimum number of labor union or professional association members required for franchise insurance? A) Seven members. B) Nine members. C) Ten members. D) Five members.
Ten members. Explanation Sickness and accident insurance offered on a franchise plan may be issued to ten or more members of any trade or professional association or labor union. It may also be issued to five or more employees of any corporation, partnership, individual employer, or governmental agency or unit.
Which of the following is a trigger for benefit payments under a long-term care insurance policy? A) The inability to perform not more than three activities of daily living. B) The inability to go grocery shopping. C) The inability to perform not more than four activities of daily living. D) The inability to operate a motor vehicle safely.
The inability to perform not more than three activities of daily living. Explanation Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment.
Which one of the following must be licensed as an insurance producer? A) Anyone involved solely with the enrollment of individuals under group insurance policies. B) An employee involved in underwriting who does not receive commissions. C) Applicant for a temporary license. D) Those who solicit only sickness and accident and health insurance.
Those who solicit only sickness and accident and health insurance. Explanation Individuals who solicit sickness and accident and health insurance must take and pass the state licensing exam and must be licensed as insurance producers. However, certain individuals need not be licensed as insurance producers, including employees involved in underwriting, applicants for a temporary license, and anyone involved solely with the enrollment of individuals under group insurance policies.
Long-term care insurers must keep all advertisements for at least A) Five years B) Three years C) Two years D) Four years
Three years Explanation All advertising for long-term care insurance must be provided by the insurer to the Director for review or approval. The advertisements must be kept for at least three years following the date the advertisement was first used.
Persons licensed to sell life and accident and health insurance must complete continuing education hours within how many years after receiving their license? A) Two years. B) Five years. C) Three years. D) One year.
Two years. Explanation The Nebraska Insurance Code requires insurance producers and consultants to complete continuing education courses during every 2-year compliance period. In each 2-year period, resident producers must show the Director that they have satisfactorily completed the required hours of continuing education for each line of insurance for which they are licensed. The Director may grant an extension, not to exceed 1 year, for an insurance producer to complete the education requirements.
Which of the following people could qualify for coverage under the Nebraska Comprehensive Health Insurance Pool? A) Tatiana, a 9-year-old dependent of a Nebraska resident with a family history of heart disease. B) Mike, who is no longer employed but has continued group coverage under COBRA. C) Wendy, a Nebraska resident who last month applied for coverage from a private carrier but was offered a premium rate higher than that charged by NECHIP for the same coverage. D) Jake, who lived in Nebraska all his life before moving to Kansas for work last year.
Wendy, a Nebraska resident who last month applied for coverage from a private carrier but was offered a premium rate higher than that charged by NECHIP for the same coverage. Explanation To be eligible for coverage under the Nebraska Comprehensive Health Insurance Pool (NECHIP) an applicant must be a legal Nebraska resident for at least 6 months before application. Furthermore, the person must have been rejected for coverage by a Nebraska insurer for medical reasons, been offered coverage within the last 6 months that excludes a preexisting medical condition, been refused coverage comparable to that available through NECHIP, or have been offered comparable coverage at a higher premium within the last 6 months. Applicants cannot be eligible for another group health plan, Medicare, or Medicaid or have other coverage, including continued coverage under COBRA. Applicants must maintain a Nebraska residence to remain eligible for NECHIP. Finally, certain medical conditions automatically qualify a Nebraska resident for coverage under the pool. In this case, only Wendy is a Nebraska resident who meets at least one of these conditions. A family history of heart disease does not in itself make Tatiana eligible for coverage under the pool because she has not been diagnosed with a prequalifying health or medical condition.
Long-term care policies may not define a preexisting condition more restrictively than a condition for which medical advice or treatment was sought A) Beyond the six month waiting period. B) Before the six month waiting period. C) Within six months following the effective date of coverage of an insured person. D) Within six months preceding the effective date of coverage of an insured person.
Within six months preceding the effective date of coverage of an insured person. Explanation A preexisting condition cannot be denied more restrictively than a condition for which medical advice or treatment was recommended by, or received from a provider of health care services within six months preceding the effective date of coverage of an insured person.
All life insurance policies (except industrial insurance) issued in Nebraska must contain all of the following EXCEPT: A) an entire contract provision. B) a misstatement of age provision. C) a 30-day grace period. D) a 30-day free look period.
a 30-day free look period. Explanation Among the required provisions of all life insurance policies issued in Nebraska are an entire contract provision, a misstatement of age provision, a 30-day or one-month grace period provision for missed premiums, and a free look period of 10 days (not 30).
In long-term care insurance the definition of adult day care is A) Medical and nonmedical services provided to disabled and ill persons in their residences. B) Assisting an adult with activities of daily living. C) Personal care services in a hospital after surgery. D) a community group setting that provides social and medical services for six or more individuals.
a community group setting that provides social and medical services for six or more individuals. Explanation Adult day care is defined as a social and medical service program for six or more individuals in a community group setting
Disclosure requirements in the life insurance solicitation regulation mandate that prospective purchasers be given a: A) Notice to Purchasers. B) buyer's guide and policy summary. C) written policy guarantee. D) conditional receipt.
buyer's guide and policy summary. Explanation The life insurance solicitation regulation requires insurers to provide certain information to life insurance purchasers to improve their ability to select the most appropriate policy, improve their understanding of life insurance, and evaluate the relative costs of similar life insurance plans. To help meet these objectives, insurers must provide a buyer's guide and policy summary to purchasers. Failure to do so constitutes an omission that misrepresents the benefits, advantages, conditions or terms of an insurance policy.
Insurance producers may be licensed to write one or more of the following lines of insurance EXCEPT: A) celebrity insurance. B) credit life and credit accident and health insurance. C) miscellaneous insurance. D) variable contracts.
celebrity insurance. Explanation Insurance producers may be licensed to write one or more of the following lines of insurance: property and casualty; life insurance and annuities; variable contracts; sickness, accident, and health insurance; credit life and credit accident and health insurance; title insurance; crop insurance; assessment association insurance; and miscellaneous insurance. There is no celebrity line of insurance in which producers may be licensed.
An insurance company desiring to do business in Nebraska must apply for and be granted a(n): A) certificate of merit. B) company permit. C) operating license. D) certificate of authority.
certificate of authority. Explanation In order to conduct business in Nebraska an insurer must receive a certificate of authority from the Department of Insurance. Before granting a certificate of authority, the Department must be satisfied that the insurer is qualified to transact business in Nebraska.
Under a group health insurance policy, dependents include A) nannies, caretakers and housekeepers. B) children enrolled part-time in any college, university, or trade school. C) students up to age 18. D) children up to age 30.
children up to age 30. Explanation A policy may insure any two or more eligible members of a family, including children under a specified age which shall not exceed 30 years.
A utilization review conducted during a patient's hospital stay or course of treatment is a A) medical review B) concurrent review C) prospective review D) clinical review
concurrent review Explanation The Utilization Review Act establishes requirements and standards of operation for certification of medical utilization review agents. A concurrent review is utilization review conducted during the patient's hospital stay or course of treatment. Prospective review is utilization review conducted prior to an admission or a course of treatment.
Controlled business refers to insurance written upon the following EXCEPT: A) a producer's employer. B) employees of the producer. C) friends of the producer. D) relatives of the producer by blood or marriage.
friends of the producer. Explanation Controlled business refers to business written on the property, life, health, or liability of insurance producers, their relatives by blood or marriage, and their employers or employees. If a producer's total commissions and underwriting fees from controlled business exceed 10% of the total commissions or underwriting fees received during any one year, the producer will be presumed to have obtained a license for the purpose of writing controlled business. If the amount exceeds 30% of the total during a year, the producer will be conclusively presumed to have obtained a license to write controlled business, which is a misdemeanor.
The following may be excluded from Medicare supplement coverages EXCEPT: A) mental or emotional disorders, alcoholism, or drug addiction. B) eyeglasses, hearing aids, and examinations for the prescription or fitting of the same. C) daily coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any benefit period. D) treatment provided in a governmental hospital.
daily coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any benefit period. Explanation Medicare supplement policies must cover Part A Medicare eligible expenses for hospitalization that are not covered by Medicare from day 61 through 90 of the Medicare benefit period. In addition, Medicare supplement polices may not limit or exclude coverage by type of illness, accident, treatment, or medical condition. However, policies can exclude treatment for mental or emotional disorders, alcoholism, and drug addiction, treatment provided in a governmental hospital, and eye-glasses and hearing aids.
All of the following are duties of the Director of Insurance EXCEPT: A) appointing a staff of actuaries and examiners. B) issuing insurance licenses. C) drafting and enacting insurance laws. D) enforcing insurance laws.
drafting and enacting insurance laws. Explanation In Nebraska, insurance laws are enacted by the state legislature while the Department of Insurance, which is headed by the Director, is responsible for implementing and enforcing these laws. The Director is responsible for issuing all certificates and licenses and for collecting fees and charges as specified by law. The Director also appoints a staff of actuaries and examiners.
In Nebraska, insurers must retain records of insurance transactions for: A) five years. B) three years. C) six years. D) one year.
five years. Explanation Insurers must keep their usual and customary records of their insurance transactions at their place of business. Such records must be available and open to inspection by the Director of Insurance or his representatives anytime during business hours. Records of insurance transactions must be kept for five years.
Assisted living facilities must provide care A) on a 24-hours basis for acute and chronic individuals. B) for individuals who have had a minimum hospital stay of 14 days prior to arriving at the facility. C) for at least four individuals requiring assistance due to age, illness or physical handicap. D) for a minimum of five individuals requiring medical services due to age, illness or physical handicap.
for at least four individuals requiring assistance due to age, illness or physical handicap. Explanation Assisted living facilities must provide shelter, food and care to at least four individuals for more than 24 consecutive hours for a fee because of age, illness, or physical disability.
Long-term care insurance policies may not be cancelled for any of the following reasons EXCEPT A) decline in physical health. B) the insured's age. C) deteriorating mental health D) fraudulent claims.
fraudulent claims. Explanation Specifically, a long-term care policy cannot be cancelled, nonrenewed or terminated based on the insured's age or the deterioration of their mental or physical health.
All of the following are exempted from the replacement rule EXCEPT: A) application to exercise contractual changes or privileges in existing policies. B) individual life insurance policies. C) group annuities. D) credit life insurance.
individual life insurance policies. Explanation The purpose of the replacement regulation is to regulate the activities of insurers and producers when replacing existing life insurance and annuities and to protect purchasers by establishing minimum standards for replacement transactions. It also ensures that purchasers receive information to help them make decisions in their own best interests. However, the replacement regulation does not apply to credit life insurance, group life insurance, or group annuities. It also does not apply to applications for contractual changes or if a conversion privilege in an existing policy is being exercised. The regulation does not apply to proposed life insurance that is replacing life insurance under a binding or conditional receipt issued by the same company, and transactions where the replacing and existing insurer are the same. Individual life insurance policies would therefore be subject to the replacement regulation.
Convicted violators of the Unfair Trade Practices Act are subject to all of the following penalties EXCEPT: A) suspension or revocation of the violator's license, if he knew or reasonably should have known about the violation. B) minimum fines of $2,000 for each violation. C) fines of up to $1,000 for each violation to a maximum total of $30,000. D) for violators who knew or should have known that they were breaking the law, fines of up to $15,000 for each violation or an aggregate penalty of $150,000.
minimum fines of $2,000 for each violation. Explanation For violations of the Unfair Trade Practices Act, the Director may, after giving proper notice and a hearing, issue a cease and desist order. The Director may also impose a fine of up to $1,000 for each violation, not to exceed a total of $30,000. However, if the violation was committed flagrantly in conscious disregard of the law, a maximum fine of $15,000 or a total fine of $150,000 may be imposed. The Director may also suspend or revoke the insurer's license if the insurer knew or reasonably should have known it was violating the law.
Conversion privileges under an individual HMO contract A) must include a Benefit Schedule B) must cover all services rendered during the conversion C) must provide a 30-day free look period D) must provide a 10-day free look period
must provide a 10-day free look period Explanation An individual HMO contract must provide a 10-day free-look period and allow the individual to return the contract for a premium refund. If the individual uses any services in that 10-day period, and the contract has already been returned, then the individual is responsible for those charges.
None of the following needs to be licensed as an insurance consultant EXCEPT: A) actuaries during the normal course of their business. B) licensed agents who give advice incidental to the normal course of their business and do not charge a fee, but who receive commissions for the insurance they write. C) bank trust officers performing their usual duties. D) persons who, for a fee, offer advice and service with respect to insurable risks.
persons who, for a fee, offer advice and service with respect to insurable risks. Explanation An insurance consultant is any person who, for a fee, engages in the business of offering to the public any advice, counsel, opinion, or service with respect to insurable risks, or concerning the benefits, coverages, or provisions under any policy of insurance that could be issued in Nebraska, or involving the advantages or disadvantages of any such insurance policy or any formal plan of managing pure risk. Although consultants must be licensed, actuaries and bank trust officers performing their usual duties and licensed agents who give free advice incidental to the normal course of their business do not need to be licensed as insurance consultants.
All of the following statements regarding Medicare supplement policies are true EXCEPT A) eligible individuals must apply no later than 63 days after the date of termination of enrollment in a group health or Medicare Advantage plan. B) preexisting conditions may not be excluded for more than nine months after the effective date of coverage. C) All Medicare supplements must include Plan A as a separate policy. D) As long as an applicant is enrolled in Medicare Part B and 65 years old, a policy may not be cancelled based on the individual's medical condition.
preexisting conditions may not be excluded for more than nine months after the effective date of coverage. Explanation A Medicare supplement policy must be made available to all applicants who qualify without regard to age. Preexisting conditions may not be excluded for more than six months after the effective date of coverage.
An admitted company is one that is: A) on probation for admitting the commission of an insurance violation. B) organized in another country, but approved for doing business in the United States. C) qualified and licensed to do business in Nebraska. D) found guilty of breaking the law.
qualified and licensed to do business in Nebraska. Explanation An admitted company is one that is qualified and licensed to transact business in Nebraska while a nonadmitted company is not licensed to do business in the state.
Generally, anything of value that directly or indirectly reduces the premium below the amount specified in an insurance policy is a: A) dividend. B) discount. C) rebate. D) bonus.
rebate. Explanation A rebate is anything of value that directly or indirectly lowers any premium below the amount specified in the insurance policy. However, it does not include the dividend or refund allowed with participating policies or bonuses paid on nonparticipating policies that have been in force at least 5 years. Rebating in any form as an inducement to purchase insurance is illegal.
To establish an HMO in Nebraska, the proper application must be submitted to: A) the Director of Health. B) the Director of Insurance. C) the Secretary of State. D) the Nebraska Medical Association.
the Director of Insurance. Explanation To establish an HMO in Nebraska, an application for a certificate of authority must be submitted to the Director of Insurance with the required organizational documents. The application must include a statement describing the geographic area to be served by the HMO.
An insurer may pay its producer for the sale of a Medicare supplement policy only if A) it is not a replacement. B) the payment in the second year is no more than 200% of what was paid for selling or servicing the policy in the first year. C) payment in the third and subsequent years is the same as what was paid in the first year. D) the first-year payment is no more than 200% of what was paid for selling or servicing the policy in the second year.
the first-year payment is no more than 200% of what was paid for selling or servicing the policy in the second year. Explanation An insurer may pay its producer for the sale of a Medicare supplement policy only if the first-year payment is no more than 200% of what was paid for selling or servicing the policy in the second year.
The following statements regarding the free look provision in individual health and accident policies are true EXCEPT: A) the provision must be printed on single premium, nonrenewable policies, as well as other kinds of health insurance policies. B) the free look provision must be printed on the face of the policy or be included as a notice with the policy. C) when a policy is returned in accordance with the free look provision, it is void as though it were never issued. D) the policyowner may return the policy within 10 days for a full refund of any premium paid.
the provision must be printed on single premium, nonrenewable policies, as well as other kinds of health insurance policies. Explanation Individual health and accident policies---except single-premium, nonrenewable policies---must have printed on the face or include a notice that the policyowner may return the policy within ten days after its delivery for a refund of any premium paid if, after examining the policy, the purchaser is not satisfied with it for any reason. When a purchaser returns a policy during the free look period, the policy is void as though it was never issued.
Benefits payable on behalf of an insured high school student under a blanket policy may be payable to any of the following EXCEPT: A) the designated beneficiary. B) a parent. C) the school. D) the student's estate.
the school. Explanation If a school has a blanket health and accident insurance policy covering its students, benefits under the policy are payable only to the person insured or to her designated beneficiary or estate. If the insured is a minor, these benefits may be payable to the parent, guardian, or other person supporting the minor.
All of the following words or phrases are prohibited from being used in advertisements or in sales presentations for Medicare supplement policies because their use can be misleading EXCEPT: A) comprehensive. B) as high as. C) this is a limited policy. D) unlimited.
this is a limited policy. Explanation Advertisements must be truthful and not misleading by fact or implication. No advertisement may contain words or phrases such as ""all,"" ""full,"" ""complete,"" ""comprehensive,"" ""unlimited,"" ""up to,"" ""as high as,"" or similar words or phrases in a manner to exaggerate policy benefits. If a policy provides benefits for specified diseases or specified accidents only, it must clearly state ""this is a limited policy"" or ""this is a cancer-only policy,"" or a similar statement.