Virginia Statutes and Regulations Common to All Lines
Margaret applies for an insurance license, but the Commission decides not to issue the license because her tarnished reputation. She notifies the Commission that she wants to dispute this judgment in a hearing. The Commission must give her at least how many days' notice of the date of the hearing? A. 0 B. 10 C. 30 D. 60
10
If an agent's appointment is terminated, suspended or revoked, the agent must cease selling or soliciting on behalf of the insurer within A. 10 calendar days. B. 15 calendar days. C. 30 calendar days. D. 5 calendar days.
10 calendar days.
If an agent's appointment is terminated, suspended or revoked, the agent must cease selling or soliciting on behalf of the insurer within A. 30 calendar days. B. 5 calendar days. C. 10 calendar days. D. 15 calendar days.
10 calendar days.
Once the agent's appointment with the insurer has been terminated, how soon must the insurer mail a notice of termination to the agent? A. 10 days B. 15 calendar days C. 30 days D. 5 business days
15 calendar days
Once the agent's appointment with the insurer has been terminated, how soon must the insurer mail a notice of termination to the agent? A. 15 calendar days B. 30 days C. 5 business days D. 10 days
15 calendar days
Once the agent's appointment with the insurer has been terminated, how soon must the insurer mail a notice of termination to the agent? A. 30 days B. 5 business days C. 10 days D. 15 calendar days
15 calendar days
Agent P has a life license. How many hours of CE must be completed to complete Agent P's requirement? A 8 B 10 C 12 D 16
16
Agent P has a life license. How many hours of CE must be completed to complete Agent P's requirement? A. 8 B. 10 C. 12 D. 16
16
What is the minimum age for obtaining an agent license in this state? A. 18 B. 19 C. 21 D. 25
18
How many hours of continuing education must be completed on the subject of ethics biennially? A. 3 B. 5 C. 10 D. 12
3
How long is an insurer required to maintain records in Virginia? A. Permanently B. 3 years C. 5 years D. 10 years
3 years Records must be kept for at least 3 years.
An insurance agent changes his residential address. Within what time period must the agent notify the Commission of the change? A. Immediately B. 10 business days C. 30 calendar days D. There is no requirement for residential addresses.
30 calendar days
An agent is convicted of a felony in another jurisdiction. Within what period of time must the agent report the felony charge to the Commission? A. Immediately B. 5 days C. 10 days D. 30 days
30 days
If the Commission determines the agent's appointment is invalid, within how many days will the Commission notify the insurer? A 5 business days B 10 business days C 21 calendar days D 30 calendar days
A 5 business days
When an insurance producer is to charge an administrative fee to an insured, all of the following must be done EXCEPT A. A copy of any fee disclosure must be provided to the insured. B. The agent must disclose the fees in writing. C. The insured must provide a signature on any fee disclosure. D. A schedule of fees must be posted in the office.
A copy of any fee disclosure must be provided to the insured.
All of the following must be included in the report to the Commissioner after any felony conviction or administrative action is taken against a licensed insurance agent EXCEPT A. General facts and circumstances surrounding the conviction/action. B. Specific facts and circumstance surrounding the conviction/action. C. A copy of the agent's license. D. Consent to the order.
A copy of the agent's license.
All of the following must be included in the report to the Commissioner after any felony conviction or administrative action is taken against a licensed insurance agent EXCEPT A. Specific facts and circumstance surrounding the conviction/action. B. A copy of the agent's license. C. Consent to the order. D. General facts and circumstances surrounding the conviction/action.
A copy of the agent's license.
An agent who collects a premium payment from a client must hold such funds in which of the following types of accounts? A. A separate account from the agent's personal or business account B. As long as records are kept, any federally insured account C. An equity indexed account D. A business account
A separate account from the agent's personal or business account
Which of the following persons is NOT allowed to act as a viatical settlement broker in Virginia? A. A nonresident broker B. A business entity C. An unlicensed person D. A licensed producer
An unlicensed person
Which of the following represents an insurer? A. Insured B. Commissioner C. Nonresident D. Agent
Agent
Who is legally required to keep records pertaining to insurance transactions? A. Agencies and insurers only B. The Commission C. All licensees D. Insureds
All licensees
Person M and Person N worked on writing an insurance policy for a client. Which of the following statements regarding their possible share of commission is correct? A. Only one person can receive commission; sharing is not allowed. B. As long as M and N are both licensed for the line of insurance written, they may share the commission. C. Person M was not licensed at the time the insurance was written; however, Person N is licensed. Both individuals may share the commission since both worked on the account. D. Person M is licensed as a health agent. Person N is licensed as a life agent. The policy written was for life insurance. Both individuals may share in the commission for the life policy written.
As long as M and N are both licensed for the line of insurance written, they may share the commission.
Person M and Person N worked on writing an insurance policy for a client. Which of the following statements regarding their possible share of commission is correct? A. Person M is licensed as a health agent. Person N is licensed as a life agent. The policy written was for life insurance. Both individuals may share in the commission for the life policy written. B. Only one person can receive commission; sharing is not allowed. C. As long as M and N are both licensed for the line of insurance written, they may share the commission. D. Person M was not licensed at the time the insurance was written; however, Person N is licensed. Both individuals may share the commission since both worked on the account.
As long as M and N are both licensed for the line of insurance written, they may share the commission.
At what time may the Insurance Commissioner inspect records pertaining to insurance transactions? A. At least 5 years after the transaction B. At any business time in the 3 years immediately following the relevant transaction C. At least 3 years after the transaction D. At any business time in the 5 years immediately following the relevant transaction
At any business time in the 3 years immediately following the relevant transaction
How often will the Commissioner examine an insurer's books and records? A. Annually B. Only upon a request from the insurer or a complaint from a customer C. At least once every 5 years D. Every 3 years
At least once every 5 years
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called? A Adverse selection B Discrimination C Law of large numbers D Misrepresentation
B Discrimination
In which of the following situations is it legal to limit coverage based on marital status? A Divorce within the last six months of applying for insurance B It is never legal to limit coverage based on marital status. C Excessive number of divorces, as defined by the Insurance Code D Legal separation during the application process
B It is never legal to limit coverage based on marital status.
An agent is licensed for life and property insurance. How many hours of CE is the agent required to earn every 2 years? A 10 B 16 C 24 D 40
C 24
An agent has moved from Virginia to another state. When will his license authority be terminated? A 30 days after the change of residence B Within 10 business days C Immediately D 30 days after the Commission receives the notification of the move
C Immediately
To what organization must all admitted insurers belong? A The Commissioner's Association B The Virginia Insurance Department Association C Life, Accident and Sickness Insurance Guaranty Association D The Virginia Insurers Association
C Life, Accident and Sickness Insurance Guaranty Association
Which of the following best describes the unfair trade practice of defamation? A Issuing false advertising material B Refusing to deal with other insurers C Making derogatory oral statements about another insurer's financial condition D Assuming the name and identity of another person
C Making derogatory oral statements about another insurer's financial condition
What governing body issues rules and regulations for the administration of the Insurance Code? A The Life and Health Guarantee Association B The Joint Legislative Audit and R eview Commission C The State Corporation Commission D The Virginia Department of Insurance
C The State Corporation Commission
An agent has been convicted of a felony in another jurisdiction. Who must report the offense to the Commission? A The Commissioner of the other jurisdiction B The police C The agent D The prosecuting attorney of the other jurisdiction
C The agent
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of A. Coercion. B. Loading. C. Defamation. D. Twisting.
Coercion This is an example of the illegal practice of coercion.
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as A. Coercion. B. Rebating. C. Misleading advertising. D. Defamation.
Coercion. These are all considered to be Unfair Trade Practices, which are major violations that can lead to heavy penalties. Coercion, for example, is when the bank won't give you an auto loan unless you agree to buy auto insurance from them.
Which of the following authorities ultimately decides whether an applicant is in good enough standing to receive a license? A. NAIC B. Federal Association of Insurers C. Governor D. Commission
Commission
Which of the following authorities determines whether an insurer's appointment of an agent is valid? A. NAIC B. Commission C. Guaranty Association D. Federal Association of Insurers
Commission If the Commission determines the appointment is invalid, it will notify the insurer within 5 business days of receipt of notice. If the appointment is valid, the Commission will issue an acknowledgement of appointment to the agent and insurer within 5 business days.
What authority issues a Cease and Desist Order? A. NAIC B. Federal Board of Insurance Fraud C. Commission D. Law Enforcement Officials
Commission Whenever it appears that any person is violating an insurance law of Virginia or any rule or regulation made by the Commission, the Commission may issue a cease and desist order.
Which of the following is licensed solely to advise insureds about their policies? A. Agent B. Broker C. Actuary D. Consultant
Consultant
When an insurance producer is to charge an administrative fee to an insured, all of the following must be done EXCEPT A The agent must disclose the fees in writing. B The insured must provide a signature on any fee disclosure. C A schedule of fees must be posted in the office. D A copy of any fee disclosure must be provided to the insured.
D A copy of any fee disclosure must be provided to the insured.
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? A. Defamation B. Undercutting C. Twisting D. Slandering
Defamation
Which of the following will NOT be considered unfair discrimination by insurers? A. Cancelling individual coverage based on the insured's marital status B. Assigning different risk classifications to applicants based on gender identity C. Discriminating in benefits and coverages based on the insured's habits and lifestyle D. Charging applicants with similar health histories different premiums based on their ethnicity
Discriminating in benefits and coverages based on the insured's habits and lifestyle
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called? A. Misrepresentation B. Adverse selection C. Discrimination D. Law of large numbers
Discrimination Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered A. Controlled business. B. Adverse selection. C. Discrimination. D. Twisting.
Discrimination.
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered A. Twisting. B. Controlled business. C. Adverse selection. D. Discrimination.
Discrimination.
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A. Stocks, securities, or bonds. B. An offer to share in commissions generated by the sale. C. Dividends from a mutual insurer. D. An offer of employment.
Dividends from a mutual insurer.
How often must continuing education requirements be met? A. Every year B. Every 2 years C. Every 3 years D. Every year for the first 5 years, then every 3 years
Every 2 years
Which of the following is NOT a duty of the Commission of Insurance? A. Examining each domestic insurer at least once a year B. Appointing the Commissioner of Insurance C. Enforcing the Insurance Code D. Suspending or revoking licenses of Insurance Code violators
Examining each domestic insurer at least once a year
Which of the following is NOT a duty of the Commission of Insurance? A. Suspending or revoking licenses of Insurance Code violators B. Examining each domestic insurer at least once a year C. Appointing the Commissioner of Insurance D. Enforcing the Insurance Code
Examining each domestic insurer at least once a year
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? A. False advertising B. Unfair claims C. Twisting D. Defamation
False advertising
What is the term most specifically associated with the fact that an agent is in a position of financial trust, and must be held accountable for handling premiums or other funds? A. Express authority B. Utmost good faith C. Legal duty D. Fiduciary capacity
Fiduciary capacity
What is the term most specifically associated with the fact that an agent is in a position of financial trust, and must be held accountable for handling premiums or other funds? A. Express authority B. Utmost good faith C. Legal duty D. Fiduciary capacity
Fiduciary capacity An agent is in a position of financial trust and must be held accountable for receipt of premiums, return premiums, or other funds. This responsibility is referred to as the agent's fiduciary capacity.
All of the following are true regarding rebates EXCEPT A. Dividends are not considered to be rebates. B. Rebates are allowed if it's in the best interest of the client. C. Rebates are only allowed if specifically stated in the policy. D. Rebating can be anything of economic value, given as an inducement to buy.
Rebates are allowed if it's in the best interest of the client.
The purpose of the Life, Accident and Sickness Insurance Guaranty Association is to A. Protect the reputation of the Insurance Department if they issue a Certificate of Authority to a company that becomes insolvent. B. Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company. C. Encourage Life insurers to write substandard business. D. Allow producers to continue to solicit insurance, even if the company they represent is financially impaired.
Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company.
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice? A. A legal advertising strategy B. Unfair Discrimination C. Defamation D, Illegal
Illegal
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? A. Illegal until endorsed by the Guaranty Association B. Legal, provided that the other insurers are paid royalties for the usage of their names C. Illegal under any circumstances D. Legal, provided that the information can be verified
Illegal under any circumstances
Which of the following best describes a misrepresentation? A. Making a deceptive or untrue statement about a person engaged in the insurance business B. Making a maliciously critical statement that is intended to injure another person C. Discriminating among individuals of the same insuring class D. Issuing sales material with exaggerated statements about policy benefits
Issuing sales material with exaggerated statements about policy benefits
Within his or her fiduciary capacity, what must an agent do with funds held in the separate account? A. Index earnings with other separate accounts B. Keep accurate and detailed records C. Report quarterly to insurer D. Issue annual statements to the insured and the insurer
Keep accurate and detailed records
To what organization must all admitted insurers belong? A. The Commissioner's Association B. The Virginia Insurance Department Association C. Life, Accident and Sickness Insurance Guaranty Association D. The Virginia Insurers Association
Life, Accident and Sickness Insurance Guaranty Association
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of A. Rebating. B. Coercion. C. Twisting. D. Controlled business.
Rebating.
During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes A. Defamation. B. Twisting. C. Coercion. D. Misrepresentation.
Misrepresentation.
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of A. Rebating. B. Misrepresentation. C. Concealment. D. Unfair claim practice.
Misrepresentation.
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of A. Rebating. B. Misrepresentation. C. Concealment. D. Unfair claim practice.
Misrepresentation. Issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal.
During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes A. Defamation. B. Twisting. C. Coercion. D. Misrepresentation.
Misrepresentation. Making false or misleading statements with the intent to defraud another is misrepresentation.
What are the disclosure requirements if an insurance producer wishes to charge a fee? A. Posting a schedule of fees in the producer's office, disclosing the fees to the client in writing, and obtaining a signature on the disclosure from the client B. At least verbally disclosing the fees to the client, issuing a fee receipt to the client C. Issuing a conditional premium fee receipt, giving written notice of the premium, obtaining a signature of the insurer D. Obtaining a signature on a schedule of fees, issuing premium fee receipts to the client, providing copies of deposit statements to client.
Posting a schedule of fees in the producer's office, disclosing the fees to the client in writing, and obtaining a signature on the disclosure from the client
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as A. Rebating. B. Twisting. C. Unlawful distribution of dividends. D. Coercion.
Rebating. Rebating is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy. Both the offer and acceptance of a rebate are illegal.
An insurance application cannot ask about which of the following information about an applicant? A. Address B. Sexual orientation C. Age D. Gender
Sexual orientation
What governing body issues rules and regulations for the administration of the Insurance Code? A. The Joint Legislative Audit and Review Commission B. The State Corporation Commission C. The Virginia Department of Insurance D. The Life and Health Guarantee Association
The State Corporation Commission
What governing body issues rules and regulations for the administration of the Insurance Code? A. The Life and Health Guarantee Association B. The Joint Legislative Audit and Review Commission C. The State Corporation Commission D. The Virginia Department of Insurance
The State Corporation Commission
An agent has been convicted of a felony in another jurisdiction. Who must report the offense to the Commission? A. The police B. The agent C. The prosecuting attorney of the other jurisdiction D. The Commissioner of the other jurisdiction
The agent
An agent has been convicted of a felony in another jurisdiction. Who must report the offense to the Commission? AThe prosecuting attorney of the other jurisdiction B. The Commissioner of the other jurisdiction C. The police D. The agent
The agent
In order to maintain funds in a fiduciary capacity, all of the following actions are required EXCEPT: A. The agent must photocopy all funds received prior to deposit. B. Funds must be held in a separate account. C. The agent must keep detailed records of the funds held. D. The agent must act in a reasonable, prudent and competent manner.
The agent must photocopy all funds received prior to deposit.
An applicant for an insurance license passed his state licensing exam 7 months ago. He applied for his license yesterday. Which of the following is true? A. The applicant must retake the exam and submit a new application and processing fees. B. The exam score and fees are good for 1 year; the applicant just needs to wait for his license. C. The fees remain valid, but the exam results will be forfeited. D. The exam score is still valid; the applicant only has to pay a license processing fee.
The applicant must retake the exam and submit a new application and processing fees.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? A. False advertising B. Rebating C. Twisting D. Switching
Twisting
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? A. Switching B. False advertising C. Rebating D. Twisting
Twisting "Twisting" is a misrepresentation that persuades an insured/owner, to his or her detriment, to cancel, lapse, or switch policies from one to another.
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of A. Rebating. B. Twisting. C. Defamation. D. Misrepresentation.
Twisting.
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of A. Twisting. B. Defamation. C. Misrepresentation. D. Rebating.
Twisting.
In which instance may 3 licensees share commissions? A. Three licensees may never share a commission. B. Sharing of commissions is at the discretion of the insurer. C. When all 3 are licensed for the same line of insurance from which the commission comes D. When at least 2 are licensed for the appropriate line of insurance from which the commission comes
When all 3 are licensed for the same line of insurance from which the commission comes