XCEL Chapter 11 - Laws and Rules (new)
A producer may be disciplined by the Commissioner for which of the following actions?
Misappropriation of premium funds
Benefits for a Medicare Supplement policy
Must not duplicate Medicare benefits
Which of the following is NOT required in an order from the Commissioner?
The Governor's signature
A separate converted policy may, at the option of the insurance company, be issued to cover a(n)
dependent
Replacement can be BEST described as
exchanging a new policy for one already in force
A producer's license may only be suspended or revoked if the producer
has been afforded a right to a hearing
A Buyer's Guide MUST
have it's content approved by the commissioner
An ____ ____ sells, solicits, or negotiates insurance contracts for compensation.
insurance producer
An existing health benefit plan offered by a small employer may be replaced by a SHOP Exchange Navigator only if the small employer
is eligible for a Federal tax credit through the SHOP Exchange
Commissions may ONLY be paid to
licensed and duly appointed Producers
A viatical settlement broker may NOT
make any transactions before being approved for a license
as of January 1, 2014, small group health insurance can be rated on the basis of
Tobacco use
Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a(n)
Unfair claim settlement practice
An example of rebating is
a producer who shares commissions with a client
A domestic insurance company in Maryland MUST
be formed under Maryland insurance laws
An insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a(n)
rebate
Insurance producer Kelly offers an insured a $500 shopping card if an insurance product is purchased through her. what is this an example of?
rebating
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is called
reinsurance
All of the following actions are considered rebating EXCEPT
sharing commissions with other licensed and appointed agents
An insurance producer who replaces an existing policy by making false written or oral statements is committing the act of
twisting
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as
twisting
Producers must complete a total of ___ continuing education credits for each two-year licensing period.
24
To be eligible for small employer group coverage, an employee must work a MINIMUM of ___ hours in a typical week.
25
All Medicare Supplement policies MUST contain which provision?
Pre-existing conditions may only be excluded from coverage for a maximum of 6 months
A(n) ______ negotiates an insurance contract on behalf of an insurer.
producer
A producer MUST maintain insurance transaction records for a minimum of ___ years.
5
The Commissioner must examine the financial affairs of each admitted insurer operating in Maryland at least once every how many years?
5
A Medicare Supplement policy may exclude coverage for a preexisting condition for up to ___ months.
6
Under a small group health plan, an insurer is required to provide a newly-married employee at least __ days to add the new spouse to the plan.
60
A life policy loan in Maryland cannot charge a fixed rate of interest higher than
8%
Which of the following life events would allow an uninsured employee to qualify for special enrollment in a small employer health benefit plan?
Adoption of a child
Which of the following is NOT a requirement for soliciting insurance in Maryland?
At least 21 years old
Coverage for newborns under a health plan MUST include coverage for
Birth abnormalities
Which of the following unfair trade practices involves a producer who makes public malicious statements about an insurer's financial condition?
Defamation
All of these are responsibilities of the Commissioner EXCEPT
Endorsing insurers
How long after its effective date will an individual life insurance policy become incontestable?
2 years
How long is the Contestable Period for health insurance policies sold in Maryland?
2 years
Written notice of a health insurance claim should be given to the insurer within __ days after the occurrence of any loss covered by the policy.
20
Producers must complete a total of ___ Continuing Education hours for each two-year licensing period.
24
Maryland requires that a licensee completes ___ hours of continuing education on the subject of ethics every reporting period.
3
A producer must notify the Commissioner within ___ days of a felony conviction.
30
Which of the following is NOT information found in a life insurance buyer's guide?
How to take legal action against an insurance company
An insurer may pay a commission in which of the following scenarios?
To a licensed producer who is appointed with the insurer
Proceeds payable under a life insurance contract to a policyowner in anticipation of death or upon the occurrence of specified life-threatening conditions as defined by the policy are best described as:
accelerated benefits
A minor may receive a life insurance policy's death benefit ONLY
if the minor has an appointed guardian
Upon receiving a producer complaint, the Commissioner may immediately
issue a cease and desist order
under the maryland health insurance plan, comprehensive health benefits are provided to
medically uninsurable residents
Twisting is an illegal act which involves
misrepresentation
A producer's secretary who solicits prospects on the telephone
must be licensed as a producer
An advertisement for an insurance product may contain
the insurer's name
Two producers may share a commission ONLY if
they are both licensed in the same line of business
Mary's Medicare Supplement policy had been in effect for 12 months. She recently replaced the policy with a new one that provides better coverage. The replacing policy may only impose a ___ month time exclusion for pre-existing conditions.
0
The standard grace period for a life insurance policy sold in Maryland is
30 days
To be classified as a small employer, an employer must NOT have more than ___ eligible employees.
50
A life insurance policyowner is allowed ___ days upon policy delivery to return the policy for a full premium refund.
10
A policyowner has ___ days after policy delivery to return a major medical policy for a full refund.
10
within how many days must a producer report to the commissioner any administrative actions made against him/her?
30
A newborn is required to be covered for ___ days from the moment of birth.
31
which of the following is an example fraud?
A producer who knowingly submits a false statement in support of a claim
All of the following is considered a form of advertising EXCEPT
An insurer's AM Best rating
________ is the authority given to a producer to sell, solicit, or negotiate insurance on behalf of the insurer.
Appointment
Which of the following is required for an insurer to conduct business in this state?
Certificate of authority
Which of the following is NOT considered to be an act of fraud?
Collecting a charge for insurance that is less than the charge applicable to that insurance
The ___________ must be notified of a licensee's address change within 30 days of such change.
Commissioner
How often must the Commissioner examine each domestic insurance company?
Every 5 years
How often must an insurance producer's license in Maryland be renewed?
Every two years
A producer is meeting with a client to determine whether an annuity would be suitable for purchase. Which of the following topics needs to be discussed with this client?
Financial objectives
Which type of contract may NOT be issued by an insurance company?
HMO contract
When is an existing health insurance policy required to provide coverage for a newborn child?
Immediately
All of the following are typically included in a life insurance policy illustration EXCEPT
Names of the beneficiaries
What is the required action to be taken by a Maryland licensee before operating under an assumed business name?
Notify Commissioner
The _______ of Coverage describes policy features, benefits, exclusions, and riders in a Long-Term Care policy.
Outline
Replacement regulation is designed to protect
Policyowners from misrepresentations and loss of benefits
Which of the following actions by a producer would NOT result in a license suspension or revocation?
Producing an inadequate amount of new premium
When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer?
Promptly
All of these may be an Unfair Claims Practice EXCEPT
Refusing to pay persons bringing false or fraudulent claims
Who regulates the quality of care provided by a heath maintenance organization (HMO)?
Secretary of the Department of Health and Mental Hygiene
Claims for a Long-Term Care policy MUST be paid for which of the following conditions?
Senile dementia
In Maryland, a Producer may have his/her license revoked for which of the following acts?
Signing a prospect's name without their knowledge or presence
Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?
Submit to the replacing insurer a list of the policies to be replaced
What may be the result of replacing an existing life insurance policy with a new one?
Surrender charge
At minimum, a carrier is required to offer which of the following health benefit plans to small employers?
The standard plan
A producer has committed an insurance crime that violates US Code 1033 (interstate commerce). who would be responsible for the prosecution of this crime?
US Attorney General
An insurance producer is BEST defined as
a person who has a contract with an insurance company to represent it
an example of replacement is
canceling a term life policy to buy a whole life policy
An order issued by the commissioner that prohibits a specific practice listed in the order is called a(n)
cease and desist order
All of these types of benefits may be covered by a nonprofit health service plan EXCEPT
disability income
Recording the receipt and distribution of premiums due to an insurer is considered a producer's ________ responsibility.
fiduciary
Each delivered life insurance policy in Maryland MUST include a(n)
legible and brief description of the policy on the first page
Producer commissions may NOT be paid to
licensed producers not appointed by an insurer
What kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital?
long-term care
A Medicare Supplement policy can be cancelled by the insurer for
nonpayment
Long-term care insurance provides
one or more diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital
XYZ Corp was issued a group health policy for its employees. Under this plan a
policy must be issued to XYZ, and a certificate must be issued to each employee
The promise of a discount in premium as an inducement to purchase insurance is known as
rebating
A(n) ______ company is owned by its shareholders
stock
Long-term care policies sold in maryland may exclude coverage related to
substance addictions
The Fair Credit Reporting Act protects consumers
with guidelines regarding credit reporting and distribution
A temporary producer license issued in Maryland is valid for up to
15 months
An eligible employee can be excluded from group health coverage for up to ___ months if he/she is considered a "late enrollee".
18
Once a health insurance policy has been in force for ___ year(s), the policy may NOT be contested by the insurer.
2
Tim's individual life insurance policy has just recently lapsed. His policy may be reinstated at any time within ___ year(s).
3
ABC Corporation has a group life insurance policy that covers its employees and their dependent children. Which of the following would be considered a "dependent child"?
Child over the age of 18 years who attends an educational institution and relies on the insured employee for financial support
To conduct insurance business in this State, an insurer must be issued a certificate of authority. The entity which issues the certificate of authority is the
Commissioner
Jim recently sold his whole life insurance policy under a viatical settlement contract. The proceeds of this contract could be subject to the claims of
Creditors
Which of the following is NOT a qualification to be licensed as a producer?
High School diploma
A(n) _______ insurance company is one that was formed under the laws of another country outside of the U.S.
alien
A person who, for a fee, gives advice or recommendations on benefits provided by an insurance contract is called
an advisor
The Entire Contract provision states that an entire contract consists of the actual policy and the
application
A producer may begin to solicit insurance ONLY when
appointed by an insurer
Advertising regulations exist to
assure full and truthful disclosures to the public
A(n) _______ insurance company is one that was formed under the laws of a state other than Maryland.
foreign
When collecting insurance premiums from a client, a producer MUST
forward premiums to the insurer on a timely basis
the life and health guaranty corporation provides funds to carry out its powers and duties by assessing
member insurers
An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of
misrepresentation
Buyer's Guide and Policy Summary
must be delivered with or prior to policy delivery
The _______ is responsible for determining the appropriateness of a Medicare Supplement policy for an applicant.
producer
In the state of maryland, a licensed producer
represents the insurer
A producer has recently died and leaves behind a spouse. In order for the producer's insurance business to continue, the Commissioner may issue to the producer's spouse a(n)
temporary insurance license
Any advertisement that mentions a dollar amount, period of time for which any benefit is payable, cost of policy, policy benefit, or the loss for which the benefit is payable MUST disclose
the exceptions, reductions, and limitations affecting the basic provisions of the policy
An individual life insurance policy can be contested by the insurer only during the first ____ year(s) of the contract.
two
Terminally-ill life insurance policyowners may sell their policy at a discount to a third party. This type of agreement is called a(n)
viatical settlement
One role of the commissioner is to
enforce state insurance laws
To be classified as a small employer in Maryland, an employer must employ
2-50 employees
How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?
3 years
ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful insurance practice known as
illegal inducement
What is the MINIMUM benefit period that must be offered by a Long-Term Care Policy?
12 Months
a producer's license must be renewed every ___ year(s).
2
A life insurance policy sold in Maryland can be cancelled for nonfraudulent misstatements for up to
2 years
Dependent children under a health insurance plan must be provided coverage up to age
26
A licensee must notify the Commissioner of an address change within ___ days of the change.
30
If a producer has been engaged in an administrative action by any governmental agency, within how many days following the final deposition must the producer report the action to the Commissioner?
30
Long-term care insurance and Medicare Supplement plans have a free-look period of ___ days.
30
A Long-Term Care policy may only exclude pre-existing conditions for up to ___ months.
6
If an insurer refuses to pay a claim, how many days must the insured wait to take legal action against a health insurer after submitting written proof of loss?
60
An insurer is REQUIRED to offer which of the following to each long-term care applicant at the time of purchase?
An insurer is REQUIRED to offer which of the following to each long-term care applicant at the time of purchase?
Which of the following basics is a producer's fiduciary responsibility?
Collecting premiums and paying them to the insurance company
Maria the insurance producer completes a sale by collecting the required signatures on the application and obtaining the initial premium. Afterwards, she deposits the check into her personal checking account. Maria has committed what crime?
Fraud
Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Maryland?
Health Insurance Producer License
Who is required to notify the producer in the event of appointment termination?
Insurer
A Medicare Supplement policy may be cancelled by an insurer for which of the following reasons?
Material misrepresentation
A producer who sells an individual life insurance policy in Maryland MUST deliver to the policyowner a(n)
Policy Summary and Buyer's Guide
Which of the following is NOT a circumstance to which a temporary producer license can be issued?
Prospective producer who is waiting to take the state licensing examination
Which of these is NOT an Unfair Claims Settlement Practice?
Providing claim payments to insureds under the guidelines of the insurance contract
Which of the following is NOT a reason for the Commissioner to deny or refuse a producer license application?
Unintentionally misrepresented a material fact on the application
An insurer formed according to the legal requirements of another country is called a(n)
alien insurer
During the examination of an insurer's books and records by the Commissioner, the insurer
must not impede the examination
A producer who is licensed in Maryland but resident in another state is called a
nonresident producer
When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT
obtain the beneficiary's signature
john the insurance producer has an insurance license that expires in 6 months. if he files an application for renewal before the expiration date, his license will
remain in effect until a new one is issued
Twisting is
replacing an insurance policy from one insurer to another based on misrepresentation
A producer does NOT have a fiduciary responsibility to
the Guaranty Association
In Maryland, an insurance producer cannot sell, solicit, or negotiate policies for an insurer unless there is an agreement in place between the producer and insurer. This agreement is called a(n)
appointment
A dependent child may remain on a parent's health insurance plan beyond age 26 if the child
has a mental or physical handicap and remains dependent on the parent
The identity of the ___ must be made clear in every health insurance advertisement.
insurer
Prior to conducting an HIV-related test, the insurer must obtain a(n)
written authorization from the proposed insured
proof of loss on a health insurance claim must be submitted to an insurer within ___ days after the insured's date of loss.
90
Interest on death benefits are NOT required to be paid by an insurance company as long as proceeds are paid within ___ after the date of the death of the insured.
30 days
In Maryland, a full-time employee of a small employer MUST work an average of at least ___ per week.
30 hours
How many days notice must the Commissioner give prior to a hearing?
10 days
A life insurance replacement gives the policyowner the right to return the policy for a 100% refund within ___ days of policy delivery.
30
The Right-to-Examine period in Maryland for Long-Term Care policies is ___ days.
30
At what age does the open enrollment period typically begin for Medicare Supplement coverage?
65
who is eligible for insurance under a group policy issued to a labor union?
Every member of that union
All of these activities require an individual to hold a producer's license EXCEPT
Providing referrals
A Maryland insurance producer solicits an insurance policy. In the event of a controversy between the insured and the company, the producer is considered to represent the
company
The Maryland Insurance Commissioner
counsels and advises the governor on all matters assigned to the MarylanD insurance administration
The ________ has the right to renew a small employer health plan.
employer
violations of US Code Title 18 section 1033, may result in
fine and/or imprisonment
The renewability provision for an individual long-term care insurance policy must be located on the policy form's
first page
The food and drug administration approves prescription drugs for treatment as stated on the drug's labeling. the prescription of a drug for treatments other than what's labeled is known as ___ use
off-label
An example of misrepresentation is
providing incorrect, misleading, incomplete, or materially untrue information in the license application
All long-term care policies sold in North Dakota are REQUIRED to pay the SAME daily benefit amount for "at home" care as paid for
the daily amount paid for nursing home care
A producer's renewal date for his/her resident insurance license is on or before
the last day of the licensee's birth month (every two years)