Accident and Health practice questions
a Massachusetts producer has violated an unfair trade practice law. this producer may be fined up to _____ per violation.
1,000
in Massachusetts a small employer is comprised of
1-50 employees
the superintendent must be notified by the insurer within _____ days of a producers appointment
15
How many days notice must a producer be given prior to a scheduled hearing
21 days
a producer has received the first year commission paid on Medicare supplement policy. renewal commissions must then be provided for at least____ years after the first year
5
What is the actuarial value of bronze level health plan
60
What does the term "field underwriting" refer to in the health insurance industry
A producer's contact with the applicant
Which of the following is NOT covered by a comprehensive long-term care policy?
Acute Care
Insurance is not characterized as which of the following
As the number of insureds increases the number of of losses decreases
Julie is in need of assistance with one or two activities of daily living. She may be eligible for a(n)
Assisted living facility
If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased
At least once per year from when benefits began
According to the affordable care act new health insurance market places are established by the
CCIIO
Which of the following provisions allows an insured or the insurer to terminate the policy?
Cancelable provision
the insurers obligation to pay a claim depends on whether the insured or beneficiary has complied with all policy conditions. this makes the policy
Conditional Contract
What must be given to an accident and health insurance applicant when the producer receives an application and the initial premium?
Conditional receipt
An accident and health insurance policy's premium requirements are set forth in which of the following provisions?
Consideration clause
Which report contains information regarding an individual's general reputation and credit standing?
Consumer report
Which of the following reduces the opportunity for overinsurance?
Coordination of benefits provision
which statement is true about a permanent disability under workers compensation coverage
Coverage excludes nonoccupational injuries
Health providers are compensated by a preferred provider organization (PPO) for normal dental procedures by what means?
Decreased fee schedules
To which of the following group plans do HIPAA rules NOT apply?
Disability income
Which of these is NOT a factor during the health insurance underwriting process?
Former residence
Emily is disabled. In order to become eligible for Social Security disability income benefits, she must be
Fully insured, according to Social Security
When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?
Give notice, explain, and allow opting out
most Medicare supplement information used by an insurer must be approved by the state. which of the following types of information does not require state approval
Government publications
Kyle is an insured who disregarded an accident and health insurance policy provision that requires him to seek a second surgical opinion. What will the end result be?
He may be reimbursed for the surgical procedure at a reduced benefit level
In a staff model HMO, enrollees normally have which of the following pharmacy options available to them?
In-house pharmacy
The type of health insurance in which underwriting procedures are the most restrictive is
Individual
Which of the following provisions permits an insurer to return a portion of the premium and pay benefits on a pro rata basis if it finds that an insured has duplicate coverage?
Insurance with other insurers
Who must sign a rider attached to a health insurance policy in order for it to be valid?
Insured and producer
Which health policy clause specifies the amount of benefits to be paid?
Insuring
Ken is age 65 and has 2 years until he receives Social security retirement income benefits. at his current age, which is true about Medicare part a hospital insurance coverage
It is available through application to Social Security
Bert's spouse passed away recently. Bert was covered under his spouse's group family health insurance plan but now is covered under COBRA. How much of the active-employee cost may be passed on to Bert for continued coverage?
Maximum of 102%
Which of these is a type of private insurance that covers the cost-sharing amounts under Medicare?
Medicare Supplement
Which of these actions is considered unfair to be an Unfair Claims Settlement Practice?
Misrepresenting pertinent policy provisions relating to coverage after a loss
Which of the following health insurance plans charges a premium that cannot be increased?
Noncancelable
Which of these plans allow a participant to choose either a network or non-network provider at the time when medical care is needed?
Point-of-service
When issuing disability income coverage to a substandard risk, an insurance company may
Shorten the benefit period
Which of the following does a Medicare Advantage enrollee typically pay for?
Small co-pay per visit or per service
Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?
The agent doesn't have the authority to change the policy or waive its provisions
The insureds consideration given for a health insurance policy for
The first premium payment and the application
Who may terminate coverage under a cancelable health insurance policy?
The insurer or the insured
Darrell has a group long-term disability income policy paid by his employer. Which of these statements is true?
The specified benefit amount is a percentage of his wages
A producer gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met
an example of misrepresentation is
a producer misleading or failing to adequately disclose the title and true nature of a policy offered to a potential insured
which of the following is an example of defamation
a producer who publicly and erroneously announces that an insurance company is insolvent
before an individual is permitted to act as an insurance agent they must hold a valid insurance license and be____by an authorized insurer
appointed
Which of the following is not required for the renewal of a producers license
appointment by an insurer
which of the following is not the responsibility of an insurer
assuming liability for a producers unauthorized acts
at what point must a newborn be covered under and individual or group health policy
at the moment of birth
Continued health insurance coverage is available for dependent children beyond the age of 26 if the child
cannot support themselves because of a handicap
a superintendent has reason to believe a producer violated Mass insurance law the superintendent may issue a(n)
cease and desist order
a foreign insurer wishing to conduct business in MA must obtain a
certificate of authority
upon receipt of written notice of claim an insurer is required to provide the claimant with
claim forms
a prospective client was intimated by a producer to purchase an insurance contract. the producer could be found guilt of
coercion
Which of these is not a punishment for committing an unfair and deceptive insurance practice
community service
which of these is not considered a federal punishment for unfair and deceptive insurance practices
community service
individual and group health insurance typically exclude coverage for which of the following?
cosmetic surgery
Reductions in coverage are one feature of _______ in Health insurance policies.
cost containment
Major medical plans typically exclude coverage for which of the following benefits
custodial care
the "notice to buyer?" on the first page of each long term care policy delivered in Massachusetts
explains that some long term care costs may not be covered
when a producer is appointed the _____is considered the principal
insurer
who is required to notify the producer in the event of appointment termination
insurer
In order for a person to sell insurance in MA they must have a
letter signed by the superintendent
An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
living in a rural area
risk___is the process of analyzing exposures that create risk and designing programs to handle them
management
a producer is proposing that a policy owner replace an existing individual health insurance policy with a new one. under the new contract a pre existing conditions exclusion
may reduce the insured's benefits
Field underwriting by a producer
may result in the disclosure of hazardous activities of the applicant
all the following are covered under most dental plans except for
mouth cancer
In MA the human immunodefiency virus (HIV) consent form
must disclose who will be receiving a copy of the test results
If the commissioner requests access to a producers business records the producer
must provide access to the records upon request
An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must
notify the insurance company in writing
which of the following is not covered by MA workers compensation laws
on the job injury that was both intentional and self inflicted
The ______ is responsible for determining the appropriateness of a Medicare Supplement policy for an applicant.
producer
in order for a handicapped child to continue health insurance coverage beyond the policy limiting age the insurer may require
proof of incapacity
which of these situations would not potentially involve a prison sentence under federal law
selling insurance with a nonresident license
which entity is responsible for regulating claims settlement practices of insurers
state insurance departments
once a child is born and covered under a health insurance plan any reduction in benefits on the newborn is
strictly prohibited
the____ has the ability to examine the records of authorized insurers because of the powers granted through state statutes
superintendent
a married couple adopts a child that was voluntarily surrendered by birth mother. the married couple is already covered under a group health insurance policy. at what point is the child considered a dependent under this coverage
the date the child is placed in the couples home
In accident and health insurance, field underwriting is very important because of
the risk of a moral hazard
a notice of information practices must be given to a policy owner at least every____years
three
How long is individual medical expense insurance normally written for
1 year
Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least
12 months
Nonqualified medical expense distributions from a Health Savings Account (HSA) have a tax penalty of
20%
Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?
31
Larry wants to purchase an individual disability income policy to provide continuous income while disabled. He is also covered by a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?
60 days
What are reasonable and customary charges for health insurance primarily based on?
Average charges within a geographic region
In long-term care insurance, what is the length of time for which claims will be paid?
Benefit period
Which of these statements regarding Major Medical Expense insurance is NOT true?
Benefits are paid on a capitation basis
A policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim?
Claim must be paid after proof of loss is received
The courts will normally interpret a policy in favor of the insured when the meaning of the policy is not clear. This is because an insurance policy is an?
Contact of adhesion
When dealing with long-term care coverage, which of the following are classified as ADLs?
Eating, bathing, dressing, and mobility
Non-occupational disability coverage is designed for
Employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
Terry suffers an injury at his workplace which is covered by workers compensation. Terry also has a medical expense insurance policy. Under medical expense insurance policies, losses that are covered by workers compensation are typically
Excluded from coverage
Tonya has been diagnosed with kidney failure and is covered by group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months immediately following her diagnosis?
Her employer's group accident and health plan
A family counseling benefit is typically offered under which of these coverages?
Hospice care
Which of the following is NOT true of a preferred provider plan?
Hospitals can only initiate preferred provider plans
which of the following is a syndicate established by a group of insurers to share underwriting duties
Lloyd's organization
Which of the following covers the Part A deductible of Medicare
Medicare supplement core benefits
Which of the following does NOT meet the requirements of "skilled nursing care"?
Must be provided exclusively in a hospital
Jerome is covered by a disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Nonoccupational Coverage
Which of the following is NOT true of participants in multiple-employer trusts?
Participants must purchase all coverages the trust offers
Mark is covered by a policy that uses the regular occupation (own-occ) definition of total disability. Using this definition, he will be considered disabled if unable to
Perform the substantial and material duties of his regular occupation
Which would NOT be a location where skilled nursing care is provided?
Personal Residence
Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n)
Pre-existing condition
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long as the person has received which of the following benefits for at least 24 months?
Social Security Disability
Qualified long-term care premiums are treated for tax purposes as
Tax-deductible to the extent they exceed 7 1/2% AGI
Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?
Taxes must be paid on 75% of the benefits received
All parts of the Medicare program (except for public information and enrollment) are administered by which federal agency?
The Centers for Medicare and Medicaid Services
What is taken into consideration when defining "total disability" in a disability income insurance policy?
The insured's education, training, and experience
Which of the following best describes the presumptive disability provision?
Waives the typical total disability requirements
an insurance company can be liable for a producers unauthorized acts
When the agency contact is unclear concerning the authority given
Medicare supplement insurance that provides a preventative medical care benefit will often cover
Yearly Physical Examinations
Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?
accidental death and dismemberment
a producer working for an insurance company may be personally liable for
acts performed which are prohibited in the agency contract
what qualifies as acceptance of an insurance contract
an issued policy
Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of
apparent authority
which of these statements regarding insurance is false
as the number of insured units increases, the number of losses decreases
Which of the following is considered a limited accident and health plan
cancer plan
Which of the following types of insurers limits the exposures it writes to those of its owners
captive insurer
Jill has a group health plan with an employer that covers employees in more than one state. Which of the following is NOT affected by the state regulatory jurisdiction established for this plan?
continuation of coverage under COBRA
An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are
deductible to the business
An HMO prescription drug plan is generally characterized by
drugs dispensed through participating pharmacies
A group health insurance policy is a contract between an
employer and insurance company
Which parties are directly involved in a group accident and health insurance contract?
employer and insurer
an agreement is reached when an insurance contract is formed. which of the following is not considered to be an element of an agreement
equity
the powers directly given to a producer is an agency contract are called
express
when a ceding insurer transfers a portion of its risk to an assuming insurer on a case by case basis, this process is referred to as
facultative
A major medical expense plan typically includes coverage for hospital room and board. Which of the following is normally covered under the category "room and board"?
general nursing care
Which of the following statements is NOT true concerning the relationship between group health insurance plans and Medicare? (assuming the business has more than 20 employees)
group health coverage is NOT available for workers over the age of 65
for instance purposes, similar objects which are exposed to the same group of perils are referred to as
homogeneous exposure units
Medicare part a typically covers
impatient drugs
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?
implied authority
James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called
key employee coverage
Inpatient psychiatric care is covered under Part A Medicare Insurance for 190 days per
lifetime
an insurance contract may be voided if a misrepresentation found on the application is determined to be
material
Which of the following is excluded in a medical expense plan
military duty
which of the following can be defined as a cause of loss
peril
The___may change a revocable beneficiary as part of an accident and health policy
policy owner
Which of the following accurately describes a participating insurance policy
policyowners may be entitles to receive dividends
A pre-existing condition exclusion in an accident and health insurance policy pertains to
prior health matters
Which of the following outlines the authority given to the producer on behalf of the insurer
producer contract
A Medicare supplement policy is required to do which of the following?
provide a 30 day free-look period
which of the following types of risk is insurable
pure
ambiguities in insurance contracts are typically interpreted in favor of the insured. this rule is referred to as
reasonable expectations
an insured is entitled to coverage under a policy that a prudent person would expect it to provide. the principle is called
reasonable expectations
Which of the following disability income provisions allows two periods of disability to be counted as one
recurrent disability
an___insurer assumes risk from another insurance company
reinsurance
an insurer has contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this
reinsurance contract
What is the accounting measurement of an insurance company's future obligations to its policy owners
reserves
Which of the following would provide a reimbursement of some premiums when a long-term care policy is cancelled
return of premium rider
a group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a
risk retention group
Dividends from a stock insurance company are normally sent to
shareholders
Medicare part a covers which type of care
skilled nursed facility care
What type of risk involves the potential for loss and possibility of gain
speculative
which one of these is not considered to be an element of an insurable risk
speculative
In order to contribute to a health savings account (HSA)
the applicant must have no sickness and accident coverage
under the law of agency the principal is considered to be
the insurer
Under which circumstance can an insurance company offer group Health insurance?
the sponsoring group provides an employer-employee relationship
Under HIPPA requirements, eligibility for the pre-existing conditions exclusions waiver under new coverage is lost if
there is a break in coverage of more than 63 days
a business becoming incorporated is an example of risk
transfer
a hold-harmless clause is an example of risk
transfer
giving up a known right on a voluntary basis is called
waiver
the following are all elements of a valid contract except
written evidence
