AD Banker Chapter 15
Which one of the following regarding the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association is false? A The Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association assesses each member insurer an amount equal to the proportion of its net direct written premiums in the previous year to total net direct written premiums in the previous year for all member insurers B A policyowner must be given, upon request, a summary document describing the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's general purposes and current limitations C The purpose of the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association is to pay covered claims under certain policies when an insurer cannot pay due to the insurer's insolvency to avoid claimants' financial losses D A licensee may make use the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's existence to sell, solicit, or induce the purchase of any form of insurance
D A licensee may make use the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's existence to sell, solicit, or induce the purchase of any form of insurance No person may make any statement using the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's existence to sell, solicit, or induce the purchase of any form of insurance.
Which of the following statements regarding a producer's license is true? A A producer may never act as an adjuster B Individuals do not need a license to sell baggage insurance C Producers may sell insurance for up to 180 days with a temporary license D A producer must hold a license in the line of authority he or she intends to sell
D A producer must hold a license in the line of authority he or she intends to sell Producers always have to be licensed in the line they are selling, whether it is a major or limited line. Producers may act as adjusters in limited circumstances, but may not sell on the basis of having a temporary license.
Which of the following organizations requires a Certificate of Authority in Washington State? A An entity selling emergency expense reimbursement B An entity acting as a surplus lines broker C An entity offering travel and automobile related services D An entity selling Medicare Supplements
D An entity selling Medicare Supplements
Under the Health care False Claims Act, making a fraudulent claim against a health care policy is punishable: A In civil court with a civil fine B As a criminal misdemeanor C Only as an administrative matter D As a felony
D As a felony
All of the following are required in a certificate of insurance provided to an individual insured under a group life insurance policy, except: A Time for exercising conversion right B Right to convert coverage to an individual policy upon termination of group coverage C Amount of coverage provided D Evidence of beneficiary insurability
D Evidence of beneficiary insurability
Which of the following statements regarding long-term care insurance is correct? A The minimum benefit period is 24 months B Association group plans are available to small groups of 2-50 members C Lump sum, accelerated death benefits offered by life policies are considered LTCI plans D Qualified LTC policies offer deductible premiums and tax-free benefits
D Qualified LTC policies offer deductible premiums and tax-free benefits
Which of the following statements describes the Commissioner's ability to levy penalties? A Licensed business entities may not be held responsible for the illegal actions of a producer B Fines must be paid within 15 days C If the Commissioner suspends a producer's license, the term of the suspension must be at least one year D The Commissioner may revoke a producer's license for obtaining a loan from a client who is not a financial institution or a relative
D The Commissioner may revoke a producer's license for obtaining a loan from a client who is not a financial institution or a relative
The Insurance Commissioner may take all of the following actions, except: A Investigate potential violations any provision of insurance code B Make reasonable rules and regulations to enforce the insurance code C Prosecute an action in any court of competent jurisdiction D Amend the insurance code as needed
D Amend the insurance code as needed
All of the following, if committed so frequently as to be a general business practice, constitute unfair claims settlement practices, except: A Failing to attempt in good faith to promptly, fairly, and equitably settle claims in which the insurer's liability has become reasonably clear B Compelling an insured to sue to recover claims by offering less than the amounts recovered in such lawsuits C Telling claimants of a practice of appealing arbitration awards in order to compel them to accept settlements or compromises for less than such award D Paying claims without investigation
D. Refusing to pay claims without investigation if committed so frequently as to be a general business practice, constitute unfair claims settlement practices.
Every licensee must promptly reply in writing to an inquiry of the Commissioner of Insurance about his/her insurance business within ______ days after the licensee receives the inquiry. A 30 B 20 C 45 D 15
D. 15 Every licensee must promptly reply in writing to an inquiry of the Commissioner of Insurance about his/her insurance business within 15 days after the licensee receives the inquiry.
A life insurance policy is required to have a provision allowing the insured to borrow up to the cash value of the policy after a full _____ years' premiums have been paid. A 5 B 4 C 6 D 3
D. 3 A life insurance policy is required to have a provision allowing the insured to borrow up to the cash value of the policy after a full 3 years' premiums have been paid.
The duties of a producer during the process of selling and placing a life insurance policy include all of the following, except: A Avoiding the sale of replacement policies B Leave the consumer a copy of any written sales presentation if a replacement is involved C Provide a signed statement as to whether a replacement is involved D Giving the applicant a Notice Regarding Replacement at the time of application
A Avoiding the sale of replacement policies
The Life-Disability Insurance Guaranty Association pays covered life insurance death benefit and cash value claims on one life of up to: A $100,000 B $500,000 C $600,000 D $300,000
B $500,000
The free-look period for a life insurance policy is: A 15 days B 10 days C 30 days D It depends on whether the purchaser received a policy summary
B 10 days
The free-look period for a life insurance policy is: A It depends on whether the purchaser received a policy summary B 10 days C 30 days D 15 days
B 10 days
Every order by the Commissioner of Insurance suspending any license shall specify the period during which suspension will be effective but in no event exceed how many months? A 18 B 12 C 24 D 36
B 12
In general, a health policy may not exclude coverage for a preexisting condition for more than: A 6 months B 12 months C 2 years D 63 days
B 12 months
The Life-Disability Insurance Guaranty Association pays covered life insurance death benefit and cash value claims on one life of up to: A $100,000 B $600,000 C $500,000 D $300,000
C $500,000
In general, a health policy may not exclude coverage for a preexisting condition for more than: A 2 years B 63 days C 12 months D 6 months
C 12 months
An HMO plan must offer the option of covering any child under the age of: A 22 B 19 C 26 D 25
C 26
Coverage for the newly born child must be no less than the coverage of the child's mother for no less than _____ week(s). A 1 B 4 C 3 D 2
C 3
A Medicare Supplement must have a free-look period of: A 10 days B 63 days C 30 days D 180 days
C 30 days
How much Long-Term Care training must producers have before they can solicit or sell LTC insurance? A 3 hours B 4 hours C 8 hours D 20 hours
C 8 hours
Which of the following is NOT an acceptable type of group life insurance plan? A A debtor group to insure repayment of the indebtedness B A labor union group policy covering members C A group formed to purchase life insurance D An employer group plan
C A group formed to purchase life insurance
Under what conditions, if any, may an individual that is not licensed to sell a particular line of insurance be compensated for the sale of such insurance? A Only when the compensation is a fee and not a commission B There are no such circumstances C If the compensation is a deferred commission and the individual had been licensed at time of sale D It is possible the producer has a license to sell a related line of insurance Good Job!
C If the compensation is a deferred commission and the individual had been licensed at time of sale
All of the following are required to get a nonresident producer license in Washington, except: A Holding the comparable license in the home state in good standing B Holding a resident license in a state that grants reciprocity to Washington licensees C Passing the licensing exam D Paying the required fee
C Passing the licensing exam
All of the following factors must be taken into account in recommending the purchase or exchange of an annuity, except: A Customer's tax status B Customer's investment objectives C The incontestability provision D Other insurance or annuities owned
C. In recommending a purchase or exchange of an annuity, the producer must have reasonable grounds to believe that the recommendation is suitable for the customer based on facts disclosed by the customer about their investments, other insurance, financial situation, tax status, needs, and objectives. The incontestability provision eliminates insurer defenses to paying on a life insurance policy and is required to be the same for all policies; it would not affect an annuity recommendation.
A nonresident producer who moves to another state or a resident producer who moves to another state must notify the Commissioner of the change of address within ______ days. A 60 B 45 C 30 D 90
C. 30 A nonresident producer who moves to another state or a resident producer who moves to another state must notify the Commissioner of the change of address within 30 days.
How many hours of approved continuing education must resident producers complete per renewal period? A 24 hours per year B 24 hours plus 3 hours of ethics C 20 hours per line D 24 hours including 3 hours of ethics
D 24 hours including 3 hours of ethics
In order to be able to sell, solicit, or negotiate LTC insurance after successfully completing his/her initial LTC coverage education, at least _____ hours of continuing education must be completed every 24 months. A 6 B 2 C 3 D 4
D 4
Within ___ days of the initial pretrial hearing date, an insurance producer must report to the Commissioner any criminal prosecution of the insurance produce taken in any jurisdiction. A 14 B 90 C 31 D 30
D. 30 Within 30 days of the initial pretrial hearing date, an insurance producer, title insurance agent, or adjuster shall report to the Commissioner any criminal prosecution of the insurance producer, title insurance agent, or adjuster taken in any jurisdiction.
A person may not sell, solicit, or negotiate the sale of an annuity product unless he/she has successfully completed a one-time, _____-hour training course in annuity suitability. A 6 B 8 C 12 D 4
D. 4
A producer must establish and maintain records and an appropriate accounting system for all premiums and return premiums he/she receives subject to inspection by the Commissioner of Insurance for _____ years immediately after the transaction's date. A 4 B 2 C 3 D 5
D. 5 A producer must establish and maintain records and an appropriate accounting system for all premiums and return premiums he/she receives subject to inspection by the Commissioner of Insurance for 5 years immediately after the transaction's date.
A health policy may not establish a probationary or waiting period exceeding how many months? A 12 B 18 C 9 D 6
D. 6 A health policy may not establish a probationary or waiting period exceeding 6 months.
The holder of any license that has been revoked or suspended must surrender the license certificate to the __________ at the Commissioner of Insurance's request. A Attorney General B Governor C Insurer D Commissioner of Insurance
D. Commissioner of Insurance
The Commissioner shall examine the affairs, transactions, accounts, records, documents, and assets of each authorized insurer at least once: A Every 5 years B Annually C And only once when a Certificate of Authority is granted D Every 4 years
A Every 5 years
An illustration used to sell a life policy must: A Show the policy's generic name, product name, and form number B Use an illustration that is lapse-supported C Show only the guaranteed elements D Be used during the sale of all policies
A Show the policy's generic name, product name, and form number `
Any person, other than a licensed ___________, making an insurance contract in Washington on an unauthorized insurer's behalf is personally liable under the contract. A Surplus line broker B Broker C Insurance counselor D Producer
A. Surplus Line Broker Any person, other than a licensed surplus line broker, making an insurance contract in Washington on an unauthorized insurer's behalf is personally liable under the contract.
Premiums paid to reinstate a health policy cannot be applied to premiums more than days past due. A 30 B 60 C 90 D 45
B 60 The correct answer is 60 days - 90 days refers to proof of loss. 30 days is sometimes a free-look period. 20 days refers to Notice of Claim.
All of the following statements regarding license renewal are true, except: A The license fee for a producer's license is $55 B Licensees have 2 years to request a reinstatement C After 60 days following one's license expiration date, a licensee may request reinstatement for a limited period of time D A producer's license is not terminated until 60 days after the license expiration date
B Licensees have 2 years to request a reinstatement
All of the following statements regarding the treatment of Chemical Dependency by health plans in Washington are correct, except: A HMOs may apply a waiting period or pre-existing condition limitation B HMOs must cover medically necessary detoxification as an emergency medical condition C HMOs often exclude chemical dependency D Cost sharing amounts for chemical dependency services may not be more than for other medical and surgical services
C HMOs often exclude chemical dependency
Conducting the business of insurance without required or proper licensure is a(n): A Misdemeanor B Unfair trade practice C Civil infraction D Class B felony
D Class B felony
All of the following statements regarding license renewal are true, except: A A producer's license is not terminated until 60 days after the license expiration date B After 60 days following one's license expiration date, a licensee may request reinstatement for a limited period of time C The license fee for a producer's license is $55 D Licensees have 2 years to request a reinstatement
D. Licensees have 2 years to request a reinstatement After 12 months following the license expiration date, previously licensed individuals must go through the entire prelicensing process again.
Which of the following statements regarding the handling of premiums is correct? A Premium account records must be maintained for 5 years B All premiums must be directed toward the insurer or a producer C Premium account funds may not be withdrawn unless they are being transferred to an insurer or a policy owner D It is a felony to violate the separate account requirement
A Premium account records must be maintained for 5 years B
All of the following are unfair claims settlement practices, except: A Taking up to 30 days to investigate a claim B Refusing to pay claims without an investigation C Paying claims without stating the coverage under which the payment is made D Failing to adopt reasonable standards for paying claim
A Taking up to 30 days to investigate a claim
Which one of the following is exempt from the requirements of the replacement regulations? A An existing life policy or annuity has been or will be go through contractual changes or conversion privileges exercised with the existing insurer B An existing life policy or annuity has been or will be converted to reduced paid-up insurance, continued as extended term insurance, or reduced in value by the use of nonforfeiture benefits C An existing life policy or annuity has been or will be terminated (e.g. lapsed, forfeited, or surrendered) D An existing life policy or annuity has been or will be pledged as collateral or borrowed against for over 25% of the loan value
A. Contractual changes or conversion privileges exercised with the existing insurer is not defined as a replacement transaction therefore is exempt from the requirements of the replacement regulations.
An insurance producer must report to the Commissioner any administrative action taken against the producer in another jurisdiction within ___ days of the final resolution of the matter. A 30 B 14 C 20 D 31
A. 30 An insurance producer, title insurance agent, or adjuster must report to the Commissioner any administrative action taken against the insurance producer, title insurance agent, or adjuster in another jurisdiction or by another governmental agency in this state within 30 days of the final resolution of the matter.
A producer must be __________ by an insurer in order to represent the insurer. A Licensed B Authorized C Appointed D Approved
C. Appointed A producer must be appointed by an insurer in order to represent the insurer.
All of the following actions are prohibited as they relate to the marketing and sale of Medicare Supplements, except: A Attained age rating B Pre-existing condition exclusions C Cold-lead advertising D High-pressure tactics
B Pre-existing condition exclusions
All of the following factors must be taken into account in recommending the purchase or exchange of an annuity, except: A Other insurance or annuities owned B The incontestability provision C Customer's investment objectives D Customer's tax status
B The incontestability provision
A If the Commissioner suspends a producer's license, the term of the suspension must be at least one year B The Commissioner may revoke a producer's license for obtaining a loan from a client who is not a financial institution or a relative C Licensed business entities may not be held responsible for the illegal actions of a producer D Fines must be paid within 15 days
B. Getting a loan from an unrelated, non-bank client is a violation. Entities can be penalized for the behavior of their producers, and as for penalties, the MAXIMUM suspension period is 1 year, and fines must be paid in 30 days.
hich of following disclosure standards must be followed during the sale of a life insurance policy? A An insurer need only provide a Buyer's Guide or Policy Summary if a purchaser requests it B Producers are always required to present a Policy Summary at the time of application C Before making any sales presentation, producers must inform prospective buyers that they are acting as life insurance producers D A producer must identify herself as a financial planner if she sells life insurance
C Before making any sales presentation, producers must inform prospective buyers that they are acting as life insurance producers
Which of the following statements regarding long-term care insurance is correct? A The minimum benefit period is 24 months B Association group plans are available to small groups of 2-50 members C Qualified LTC policies offer deductible premiums and tax-free benefits D Lump sum, accelerated death benefits offered by life policies are considered LTCI plans
C Qualified LTC policies offer deductible premiums and tax-free benefits
Using a misleading policy comparison to induce an insured to convert any insurance is known as: A Misrepresentation B False information and advertising C Twisting D Defamation
C Twisting
Unless the policy was issued as part of a replacement sale, a policyowner may return the policy within _____ days after receipt for a premium refund if unsatisfied for any reason. A 15 B 20 C 10 D 30
C. 10 A policyowner may return the policy within 10 days after receipt for a premium refund if unsatisfied for any reason unless it is a replacement sale in which case the insured has 20 days.
