A.D. Banker - Life Insurance Prep - Ch. 15

Engaging in an unfair method of competition unwillingly subjects an agent to a civil penalty up to _______ per violation. A $5,000 B $500 C $50,000 D $1,500

A $5,000 Engaging in unsuitable insurance transactions also subjects the agent to administrative penalties imposed by the Commissioner. A first violation invites a fine of up to $5,000.

The Commissioner must approve which of the following agency names: A A bona fide natural name of an individual B One which implies that the licensee is an underwriter C One which infers the licensee will engage in activities not permitted under the license D One already filed by another licensee

A A bona fide natural name of an individual The Commissioner may disapprove of the use of true or fictitious names that are misleading, but not a bona fide natural name of an individual.

Which of the following is not an example of an unfair trade practice? A Advertising on the internet B False entry C Misrepresenting the benefits of an insurance policy D Discriminating between persons of the same class that have essentially the same hazard

A Advertising on the internet Advertising on the Internet is not an unfair trade practice.

Under the California Insurance Code, an insurance agent cannot act as a broker for any insurer by which the agent is actively: A Appointed B Soliciting C Selling D Licensed

A Appointed Under the California Insurance Code, an insurance agent cannot act as a broker for any insurer by which the agent is actively appointed.

The Insurance Commissioner is required to: A Interpret laws relating to insurance B Approve insurance premium rates C Write laws relating to insurance D Approve insurance laws

A Interpret laws relating to insurance The Insurance Commissioner has the duty to interpret laws relating to insurance.

Under the California Insurance Code, all life __________ are agents when transacting life or disability insurance, regardless of the language the insurance company may use in its agency agreements, advertising, or other communication. A Licensees B Brokers C Applicants D Solicitors

A Licensees Under the California Insurance Code, all life licensees are agents when transacting life or disability insurance, regardless of the language the insurance company may use in its agency agreements, advertising, or other communication.

A person who, for a fee, makes recommendations and advises an insured who has an interest in a life or disability insurance contract of the rights regarding the contract must be licensed as a: A Life and Disability Insurance Analyst B Certified Health Consultant C Life-only agent D Broker

A Life and Disability Insurance Analyst Under the California Insurance Code, a Life and Disability Insurance Analyst is a person who, for a fee, advises an insured, beneficiary or person who has any interest in a life or disability insurance contract of his/her rights regarding the contract, reviews clients' incomes, insurance and investments, and makes recommendations.

Which statement is false of the California Life and Health Guarantee Association? A The maximum amount that will be paid to a covered person on behalf of an admitted insolvent insurer is $500,000 per life B The Association establishes a mechanism to pay claims that are unpaid as a result of the insolvency of a member insurer C Member insurers are those that are admitted to transact insurance in California and are required to participate D Annuity benefits cannot exceed $250,000 in present value

A The maximum amount that will be paid to a covered person on behalf of an admitted insolvent insurer is $500,000 per life The maximum amount payable for a life insurance death benefit per life is $300,000.

Which of the following is not a natural person? A Tom Thumb Tailors, a business operated by Tom Thumb, a sole proprietor B Tom Thumb, a self-employed tailor doing business as Tom Thumb Tailors C Tom Thumb, a tailor who is employed by a dry cleaner D Tom Thumb, a retired tailor who still owns Tom Thumb Tailors

A Tom Thumb Tailors, a business operated by Tom Thumb, a sole proprietor A natural person is a living (or formerly living) human being. A business entity is not a natural person, even when operated as a sole proprietorship.

The Commissioner may suspend or revoke a license or certificate of authority, not to exceed ______ year(s), of anyone for willfully violating the prohibition on arranging for the sale of free insurance. A 3 B 1 C 2 D 4

B 1 Under the California Insurance Code the Commissioner may suspend or revoke a license or certificate of authority not to exceed 1 year of anyone for willfully violating the prohibition on arranging for the sale of free insurance.

An agent whose license is suspended for more than ___ years will need to retake the prelicensing course and pass the qualifying exam. A 3 B 2 C 5 D 4

B 2 A license suspended for more than 2 years will require the agent to retake the prelicensing course and pass the qualifying exam.

A person will be deemed to be transacting insurance when the person advertises on the internet, and does any of the following, except: A Provides an insurance premium quote to a California resident B Communicates an invitation to inquire C Communicates with a California resident regarding one or more terms of an agreement to provide insurance on an insurance policy D Accepts an application for coverage from a California resident

B Communicates an invitation to inquire Under the California Insurance Code, a person will be deemed to be transacting insurance when the person advertises on the internet, and provides an insurance premium quote to a California resident, accepts an application for coverage from a California resident, or communicates with a California resident regarding one or more terms of an agreement to provide insurance on an insurance policy.

Which of the following is considered the responsibility of the California Commissioner of Insurance? A Issues a Certificate of Authority to any insurer that requests one B Established policies and procedures for dealing with insurer insolvency C Sets insurance rates D Alters or amends insurance legislation as passed by the state legislature or governing body

B Established policies and procedures for dealing with insurer insolvency The Commissioner has no authority to establish laws or alter or amend /insurance laws, that is the responsibility of the legislature. The Commissioner establishes policies and procedures for carrying out the laws. He or she does not set rates. Certificates of Authority go only to authorized insurers.

Upon receiving a request for records, insurers and/or agents must deliver the records to the Commissioner within ____ days. A 7 B 10 C 30 D 60

C 30 Upon receiving a request for records, insurers and/or agents must deliver the records to the Commissioner within 30 days. If the requested files cannot be immediately furnished, on request the agent will be given an additional 60 days to provide the information.

Under the California Long-term Care Education Requirements newly licensed agents who intend to market Long-Term Care insurance must complete a(n) _____-hour course in Long-Term Care insurance in each of their first 4 years of licensing (two terms). A 6 B 10 C 8 D 12

C 8 Under the California Long-term Care Education Requirements newly licensed agents who intend to market Long-Term Care insurance must complete an 8-hour course in Long-Term Care insurance in each of their first 4 years of licensing (two terms).

Which statement is false regarding fraudulent claims in California? A Each admitted insurer must maintain a unit to investigate possible fraudulent claims by insureds B If an insured signs a fraudulent claim form, he/she may be guilty of perjury C Any insurer that believes that a fraudulent claim is being made shall report the fraudulent claim to the Bureau of Fraudulent claims within 30 days of such discovery D While investigating suspected fraud claims, insurers and agents will have access to all relevant public records required to be open for inspection

C Any insurer that believes that a fraudulent claim is being made shall report the fraudulent claim to the Bureau of Fraudulent claims within 30 days of such discovery Any insurer that believes that a fraudulent claim is being made shall report the fraudulent claim to the Bureau of Fraudulent claims within 60 days of such discovery.

Before a licensed agent may transact insurance, the agent must first be _________ by an admitted insurer or a licensed agency which has a marketing agreement with one or more insurers. A Licensed B Authorized C Appointed D Certified

C Appointed Under the California Insurance Code, before a licensed agent may transact insurance, the agent must first be appointed by an admitted insurer or a licensed agency which has a marketing agreement with one or more insurers.

Entering into an agreement that would result in an unreasonable restraint of, or monopoly in the business of insurance is considered: A Deceptive Advertising B Discrimination C Boycott, Coercion, or Intimidation D Defamation

C Boycott, Coercion, or Intimidation Entering into any agreement that would result in an unreasonable restraint of, or monopoly in the business of insurance is known as Boycott, Coercion, or Intimidation.

Under the California insurance code, the penalty for unlawfully acting as an insurer without a(n) _____________ is imprisonment (state or county jail) not to exceed 1 year, and/or a fine not to exceed $100,000. A Letter of Acceptance B Approval C Certificate of Authority D Acknowledgment

C Certificate of Authority Under the California insurance code the penalty for unlawfully acting as an insurer without a Certificate of Authority is imprisonment (state or county jail) not to exceed 1 year, and/or a fine not to exceed $100,000.

An agent's license will remain active as long as all of the following requirements have been met, except: A Renewal fees are paid B A Notice of Appointment is on file with the Commissioner C Insurer sales quota D Continuing education

C Insurer sales quota As long as the agent pays renewal fees, has a notice of Appointment on file with the Commissioner and the continuing education hours have been met, the license will remain active. A minimum number of sales is not a licensing requirement.

A producer may be guilty of misrepresentation if he/she: A Denied a claim for failure of the policyholder to prove damages B Issued a settlement check that totally releases the insurer C Misstated the terms of a policy for the purpose of inducing a policyholder to lapse a policy D Requested timely written notice of loss for all claims

C Misstated the terms of a policy for the purpose of inducing a policyholder to lapse a policy Misrepresentation includes making, issuing, or circulating any estimate, illustration, circular, or statement misrepresenting the terms of any policy issued; using any name or title misrepresenting the true nature of any policy or class of policies; misrepresenting the financial condition of any insurer; or making any misrepresentation to a policyholder insured by any company for the purpose of inducing the policyholder to lapse, forfeit, or surrender a policy.

Funds controlled by the Guarantee Association are used to: A Subsidize investment income losses B Subsidize insurer reserves C Pay claims of insolvent insurers D Subsidize state premium taxes

C Pay claims of insolvent insurers The Guarantee Association pays claims to the insureds of insolvent admitted insurers.

The purpose of a Certificate of Authority is to: A Give a producer authority to represent a certain insurer B Permit a deceased producer's relative to act for the producer C Permit an insurance company to transact business D Allow producers to transact business

C Permit an insurance company to transact business A Certificate of Authority permits an insurance company to transact business.

An agent would be guilty of 'pretexting' or conducting a 'pretext interview' in which of the following situations? A Advises a client to lapse, forfeit, or surrender any insurance contract on the basis of misrepresentation or fraud B Pretending to be an employee of a local utility company when attempting to obtain information in the investigation of an insurance claim C Pretends to be someone or something other than an insurance producer in order to obtain personal non-public information about someone in connection with an insurance transaction D Sends unsolicited text messages to persons who are not existing client

C Pretends to be someone or something other than an insurance producer in order to obtain personal non-public information about someone in connection with an insurance transaction Pretending to be someone other than an agent or broker when transacting insurance is prohibited, and may be a state or federal crime under specific circumstances. Pretending to be someone else during the investigation of an insurance claim is not prohibited and is a common practice by insurance company and law enforcement investigators working undercover.

After expiration or cancellation, agents and brokers must keep records of every insurance transaction for at least ___ years. A 3 B 10 C 2 D 5

D 5 Records of insurance transactions must be kept on file for at least 5 years after the expiration or cancellation date.

All of the following are allowed or true regarding a producer or agent, except: A As an incentive to close a sale, they may select the lowest priced policy from the companies they represent to offer to a prospective client B As an incentive to close a sale, they may commit themselves to professional insurance counseling at no charge to the prospective client C As an incentive to close a sale, they may place coverage on a brokerage basis with a company the agent does not represent, to serve a prospective client D As an incentive to close a sale, they may offer discounts of premium to a prospective client

D As an incentive to close a sale, they may offer discounts of premium to a prospective client Discounts of premium are considered rebates and are prohibited by law.

All of the following are considered duties of the California Insurance Commissioner, except: A Regulate the internal affairs of the Department of Insurance B Keep all papers as required by law C Structure and control insolvency procedures D Set insurance rates

D Set insurance rates The Commissioner does not set rates.

Which of the following is not an unfair discriminatory practice: A Refusing to accept an application due to an applicant's marital status B Determining insurability using an applicant's sexual orientation C Determining insurability using an applicant's race D Using an applicant's birthplace for purposes of identifying the applicant

D Using an applicant's birthplace for purposes of identifying the applicant The applicant's birthplace can be used only for purposes of identifying the applicant and not to discriminate against the applicant.