ch 11
fine for violating a final cease
10K
in mass, a temporary license may be issued for a period to not exceed______ days
180 days
amount of civil fine for each unfair act or practice
1k
how many days notice must a producer be given prior to scheduling a hearing
21
a notice of information practices must be given to a policyhold at least every ____ years
3 yeas
an insurance company may NOT use a policy form unless it has been approved by the superintendent for at least ____ days
30
which entity is responsible for regulating claims settlement practices of insurers
State insurance departments
which of the following idividuals is eligible to receive a temporary producer license?
a designated employee who is replacing a deceased producer
in order for a prohibited person to sell insurnace in mass, they must have
a letter signed by the superintendent
life insurance replacement can be best defined as
a transaction in which a new life insurance policy is purchased and an existing lfie insurance poliyc is surrendered
a life insurance policyowner has been diagnosed with a terminal illness. which of the folowing is often payable to a policy owner whose life expectancy is substancially reduced due to illenss
accelerated living benefit
a mass residential producer has been conicted of a felony. under which circumstance may this producer resume engaging in insurance transactions
after the commisioner gives written consent
which of the following is NOT the responsibility of an insurer
assuming liambility for a producers unauthorized act.
life settlement proceeds may be subject to the claims of
creditors
if the superintendent has reason to believe a producer has violated mass insurnace law, they may issue an
cease and desist order
which of these is NOT a punishment for committing an unfiar and deceptive insurance practice
community service
which of the following does NOT involve a life settlement transaction
converting term life coverage to whole life insurance
group life plans sold in MA typically contain a conversion option. if the insured elects this option, the new policy
do NOT require evidence of insurability
group life plans sold in mass typically contain a conversion option. if the insured elects this option the new policy
does NOT require evidence of insurability
the aplication is part of the annuity contract according to the
entire contract clause
the application is part of the annuity contract according to the
entire contract clause
a life insurance applicant is tested for HIV. the applicant MUSt be informed that the testing
helps determine the insurability of the applicant
which of the following is a potenial punishment given to a producer found guilty of an unfair method of competition
license suspension
womeone who is licensed to negotiate a life settlement contract is called a
life settlement broker
in MA, false advertising is an example of
misrepresentation
an insurer may contest the validity of a life insurance policy during the policys's first two years for all of these reasons EXCEPT
misstatement of age can do it forL material concealment fraud material misrepresentation
if the commisoner requests access to a producers business records, the prodcuer
must prodivde access to records upon request
which of these is NOT an unfair claims settlement practice
offering to settle a claim by arbitration
replacement regulations exist in order to
protect policyowners from misrepresetnation and loss of benefits
security laws passed by congress are enforced by which federal agency
security and exchange commission
which of these situations would NOT potentially involve a prison setnence under federal law
selling insurance with a non resident license
mixed plan insurance company
stock insurnace comany that issues both participating and on participating policies
the ______ has the ability to examine the records of authroized insurere because of the powers granded through the state stuautes
superintendent
when testing for HIV, MA law requires a consent form
that discloses who may receive a copy of the results
who is required to notify the producer in the event of appoitment termination
the insurer
who is required to notify the superintendent of a licensees change of adress
the licensee
a life insurance policy can be contested by the insurere only during the first ___ years of the contract
two
a producers insurance records must be provided to the superintended
upon request by the superintendent
impersonating a producer fine
$100 fine
licensed agents may not submit applications to an insurance company wihtout the following
-the insurnace companies name on the first page -the agnents license number
insurers are responsible for submitting an appointment notice to the commisioner within _______day sof an agents appointment or submission of first insurance application
15 days
a mass producer has violated an unfair trade practice law. this priducer may be fined up to _____ per violation
1k
the replacing insurer must allow the owner of the life insurance policy to return the policy within ______ after delivery for a full refund
20 days
how many days notice must a producer be given prior to a scheduled hearing
21 days
grace period
30 days after the premium is due but not paid.
all life insurance policys may be legally backated in mass up to ___ months
6
backdating limit
6 months from date of issue
authorized insurer
a company that qualified and recieved a certificate of authority from the insurance department to sell insurnace in this state aka an admitted insurnace company
which of the following individuals is eligible to receive a temporary prodicer license
a designated employee who is replacing a deceased producer
fair credit reporting act
a federal law that regulates the use and disclosure of consumer credit info
cobra/conversion
a federal law that requires employers with 20+ employees to include a continuation of benefits provision for former employees and their dependents -guarnatees that the participant can continue the group coverage (at their own expense) at group rates if their particiaptioni in the group plan is terminated because of a qualifying event
which of these is NOT considered to be an example of misrepresentation
a producer comparing the benefits of competing insurance policies
buyers guid
allows applicants to compare different life insurance policies and help them choose which poliyc is best ofr thier needs -required to be given to applicant before premium is collected
viatical settlement
allows someone with a terminal illness to sell their existing life insurance policy to a third party for a percentage of the face value new owner makes premiums and eventually collects entire death benefit
producers
an individual appointed by an insurance company that represents that company and presents policies on its behalf -usually the major personal contact with the insured -can represent either an isurer or insured
producers must not state that dividents are guarneteed. must only present life insurance as equitable distribuiton of insureres suprlus or return of overpaid premium
cannot sell it as an investment tool or profit shring plan
if the superintendent has reason to believe a producer has violated massachusetts 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.
the misrepresentation fo any fact about the insurnace policy (terms, benefits, value, costs, effective date, existance of contract) results in....
fine of up to 1k and 6mo imprisonment
while processing a life insurance claim, the insurer discovers that the insured's age was misstated on the application . under these circumstances, the insurer is entitle to
pay proceeds based on what the premiums would have been if purchased at the insured actual age
right to examine (free look)
policies with face value less than 25K must provide a minimum free look period of 10 days upon policy delivery allows policy owner time to decide wather or not to keep poliyc. if decides not to keep wihtin the 10 days , full refund
a producer sold a life insurance policy but did NOT provide the applicant with a basic illustration. in this situation, the insurer is REQUIRED to provide the applicant with a policy summary no later than the
policy delivery date
policy loan interest rate
the max fixed interest rate charged by insurers is 8% in mass. based on an index such as standard and poor's or moody
notice of replacement
under mass law, the replacement of a life insruance contract with a new contract requires the prodcer to give the applicat a written compariosn and summary statement at the request of the policyholder. replacement: transaction in which new life insurance or annuity is purchased out. the existing life insurance or annuities will be any of the following : lapsed, forfeited, surrendered, terminated, paid up insurance, term insurance, reissued with reduction fo cash value , used in a financial purchase do not apply to grou plife insurance credit life insurance
charging different premiums to policyholders in the same risk classification is referred to as
unfair discrimination
1035 exchange
when an existing life insurance policy is assigned to another insurer for a new contract, the trnasaction may be treated for tax purposes
a stock insurance;s objective
to produce profits for the owners, the stockholders -policy owners do not share profits in the company and do not get profits through dividends. ->"nonparticipating"
number of continue education hours rquired for each 36 month period after first renewal cycle
45 hours -excess hours may be carried over to next period
commisoiner will examn the financial affairs of all insurers before issuing a certificate of authority to transact business in mass. afterwards , examinations will be conducted every_____years
5 years -cost of examination paid for by insurer
examples of larancy (which is subjust to a fine or prison) include
-a producer that has collected premiums from an insured and intentionally withholds them from the insurer -a producer who combines collected premiums with his/her own funds in order to avoid paying an insuerer -a producer who fails to refund premium due to an insurer -a producer who disregards overdue premium notices from an insurer
the commisoner of mass may do the following
-issue insruance related licenses -adopt, amend, and recind insurance rules -examine books and records of insurers -regulate insurance advertising -determine set or compute the reserves of life insurers -make final judgements in a legal proceeding -issue a cease and desist order or put any person on probation -administer oaths -subpoena the attendance of witness to testify
a life insurnace policy can be contested by the insurer only during the first ____ years of the contract
2 years the incontestable clause in a life insurance policy stipulates that after a stated amount of time (typically 2 years) the legitimacy of the policy cannot be contested by the poliycholder, unless fraud was involved.
a notice of information practices must be given to a policyholder at LEAST every
3 years
based on the producers date of birth, the inital producer license is issued for ..
3 years or less
complaint record
a producer is required to maintain and retain an complaint record for 2 years
special broker
an individual who palces insurance business with insurers that are not authorized to transact business in this state. -aka surplus lines broker
advisor
an individual who provides insurance advice for compensation. to provide this advice for a fee they must obtain an advisors license from mass and -be a mass resident -pass a written licensing exam -supply 3 references with the application for a license -renew their license every 3 years
unauthorized insurer
an insurance company that has been denied or not yet applied for a certificate of authority and may not sell insurance int his state. aka non admitted insurance company
before an indivudal is permitted to act as an insurance agent, they must hold a valid insurance license and be _____ by an authorised insurer
appointed
which of the folowing is NOT the responsibility of an insurer
assuming liability for a producers unauthorized acts
applicant for a resident producer license in mass must...
be at least 18 be resident of mass deemed competent honest and trustworthy have passed state exam submit application and fees -if you do not apply for and get issued a liscense after passing your exam W/IN 12 MO, you will have to retake the exam.
an annuity contract may be returned for a full refund during the
free look period
after the first 3 years of licensure, a producer must complete____ credit hours of continuing education for each licensing period
45 hours
cease and desist order
-if commited an unfair or decpetive act prohbits a specific practice listed in the order -fine up to 10k.
after a life insurance policy is sold in MASS has been in force for ____ year(s), it becomes incontestable
2 years
hearings
21 days notice if an unfair or deceptive act requires a hearing. -no producers license will be revoked until the producer has been afforded a right ot a hearing on the charges
life inusrnace can be reinstated at any time within ______ from date of default
3 years. provides proof of insurability and pays back all premiums, outstanding loans, and interest
if an insurance license has been suspended/revoked, or refused to be issued or renewed, the individual can file a written demand within ____days for a hearing w/the commisoner
30 days
which of the following is an example of defamation
a producer who publicly and erroneously announces that an insurance company is insolvent
federal estate tax
a tax cost typically associated with death exlusions -suicide within two years of issue -result of war -aviation restrictions outlined in the policy
temporary
a temporary license may be issued in cases where a producer has become diabled or dies, requireing a replacement to service the producers busniess -these can be the producers spouse, court appointed personal represntative, or business owner/partner/empploye -valid for 180 days
life insurance replacement can be best defined as
a transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered
a life insurance policy owner has been diagnosed with a terminal illness. which of the following is often payable to a policy owner whose life expectancy is substancially reduced due to illness
accelerated living benefit
mutual life inusrnace companies
an insurance company owned and controlled by its policy owners. they elect the board of trustees /directors to manage the firm -profits of mutual insurance co are returned to policyowners in form of dividends -"participating" bc policyowners get profits of company -objective is to provie insurance to its owners at the lowerst net cost
which of the following is considered an activity of daily living when determinign an accelerated life insurance benefit
eating to qualify for an acclerated life insurance benefit, an individual must be unable to perform at least two acitvites of daily living including eating, toileting, transfering, bathing, dressing, and continence without substainable assistance for at least 90 days
illistrations
charts graphs and numerical data that depict non guaranteed elements of a policy (premiums, benefits, values, credits, or charges not guarnateed or determeine when policy is issued) over time.
a prospective client was intimidated by a producer to purchase an insurance contract. the producer could be found guilty of
coercion
which of these is NOT a punishment for committing an unfair and deceptive insurance practice
community service
**help** which of the following does not involve a life setllement transaction
converting term life coverage to whole life coverage
medical examinations and lab tests including HIV
for underwriting, insurers may require proposed insured to undergo HIV test but ONLY in conjunction with other tests. must obtain written consent form the proposed insured mass law requires the HIV consent form to disclose the types of individuals or organizations that ay recieve a copy of the test results -may remain valid for no more than 90 days
a producers license may only be suspended or revolked if the producer
has been afforeded a right to a hearing
reinstatement and renewal
if your license laps, you may renew within 12 months to avoid retaking exam..but a penalty of x2 renewal fee will be required -exceptions for military service or other extenuating circumstances
rebating
illigal. cannot offer a premium rebate or special advantage of any kind as an inducement to purchase a contract
the ____ is required to notify the superintendent in the event of appointment termination
insurer
when a producer is appointed, the ____ is considered the principal
insurer
who is require to notify the producer in the event of appointment termination
insurer. a producers cancellation of appointment must be reported to the burearu of insurance by the insurance company
in oder for a prohibited person to sell insurance in MASS, he or she must have a(n)
letter signed by the superintendent
address change
licensees must report a change in address to the commissioner within 30 days of the change
fruad and false statments including 1033 waiver
makes it illegal to lie, falsify, or conceal info from federal officals.
according to the federal fraud and false statments act, which of these is considered to be an intentional violation?
making false enteries in a companys books
which of the following is considered to be an unfair claims settlement practice
misrepresenting pertinent policy provision relating to coverage after a loss
an insurer may contest the validity of a life insurance policy during the policy's first two years for all of these reasons EXCEPT
misstatement of age
payment of claims
must be paid within 60 days of proof of death
reporting of actions
must report any administrative action that occurs in another jurisdition to the commissioner. -must be submitted within 30 days of final dispositoin and include a cody of the order, consent to order, and any other relevant legal document
group life
no less than 10 employees -no less than 75% of employees eligable -if employee leaves they have 31 days to convert their coverage into an indivdual policy
a life insurance producer is required to give a disclosure notice about information practices to an applicant
prior to or at the time of signing the application
under federal law, which of the following actions may result in a produer becoming imprisoned
producer embezzling funds from an insurer
producers authority to bind an insuerer to an insurance contract is granted in the _______
producers appointment with the insurance company
continuing education
producers must complete continuing education courses to maintain their licenses -60 hours during first 36 month period after inital license.
assumed names
producers wishing to conduct business under a name other than their legal name must notify the commisioner before using such name
mass life and health insurance guaranty associaition
rehabilitate insolvent (financially incapacitated) insureres. provides max of 300K in total benefits to any one person. producers and insureres cannot advertise the existance of this.
notice of replacement
replacement means any transaction in which new life insurance or a new annuity is purchased and as a result the existing life insurance or annuities will be replaced
which of the following would prevent a person from obtaining a mass resident producer license
residing in a state outside of mass
accelerated benefit
someone determined to be terminally ill to access the death benefit TAX FREE
nonresident producers
states that have a reciprocal agreement allow for producers who hold a resident liscense in a state to apply for a onresident license in another. -in mass, non res applicants do not have to tak the mass exam
group life insurance certificates
the participants under a group plan are issued a certificate of insurance as evidence of coverage certificate must contain: -group policy number -description of the insurance protection -names of the insured, beneficiaries, and dependents -rights and conditions
incontestability period
the policy terms shall be incontestable after it has been in force for a period of 2 years from its date of issue
who is liable when the producer performs an act which is prohibited in the agency contract
the producer of an insuerer (the agent)
who is typically the major personal contact with the insured
the producer originating the insurance applicaiton
only home state requirements must be followed for continuing education
true
