Ch. 5 Life insurance
Rebating
returning a portion of the premium or the agent's/broker's commission on the premium to the insured or other inducements to place business with a specific insurer
Which members of a corporation or partnership are required to obtain an individualinsurance agent's license in order for the association to be licensed? A None of the partners are required to have a license if the partnership is associated with a licensed insurance agent B At least one officer or partner and any other person acting as an agent C Only members who plan on transacting insurance D Officers or partners only
C
Which of the following best describes the unfair trade practice of defamation? A Assuming the name and identity of another person B lssuing false advertising material C Refusing to deal with other insurers D Making derogatory oral statements about another insurer's financial condition
D Making oral or written statements directly or indirectly which are derogatory or maliciously critical of anotherinsurer would be an example of the unfair trade practice of defamation.
Discrimination:
The act or process of evaluating insurable risks and determining premiums on the basis of likelihood of loss
An insurer advertises a health policy that is covered by the Life and Health Insurance Guaranty Association. The advertisement includes a shortlist of benefits and approximate rates. The end of the advertisement includes statement that protection is provided by the Guaranty Association. Which of the following is true? A The advertisement must also include the contact information of the Commissioner of lnsurance. B Mentioning the Guaranty Association is mandatory when advertising insurance in the state of Texas. C Mentioning the Guaranty Association in advertisements is considered to be unfair trade practice. D The advertisement must also include the contact information of the association,
C
Stock
a corporation owned by its stockholders or shareholders, and its objective is to make a profit for them
Unfair claims settlement practice:
nowingly misrepresenting to claimants and insureds relevant facts or policy provisions relating to coverages at issue
A temporary license holder can receive a commission from a sale made to all of the following EXCEPT A The license holder's family doctor. B The license holder's sister-in-law. C The license holder's spouse's best friend. D An accountant at a rival insurance company.
B
All of the following are considered unfair or deceptive acts in connection with the saleof insurance EXCEPT A Lacking standards for the investigation of an insured's claims. B Attempting to settle a claim in which liability is clear. C Stating facts or provisions in a way that misrepresents the true nature of the policy. D Delaying a settlement because there is other insurance that will satisfy any portion of the loss.
B
An insurer must acknowledge receipt of a Notice of Claim within how many days? A 5 B 15 C 20 D 30
B
lf an agent has completed 35 hours of continuing education in one renewal period, how many CE hours will the agent have to complete in the next renewal period? A 11 B 24 C 35 D 0
B
lnsurance Commissioner
a public official in the executive branch of a state or territory in the United States who, along with his or her office, regulate the insurance industry
An agent completed a CE course in 2019. Until what year must the agent keep therecords of completion? A 2020 B 2023 C 2024 D 2029
B
An insurer must acknowledge receipt of a Notice of Claim within how many days? A 5 B 15 C 20 D 30
B
How many hours of continuing education can be carried over from one licensing periodto the next? A Any access hours B 0 C 2 D 5
B
On a participating insurance policy issued by a mutual insurance company, dividendspaid to policyholders are A Guaranteed. B Not taxable since the IRS treats them as a return of a portion of the premium paid. C Paid at a fixed rate every year. D Taxable as ordinary income.
B With participating policies, policyowners are entitled to dividends, which, in the case of mutual companies, are nontaxable because they are considered a return of excess premiums.
Which of the following would be required to be licensed as an insurance producer? A A person whose activities are limited to producing insurance advertisements. B A salaried full-time employee who furnishes information for group insurance C An insurance company director who performs executive, administrative and managerial duties D A salaried employee who advertises and solicits insurance
D A person does not require an insurance producer license if he or she only advertises without intent to solicit insurance. However, once there is solicitation, a license is required.
What percentage of continuing education hours must be in a classroom setting? A 25% B 50% C 75% D 100%
B
Which of the followint is the closest term to an authorized insurer? A Legal B Admitted C Certified D Licensed
B
An applicant properly notifies her insurer of a straightforward claim, but the insurer waits an exceedingly long time to process it. Which of the below terms best describes the behavior of the insurer? A Misrepresentation B Fraud C Unfair claims settlement practice D There is nothing wrong with this incident; there is not a specified deadline for insurers to process a claim.
C
An insured purchased an insurance policy 5 years ago. Last year[ she received a dividend check from the insurance company that was not taxable. This year she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? A Nonprofit service organization B Stock C Mutual D Reciprocal
C
Twisting:
the act of inducing or attempting to induce a policy owner to drop an existing life insurance policy and to take another policy that is substantially the same kind by using misrepresentations or incomplete comparisons of the advantages and disadvantages of the two policies.
The lnsurance Commissioner must examine each insurer at least once every __ years.
5
An insurance agent wants for a client to replace her current annuities plan with another one. He presents the new one in an incomplete and dishonest way, which makes the new contract seem far more appealing than the original one. The policy owner ends up surrendering her original contract and replacing it with the new one. Which term best describes what the agent did? A Fraud B Rebating C Twisting D False advertising
C
Which of the following is an example of a producer being involved in an unfair trade practice of rebating? A inducing the insured to drop a policy in favor of another one when it is not in the insured's best interest B Charging a client a higher premium for the same policy as another client in the same insuring class C. Making deceptive statements about a competitor D Telling a client that his first premium will be waived if he purchases the insurance policy today
D
What is a foreign insurer? A An insurer with a home office in another country B An insurer with licensed agents doing business in other countriese C An insurer with licensed agents who are citizens in more than one country D An insurer with a home office in another state
D A domestic insurer's home office is in this state, a foreign insurer's is in another state, and an alien insurer's is inanother country.
Notice of Claim
a provision in a liability insurance policy requiring the insured to promptly notify the insurer in the event that a claim is made against the insured.
Misrepresentation:
a false or misleading statement that, if intentional and material, can allow the insurer to void the insurance contract.
Reciprocal
a form of insurance organization in which individuals and businesses exchange insurance contracts and spread the risks associated with those contracts among themselves
Mutual
An insurance company owned by its policyholders
An agent completed a CE course in 2019. Until what year must the agent keep the records of completion? A 2020 B 2023 C 2024 D 2029
B
When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of A Nothing, unless the remarks were in writing B Defamation. C Misrepresentation. D Discrimination
B
Which entity has the authority to grant a temporary life insurance agent's license? A A licensed agent B Commissioner of lnsurance only C Federal Board of lnsurance Licensing D Both the Commissioner and the Federal Board of lnsurance Licensing
B
Which of the following is a TRUE statement about a temporary license issued in this state? A lt requires a written examination. B lt can be renewed after the first term. lt can only be issued once in any 6-month period. D lt allows the producer to sell replacement policies.
C
ln Texas, the Commissioner of lnsurance is A Elected by the state legislature's Banking and lnsurance Committee. B Elected byTexas voters. C Appointed by the Governor. D Appointed by the lnsurance and lndustry Committee of the state legislature.
C
ln Texas, the state's continuing education requirement A Cannot be extended or waived under any circumstances. B Applies to life, annuity, and accident and health licensees only. C Consists of completing 24 hours of CE each biennium. D Must be completed by all licensed resident and nonresident agents.
C
The insurance Commissioner may examine the affairs of any insurer as often as necessary but not less frequently than once every A 1 Year. B 2 years C 3 years D 5 years
D