Chapter 10: Florida Statutes, Rules, and Regulations Common to All Lines
Continuing education requirements must be met every
2 years
How often must domestic insurance companies be examined by the Chief Financial Officer in Florida
At least every 5 years
A producer who fails to separate premium monies from his own personal funds is guilty of
Commingling
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of
False advertising
Circulating deceptive sales material to the public is what type of Unfair Trade Practice
False advertising
Which of the following insurers are owned by stockholders
Stock
Which of the following entities is responsible for agent licensing and administrative supervision
The Office of Insurance Regulation
What is the minimum age that a person can obtain a life insurance license
18
An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance
30 days
In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total given in a year
50%
What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws?
Absolute
Which of the following is true regarding branch ageny licensing
Agent in charge must be licensed
When transacting business in this state an insurer formed under the laws of another country is known as a/an
Alien insurer
What is a foreign insurer
An insurer with a home office in another state
How are state Insurance Guaranty Associations funded?
By their members - authorized insurers
To legally transact insurance in this state, an insurer must obtain which of the following
Certificate of Authority
What term best describes the act of withholding material information that would be crucial to an underwriting decision
Concealment
An insurance producer just sold an insurance policy to his sister. What kind of business is this
Controlled
Applications to an insurer must include all of the following information, EXCEPT
Credit history report
Which of the following will NOT be considered unfair discrimination by insurers
Discriminating in benefits and coverages based on the insured's habits and lifestyle
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charge him a higher rate for his insurance. This practice is considered
Discrimination
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual insurer
Which of the following is NOT a responsibility of the Office of Insurance Regulation
Enacting new insurance laws
An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as
Excess
Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in
Expiration of the license
The requirement that agents not commingle insurance monies with their own funds is known as
Fiduciary responsibility
No insurance policy form can be issued, delivered or used in this state unless it has been
Filed with and approved by the Office of Insurance Regulation
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming
Foreign
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer
Foreign
Which of the following activities would be sufficient violation to warrant rejection, rejection, revocation, or suspension of an insurance agent's license
Forgery
In insurance transactions, fiduciary responsibility means
Handling insurer funds in a trust capacity
All of the following are the general qualifications for an agent's license EXCEPT
Have a high school diploma
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. The insurer is hoping that this advertising will help to eliminate the competition and therefore create a monopoly. Which of the following best describes this act
Illegal
Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment
Insurance Guaranty Association
Insurance contracts are agreements between which two parties
Insurer and policyowner
The Office of Insurance Regulation is responsible for all of the following insurer activities EXCEPT
Issue of securities
Which of the following best describes the unfair trade practice of defamation
Making derogatory oral statements about another insurer's financial condition
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license
What is the major difference between a stock company and a mutual company
Ownership
Who might receive dividends from a mutual insurer
Policyholders
Pertaining to insurance, what is the definition of a fiduciary responsibility
Promptly forwarding premiums to the insurance company
When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT
Provide a 30-day advance notice to the Commissioner
In what way can an agent demonstrate a high standard of ethics?
Putting the client's best interests before their own
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
Rebating
What method do insurers use to protect themselves against catastrophic losses
Reinsurance
An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action
Send a written notification to the department of insurance
Which of the following may NOT be included in an insurance company's advertisement
That its policies are covered by a state Guaranty Association
Who examines the books and records of insurance companies in Florida
The Chief Financial Officer
What are the 2 offices of the Financial Services Commission
The Office of Financial Regulation and the Office of Insurance Regulation
If an agent is in the military, which of the following is true
The agent cannot sell a policy to another active military person who is of a lower rank
If a person accumulates more continuing education hours than is necessary to fulfill the requirements for a 2-year period, which of the following will occur
The extra hours may be continued into the next period
Which of the following is an example of a producer's fiduciary duty
The trust that a client places in the producer in regard to handling premiums
Under what circumstances can an agent's appointment be transferred to another person
Under no circumstances
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
Defamation
Which of the following statements is INCORRECT
Replacing insurance policies for the purpose of making commissions is legal
In accordance with the Code of Ethics, agents must provide a completed application to
The prospective insured and the insurer
If a license changes his or her residence address, within how many days must the department be notified
30
If an agent does not notify the insurer of an address change, what is the maximum penalty that can be imposed for a one-time offense
$250
All of the following actions can be described as twisting EXCEPT
Explaining to client the advantages of a permanent insurance over term and suggesting changing policies
Which of the following would be an example of an unfair claims settlement practice
Failing to acknowledge a claim within 30 days
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
Authorized insurer
In which of the following situations is it legal to limit coverage based on marital status
It is never legal to limit coverage based on marital status
A participating insurance policy may do which of the following
Pay dividends to the policyowner
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?
Mutual
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen
The policy will not be affected
A licensed agent must complete how many hours of continuing education specific to ethics and regulatory updates
5
Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization
Fraternal benefit society
All of the following would be considered rebating EXCEPT
An agent misrepresents policy benefits to convince a policyowner to replace policies
