Chapter 10: Texas Statutes and Rules Common to Life and Health Insurance

Anyone who violates the Insurance Code of Texas may be fined up to

$25,000

To legally transact insurance in this state, an insurer must obtain which of the following?

Certificate of Authority

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

A banker is ready to close on a customers loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

Coericon

The Commissioner of Insurance issues a Cease and Desist to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?

30 days

Which of the following individuals could legally receive commissions from the sale of a life insurance policy?

A licensed life insurance agent

What is a foreign insurer?

An insurer with a home office in another state

All of the following must be true of an individual before a license can be issued except that the

Applicant submitted his or her most recent tax return to the department

In Texas, how is the Commissioner of Insurance placed in office?

Appointed by the governor for a term of two years

Which members of a corporation or partnership are required to obtain an individual insurance agent license in order for the association to be licensed?

At least one officer or partner and any other person acting as an agent

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized

When a producer was reviewing a potential customer's insurance coverage that is written by another company, the producer made several oral statements that were maliciously critical of that other insurer. The producer could be found guilty of

Defamantion

If a licensed agent in Texas receives a criminal conviction, that information must be reported to

Department of Insurance

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 charged him a higher rate for his insurance. This practice is considered

Discrimination

The Commissioner has full power and authority to do all of the following except

Draft insurance laws

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

Which of the following entities is not an insurer but an organization formed to provided insurance benefits for members of an affiliated lodge or religious organization?

Fraternal benefit society

To become a Texas insurance agent, an individual must

Have passed a licensing exam within the 12 months before applying

Which of the following occupations would not directly help to qualify someone for the office of Commissioner of Insurance?

Insurance agent

What is the major difference between stock company and mutual company?

Ownership

A participating insurance company policy may do which of the following?

Pay dividends to the policyowner

Who might receive dividends from a mutual insurer?

Policyholders

An agent discovers his newest client was the result of a referral. To show his thanks to the referring customer, the agent could

Thank the customer.

An agent explains the details of a life insurance policy to a client. The agent does not realize, however, that the state has recently rewritten two of the provisions. As a result, the agent inadvertently misrepresents the policy, making it more attractive than it really is. What best describes this situation?

There is no misconduct

After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until hears what the other company will pay. The insurer's action will be classified as

Unfair