Chapter 10- Texas Statutes and Rules Common to Life and Heath Insurance

What is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation on rebating?

$25 or less

What is true about continuing education?

-It requires satisfactory completion of 24 hours of approved training every 2 years -It does not allow excess credit hours to be carried foward to the next reporting period. -Hours may be completed using independent self study courses or classroom study

Unfair claims settlements are...

-Refusing to pay claims without conducting a reasonable investigation -Failing to adopt and implement reasonable standards for settling claims -Failing to acknowledge pertinent communication pertaining to a claim

If 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?

24 hours

The Commissioner of Insurance issues a Cease and Desist order 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

The Insurance Commissioner may examine the affairs of any insurer as often as necessary, but not less frequently that once every...

5 years

Who is required to hold a producer license?

A person who negociates insurance contracts

An authorized insurer is also known as?

An admitted insurer

Who is considered a nonresident agent?

An agent who resides in another state, but is licensed to write insurance in Texas.

What is a foreign insurer?

An insurer with a home office in another state

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

Appointed by the Govenor for a term of 2 years

What 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 an insurance policy from the bank in the amount of the loan. This is an example of...

Coercion

In Texas, the state's continuing education requirement...

Consists of completing 24 hours of CE each biennium

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

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstance

An insurer advertises a health policy that is covered by the Life and Health Insurance Guaranty Association. The advertisement includes a short list of benefits and approximate rates. The end of the advertisement includes statement that protection is provided by the Guaranty Association.

Mentioning the Guaranty Association in advertisements is considered to be unfair trade practice

What describes an insurance company that has been formed under the laws of this state?

domestic

Insurers are classified according to their domicile. What are the three types of insurers?

domestic, foreign, and alien

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: Funds not paid out after paying cliams and other operating costs are returned tothep olicowners in the form of a dividend

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are...

Not taxable since the IRS treats them as a return of a portion of the premium paid.

An insurance transaction is...

Obtaining an insurance license

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

Ownership

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

An agent licensed in Texas is moving to Kansas. What does he need to do?

The agent has 30 day to notify the Department of Insurance of the new address

An Insurance Commissioner can suspend or impose conditions upon the continuance of an agent's license if...

The applicant has been shown to be a poor personal credit risk

An agent recieves an Emergency Cease and Desist Order for chronically misrepresenting his insurance policies. The agent knows that he did not commit the violations stated in the emergency Cease and Desist Order. He wants to contest the charges in a court hearing. Which of the following is true?

The hearing must be held within 10 days of recieving a request, unless both parties agree to a later date.

What is the purpose of the Life Insurance Guaranty Association?

To help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company

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?

Unfair claims settlement practice