Chapter 11 Exam - Laws and Rules
How does the Commissioner attain his position?
Appointed by the Governor
When replacing an existing life insurance policy, the replacing insurer must notify the existing insurer within
5 business days
How long must a replacing insurer maintain the records of a replacement transaction?
5 years
When a life insurance underwriter is determining insurability, it is illegal to base these decisions on
Sexual orientation
If a producer is found to be writing primary controlled business,
The commissioner will not renew license
When is it appropriate for a producers spouse to be the primary beneficiary on an applicants insurance policy?
When insurable interest exists
An producer who violates a cease and desist order may, after a hearing, be fined up to
$500
Which information is NOT included in the Colorado supplement of Benefits and Coverage form?
The insurer's prior year financials
What is the maximum amount the commissioner can fine an insurer for each violation of a cease and desist order?
$10,000
On June 1, 2004 G takes out a $20,000 whole life insurance policy with an AD &D rider. On July 15, 2005 G intentionally takes his own life. What will G's beneficiary receive as a death benefit?
$20,000
A producer that only sells insurance to family members is said to be engaging in
Controlled business
A producer license may be suspended or revoked if the producer is found to be engaging in
Misrepresentation
Which of the following is required for a life insurance lapse notice?
Reason stated why policy will lapse
In Colorado, all of the following are considered unfair trade practices EXCEPT
Replacement
If an insurer is authorized to conduct business in another state and wishes to conduct business in Colorado, it must
Receive a certificate of authority from colorado
Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of ____ from the policy's effective date?
1 year
In Colorado a life insurance applicant has ___ days after policy delivery for a full refund of premium if not satisfied for any reason
15
Renewing a producer's license requires __ hours of continued education every 2 years.
24
An insurer that terminates a producer's appointment must inform the Commissioner within how many days?
30
Which of the following is an example of defamation
A brochure including an untrue statement regarding a competitor's ability to pay claims
Which of the following statements regarding the Notice Regarding Replacement of Life Insurance is CORRECT
A copy of the notice must be signed by the the applicant and submitted with the application
When a minor is designated as the sole primary beneficiary,
A guardian will be court appointed in the event of a death claim
Which of the following potential insurance sales would be subject to replacement regulations?
A new policy that causes an existing life insurance policy to be surrendered
Which of the following statements is CORRECT regarding insurable interest in a life insurance contract?
A person is generally considered to have unlimited insurable interest in himself or herself
Which of the following is CORRECT regarding a producers fiduciary responsibility with clients funds?
A producer may never commingle personal funds with funds paid by or to a client
A life insurance applicant realized he failed to disclose material medical history and calls the producer. Any changes made to the application must be initialed by the
Applicant
When may the commissioner conduct an examination of an insurance company?
As often as deemed necessary
If an insurance company wishes to discriminate rates based on gender, it must,
Be justified by actuarial statistics
According to the Colorado Fraud Statute, all of the following must contain a warning against insurance fraud EXCEPT:
Certificate of authority
Which of the following is NOT a problem when existing life insurance is replaced with new coverage?
Comprehensive coverage may increase under the new policy
Who is not eligible to receive commissions from the sale of an insurance product?
Corporate executive
If a producer completes and insurance application, collects the initial premium, and issues the appropriate receipt,
Coverage will be contingent on the underwriting policies
From what point must the insurer pay interest on the proceeds of a death claim?
Date of death
Which of the following is an example of a misrepresentation?
Describing a universal life policy as a security
When recommending the purchase or exchange of an annuity, the producer must determine suitability of the purchase by performing all of the following EXCEPT
Determining the marital status of the applicant
Which of the following words may be used in the advertisement of life insurance or annuities ?
Guaranteed
All of the following penalties apply to anyone giving intentional false testimony during an insurance examination EXCEPT:
Guilty of a felony
Ultimately, who is responsible for a producer generated advertisement
Insurer
When a claim is denied, the insurer must
Issue a statement to the policy owner explaining the coverage, provision, or laws on which denial was based.
In addition to suspending/revoking licenses and issuing fines, the commissioner has the authority to do all of the following EXCEPT:
Issue prison sentences
In Colorado, which of the following is true regarding the commingling of an insureds funds with the funds of a producer?
It is never okay
To be valid, a group life insurance policy
May not be issued to a group formed solely for the purpose of obtaining insurance
A company that has not been authorized to operate in Colorado is known as
Nonadmitted insurer
As a condition to be approved for a loan , a creditor may require the borrower to
Obtain an insurance policy through an insurer of the borrower's preference
If a producer offers to refund part of a prospects premium in exchange for the purchase of a life insurance policy, the producer is committing the illegal act of
Rebating
Interest on life insurance proceeds is
Required if the claim was not paid within 30 days of the date insurer received the claim
Which of the following is an example of rebating?
Returning a portion of a premium as inducement to purchase insurance
Which of the following statements is true regarding the replacement of a life insurance policy in Colorado?
The replacing insurer must maintain copies of all records regarding the replacement for at least 5 years
An insurer cannot deny a claim unless
There is a reasonable explanation of the claim
If an annuity application was not taken in person, an insurer must provide the applicant a Buyers Guide
Within 5 days of the insurer receiving the application I
A fiduciary responsibility is defined as
a relationship of speciaFl trust and confidence when a person is entrusted with another's funds
Colorados replacement rules apply to all of the following types of insurance EXCEPT
Single premium whole life
G takes out a life insurance policy on October 8, 2008. On August 3,2009, Gtakes his own life. when G's beneficiary files a claim,
The claim will be denied under the suicide provision
A verbal or written statement which misleads a policy's features, benefits, or coverage is considered
Misrepresentation
All of the following are considered a form of advertisement EXCEPT
Communication or materials used within an insurers own organization
Paying insurance premiums on a more frequent basis will cause the policy to have
Higher premiums
When may a commissioner issue an emergency cease and desist order?
If there is suspicion of an unauthorized person engaging in insurance business without being licensed
Licensing is required for all of the following EXCEPT
Selling prepaid legal services
If a producer is going to deposit any premium into a bank account prior to remitting the funds to the insurer, he/she must use a
Separate insurance trust account
A producer must remit premiums to the insurer within ____ days after receipt
45
Which situation allows the producer to also be the beneficiary on a clients application for life insurance?
When insurable interest exists
Upon request, when must the Colorado Supplement to the Summary of Benefits and Coverage Form be provided?
Within 7 business days
The commissioner may issue an emergency cease and desist order without a hearing for all of the following circumstances EXCEPT
Writing controlled business
Which of the following documents are NOT required to mention the Colorado Fraud Statute
certificates of authority
Which of the following is a duty of the commissioner
Reviewing and approving license applications
The USA patriot act was signed into law as a response to
The 9/11 terrorist act
A license is deemed to be used for a controlled business if, during the immediately preceding 12 - month period,
The licensees total premiums on controlled business exceeded the total premiums on all other businesses
If a producer chooses to conduct business under an assumed name, when must notification be given to the Commissioner?
Prior to using the assumed name
Circulation of a maliciously critical statement about any insurer's financial condition to injure the insurer is called:
Defamation
Which of the following offers an insurance applicant the right to view the contract and receive a full refund?
Free look period
Employer noncontributory group life policies must allow for all of the following EXCEPT
Insured can determine the benefit amount
If an applicant for an annuity refuses to provide suitability information, the producer should
Obtain the consumers signed statement documenting his or her refusal to provide sustainability information
