Chapter 17
A producer who attempts to intimidate a consumer with regard to an insurance transaction has engaged in: 1. Defamation 2. Coercion 3. Misrepresentation 4. Rebating
2. Coercion
Each of the following is necessary for an insurance license to be renewed, EXCEPT: 1. Payment of license renewal fee 2. Completion of continuing education credits 3. Passing a State examination 4. Completing a renewal application
3. Passing a State examination
In some states, the Commissioner of Insurance is appointed by the Governor. Which of the following are powers or duties of the Commissioner? 1. Activates the reserves of an insurer 2. Prosecutes producers who break insurance laws 3. Sets life insurance premium rates 4. Issues licenses to producers
4. Issues licenses to producers
Which of the following licensed individuals may provide insurance advice to a customer for a stipulated fee? 1. A consultant or adviser 2. An insurance producer 3. A broker 4. An adjuster
1. A consultant or adviser
A producer may have his or her license suspended for engaging in an unfair sales practice or a failure to comply with other insurance regulations. Which of the following would cause a producer to suffer a license suspension? 1. Failure to pay a child support obligation 2. Lack of sales production 3. Low persistency 4. Providing a buyer's guide to a prospective client
1. Failure to pay a child support obligation
All of the following are considered to be insurance transactions, EXCEPT: 1. Filing of a claim 2. Contract issuance 3. Delivery of an insurance policy 4. Collection of premiums
1. Filing of a claim
A producer failing to remit premiums collected to an insurer has engaged in: 1. Larceny 2. Misrepresentation 3. Twisting 4. Fiduciary capitalization
1. Larceny
Which of the following best describes a producer providing an incomplete comparison of policies in order to persuade an individual to lapse an existing policy voluntarily? 1. Twisting 2. Defamation 3. Coercion 4. Larceny
1. Twisting
Those who make false statements regarding the solvency of a competing insurer have engaged in: 1. Misrepresentation 2. Fraud 3. Defamation 4. Coercion
3. Defamation
A producer or agent may share commissions with another producer or agent: 1. If both reside in the same State 2. If both are licensed producers 3. If both are licensed in the same line of insurance 4. If both work for the same insurer
3. If both are licensed in the same line of insurance
When a replacement of an insurance policy occurs, all States require that an insurer provide a "Notice Regarding Replacement" to a policyowner advising him or her of: 1. Any reduction of benefits that may occur due to the replacement 2. The compensation to be provided to the replaced producer 3. The annual income of the replacing producer 4. The time that must elapse before the replacement will occur
1. Any reduction of benefits that may occur due to the replacement
Each of the following is an unfair or illegal sales practice, EXCEPT: 1. Disclosure 2. Defamation 3. Impersonation 4. Rebating
1. Disclosure
A fictitious or assumed name may be used by an individual when marketing services as long as: 1. The appropriate fee is paid 2. Approval from the Department of Insurance has been secured before the assumed name is used 3. The Commissioner has reviewed the proposal for the assumed name and has referred it to the Department of Labor 4. The State or Commonwealth has a statute that allows such an assumed name
2. Approval from the Department of Insurance has been secured before the assumed name is used
Which of the following is not considered a rebate? 1. Any valuable consideration used as an inducement to contract insurance, not specified in the policy 2. Stocks and bonds given as an inducement to contract 3. A favorable payment plan provided to a policyholder 4. A personal service offered as an inducement to contract insurance, not specified in the policy
3. A favorable payment plan provided to a policyholder
The Commissioner of Insurance may place on probation, suspend, revoke or refuse to renew a producer license after a hearing if the producer has engaged in which of the following: 1. Shared commissions with a fellow producer 2. Was convicted of a traffic violation 3. Failed to explain the terms, benefits and conditions of a policy 4. Engaged in coercive practices
4. Engaged in coercive practices
Which of the following is the reason why a Commissioner, Superintendent or Director of insurance approves policy forms ? 1. To ensure that policies include applicable exclusions 2. To enable insurers to comply with file and use requirements 3. To protect the public from unfair provisions 4. To regulate an insurer for solvency
3. To protect the public from unfair provisions
Which of the following would not be considered rebating? 1. A producer offers to pay a portion of the insured's premium. 2. A producer provides a television set to a current customer. 3. A producer offers season tickets to a prospective client. 4. A producer offers an advantageous premium payment plan to an insured.
4. A producer offers an advantageous premium payment plan to an insured.
Insurers send confidentiality statements about privacy issues to a policyholder on which of the following bases ? 1. Annually 2. Biennially 3. Triennially 4. Every five years
1. Annually
A producer may have his or her insurance license suspended for engaging in an unfair sales practice or a failure to comply with other insurance regulations. Which of the following would cause a producer to suffer a license suspension. 1. Low sales production 2. Failing to provide a buyer's guide to a prospective client 3. Failure to pay a child support obligation 4. Low persistency
2. Failing to provide a buyer's guide to a prospective client
Mike is a producer licensed in this State. To make sure that his largest commercial insurance account renews their policy, he makes a gift of a pair of diamond earrings to the owner's wife. Therefore, Mike has engaged in: 1. Twisting 2. Misrepresentation 3. Defamation 4. Illegal inducement
4. Illegal inducement
