Chapter 5: Ga Laws, Rules, and Regulations Pertinent to All Lines of Insurance

An agent is acting ethically in all the of following situations EXCEPT a) working within the conditions of his/her contract b) representing the insurer, not the insured c) keeping customers' best interests in mind d) always representing the insured

d) always representing the insured

The maximum penalty that may be assessed for a single nonwillfull violation of the Insurance code is a) $1,000 b) $5,000 c) $10,000 d) $50,000

a) $1,000

What is a foreign insurer? a) An insurer with a home office in another state b) An insurer with a home office in another country c) An insurer with licensed agents doing business in another country d) An insurer with licensed agents who are citizens in one or more countries

a) An insurer with a home office in another state

Which of the following best describes an insurance company that has been formed under the laws of the state? a) Domestic b) Sovereign c) Local d) Admitted

a) Domestic

When does a producer's license expire? a) Every 2 years on the last day of the producer's birth month b) Every even-numbered year c) Every 3 years d) Annually on January 1

a) Every 2 years on the last day of the producer's birth month

What is the function of the certificate of authority? a) It allows an insurer to transact insurance in Ga b) It gives the commissioner of insurance the authority c) It is given to the department of insurance By the Federal Insurance Regulation board to allow it to enforce the provisions of the Insurance Code d) It is given to all agents when they receive their license

a) It allows an insurer to transact insurance in Ga

Which of the following is an example of a producer's fiduciary duty? a) The trust that a client places in the producer in regard to handling premiums b) An obligation to state every known fact about the policy the producer is selling c) A duty to base all transactions upon the principle of utmost good faith d) The obligation to tell the truth to the best of one's knowledge

a) The trust that a client places in the producer in regard to handling premiums

Which of the following would be required to submit fingerprints with the license application? a) A nonresident producer renewing their nonresident license in this state b) A new producer applying for a resident license c) An individual applying for license reinstatement within 6 months before the license expiration date d) An active life insurance producer applying for a health insurance license

b) A new producer applying for a resident license

When transacting business in this state an insurer formed under the laws of another country is known as a/an a) Admitted insurer b) Alien insurer c) Domestic insurer d) Foreign insurer

b) Alien insurer

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 a) nothing, unless the marks are in writing b) Defamation c) Misrepresentation d) Discrimination

b) Defamation

When does a producer's license expire? a) Annually on January 1st b) Every two years on the last day of the producers birth month c) Every even numbered years d) Every 3 years

b) Every two years on the last day of the producers birth month

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? a) Rebating b) Twisting c) Switching d) False advertising

b) Twisting

Agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period? a) 1 year b) 3 years c) 5 years d) 7 years

c) 5 years

A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered a) Subject to imprisonment b) A misdemeanor c) A felony d) A minot violation

c) A felony

What is the title of the chief officer of the Department of insurance? a) Director b) Superintendent c) Commissioner d) President

c) Commissioner

In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the a) Applicant b) Insured c) Company d) Beneficiary

c) Company

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of? a) Unfair claim practice b) Rebating c) Misrepresentation d) Concealment

c) Misrepresentation

If the Commissioner is not able to serve due to disability, resignation, or death, which of the following will happen? a) The Department will elect a new Commissioner immediately b) The Department will form a committee to serve as the Commissioner until the next election c) The Chief Deputy Commissioner will serve as the commissioner until the next election d) The governor will serve as the Commissioner until the next election

c) The Chief Deputy Commissioner will serve as the commissioner until the next election

The Commissioner of Insurance is a) Used as a synonym for the Department of Insurance b) The national head of all state insurance departments c) The Chief Officer of the Department of Insurance d) The president of the NAIC

c) The Chief Officer of the Department of Insurance

What is the maximum period of time a temporary license can be in force? a) 6 months b) 3 months c) 1 Year d) 15 months

d) 15 months

A producer whose license is revoked or whose application for a license is denied will be ineligible to reapply for any license for at least a) 1 Years b) 2 Years c) 3 Years d) 5 Years

d) 5 Years

Which of the following would be required to be licensed as an insurance producer? a) A person whose activities are limited to producing insurance advertisements b) A salaried full-time employee who furnishes information for group insurance c) An insurance company director who performs executive, administrative, and managerial duties d) A salaried employee who advertises and solicits insurance

d) A salaried employee who advertises and solicits insurance

Which of the following is another term for an authorized insurer? a) Certified b) Licensed c) Legal d) Admitted

d) Admitted

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a) An offer of employment b) Stocks, securities, or bonds c) An offer to share in commissions generated by the sale d) Dividends from a mutual insurer

d) Dividends from a mutual insurer

How often does an agent's insurance license expire? a) Every 3 years b) The license is perpetual c) Annually d) Every 2 years

d) Every 2 years

Committing insurance fraud is considered a/an a) Misdemeanor. b) Error and omission. c) Ethics violation. d) Felony.

d) Felony.

Which of the following is not true regarding Certificate of Authority? a) It may be necessary for transacting business in another state b) It is equivalent to an insurance license c) It is issued by the state department of insurance d) It is issued to group insurance participants

d) It is issued to group insurance participants

All of the following statements true regarding continuing education requirements in this state are except a) CE hours must be completed every 2 years by the last day of the producer's birth month b) Ethics education is required every licensing period c) Excess hours may be carried over to the next licensing period d) Producers may repeat the same courses to meet the required CE hours for a licensing period

d) Producers may repeat the same courses to meet the required CE hours for a licensing period

A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n a) Nonresident arrangement b) Overinsurance c) Appointment d) Reciprocity agreement

d) Reciprocity agreement

Which of the following types of insurers is owned by stockholders? a) Mutual b) Reciprocal c) Fraternal d) Stock

d) Stock