Chapter 8: New Jersey Laws

Which of the following is not considered insurance-related conduct? A) Collecting premiums B) Underwriting an insurance application C) Binding a policy D) Processing claims

B) Underwriting an insurance application Selling, soliciting, and negotiating insurance policies, communicating with insureds regarding policy terms and conditions, and office management affecting insureds are other examples of insurance-related conduct.

Which of the following is acceptable when advertising a life insurance policy? A) Call a life insurance policy a savings plan B) State what the dividend earnings will be C) Use company jargon to explain statistical information D) Send information by fax machine

D) Send information by fax machine Examples of advertisement delivery include the internet, fax machines, and other similar devices, audiovisual material, and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio and television scripts, billboards and similar displays.

A hearing will be held within ______ days after the date the notice of hearing is served. A) 10 B) 15 C) 30 D) 45

A) 10 If the Commissioner believes a person has violated an unfair method of competition or any unfair or deceptive act, a notice will be served upon the person with a statement of charges, and the hearing must be held within 10 days of the serving of the notice.

If a producer becomes permanently disabled, the commissioner may issue a temporary producer license to his/her spouse for a period up to ______ days in order to service the producer's insurance business. A) 180 B) 90 C) 60 D) 365

A) 180 The Commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if it is determined the temporary license is necessary to sell the insurance business, train and license new personnel, or the producer recovers or returns to the business.

A temporary work authority is granted and valid up to ________ days after being issued. A) 60 B) 30 C) 45 D) 90

A) 60 The Commissioner is authorized to issue a temporary work authority, valid up to 60 days, allowing the applicant to begin work the proper form has been submitted and there is no information that may disqualify the applicant from being licensed.

After the department approves a business name, the business has ______ days to submit a license application? A) 90 B) 120 C) 60 D) 30

A) 90 Prior approvals of names will expire 90 days after the date of prior approval if no license application is received by the department.

Which of the following is true regarding the New Jersey Insurance Fraud Prevention Act? A) Concealing information requested on an insurance application is a violation of the Act B) A claimant will receive twice the damages if the court determines that the defendant violated the Act C) Only criminal activities will be litigated by the Insurance Fraud Prosecutor D) Suspicious information regarding an accident obtained by the State Police must be referred to an insurance investigator within 48 hours

A) Concealing information requested on an insurance application is a violation of the Act Presenting false evidence for the purpose of obtaining insurance is a violation of the Act. The State Police and other government agencies will refer information within 24 hours. Criminal and civil actions may both be filed against a person alleged of violating the Act, and a claimant will receive 3 times the damages.

A notice of the denial of a license application must include which of the following? A) Right to request a hearing B) Return of application fee C) Insurer licensing disclosure D) Appointment status

A) Right to request a hearing Whenever an applicant has not demonstrated the required qualifications for license issuance or renewal, the department will advise the applicant in writing the reasons for the denial, and advise the applicant of the right to request a hearing.

If a licensed producer hires another producer to write insurance business on behalf of the employer/producer, the employer will not do which of the following? A) Transfer the insurance-related conduct of the employee to the employer's manager B) Sign a contract of employment C) Supervises the employee D) Examine the employee's credentials

A) Transfer the insurance-related conduct of the employee to the employer's manager A producer employing another producer does not create any responsibility for the acts of the other in the absence of knowledge or concerted action.

Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following? A) Unfair discrimination B) Sliding C) Defamation D) False statements

A) Unfair discrimination Unfair discrimination is charging different rates/premiums, using different forms, imposing different limitations, or paying different levels of benefits to individuals of the same class and equal life expectancy, the same hazard class, based on race, creed, color, national origin or ancestry, or for auto insurance, for issuance age.

An agency appointment will terminate: A) When the insurer notifies the Commissioner within 15 days of the appointment termination date B) On the 60th day after the insurer fails to deliver a contract to the producer C) When the insurer receives the producer's underwriting guidelines and other marketing materials D) When the insurer notifies the NAIC

A) When the insurer notifies the Commissioner within 15 days of the appointment termination date When an agency contract is cancelled, within 15 days the insurer must notify the Commissioner of the cancellation date and the reason for cancellation.

The New Jersey Life and Health Insurance Guaranty Association will assume the contractual obligations of an insolvent insurer up to __________ in death benefits for any one individual. A) $350,000 B) $500,000 C) $100,000 D) $250,000

B) $500,000 The Association's liability for the contractual obligations of the insolvent insurer does not exceed $500,000 in life insurance death benefits for any one person or $100,000 in net cash surrender. The maximum benefit will not exceed an aggregate of $500,000 to any one individual.

When a bank or credit union refuses to give a loan unless the borrower buys insurance from a specific company, it is known as __________. A) Rebating B) Coercion C) Churning D) Misrepresentation

B) Coercion As a condition for lending money, a person cannot require the debtor to do certain things to receive or extend the loan, such as purchase an insurance policy from a particular insurer.

Premium refunds to the insured must be paid or credited to the insured's account within __________ after received by the producer. A) 10 calendar days B) 1 week C) 5 business days D) 3 calendar days

C) 5 business days Under the Insurance Producer Standards of Conduct for the management of funds, premium refunds must be returned within 5 business days and applied to the next billing statement sent to the insured.

Failure of a producer to respond to a notice of an administrative penalty will not result in which of the following actions? A) The producer agrees with the allegations B) License suspension C) An automatic hearing is scheduled D) A final order will be sent

C) An automatic hearing is scheduled Under the Insurance Producer Standards of Conduct for administrative procedures, a hearing may be requested when the producer responds to the notice of an administrative penalty.

State insurance laws are passed by which of the following? A) Majority vote of NAIC B) Commissioner of Insurance C) State legislature D) Insurance companies

C) State legislature The state legislature debates and passes state laws.

At what age may a person contract for insurance on himself? A) There is no minimum age limit B) 14 C) 18 D) 15

D) 15 A minor who is at least 15 years of age may contract for annuities or for insurance upon his/her own life, body, or health, or upon the life, body, or health of another person in whom the minor has an insurable interest, and may acquire ownership of and exercise every right, privilege, and power with respect to any contract of annuity or insurance.

Prior to renewal, a licensee must complete ________ credit hours of approved continuing education courses, _______ of which must be related to ethics. A) 12 / 3 B) 12 / 2 C) 24 / 2 D) 24 / 3

D) 24 / 3 Licenses for life, accident and sickness, property and casualty, personal lines, surplus lines, and title will not be renewed unless the licensee has completed 24 credit hours of approved continuing education courses, 3 of which must be related to professional ethics.

A request to open a branch office of an insurance company must be submitted to the department within how many days of the office opening date? A) 60 B) 90 C) 120 D) 30

D) 30 If the office opens, closes, or moves, the notification must be submitted to the Commissioner within 30 days.

If a licensee moves his/her business location, the notification of this action must be submitted to the Commissioner within _______ days of the move? A) 120 B) 90 C) 60 D) 30

D) 30 Proof of notification must be maintained for 5 years or until receiving a new license or other documentation from the department showing the new address.