CT.2
What must an insurance company do to appoint a producer as its agent? file a notice of appointment with the Department and pay the required fee notify other authorized insurers before appointing a producer file a notice of appointment with the National Association of Insurance Commissioners to determine the producer's eligibility for appointment determine from the state's licensing database whether the producer is already appointed by another insurer
file a notice of appointment with the Department and pay the required fee
Who is authorized to sell market value adjusted (MVA) annuities in Connecticut? producers licensed in Connecticut to sell both life insurance and annuities producers licensed in Connecticut to sell variable annuities producers licensed in Connecticut to sell disability income insurance producers licensed in Connecticut to sell both health insurance and annuities
producers licensed in Connecticut to sell variable annuities
Which of the following is not a power granted to the Connecticut Insurance Commissioner? licensing producers and companies enforcing insurance laws prosecuting individuals for violating the insurance laws issuing regulations to administer insurance laws
prosecuting individuals for violating the insurance laws
To boost her sales at the end of the year, Agent Trudy started offering potential clients a $250 cash gift card in exchange for purchasing a life insurance policy. Which ethical sales practice has Agent Trudy violated? false information rebating twisting churning
rebating
Which unfair practice is specifically prohibited as unethical? commission sharing rebating controlled business replacement
rebating
Which unfair practice is specifically prohibited as unethical? controlled business rebating commission sharing replacement
rebating
Two years after her life insurance policy lapsed for non-payment of premium, Brenda pays the back-due premiums and her coverage resumes, thanks to which of the following policy provisions? reinstatement free look incontestability grace period
reinstatement
Which of the following is not a required provision in a market value adjusted annuity? time limit on certain defenses nonforfeiture benefit reinstatement grace period
reinstatement
Genevieve wants to renew her Connecticut insurance producer's license. Which of the following is not a condition for renewal? submission of a renewal form report of insurance sales made in the last two years fulfillment of continuing education payment of the renewal fee
report of insurance sales made in the last two years
Statements made on a life insurance application are considered: unconditional promises representations conditional promises warranties
representations
Statements made on a life insurance application are considered: warranties unconditional promises representations conditional promises
representations
Which of the following is not considered an unfair claims settlement practice? failing to acknowledge a request for claims forms settling claims based on an application that the agent altered without informing the insured requiring the insured to submit a formal proof of loss form making claims settlements without stating the coverage under which payments are made
requiring the insured to submit a formal proof of loss form
Which of the following is not considered an unfair claims settlement practice? requiring the insured to submit a formal proof of loss form failing to acknowledge a request for claims forms making claims settlements without stating the coverage under which payments are made settling claims based on an application that the agent altered without informing the insured All of these co
requiring the insured to submit a formal proof of loss form
The federal Risk Retention Act of 1986 contains guidelines for which of the following entities? reinsurance companies surplus lines insurance companies risk retention groups Fraternal insurance companies
risk retention groups
Acme Insurers recently started an advertising campaign in Connecticut for its new life insurance policies. Which statement is true? Acme's advertisements cannot mention other competitors or products. Acme can compare its products to competitors only if such comparisons are fair and complete. Acme may not use paid endorsements in the advertisements. Acme may not use testimonials in the advertisements.
Acme can compare its products to competitors only if such
Which of the following statements about utmost good faith in insurance contracts is correct? Both the insured and insurer must act in utmost good faith. Only the insured and the beneficiary must act in utmost good faith. Only the insurer must act in utmost good faith. Only the insured must act in utmost good faith.
Both the insured and insurer must act in utmost good faith.
How often must an insurer that issues variable annuities value the assets of the separate account used to pay benefits? at least quarterly at least annually at least monthly at least semiannually
at least monthly
What must an insurance company do to appoint a producer as its agent? determine from the state's licensing database whether the producer is already appointed by another insurer file a notice of appointment with the Department and pay the required fee file a notice of appointment with the National Association of Insurance Commissioners to determine the producer's eligibility for appointment notify other authorized insurers before appointing a producer
file a notice of appointment with the Department and pay the required fee
Jeffrey has violated a cease and desist order of the Commissioner. After notice and hearing, what is the maximum amount he may be fined? $25,000 for each violation $50,000 for each violation $5,000 for each violation $10,000 for each violation
$50,000 for each violation
What is the grace period for a market value adjusted (MVA) annuity? 20 days 40 days 30 days 10 days
30 days
Which of the following best describes an agent's responsibilities? An agent has no fiduciary duty toward insurers, applicants, or insureds. An agent has to act in the best interests of insureds, applicants, and insurers. An agent only has to act in the best interests of the insured or applicant, but not the insurer. An agent only has to act in the best interests of the insurer he or she represents.
An agent has to act in the best interests of insureds, applicants, and insurers.
Which of the following best describes an agent's responsibilities? An agent only has to act in the best interests of the insured or applicant, but not the insurer. An agent only has to act in the best interests of the insurer he or she represents. An agent has to act in the best interests of insureds, applicants, and insurers. An agent has no fiduciary duty toward insurers, applicants, or insureds.
An agent has to act in the best interests of insureds, applicants, and insurers.
Agent Monroe helped her client Brian enter into a life settlement agreement with Best Insurers. Which of the following parties will receive the life insurance proceeds at Brian's death? Agent Monroe and Best Insurers Best Insurers Brian's beneficiaries under his will Agent Monroe
Best Insurers
Federal law requires that businesses fairly and accurately report consumer information through the: Fair Credit Reporting Act Fraud and False Statements section Telemarketing Sales Rule CAN-SPAM Act
Fair Credit Reporting Act
Agent Thompson did not complete his continuing education requirements for the prior two-year reporting period by January 31 of the last even-numbered year. What will happen to his license? Nothing. There is a 30-day grace period for completion. His license will be suspended. His license will be revoked. The prior requirement will be added to the requirement for the new reporting period.
His license will be suspended.
Julia signed a life settlement agreement on May 1. Three weeks later, she decides that she no longer wishes to sell her policy. What are her options? Julia may cancel the contract because the cancellation period has not expired. Julia cannot cancel the contract because the cancellation period has expired. Julia may cancel the contract only if the life settlement provider consents. Julia may cancel the contract and can keep any settlement proceeds received.
Julia cannot cancel the contract because the cancellation period has expired.
Before taking the application, a producer must deliver which of the following documents to a policyowner who is buying a life insurance policy that replaces another? Notice of Replacement Policy Summary Buyer's Guide Certificate of Authority
Notice of Replacement
Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply for a nonresident license in Connecticut. Which of the following conditions must she satisfy? She must be sponsored by a producer licensed in Connecticut. She must move to Connecticut. She must show that her Ohio license is in good standing. She must surrender her Ohio license.
She must show that her Ohio license is in good standing.
All of the following are characteristics of a stock insurance company EXCEPT: They are governed by a board of directors. They are owned by policyowners. They may issue dividends. They have minimum financial capital requirements that must be met before they can conduct business.
They are owned by policyowners.
Alex sold an insurance policy before his license lapsed and earned a commission on the sale. Is he entitled to a commission if the policy is renewed? No, because he is no longer licensed. No, because only one commission can be paid on a policy sale. Yes, because he was licensed when the policy was sold. Yes, because his license was not revoked or suspended.
Yes, because he was licensed when the policy was sold.
If the Bakersfield Insurance Company has a low volume of insurance policy sales, must it be a member of the Connecticut Life and Health Insurance Guaranty Association, and why? No, if insurance sales volume is less than $100,000. Yes, if insurance volume is $100,000 or more. Yes, membership is mandatory. No, membership is optional.
Yes, membership is mandatory.
All the following types of insurance involve a personal contract EXCEPT: a life insurance policy a disability income insurance policy a medical expense insurance policy an automobile policy
a life insurance policy
Which insurance company function calculates company mortality and morbidity rates as well as the dividends on participating life insurance policies? actuarial division sales division underwriting division claims division
actuarial division
Through the underwriting process, an insurer weighs the risks it will accept on what basis? actuarial principles revenue goals producer preference marketing objectives
actuarial principles
When completing an application for life insurance, Andrew states that he is 39 years old, though he is actually 45. When the insurer discovers this, what will it probably do? increase the premium cancel the policy adjust the benefits notify the Commissioner
adjust the benefits
What does the entire contract clause in a life insurance policy refer to? the validity of the contract the entire amount of consideration paid for the policy is specified in the contract the fact that the company and the insured are bound to the entire contract all endorsements, attached papers, and waivers make up the entire contract
all endorsements, attached papers, and waivers make up the entire contract
When first meeting prospective insurance applicants, a producer must give them a document that explains the general features, benefits, and conditions of the type of insurance being considered, which is called a key points document prospectus buyer's guide policy summary
buyer's guide
The federal Fair Credit Reporting Act protects the rights of: creditors consumers insurers the Department of Insurance
consumers
The federal Fair Credit Reporting Act protects the rights of: the Department of Insurance insurers consumers creditors
consumers
Ambiguities in an insurance contract are most often interpreted in favor of the policyowner because insurance contracts are: contracts of adhesion unilateral conditional aleatory
contracts of adhesion
The Insurance Commissioner cannot suspend or revoke an agent's license for which of the following reasons? having an agent's license denied or suspended in another state failing to meet projected sales goals forging an individual's name on an insurance application accepting insurance from an unlicensed individual
failing to meet projected sales goals
Which of the following is not an unfair claims settlement practice if committed by an insurance company in Connecticut? failing to promptly acknowledge communications about claims failing to promptly settle a claim for which liability is uncertain appealing from an arbitration award in favor of an insured to compel the insured to accept a lower settlement failing to affirm or deny coverage within a reasonable time after completing a claim investigation
failing to promptly settle a claim for which liability is uncertain
Which of the following is not an unfair claims settlement practice if committed by an insurance company in Connecticut? failing to promptly settle a claim for which liability is uncertain failing to promptly acknowledge communications about claims appealing from an arbitration award in favor of an insured to compel the insured to accept a lower settlement failing to affirm or deny coverage within a reasonable time after completing a claim investigation
failing to promptly settle a claim for which liability is uncertain
Acme Insurance Company wants to employ Anthony as a producer. To do so, what must Acme do? submit a notice of appointment to the NAIC's national database have Anthony sign a non-compete and exclusive agency agreement file a notice of appointment with the Department verify that Anthony is eligible for appointment
file a notice of appointment with the Department
What must an insurance company do to appoint a producer as its agent? A.notify other authorized insurers before appointing a producer file a notice of appointment with the National Association of Insurance Commissioners to determine the producer's eligibility for appointment determine from the state's licensing database whether the producer is already appointed by another insurer file a notice of appointment with the Department and pay the required fee
file a notice of appointment with the Department and pay the required fee
Barbara is an employee who has group life coverage through her employer. Which of the following most likely describes the type of policy covering Barbara? group decreasing term life insurance group limited payment whole life insurance group annually renewable level term life insurance a group endowment contract
group annually renewable level term life insurance
Agent Green sells annuities to senior consumers. Before making a recommendation about an annuity purchase, Agent Green must obtain all of the following information EXCEPT: tax status investment objectives health pre-existing conditions financial status
health pre-existing conditions
An applicant for a $500,000 whole life insurance policy pays the initial premium along with his application. In this case, what has the applicant done? accepted an offer from the insurer made an offer to the insurer accepted a counteroffer from the insurer made a counteroffer to the insurer
made an offer to the insurer
What does a group sponsor receive under a group life insurance policy to show it is the policyowner? master policy certificate of insurance group certificate certificate of authority
master policy
When Terry applied for his life insurance policy four years ago, he omitted any information in the application related to treatment he received several years earlier for a serious chronic illness. Which of the following actions can the insurance company take when it learns of the omission? impose additional exclusions cancel the policy reduce the benefits nothing with respect to the omission
nothing with respect to the omission
An insurance producer's responsibilities to insurance applicants include all the following EXCEPT: Avoid replacing current insurance policies unless doing so is clearly in the customer's best interest. offer the same rebate to every applicant Disclose all pertinent information concerning a proposed policy. Make sure all product recommendations are suitable for the customer.
offer the same rebate to every applicant
Which of the following parties makes an enforceable promise in an insurance contract? only the policyowner only the beneficiary both the insurance company and the policyowner only the insurance company
only the insurance company
Who is a terminally ill person who sells his or her life insurance policy through a life settlement contract? life settlement provider life settlement broker owner life settlement purchaser
owner
The fact that ownership of a health insurance contract cannot be transferred to another party makes it what type of contract? unilateral conditional aleatory personal
personal
The Commissioner may refuse to issue or renew an insurance producer's license for which of the following reasons? conviction of a misdemeanor unintentional misrepresentation of the terms of a proposed insurance contract unknowingly accepting insurance business from an unlicensed person providing correct but incomplete information in a license application
providing correct but incomplete information in a license application
Agent Johns started offering potential clients courtside tickets to a professional basketball game in exchange for purchasing a life insurance policy. Which ethical sales practice has Agent Johns violated? replacement controlled business churning rebating
rebating
In addition to the fiduciary responsibility they have with all customer premiums and assets, producers are expected to do all the following EXCEPT: avoid all forms of rebating seek opportunities to replace existing policies with newer products disclose all pertinent information concerning a proposed policy make sure all product recommendations are suitable for the customer
seek opportunities to replace existing policies with newer products
Which of the following is not a duty of the Commissioner? licensing producers enforcing insurance laws examining insurers soliciting insurance contracts
soliciting insurance contracts
All of the following must be included in a basic illustration EXCEPT: narrative summary: description of the policy being illustrated tabular detail: statistics on premium outlay, guaranteed death benefit, and guaranteed surrender value supplemental illustration numeric summary: statistics on death benefits and values
supplemental illustration
What is credit life insurance designed to cover? an association member's life the creditor's life an employee's life the borrower's life
the borrower's life
In order to be grounds for the insurer to void a contract, an applicant's statements on an insurance application must involve: a broken warranty excessive details an incorrect statement the deliberate withholding of material facts
the deliberate withholding of material facts
When underwriting a group life insurance policy, which of the following does the underwriter look at? the group as a whole the health status of specific members the health status of the group's older members only the health status of the group's youngest members only
the group as a whole
In an insurance transaction, what does the applicant give as consideration? the promise to follow the terms of the insurance contract the promise to pay premiums during the entire policy period the initial premium the promise to be a responsible policyowner
the initial premium
With respect to the field of insurance, who are the two parties bound by the law of agency? the producer and the policyowner the state insurance department and the insurer the insurance company and the producer the insurer and the insured
the insurance company and the producer
How long must an insurer keep copies of any illustrations used to sell its life insurance policies? five years after the policy is sold five years after the policy expires three years after the policy expires two years after the policy is sold
three years after the policy expires
Which of the following is not a required provision in a market value adjusted annuity? time limit on certain defenses nonforfeiture benefit reinstatement grace period
time limit on certain defenses
When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Melanie's company. What has Melanie engaged in? defamation twisting rebating unfair discrimination
twisting
How long is an insurance producer's license valid? five years one year two years three years
two years
The insurance company function responsible for evaluating the insurable risks and assigning appropriate premium rates, is the: underwriting division actuarial division sales division claims division
underwriting division
Which of the following contract characteristics is unique to insurance contracts but NOT all contracts? unilateral competent parties consideration legal purpose
unilateral
Statements that are guaranteed to be true, such as an insurer's promise in the policy, are called: petitions representations warranties declarations
warranties
