Ethics
why is strict regulation of an insurance producer's conduct necessary for the public welfare
it is possible for sales persons to take advantage of the public's lack of knowledge about insurance
karl works with each of his clients to to determine which type of policy would be best for the individual. as a result, he sells a wide variety or products
karl is using a needs selling methodology
which of the following is most likely to provide the most specific definitions of minimum standards of behavior
law
replacement of one policy for another is a reasonable method for marketing
life insurance
a false statement of a fact is
misrepresentation
any written or oral statement that does not accurately describe a policy's features, benefits or coverage is considered
misrepresentation
over the last 30 years, insurance producers have become
more complex
the unauthorized practice of law is most likely to occur in the instance related activity of
needs analysis
the unauthorized practice of law is most likely to occur to the instance related activity of
needs analysis
an insurance producer must be dedicated to the principles of
needs selling
an unauthorized insurer is one that is
not licensed in a given state
when replacement of a life insurance policy is involved, an agent must do all of the following except
notify the existing insurer of the replacement
when conducting examination of insurers, state insurance departments are looking for
patterns of behavior
which of the following is generally not a qualification to becoming an insurance producer
pay a fee to the insurer for which the individual will work
any inducement on the sale of insurance that is not specified in the insurance contract is
rebating
chuck tells a prospect that he will return 10% of the prospect's first year premium if he buys it from Chuck, this is an example of
rebating
which of the following occurs if the buyer of an insurance policy receives any part of the producer's commission or anything else of significant value as an inducement to purchase a policy
rebating
an agent proclaims " our dividends are guaranteed and I will give you 1/2 of my commission if you sign up now
rebating and misrepresentation
all of the following are considered unfair trade practices except
replacement
all of the following are considered unfair trade practices, except
replacement
which of the following would not be an appropriate requirement for obtaining a loan
requiring that the applicant obtain property insurance from a specific producer to cover the home being mortgaged
which one of the following penalties is not one of the options the insurance commissioner can use to punish an insurer engaged in unethical behavior
revoke all policies issued by the insurer
when an insurance producer, guardian or trustee is expected to maintain a standard of conduct that is higher then the standard expected from most people
she is known as a fiduciary
which of the following was created to pay for the costs associated with insolvent insurers
state guarantee association
which of the following was created to pay the costs associated with insolvent insurers
state guarantee association
as an ethical model, the insurer will establish certain employee standards or guidelines for transacting business, includes all but
supporting local political organizations
under an agency agreement, the principal is often bound by
the actions of the agent
with regard to the elements of agency law, all of the following are correct except
the acts of the principal are binding on the agent
a code of ethics that is most likely to make promises to the public served by the professional is covered by
the code
which of the following is not required under the NAIC life insurance policy illustration regulation model
the illustration must be signed and dated by the applicant or policy owner certifying which of the non-guaranteed elements of the policy the producer has guaranteed
ethical conduct on the part of insurance producers is not irrelevant to
the insurance industry
an insurance agent acts on behalf of
the insurer
which one of the following NAIC regulations set forth marketing and disclosure standards for producer's who solicit life insurance sales
the life insurance solicitation and life insurance replacement regulation
which of the following NAIC regulations set forth marketing and disclosure standards for producers who solicit life insurance sales
the life insurance solicitation regulation and life insurance replacement regulation
an insurers ethical responsibility towards its field force includes all but
the number of sales and commission earned
an insurance producer must be dedicated to
the principles of needs selling
the specific disclosure requirements that have been implemented with regard to medicare supplemental policies include all but
the producers signature on all policy riders and endorsements
the number of hours of continuing education a producer must have to keep their license on an ongoing basis is regulated by
the state insurance department
which of the following is an objective of the NAIC
to assist state officials in administering their state laws
when investigating violations of insurance law, the commissioner has all of the following authority except
to imprison offenders
all of the following are objectives of the NAIC except
to preserve federal regulation of the insurance business
inducing a person to lapse, surrender or terminate insurance for the purpose of purchasing a similar policy
twisting
failure to investigate and settle claims is considered a violation of
unfair claims marketing practices
which of the following ruled that insurance should be regulated at the federal level
united states vs southeastern underwriters association
the training of producers and sales managers is an important responsibility of the
insurer
which of the following characteristics has the most influence on a producer's long term success in selling
integrity
which of the following characteristics has the most influence on a producer's long term success in selling insurance policies
integrity
an unauthorized insurer is one that
is not licensed in a given state
an insurer's compliance with unfair claim practices law
is one way for the company to lead by example
financial ratings
- am best - weiss - s & p
an agents fiduciary responsibility to the client includes
- continued professional education - thorough product knowledge - ethical conduct
violations of state advertising laws
- omission of material - the guarantee of policy dividends - inaccurate use of statistical data
elements of personal code of ethics
- sense of purpose - attitude - integrity
guides to insurance companies financial integrity and managerial and operational integrity
- standard & poor - am best company - moody's investment services
which of the following is a successor of IMSA
CEFLI
the goal of which of the following is to ensure that illustrations do not mislead life insurance purchasers and to make illustrations more understandable
NAIC life insurance policy illustration regulation model
which of the following organizations developed illustration questionnaires to help producers understand the assumptions that were used to create and design sales
SFSP
which of the following organizations developed illustration questionnaires to help producers understand the assumptions that were used to design and create sales
SFSP
insurance producers often act for insurance companies in ways that are expected., but may not have been specified in a written agency agreement, the type of authority described here is
implied authority
which of the following is not an ethical advertising practice
implying that a insurance company has been approved by an individual that has not endorsed the policy
during the application process, what party does the producer represent
insurer
ethics is best described as
a personal code on how to act with fellow members of a group or community
which of the following statements regarding agency is correct
an agent may create a contract on the principal's behalf
which of the following statements regarding agency is correct
an agent may create a contract on the principals behalf
a report that consists of information gathered in personal interviews is known as
an investigative report
professionals that behave unethically erode the public trust
and damage the entire industry
industrial insurance is generally less complex
and easier to understand then more recent types of insurance
insurance producers may act in ways that exceed the authority the insurer intended for them to have. But if client's have no way of knowing that and rely on the producers representations, the insurer may be bound by the producer's actions. this type of agency authority described here is
apparent authority
proper training of producers generally begins
before the producer is hired and continues throughout their career
when new insurance is purchased, which of the following would not be considered an act of replacement
borrowing 10% of the cash value to pay a new premium
the insurance industry has had a few inherent conflicts of interest
built into the way business is conducted
mixing personal funds with premiums collected is
commingling
insurance producers are generally paid
commission
most insurers will prohibit employees from serving as director in any outside business. the reason for this is that the insurer is attempting to avoid
conflicts of interest
which of the following is not one of the ways insurers have been maintaining the positive ethics that the insurance industry was once known for
consistently monitoring their competitors advertising policies
what should you do when you encounter a situation with a client that you do not feel you can handle competently
consult with experts
a deliberate attempt to discredit the good name and reputation of another insurer by means of false, malicious or derogatory statements is
defamation
malicious statements designed to injure the reputation of another insurer best defines
defamation
oral or written statements that are false, maliciously critical or derogatory in regard to the financial condition of an insurer are generally known as
defamation
when a producer spreads a false story that damages a competing producer's reputation, the offense is called
defamation
the chief responsibility of the insurance department is to
enforce insurance laws
in the past 35 years, insurance products have shifted from more traditional products to
equity based life insurance products
the best way for a professional to avoid costly errors is to
follow the code of ethics
money entrusted to producers by insured must be used for paying premiums to the insurer and
for no other reason
an insurer's reputation is one of their
greatest strengths
insurance producers often act for an insurance company in ways that are expected, but may not have been specified in a written agency agreement. the type of agency authority described here is
implied authority