Florida State Licensing Exam Prep: Life & Health Insurance Agent #1-240
Advertising gifts given by an agent to a prospective client are not allowed to exceed
$25
What percentage of eligible persons must a policy cover in a noncontributory group?
100%
A person is required to be AT LEAST how old before he or she is licensed as an agent in most states?
18
If an agent has been licensed for LESS THAN six years, how many hours of continuing education must they complete every two years?
24 hours - five being in law and ethics
Agents must notify the Commissioner or Director of a change of home address within a MAXIMUM of how many days?
30
What is the maximum number of days a licensee has to notify the Department of Financial Services of a change in address?
30 days
After a group plan is terminated in Florida, how many days are the insureds guaranteed coverage?
31 days
If an insurance agent is not appointed, how long before their license is terminated?
48 months
How many hours of continuing education on the subject of law and ethics does Florida law require an insurance agent have every TWO years?
5 hours every two years
What is the maximum percentage of controlled business an agent may produce?
50%
Deceptive advertising is considered to be what?
A form of misrepresentation - false or incomplete statements during the course of an insurance transaction
What kind of insurance company solicits insurance business by mail without the assistance of a licensed agent?
Admitted mail order insurance company
Insurer can refuse to insure an individual because of
Age, Occupation, or Health Condition
Insurance companies that are organized in countries outside of the United States are referred to as
Alien companies
An agent in Florida with a nonresident insurance license must
Also hold a similar license in their state of residence
An agent may legally share commissions with only
Another agent who is licensed in the same line of business
The Financial Services Commission may hold hearings for
Any reason deemed necessary
What act is an agent NOT authorized to do on behalf of an insurer?
Authorize claim payments
What is one of many acts an agent is NOT authorized to do on behalf of an insurer?
Authorize claim payments
What can an agent provide to help a prospective client understand and purchase the most appropriate product?
Buyer's Guide
The insurer must provide a prospective buyer with
Buyer's Guide and Policy Summary
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
Coercion - unfair trade or marketing practice in which an agent makes untrue threats to a customer to motivate a sale
J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?
Coercion - unfair trade or marketing practice in which an agent makes untrue threats to a customer to motivate a sale
Rating services are designed to rate
Companies - not people
Insurance business that is written on an agent's own life, property, or interests
Controlled Business
Publishing or circulating brochures falsely criticizing the financial condition of an insurance company is known as
Defamation
Which unfair trade practice involves an agent who makes malicious statements about another person's financial condition?
Defamation
Before approving an application for a business entity acting as an agent, the Commissioner or Director must find that the business entity has
Designate an agent to be responsible for compliance with insurance laws
The Insurance Commissioner or Director may examine the records of an insurance company in order to
Determine the solvency of a company (financial strength)
An insurance company incorporated under the laws of the state in which its home office is located is called
Domestic company
In Florida, an insurer domiciled and incorporated in this state is called what?
Domestic company
The Commissioner or Director of Insurance is empowered to
Enforce state laws relating to insurance
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?
Fair Credit Reporting Act
Which federal law allows an insurer to obtain an inspection report on a potential insured?
Fair Credit Reporting Act
An insurance company that exaggerates its dividends in a newspaper advertisement may be guilty of what?
False advertising
An insurance company that promises lower insurance rates than any other company may be charged with what?
False advertising
The act of an insurance company publishing misleading information about its policy's provisions is called what?
False advertising
T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as
Fiduciary responsibility
Which of the following is NOT a consequence for placing business with an unauthorized insurer?
First degree misdemeanor
If an insurance company is organized under the laws of New Jersey and licensed to do business here, it is considered what in Texas?
Foreign company
An insurance company that is incorporated in New Hampshire and does business in Florida is defined in Florida as
Foreign insurer
M completes an application for health insurance, but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT
Free-Look period has expired
Making malicious and false statements about an insurer, replacing an insurance policy from one insurer to another based on misrepresentation, being convicted of a felony, forging a name on an insurance application, and misrepresenting any fact about an insurance policy are all ways to
Have the agent's license suspended
Working for a foreign insurer will NOT cause an agent to
Have their license suspended
Writing primarily controlled business will cause a licensed agent to
Have their license suspended or revoked
The Commissioner or Director of Insurance may suspend, revoke, or refuse to renew the license of an agent who
Is found guilty of misrepresentation or fraud in obtaining the license
An insurance company will not compensate
Licensed agent not appointed by the company
The fund that assures policyholders payment of benefits on Life and Health policies, if the company is insolvent at the time of the claim, is called the
Life and Health Insurance Guaranty Association
The rules and regulations of the Life and Health Insurance Guaranty Association apply to
Life and Health policies issued by companies authorized in that particular state
What are some of the factors considered when the Department of Financial Services determines if an agent's home is an insurance agency?
Listing the address on the agent's business cards, business solicitation is done at this location, clients are met at this location
What is the main reason for regulating the insurance industry?
Maintain the solvency of insurance companies
An agent who tells a client that dividends are guaranteed may be guilty of
Misrepresentation - false or incomplete statements during the course of an insurance transaction
Convincing a prospective insured to buy an insurance policy based on exaggerations is called what?
Misrepresentation - false or incomplete statements during the course of an insurance transaction
During the course of an insurance transaction, if an agent makes a false or incomplete statement, he or she can be found guilty of what?
Misrepresentation - false or incomplete statements during the course of an insurance transaction
An agent's commission is
Not classified under the principal areas of Florida insurance laws
How can an agent-in-charge have more than one location?
Only if the agent-in-charge is present when insurance activity occurs
A certificate of authority does what?
Permits an insurance company to transact business in that state
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?
Policy was returned within the free-look period, premium will be fully refunded
No insurer shall refuse to insure an individual because of
Race
Underwriting uses inspection reports, credit reports, the MIB, but NOT a
Rating service
Offering a client something of value not stated in the contract in exchange for their business is considered to be what?
Rebating
Offering a prospective insured special dividends to induce them to complete a sale is an example of what?
Rebating
Returning a portion of a premium as an inducement to purchase insurance is an example of what?
Rebating
Sharing commissions with an agent licensed in the same line of business is NOT an example of what?
Rebating
Splitting commissions with a policyholder who has purchased additional coverage is considered what?
Rebating
Gender is used in underwriting to determine coverage and cost, but it CANNOT be used to
Reject an application
Hazardous hobbies, unfavorable weight, and high risk medical history are all basis on which insurers may
Reject an application
What type of insureds are life insurance companies NOT allowed to make policy rate discriminations against?
Religion, Marital Status, Race
Charging for an additional product without the applicant's consent is an example of what?
Sliding
What type of insureds are life insurance companies allowed to make policy rate discriminations against?
Smokers
If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in that particular state, who would be liable?
The agent and the company
It is fair to discriminate in amount of benefits for life and health policies when
The individuals are in different rate classes
In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?
The state where they are conducting business
State insurance laws specifically allow the Commissioner or Director to issue a temporary license to which the following individuals?
The surviving spouse of a deceased agent - this is to allow the surviving spouse time to take over or dissolve their deceased spouse's insurance business
An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out is an example of what?
Twisting
Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is an example of what?
Twisting
Offering different terms of coverage for policyowners in the same risk classificiation is an example of
Unfair Discrimination
Failing to accept or deny a claim within reasonable time after proof of loss is submitted is an example of what?
Unfair claim settlement practic
Attempting to settle claims on the basis of an application that was altered without the consent of the insured is an example of what?
Unfair claim settlement practice
Compelling an insured to initiate a lawsuit by offering less on an insurance claim is an example of what?
Unfair claim settlement practice
Failing to acknowledge and act promptly with respect to an insurance claim is an example of what?
Unfair claim settlement practice
Turning down a claim without providing the basis of denial is an example of what?
Unfair claim settlement practice
Comparisons showing that a policy has higher benefits is NOT an example of what?
Unfair methods of competition and deceptive practices in the business of insurance
Agreements between insurance companies not to offer coverage in a defined geographic region for three months is an example of what?
Unfair trade practices under state law
Inaccurately describing guaranteed elements of a life insurance policy is an example of what?
Unfair trade practices under state law
Using a portion of commission payments to help applicants pay for insurance they otherwise cannot afford is an example of what?
Unfair trade practices under state law
A stock life insurance company that issues both participating and nonparticipating policies is doing business on
a mixed plan
Which employer tasks does a Professional Employer Organization normally handle?
administration tasks
The Life and Health Insurance Guaranty Association is funded by
assessments on member companies
The coordination of benefits (COB) provision exists in order to
avoid duplication of benefit payments
A person who places insurance on behalf of anyone seeking insurance must
be licensed as an agent
The Commissioner or Director of Insurance has the power to
conduct examinations of insurance companies
The purpose of the Guaranty Fund is to
ensure that claims filed against insolvent insurance companies will be paid
A stock insurance company is owned by
it's stockholders
A mutual insurance company is owned by
its policyholders
Which type of insurance company allows their policyowners to elect a governing body?
mutual
An insurance broker is a representative of
the insured
According to State insurance law, while transacting insurance business, agents act as representatives of
the insurer
One of the state purposes of the Life and Health Insurance Guaranty Association is
to assist in the prevention of insurer insolvencies
A foreign insurance company is one that is incorporated
under the laws of another state
