Florida Statutes 2 Practice Quiz

An applicant for a life agent's license may obtain a temporary license for a maximum period of

6 months An applicant for a life agent's license may obtain a temporary license for a maximum period of 6 months. If, during the 6-month temporary license period, the applicant passes the license examination, the temporary license and appointment will terminate, and a license will be issued by the department after payment of a modification fee. Only one temporary license may be issued to an applicant.

In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year?

50% A license will not be permitted to exist if the department finds that during any 12-month period, aggregate commissions or other compensation accruing in favor of the licensee's insurable interest have exceeded 50% of the aggregate amount of commissions and compensation accruing in the licensee's favor during the same period as to all insurance coverages procured through him/her.

What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws?

Absolute. Florida statutes provide the Office of Insurance Regulation with an absolute right to examine the affairs of every person (insurers and licensees) involved in the business of insurance to see if they are engaged in any unfair trade practices.

What is a foreign insurer?

An insurer with a home office in another state

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign A foreign insurer is one that is formed under the laws of another state. A nonadmitted or unauthorized insurer is an insurance company that has not applied for, or has applied and been denied a Certificate of Authority and may not transact insurance.

Which of the following activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance agent's license?

Forgery. Upon conviction of a felony, an agent's license will be revoked by the Commissioner.

What is the major difference between a stock company and a mutual company?

Ownership Mutual companies are owned by policyholders, while stock companies are owned by stockholders.

In what way can an agent demonstrate a high standard of ethics?

Putting the client's best interest before their own. The needs of the client(s) are the priority to a highly ethical agent.

An insurance producer just sold an insurance policy to his sister. What kind of business is this?

Controlled -When producers sell policies on themselves, their family, or their coworkers, this is called controlled business. Controlled business is legal as long as premiums paid on these policies do not exceed the premiums that the producer writes for other business.

Applications to an insurer must include all of the following information, EXCEPT

Credit history report. Licensed agents may not submit applications to an insurer or furnish a copy of an application to a prospective insured unless the name of the insurer is legibly typed or printed on the first page of the application form at the time coverage is bound or the premium is quoted. The application must also disclose the name and license identification number of the agent as shown on the agent's license.

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

Defamation

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants. Before insurers may transact business in a specific state, they must apply for a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set down by the state.

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual: Funds not paid out after paying cliams and other operating costs are returned to the policowners in the form of a dividend

Which of the following entities is responsible for agent licensing and administrative supervision?

Office of Insurance Regulation

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating.