Illinois Life Producer State - Designated Exam SIMULATOR (75 questions)

All of the following are examples of insurance advertisements

1. A celebrity endorsement of an insurance company 2. A mass mailing announcing a new insurance product 3. A full page announcement of an insurer conducting business in a new territory

List actions that constitute life insurance policy replacement

1. Cash surrender an existing policy and purchase a new policy 2. Discontinue premiums on an existing policy and apply the payments to a new policy 3. Take reduced paid-up insurance and purchase a new policy with another insurer

The director is permitted to

1. Enforce All Illinois Insurance Statutes 2. Examine an insurers financial records 3. Issue cease and desist orders

An applicant may be refused insurance coverage due to

1. Health 2. Age 3. Occupation

All of these must be included on an insurance producers license

1. Name of producer 2. Producer ID number 3. Date of issue

All of these are unfair trade practices

1. Rebating 2. Discrimination 3. Twisting

All of these statements concerning a licensee's responsibility for premiums received are true

1. The licensee may not commingle premiums with personal funds 2. The licensee shall hold them in a fiduciary capacity 3. The licensee must remit them to the insurance company within a specificed time

It is NOT acceptable to discriminate the amount of benefits for life and health insurance policies between individuals of

1. The same country of origin 2. Different religious faiths 3. The same racial category

A new life insurance policy owner may review and return it for a full refund within __ days after policy delivery

10 days

The total amount of premiums that a producer writes on a controlled business may not exceed the total amount written on all other business within a __ month period

12 month

A lapsed producer's license may be reinstated without having to pass a written exam if the license lapses within _______ months after the renewal fee due date

12 months However, a penalty in the amount of double the unpaid renewal fee shall be required after the due date

T the producer has collected premium monies from a client. T may personally hold these funds for a maximum of __ Days before depositing them in a Premium Fund Trust Account

14 days Any funds from applicants or policy owners that will be held for 15 days or longer by the producer must be deposited in a Premium Fund Trust Account (PFTA)

What is the minimum age for an individual to be a licensed Illinois Insurance producer

18

How many days is a temporary producers license valid

180 days Issued by the director

Every _ year(s), a producer must complete 24 hours of continuing education

2 years In order to keep license in good standing

A producer must complete _ hours of ethics per continuing education reporting period

3 hours To renew a producer license, a producer must complete 24 hours of continuing education courses every 2 years, with 3 of those hours being on the subject of ethics.

Producer must report felony convictions to the director within __ days after the entry date of the judgment

30 days

The holder of a business entity registration is required to notify the director within __ days of a change in office location

30 days

Within how many days must a licensee notify the director of a change in address

30 days

According to Illinois insurance law, life insurance claim payments made after __ days from receipt of satisfactory proof of loss must receive the insurers current interest rate

31 days If settlement of a claim is not reached within 31 days of receipt of satisfactory proof of death, the insurer shall pay interest on the claim at the rate no less than that paid on proceeds left on deposit with the insurer, computed from the date of death.

Producers must keep record of service fees charged or received for a period of _ years

7 years

All of the following are examples of insurance advertisements except

A memo from an employer announcing the availability of coverage for employees

A producer is attempting to replace an existing life insurance policy with a new one. What must this producer submit as part of the application?

A signed statement by the applicant regarding the replacement

Which of these is a requirement for obtaining a nonresident insurance producer license

A similar license must be held by the producer in his/her state of residence

Which of the following is a requirement to attain a nonresident producer license

Be licensed as a producer in the producer's state of domicile

Q the producer knowingly misappropriated fiduciary money in the amount of $150. This is his second offense. Q will likely be charged with a

Class 4 felony If a producer producer knowingly misappropriates or converts fiduciary moneys in the amount of $150 or less, they are guilty of a class A misdemeanor. Repeated occurrences of such actions are subsequently rated a class 4 felony.

Which of the following is considered a producers fiduciary responsibility

Collect premiums and remit to the insurance company as soon as reasonably possible

Which of these actions does not constitute life insurance policy replacement

Convert term coverage to a whole life policy

Illinois' 10-day free look period for life insurance policies begin at the

Date of delivery

A business entity wishes to become approved as a producer for soliciting insurance business. Before doing so, the business entity is required to submit to the director a(n)

Designated producer assigned for compliance with Illinois insurance laws

It is acceptable to discriminate the amount of benefits for life and health insurance policies between individuals of

Different classes (they will be able to afford different benefits)

The guaranty fund

Ensures that claims filed against insolvent insurance companies will be paid

How is the Illinois life and health insurance guaranty associated funded

From member companies

The director

Has authority to review policy forms if they will be issued for delivery in Illinois

An entity that acts as an insurance producer

Has the same bond requirements as an individual producer

Which of the following types of insurance may a limited lines producer sell

Industrial life insurance Industrial (home service) insurance is a policy priced well below it's counterparts and is sold by producers who sell it door to door. It is popular among low- to middle income buyers

Which of these accounts are producer license fees deposited into

Insurance producer administrative Fund All licensing fees collected by the director are paid into a special fund in the state treasury known as the Insurance producer administration Fund

Which licensee faces possible license revocation by the Director

Licensee who commingles monies belonging to policyholders with personal funds

A(n) _______ lines producer may sell travel accident insurance in Illinois

Limited

The director of insurance is authorized to

Make reasonable insurance rules and regulations

An Illinois producer must do which of the following to continue as a residential licensee

Meet continuing education requirements 24 hours of continuing education every 2 years with 3 of those hours being in the subject of ethics

A producer is circulating incorrect information about the benefits of a policy. This producer may be found guilty of

Misrepresentation

During the course of an insurance transaction, if a producer makes a false or incomplete statement, he/she could be found guilty of

Misrepresentation

Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?

Misrepresentation

An example of unfair claims practice would be

Misrepresenting insurance policy provisions affecting a loss

When a producer submits an insurance application, the application is required to contain the producers

Name and signature

In the event of a replacement, what must be given to the insurance applicant at the time of application

Notice Regarding Replacment

What must be signed by both the producer and applicant when an existing life insurance policy is being reissued with a reduction in cash value

Notice regarding replacement

Which of these contracts are affected by replacement regulations

Ordinary life insurance

An accelerated (living) benefit is payable based upon the occurrence of a qualifying event. This qualifying event is certified by a(n)

Physician

In Illinois, which of the following must be delivered to a policyowner upon the sale of an individual life insurance policy

Policy summary and buyers guide

A producer charged an insurance applicant an administration fee. At what point must the producer give a written disclosure for this fee

Prior to any services being rendered

Who signs a "notice regarding replacement" form when an application is taken for a new life insurance policy that replaces an existing one

Producer and applicant A copy must also be left with the applicant

Which of the following actions by a producer would not result in a license suspension or revocation

Producer representing a foreign insurance company

Which of the following is not a valid reason for the director to suspend or revoke a producers license

Producer represents more than one insurance company

Which of the following actions by a producer would not result in a license suspension or revocation

Producer sells a replacement policy that causes an insured to lapse an existing policy

Which of the following triggers an accelerated (living) benefit

Qualifying event Such as terminal illness or needing long-term care

An applicant may not be refused insurance coverage due to

Race

Q the producer has recently replaced one insurance policy with another. In Illinois, replacement is

Regualted and requires full disclosure

All of these are unfair trade practices except

Reinsurance

The act of replacing an existing insurance policy with another is called

Replacement

The director is NOT permitted to

Set insurance rates within the state

Life insurance replacement regulation protects the interests of

The Policyowner Since it's usually not in their best interest to replace existing coverage

All of these statements concerning a licensee's responsibility for premiums received are true except

The licensee must hold them in a separate account before transmitting them to the insurance company

Why would the director issue a temporary license

To allow the personal representative of a deceased producer to provide service to existing policyowners

An individual received a quote from an insurance company that is a different rate from individuals in the same risk class. The insurance company may be accused of

Unfair discrimination

Which Unfair Trade Practice involves making false statements about the financial condition of another insurance company

defamation

Replacement can be defined as

exchanging an existing policy for a new policy

An example of unfair claims practice would be

failing to effectuate prompt, fair, and equitable settlements of a claim

A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Director of Insurance is required to

give written notice to the producer

During the course of an insurance business transaction, who does the producer legally represent

insurance company

A license may be denied, suspended, or revoked if the licensee

is found guilty of misrepresentation

An example of rebating would be

offering a client something of value not stated in the contract in exchange for their business

An example of unfair discrimination would be

offering different terms of coverage for different policyowners having the same risk classification

An individual who has a contract with an insurance company to represent it is called a(n)

producer

A producer has influenced an existing policyowner to convert an existing whole life policy to Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called a(n):

replacement

An insurance producer could be found guilty of rebating by

sharing commissions with a client who has purchased insurance

Who negotiates viatical settlements between a policyowner and a viatical settlement provider

viatical settlement broker

In a viatical settlement, how much does the policyowner receive for a life insurance policy

Amount less than the death benefit

Which of these statements accurately reflects Illinois law regarding life insurance advertisements

An insurance agency is responsible for advertisements placed by it's insurance producers

All of these must be included on an insurance producers license except

Appointing insurance company