Insurance

An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?

$120 a day

An insurer misses the deadline to respond to an Examination Request from the Division of Insurance. If this is the company's first violation, it can face a penalty of

$500.

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

The Division of Insurance has requested information regarding an insurer's underwriting policies via e-mail. How many days does the insurer have to respond to this request?

20 days

In all individual and small employer health benefit plans, how long is the grace period for persons receiving the federal advance payment tax credit?

3 months

Mrs. B applied for a Medicare Supplement policy one month before her 65th birthday. The policy was issued on her birthday, January 31. Her producer mailed the policy by certified mail, and Mrs. B received the policy on February 5. How many days does she have to examine the policy and decide whether or not to keep the policy?

30 days from the date it was received

A Medicare supplement must have a free-look period of at least

30 days.

In accident and health policies issued in this state, an insured must submit proof of loss within how many days?

90 days

Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within

90 days.

A deductible is

A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits.

Which of the following individuals is eligible for a Health Savings Account?

Allison is insured by a High Deductible Health Plan (HDHP)

Long-term care policies MUST cover

Alzheimer's disease.

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account?

Amanda is 67 and is covered by a basic medical expense policy

While a claim is pending, an insurance company may require

An independent examination as often as reasonably required.

Which of the following is included within the definition of an eligible employee?

Any employee who works full time

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

Application

What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?

As long as the policy is in force

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?

Ask her to sign a statement of good health

The guaranteed issue provision will apply to any health benefit plan that provides coverage to the employees of a small employer if

At the time of hire or other annual open enrollments

When must an insurer offer a long-term care insurance policyholder the option of purchasing inflation protection?

At the time of purchase

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?

Attending physician

In insurance, producers are permitted to share or split commissions, providing that

Both are properly licensed for the line of insurance.

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is

Broader in general.

Whenever the Commissioner issues a cease and desist order, how will that order be delivered to the person in violation?

By certified mail

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation.

Which of the following premium modes would result in the highest annual cost for an insurance policy?

Monthly

The primary eligibility requirement for Medicaid benefits is based upon

Need.

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?

Notice of Claim

In long-term care insurance, what type of care is provided with intermediate care?

Occasional nursing or rehabilitative care

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?

Offer the supplement policy on a guaranteed issue basis

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as

Part A.

Which of the following factors would be an underwriting consideration for a small employer carrier?

Percentage of participation by the employees

Regarding the taxation of Business Overhead policies,

Premiums are deductible, and benefits are taxed.

The purpose of insurance regulations is to

Protect the insurance buying public.

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client.

The Federal Fair Credit Reporting Act

Regulates consumer reports.

Which of the following scenarios would be an example of coercion on the part of a lender?

Requiring the debtor to acquire a policy from a specific producer

What is the best way to change an application?

Start over with a fresh application

Regarding investigations of insurers, the Colorado Commissioner of Insurance may

Subpoena witnesses whenever he/she deems necessary.

Which of the following would basic medical expense coverage NOT cover?

Surgeon's services

Which of the following would an accident-only policy NOT cover?

Surgery to repair a wrist damaged by tendonitis.

All of the following provisions must be included in an insurer's anti-fraud plan EXCEPT

Suspension of producer's licensure.

Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are

Tax deductible.

Which of the following is a required provision for group accident and health policies?

Terminated employees may continue coverage in the group for up to 18 months.

Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now?

The agent should ask the customer to sign a statement acknowledging that he is aware of the change.

Which of the following is true about the requirements regarding HIV exams?

The applicant must give prior informed written consent.

In order to facilitate responses to inquiries from the Division of Insurance, companies must maintain all records for at least

The current calendar year, plus the 2 prior calendar years.

The period of time immediately following a disability during which benefits are not payable is

The elimination period.

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,

The insurance through his company is primary.

An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim.

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

The insured.

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

The insurer is considered to be notified since the notification to agent equals notification to the insurer.

Which of the following statements is true regarding coinsurance?

The larger the percentage that is paid by the insured, the lower the required premium will be.

Which of the following is true regarding elimination periods and the cost of coverage?

The longer the elimination period, the lower the cost of coverage

Which of the following definitions would make it easier to qualify for total disability benefits?

The more liberal "own occupation"

Diabetic benefits provided under sickness and accident policies are subject to

The same annual deductibles and copayments established for all other covered benefits.

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true?

There is nothing wrong with this form of policy delivery.

Which of the following is true regarding optional benefits with long-term care policies?

They are available for an additional premium.

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of Payment of Claims

If the Commissioner believes a producer has committed a violation of an insurance law, the Commissioner will hold a hearing. What is the purpose of the hearing?

To allow the aggrieved party to be heard

Believing a producer has violated provisions of the Insurance Code, the Commissioner will schedule a hearing

To allow the producer to show why penalties should not be assessed.

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

A policyowner has a health insurance policy with his wife listed as the primary beneficiary. He would like to change the primary beneficiary to his sister. Which of the following is true?

Unless the policy designated the current beneficiary as irrevocable, the policyowner can make the change at any time.

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary and reasonable.

Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes

Waiver of Premium rider.

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible, but not to exceed 1 year

Regarding a PPO, which of the following is correct when selecting a primary care physician?

a)The insured may choose medical providers not found on the preferred list and still retain coverage. b)The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, the insured will realize lower out-of-pocket costs. c)If a non-network provider is used, the insured's out-of-pocket costs will be higher. Correct: d)All of the above are correct

In a group health policy, a probationary period is intended for people who

Join the group after the effective date.

An insurer receives an Examination Request Form dated June 2 from the Division of Insurance. The insurer must respond by

June 12.

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the

Major medical coverage.

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

Under the Guaranteed Renewability rider, for which of the following reasons may an insurance company nonrenew a health benefit plan?

Material misrepresentation

What type of policy allows the insurance company to cancel a policy at any time?

Cancellable

The provision that provides for the sharing of expenses between the insured and the insurance company is

Coinsurance.

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions.

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report

Which of the following would NOT be considered an unfair and deceptive practice?

Controlled business

Which of the following is considered a qualifying event under COBRA?

Divorce

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was written with a 30-day

Elimination period.

Long-term care coverage may be available as any of the following options EXCEPT

Endorsement to a health policy.

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the

Entire contract clause.

The requirement that producers must account for all insurance funds collected, and not commingle those funds with their own is known as

Fiduciary responsibility.

The benefits available to newborn children must include coverage for injury or sickness, and all medically necessary care and treatment for how many days of the newborn's life?

First 31 days

Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?

Free Look Period

As it pertains to group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

A Medicare supplement plan must have at least which of the following renewal provisions?

Guaranteed renewable

To obtain a nonresident producer's license in this state, a prospective licensee must

Have a similar license in his or her home state.

No individual or group policy of sickness and accident insurance issued by an insurer, nor a plan which provides hospital, surgical, or major medical coverage on an expense incurred basis will be sold in Colorado unless a policyholder under the policy or plan is offered the opportunity to purchase coverage for

Home health services and hospice care which have been recommended by a physician as medically necessary.

Which of the following riders would NOT increase the premium for a policyowner?

Impairment rider

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

Indemnity

Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT

Individual members of the group may select the level of benefits for their own coverage.

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons.

Which of the following entities can legally bind coverage?

Insurer

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

Insurer to the insured

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

What statement best describes the free look provision?

It allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason.

Colorado law requires all of the following regarding mammography coverage for women EXCEPT

It may be subject to a deductible.