Laws and Rules
A foreign insurance company conducting insurance business in Texas
was formed under the laws of another state
B the insurance agent tells his client that their rights may be impaired if they fail to complete a release from within a given period of time. B may be found guilty of
coercion
An Evidence of Coverage form may be issued by a Health Maintenance Organization (HMO) after being approved by the
Commissioner
Which of the following statements about health coverage for newborns is NOT true?
Coverage is limited to only congenital defects
An applicant MUST receive an Outline of Coverage when an application is taken for an
Medicare Supplement policy
A certificate of ____ permits an insurance company to transact business in Texas
authority
An insurance company organized under New York laws and licensed to do business in Texas is considered an
foreign company
Credit Life insurance is
insurance issued on a debtor to cover outstanding loan balances
A license may be denied, suspended, or revoked if the licensee
is found guilty of misrepresentation in obtaining the license
A domestic insurance company in Texas is considered a company that
is incorporated and formed in Texas
How long a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law?
6 months
A temporary agent's license issued by the Commissioner of Insurance is valid for up to ___ days
90
Which of the following actions does the commissioner of Insurance NOT have the power to conduct?
Activate insurance companies' financial reserves
An example of false advertising would be
An insurer exaggerating its dividends in a magazine advertisement
In Texas, which of these statements regarding the Suicide clause is TRUE?
An insurer may not use suicide as a defense against payment after the second year
With whom may an agent legally share commissions?
Another agent with the same line of insurance
How often must an insurance agent license normally be renewed?
Every two years
Which of these provisions is NOT required in life insurance policies?
Extended Term
What is an organization that solicits insurance only to its members?
Fraternal benefit society
Which of the following groups may NOT be insured by a group life insurance policy?
Individuals who are related by blood
When advertising, an insurance company MUST use its
Legal corporate name
Which of the following may NOT charge fees for insurance advice?
Legal reserve agents
All of these statement about the Commissioner of Insurance are true EXCEPT
The Commissioner must be elected
During a sales presentation for a participating life insurance policy, an agent MUST
make a prospect understand that dividends are NOT guaranteed
An insurance agent has a fiduciary responsibility to all of the following EXCEPT
other agents
An example of rebating would be
returning a portion of a premium as inducement to purchase insurance
To terminate an agent's appointment, an insurance company must
send termination notice to the Texas Department of Insurance
Which of the following is a requirement for obtaining a Texas insurance agent's license?
Be honest, trustworthy and reliable
Which of the following is a valid reason for an enrollee to be cancelled by a Health Maintenance Organization (HMO) plan?
Nonpayment of coverage
Which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstated on the application?
Pay an amount the premiums would have purchased at the insured's actual age
Which of the following is NOT a required provision in group life policies?
Right to Loan
Which of these is NOT an example of doing insurance business?
Selling shares of stock
An employee is covered under a company group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse may be insured for under this program
$25,000
An insured may assign up to ____ of policy ownership under an individual life insurance policy
100%
What is the MINIMUM benefit period that must be offered by a Long-Term Care policy?
12 months
In Texas, how long a policy be in force before an insurance company must pay death benefits for suicide?
2 years
A new agent must complete at LEAST___hours of continuing education within 24 months of initial licensure.
24
The Insurance Commissioner must give how many days notice prior to holding a hearing regarding an agent's unfair or deceptive practice?
30
Every 12-months after the initial enrollment period, an HMO must hold an open enrollment period of
31 days
In Texas, an individual life insurance policy is REQUIRED to have a grace period of
31 days
____ of continuing education MUST be completed in the classroom or classroom equivalent.
50%
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
Which of the following is NOT included in a life insurance illustration?
Company's mortality table
Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas?
The agent and the company
A Medicare Supplement policy may be cancelled for which of the following reasons?
The premium has not been paid by the insured
Which of the following benefits is NOT required under a group health plan for drug and alcohol treatment?
Transportation to and from a treatment facility
How long does an insurance company appointment remain in force?
Until terminated
If an insured's age was misstated on life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be
an amount that the premiums paid would have purchased at the current age
An insurer is NOT required to provide information on fraudulent claims if requested by
an insured
A plan through the Marketplace may be purchased by
any legal resident (except those imprisoned)
The phrase "transacting business" includes
collecting premiums
Why would the Insurance Commissioner examine the records of an insurance company?
to determine the solvency of the company
An example of an unfair claims settlement practice is
turning down a claim without providing the basis of denial
ABC Insurance Company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is commmitting a prohibited act under Texas insurance laws covering
unfair methods of competition
What is required for an agent whose license has been revoked?
wait at least five years before applying for a new license
Who owns a stock insurance company?
Stockholders
Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?
Misrepresentation
