Legal and Professional Aspects

Solicitors are employed by A. Agents B. Insureds C. The executive director D. The public

A. Agents

The full premium amount was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? A. As of the application date B. As of the policy delivery date C. As of the first of the month after the policy issue D. As of the policy issue date

A. As of the application date

A producer must do all of the following when delivering a new policy to the insured EXCEPT A. Disclose commissions earned from the sale of the policy B. Explain the policy provisions, riders, and exclusions C. Collect any premium due D. Explain the rating procedures if the policy is rated differently than applied for

A. Disclose commissions earned from the sale of the policy

An insurance producer just sold an insurance policy to his sister. What kind of business is this? A. Personal B. Controlled C. Illegal D. Internal

B. Controlled

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? A. Express B. Implied C. Assumed D. Apparent

D. Apparent

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? A. Disclosure rule B. Replacement Rule C. Reinstatement Rule D. Conversion Rule

B. Replacement Rule

An agent is convicted of defrauding a client. In addition to a prison term and a fine, how else may the agent be punished? A. The agent may be ordered to take an ethics course B. The agent may be ordered to make restitution to the client C. The agent may have to purchase a legal ad detailing his crime D. The agent may be ordered to pay the client $1,000

B. The agent may be ordered to make restitution to the client

Which of the following would NOT be a violation of state insurance regulations? A. Agent A uses her license to write only insurance for herself and her immediate family B. Agent B charges his clients a consulting fee, in addition to the premium for placing a policy C. Agent C uses her license to write only business other than controlled D. Agent D collects premiums due on policies and deposits the funds in his own personal account

C. Agent C uses her license to write only business other than controlled

Under what circumstance may an insurance agent licensed in Kentucky pay an unlicensed person for a referral? A. If the agent writes a policy for the new customer B. If it's the 10th referral the person has made C. If the unlicensed person is planning to become licensed D. If the agent pays the person for every referral regardless whether the coverage is sold

D. If the agent pays the person for every referral regardless whether the coverage is sold

If an insured feels he or she has suffered a wrong concerning an insurance policy, to whom should a written complaint be submitted? A. The agent B. The insurance company C. The police D. The Insurance Commissioner

D. The Insurance Commissioner