POL California Life: The Insurance Marketplace
Which of the following provisions requires an insurer to document all correspondence with an insured?
Errors and omissions
The authority granted to an agent through the agent's contract is referred to as...
Express Authority
Which of the following are the authorities that an agent can hold?
Express and implied
The requirement that agents not commingle insurance monies with their own funds is known as...
Fiduciary responsibility
The insurance solicitor is only found in which field of insurance?
Fire and Casualty
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least 5 years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
Fraud
Kelley is an "insurance agent" in the state of California. She is able to transact business in all classes of insurance EXCEPT...
Life insurance
Which of the following is authorized to transact insurance on human lives?
Life-only agent
Any person who transacts insurance without a license...
May be guilty of a misdemeanor
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
Oral statements cannot be considered fraud
What is the purpose of errors and omissions insurance?
Protect agents against charges that they didn't properly serve a client
Which of the following is an example of apparent authority of an agent appointed by an insurer?
The agent accepts a premium payment after the end of the grace period.
An agent can begin to solicit business for a company when...
The insurer signs the appointment form
The authority to transact insurance under an appointment becomes effective as of the day...
The notice is signed by the insurer
Any licensed agent may submit an application for insurance to an insurer without an appointment. However, the insurer must submit the notice of appointment to the Commissioner within how many days?
14
According to the Law of Agency, a principal is represented by a/an...
Agent
What documentation grants express authority to an agent?
Agent's contract with the principal
An agent is acting ethically in all of the following situations EXCEPT...
Always representing the insured.
Which of the following is a primary difference between a life and disability analyst and a life agent?
An analyst receives compensation from his client, and the agent receives compensation from the insurance company.
A person that DOES NOT work on the behalf of the company for which he or she does business, but rather represents the prospect, insured, or client is called...
An insurance broker
The Code defines the term "transact" as all of the following EXCEPT...
Analyzing a contract of insurance
In any case there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the...
Company
An agent has been hired by a local business-owner to determine what type of personal and professional coverage he needs. The agent has determined the business-owner's needs and recommended policies from 3 possible companies. The agent does NOT have an agency contract with any of these companies. The agent is acting as...
An insurance broker
A natural person that employed to aid an insurance agent or insurance broker in the transacting of insurance business other than life insurance transactions is called...
An insurance solicitor
An agent solicited a policy for a client who originally qualified for standard premiums. During the underwriting process, the applicant was rated as a substandard risk and assigned a higher premium. Upon policy delivery, the agent failed to mention that the premiums would be higher, and the client filed a lawsuit against the insurer. This is an example of...
An omission and will be covered by an Errors & Omissions policy
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?
Apparent
The term "administrator" under California Insurance Codes refers to any person who...
Collects any charge or premium from, who adjusts or settles claims on, life and health insurance policies or annuities.
Every applicant for an insurance license in this state must have filed on his or her behalf a notice of appointment with which authority?
Commissioner
In which distribution system must the potential client take the initiative and respond to an advertisement through a telephone or mail contract with the insurer?
Direct response system
In order to be paid for his or her services, a Life and Disability Insurance Analyst must do which of the following?
Disclose the fee in writing to, and have it approved by the client in advance.
Which of the following is NOT a required licensing qualification for a Life and Disability Insurance Analyst in this state?
Employment with an insurance company
No administrator may act in such capacity without a written agreement between the administrator and the insurer; furthermore, the agreement shall be maintained on file as part of the official records of both parties for a period of...
For the duration of the agreement and 5 years thereafter.
An exclusive agent...
Has a contract with one company
No person can act as an administrator in this state, other than an adjuster that is licensed for the kinds of business for which he/she is acting as an administrator, unless...
He/she holds a certificate of registration issued by the Commissioner.
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied
A person who transacts insurance business, other than life insurance, for compensation from and on behalf of another person, but not on behalf of or as a representative of an insurance company for which he has an appointment is called...
In insurance broker
Which of the following persons represents several insurance companies but owns the records of the policies sold?
Independent agent
Under California law, an insurance solicitor is a natural person employed to aid a(n):
Insurance agent or broker
When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the...
Insurer
Which of the following is NOT permitted to charge a fee for any services provided unless he/she has a signed, written agreement with the party being charged, including a statement of the charge or basis on which charges will be made?
Life and disability analyst
Which of the following is NOT a license in the state of California?
Life broker
Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
Life expectancy
An insurance agent may NOT transact...
Life insurance
Transacting insurance without a license is considered a/an...
Misdemeanor
If an insurance premium is paid by the policy-owner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true?
The policy will not lapse since payment to the agent is the same as a payment to the insurer.
An agent is a legal person who acts on the behalf of...
The principal
Which of the following is NOT true of life settlements?
The seller must be terminally ill.
What is the main difference between a life agent and a life analyst?
The way each is compensated
Which of the following does NOT apply to Errors and Omissions liability contracts?
They are written for the clients of the producer covered by the policy.
An agent has completed 30 hours of continuing education by the end of a license period instead of the required 24 hours. What will happen to the 6 hours in excess?
They will be carried over into the next licensing period.
What is the main role of a solicitor of insurance?
To aid insurance agents in transacting insurance
Which of the following is NOT a responsibility of an insurance agent?
Underwriting the contract
A property and casualty agent has been licensed for 7 years. How many continuing education hours must the agent complete this licensing period?
24
How many hours of continuing education must agents complete each licensing term?
24
What are the continuing education requirements for life-only agents in California?
24 hours every 2 years
Ignoring the principle of dual authority, life-only agents may transact all of the following types of insurance EXCEPT...
24-hour care coverage
How many hours of continuing education in ethics must agents complete each licensing term?
3
Which of the following would NOT be considered o from of direct response marketing?
A sign in an insurer's office
Which of the following statements is NOT true regarding an insurance solicitor in California?
A solicitor may act as an insurance agent at the same time
An insurance agent explains to his client the difference between two disability income insurance policies and then offers to fill out an application with the client's personal information and history. Upon completion of the application, the agent informs his client that he will "shop around" to find the company with the most favorable rates. If the agent presents the client's application to an insurer, he will be acting in which of the following capacities?
An insurance broker
In insurance transactions, fiduciary responsibility means...
Handling insurer funds in a trust capacity
Which of the following is true regarding free insurance issued in this state?
It is illegal
An independent agent may have contacts with which of the following?
More than one insurer
An insurance company that is NOT authorized to do business in the State of California is known as a(n)...
Non-admitted company
Which of the following is an example of an agent's fiduciary responsibilities?
Promptly forwarding premiums to the insurance company
An insurance agent's responsibilities include all of the following EXCEPT...
Represent the client
Ina life settlement contract, whom does the life settlement broker represent?
The owner
Which of the following best describes the owner in a life settlement contract?
The owner of the life insurance policy
What is the term for a sales campaign conducted through the mail?
Direct-response
According to California Insurance Code, the duties and requirements of solicitor, agent and broker are all distinct from one another. Which of the following is TRUE?
One or more fire and casualty broker-agents can employ a solicitor simultaneously
According to California Insurance Code, the duties and requirements of solicitor, agent and broker and all distinct from one another. Which of the following is TRUE?
One or more fire and casualty broker-agents can employ a solicitor simultaneously.
All of the following are true about a Life and Disability Analyst EXCEPT...
Performs the same duties as a life agent
All of the following are true about a Life Disability Analyst EXCEPT...
Preforms the same duties as a life agent
What is the term for the entity that an agent represents regarding contractual agreements with third parties?
Principal
To be licensed as a Life Disability Analyst in the State of California, an applicant must meet all of the following requirements EXCEPT...
The applicant must be at least 21 years of age
An agent may satisfy the continuing education requirement by attending any course approved by the Commissioner, as long as...
The course satisfies the minimum time requirements for continuing education credit.
A licensee is NOT required to comply with continuing education requirements in the state of California if which conditions are met?
The licensee has been in good standing for 30 continuous years, and is at least 70 years old