Practice Questions

An insurer terminates an agent's appointment. Within how many days of termination must the intermediary be notified? A) 15 B) 20 C) 30 D) 10

A) 15 days

What is the maximum number of insurance risks an agent can place with a single insurer in one calendar year if the agent is not listed with that insurer? A) 5 B) 7 C) 10 D) 3

A) 5

Which of the following options best depicts how the eligibility of members for group health insurance is determined? A) By conditions of employment B) Eligibility is not determined, but simply accepted C) By the physical conditions of the applicants at the time of employment D) In such a manner as to establish individual selection as to the amounts of insurance

A) By conditions of employment

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This an example of A) Coercion B) Loading C) Defamation D) Twisting

A) Coercion

A producer who fails to segregate premium monies from his own personal funds is guilty of A) Commingling B) Larceny C) Embezzlement D) Theft

A) Commingling

Pertaining to insurance, what is the definition of a fiduciary responsibility? A) Promptly forwarding premiums to the insurance company B) Helping insureds to file claims C) Performing reviews of insured's coverage D) Offering additional coverage to clients

A) Promptly forwarding premiums to the insurance company

Statements made by an applicant for an insurance policy that are true to the best of the applicant's knowledge are referred to as A) Representations B) Material information C) Indemnity D) Warranties

A) Representations

To legally transact insurance in this state, an insurer must obtain which of the following? A) Certificate of Insurance B) Certificate of Authority C) Power of Attorney D) Business entity license

B) Certificate of Authority

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? A) Adhesion B) Consinderation C) Good faith D) Representation

B) Consideration

The requirement that agents not commingle insurance monies with their own funds is known as A) Accepted accounting principal B) Fiduciary responsibility C) Premium accountability D) Express authority

B) Fiduciary responsibility

Who determines whether an insurer's operations are financially sound and that the insurer remains solvent? A) Financially Industry Regulatory Authority B) Guaranty Association C) Department of Insurance D) National Association of Insurance Commissioners (NAIC)

B) Guaranty Association

Units with the same or similar exposure to loss are referred to as A) Law of Large Numbers B) Homogeneous C) Catastrophic loss exposure D) Insurable risk

B) Homogeneous

Disability (A&H) policies are incontestable once they have been in force for A) 6 months B) 1 year C) 2 years D) 3 years

C) 2 years

A producer CANNOT act as agent of an insurer without which of the following? A) A signed contract B) A certificate of insurance C) An appointment by the insurer D) A posted bond

C) An appointment by the insurer

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A) Stocks, securities, or bonds B) An offer to share in the commissions generated by the sale C) Dividends from a mutual insurer D) An offer of employment

C) Dividends from a mutual insurer

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming? A) Domestic B) Unauthorized C) Foreign D) Alien

C) Foreign

Which of the following is an example of a peril covered in an accident and health insurance policy? A) Smoking B) Death C) Sickness D) Alcoholism

C) Sickness

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? A) The Guaranty Association B) Consumer Privacy Act C) The Fair Credit Reporting Act D) Unfair Trade Practices Law

C) The Fair Credit Reporting Act

An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin? A) 5 B) 3 C) 2 D) 1

D) 1

When the Commissioner examines an insurer, who pays the examination costs? A) Department of Insurance B) The federal government C) The state government D) Examinees

D) Examinees

Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? A) Group dental insurance plan B) Medical-surgical expense plan C) Basic medical expense plan D) Health Maintenance Organization plan

D) Health Maintenance Organization (HMO) plan

Which of the following refers to "Own occupation" disability? A) Insured is unable to perform duties of any occupation B) Insured business owner is unable to perform the duties of his/her own business C) Insured business owner is unable to perform the duties of any related business D) Insured is unable to perform duties of the occupation for which he/she was educated and trained

D) Insured is unable to perform duties of the occupation for which he/she was educated and trained

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as A) Twisting B) False advertising C) Coercion D) Rebating

D) Rebating

How does reinsurance benefit the insurer?

It helps protect the insurer from catastrophic losses

Which of the following statements is an accurate comparison between private and government insurers? A) Private insurers may be authorized to transact insurance by state insurance departments B) Insurance provided by the government is called federal insurance C) Private insurers offer fewer lines of insurance than government insurers D) Private insurers provide insurance in areas where the government will not

A) Private insurers may be authorized to transact insurance by state insurance departments

In group insurance, what is the policy called? A) Certificate of Insurance B) Master policy C) Entire contract D) Certificate of authority

B) Master policy

When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option? A) Enroll in Medicare, while the company must provide additional retirement benefits B) Enroll in Medicare when eligible; otherwise, Medicare benefits will be forfeited C) Wait until the next birthday to enroll D) Remain on the group health insurance plan and defer eligibility for Medicare until retirement

D) Remain on the group health insurance plan and defer eligibility for Medicare until retirement

Which of the following services would be covered by endodontics? A) Tooth extraction B) Treatment of gum disease C) Replacement of missing teeth D) Root canal

D) Root canal