PSI Practice Test
What do you call long-term care insures, agents, and brokers oh to the policyholder or perspective policyholder?
A duty of honesty, good faith, and fair dealing.
When a replacement policy is being considered what is required from an insurer?
A list of existing policies, replacement notice signed by the applicant and the agent, and a notice sent to any existing ensures that replacement is possible.
Which statement accurately describes De- mutualization.
A mutual insurance company that decides to convert to a stock company.
All of the following are types of licenses except:
Accident and Health solicitor. Types of licenses: Insurance solicitor. Life agent. Property-broker agent.
After what time period is the policy considered to have been delivered and in an acceptable way if premiums have been paid?
After six months if the premiums have been paid.
When does the disability policy become incontestable as to the statements contained in the application?
After the policy had been in force for a period of two years during the lifetime of the insured.
All of the following conditions provide a basis for group life insurance coverage except:
Amounts of insurance may be selected as needed per individuals personal need.
How does an admitted person differ from a non-admitted person as it pertains to insurance?
And admitted person has the right to transact insurance business within the state while a non-admitted person is not entitled to this action.
And insurance agent means a person authorized, by and on behalf of the insured, treat transact which of the following class of insurance?
Annuities.
Which of the following is true regarding continuing education requirements of an agent or broker?
Any licensee shall satisfactorily complete 24 hours of instruction prior to license renewal.
The claimant can be any of the following except...
Any person who is conducting an investigation of a claim on behalf of an insurer The claimant can be: Any person who assert a right of recovery and or a surety bond. Any person authorized by operation of law to represent the claimant. An attorney.
When may a license surrender for cancellation any license under which they are permitted to act?
At any time
When is the practice of post claims underwriting allowable on disability insurance covering hospital, medical or surgical expenses?
At no time.
When may representation be altered or withdrawn?
Before the insurance is effected.
All of the following may be eligible to qualify for enrollment in the healthy families program except:
Children who failed to meet citizenship for immigration rules. Eligible: Up to the age of 19. Children whose permanent residence is in CA. Children who are not eligible for no cost Medi-Cal.
The type of coverage that must have a proven insurable interest at the time of the application.
Coverage for a minor child under age 18 or a corporate owned policy of an employee.
Not a requirement of a Medicare supplement provider.
Displaying on first page of policy disclosure "will cover all medical expenses" Requirements: Auditable procedures for compliance. Marketing procedures to make sure excessive insurance is not sold. Reasonable effort to discover applicants already has health insurance
A person who does not hold a valid license may...
Examine contracts of insurance. Need a license to: Affect contracts Negotiate contracts Solicit contracts
All of the following are true regarding regulation and use of an agency name except:
Except: A name would not be denied in the basis of being too similar to other company names. True: Use of the name must not mislead the public. Company must file with commissioner and request approval of the name. The name may not imply the agency offers services for which it is not licensed or approved.
If fiduciary funds are received by any license, the funds shall be maintained in any of the following except.
Except: Bonds issued is all 50 states. Included: US govt. bonds and treasury certificates. Certificates of deposit of banks or saving and loan associations licensed by any state. Repurchase agreements collateralized by securities issued by US government.
"Person" means all the following except:
Except: Organizational Trust Association Corporation Business Trust
Which of the following is a party to a contract of insurance bound to communicate except:
Except: Those which the other would know by retaining a consultation with specialized knowledge insurance matters. Included: Those which the other knows. Those which the other waves communication. Those which in the exercise of ordinary care the other ought to know and of which the other party has no reason to suppose him ignorant.
According to see I see section 1711, and organization ceases to exist as an entity eligible to hold a license except...
Except: Upon the termination of all contracts. Included: Upon dissolution of the corporation. Upon dissolution of co-partnership. Upon the termination of an association.
All of the following are true about the rules regarding the sale of life insurance and annuities to seniors age 65 and older except:
Except: advance notice of meeting details before the visit and scheduling meeting. True: Senior is entitled to have other present. Agent owes seniors duty of honest, good faith, and fair dealing. Agent required to show insurance license.
The insurance commissioner may deny application for any license issued for any of the following reasons except:
Except: applicant is lacking good judgment. May deny for: Been convicted of a felony Not have good business reputation Against public interest
All of the following are requirements for an app can't to be licensed as a life and disability insurance analyst except:
Except: having been employed by insurance company. Requirements: Knowledge of life or disability insurance products Fit in proper person to hold the license Good business reputation
The following are all penalties for unlawfully acting as an insured without a certificate of authority except/
Except: individual will be banned from practicing insurance for 5 years. Included: Fined with a charge of a misdemeanor. Charged a fine not to exceed 50k. May be sentenced to county jail not to exceed one year.
All of the following are examples of representation except:
Except: it may be altered after the insurance is effected. Examples: It may be oral or written. It cannot qualify as an express provision in a contract. It is to be interpreted by the same as contracts in general.
All of the following are the duty of an insurer in regards to claims on file and record documentation except:
Except: maintaining any sales material, which had a material impact on the claims process. Duties include: Maintaining claim data Recording the date the licensee received transmitted our mail every material and relevant document in the file. Maintaining claim files accessible legible duplicated.
Losses arising from the following conditions may be excluded from group life policies except:
Excluded: Natural Disasters Included: Aviation Acts of War Military service
Which of the following may insurers use in their underwriting?
Family medical history. Cannot use: Ancestery. Genetic characteristics. National origin.
Inaccurate statement regarding replacement for long-term care coverage.
Group long-term care policies have the same rules regarding replacement as individual long-term care policies. Accurate: Policy must materially improve the position of the insured. Commission is limited to the percentage of sale normally paid for renewal. Replacement commission is based on the difference between the annual premium of the replacement and the original policy.
The California life and health insurance guarantee act provides coverage for all of the following except.
Hey stop loss insurance plan. Provides coverage for: A major medical insurance plan. A surgical insert insurance plan. A long term care insurance plan.
Which is an accurate statement regarding the requirements for life and health agent cheeses to sell Worker's Compensation coverage?
I need to wish is to sell the coverage message to receive instruction from an improved continuing education provider and successfully pass exam approved by the commissioner I need to wish is to sell the coverage message to receive instruction from improved continuing education provider and successfully pass exam approved by the commissioner
Which is true regarding a life and health agent has not been specifically appointed by the insurer?
If a policy is issued, the insurer is considered to have authorized the agent to act on its behalf.
When shall an individual certificate be deemed to be individualized within the meaning of the CIC?
If it contains either the name of the person covered or some other means of identifying to the individual covered that it is his individual certificate.
Which is an accurate statement on the purpose and intent of the insurance information and privacy protection act?
Inaccurate: The act permits disclosure of insurance underwriting information and claims history records. Accurate: The Act enables applicants and policyholders to obtain reasons for Adverse underwriting decisions. The Act grants persons access to information collected in order to verify or dispute its accuracy. That Act establishes standards for the collection, use and disclosure of information related to insurance.
In accurate statement regarding coverage for domestic partnerships?
Inaccurate: A policyholder may not require that a domestic partnership be registered to qualify for coverage. Accurate: A group health policy shall provide equal coverage for all registered domestic partners. A policy shall not cover at the Mestic partner if it is on equal to the coverage provided to the spouse of an employee, insured, or policyholder. Equal coverage shall be offered to the registered domestic partner of an employee, insured, or policyholder in terms of those provided to spouse.
Which is an in accurate statement regarding standards to avoid unfair underwriting for applicants at risk for auto immune deficiency human immunodeficiency virus or aids related conditions?
Inaccurate: Insurers are permitted to schedule aids and HIV testing without the specific consent of the individual applying for insurance. Accurate: Insurers must contain strict confidentiality regarding personal information obtained as the result of any medical testing. Insurers must establish performance standards to avoid making unfair distinctions between individuals in the same underwriting class. Establish standards that allow for adequate assessment through underwriting to determine if a life or health policy can be issued to the applicant.
Which is an accurate statement regarding a life settlement contract?
Inaccurate: The loan proceeds are used to solely pay premiums for the policy and any expenses incurred. Accurate: The owner receives the guarantee of the future settlement value. A finance loan made for a policy on or before the issuance of the policy. The owner agrees to sell the policy or any portion of the death benefit following the policy issue.
Which is an inaccurate statement regarding underwriting based on genetic testing?
Inaccurate: The proposed insured must pay for the cost of the testing. Accurate: Insured must provide informed consent prior to the testing. Test results can be provided to the insured or their physician. Purpose is to create standards classified by risk to avoid discrimination among proposed insureds with similar genetic markers.
In the event of receiving notice of a claim or other claim communication all of the following timelines are accurate except:
Inaccurate: every licensee or claims agent shall transmit notice of the claim to ensure and no more than 5 calendar days.
Which of the following provisions of free insurance offered as an incentive to purchase or rent property it's true?
It requires a separate charge or fee.
And insurance agent as a person who turn tax all of the following types of insurance except:
Life insurance ????? Does transact: Annuities Homeowners Auto
When an insured under age 60 purchases a new policy how much time do they have to cancel and receive a full refund of premiums?
Not less than 10 not and not more than 30 days they may cancel and receive a full refund for all premiums paid.
What is the punishment for a person refuses to deliver books, records, or assets to the commissioner when subject to a seizure order in an insolvency proceeding?
Not more than $1000 fine and or one year inprisonment.
Under which situation where an individual enrolled in Medicare Part B in eligible for open enrollment?
Notice of end stage renal disease from the primary care physician.
Where shall express warranty be made?
On the policy itself.
Insurance is which type of contract.
One agrees to identify against loss, damage or liability arising from a contingent or unknown risk.
Which would permit an insurer to escape insolvency?
Possession of assets equal to the total paid in capital after all liabilities and reinsurance.
Which is a requirement of an insurer who offers long-term care policies?
Provide the name address and phone number for local Health Insurance Counseling and Advocacy Program.
Which of the following can an insurer do if the insured intentionally conceals or misrepresents a material fact concerning any coverage part?
Rescind the contract
Which is considered non-public personal information as defined by the California financial code?
Tax return
When examination of been ensure shows the insured to be in solvent and a danger to the public which authority is granted to the commissioner by the CIC?
The commissioner may take possession of its offices, books and property immediately without court order.
Which of the following is true regarding change of address for licensee?
The commissioner must be notified immediately of any change in the personal, business, or email address.
According to the Administrative Procedures Act what is required to make change it to the California insurance code?
The department of insurance is required to publish proposed changes at least 45 days prior to the hearing or decision to adopt the change.
Read which is an accurate statement regarding long-term care advertisements and the cold lead device disclosure?
The fact that cold lead device was used must be immediately announce to the customer.
Call of the following are to be specified in an insurance policy except:
The financial raining at the insured. To be specified: A statement of the expected premium. The parties between home the contract is made. The period during which the insurance is to continue.
Which of the following may be described as in administrator of life or health coverage or annuities?
The insurance commissioner who has access to the records for examination audit and inspection purposes.
What happens if an owner request an immediate investment of monies in a variable annuity policy be returned during the 30 day cancellation policy?
The owner shall receive the market value at the time of the cancellation.
Which is an inaccurate statement regarding blanket life insurance?
The policy is for the benfit if rhe policy holder. True: Premim is remitted by the policyholder. The insurance is written under policy issued to a newspaper or magazine or other periodical. The policy insured without any requirement of individual enrollment or individual commitment.
How does insurance written under a franchise agreement on a wholesale basis differ from standard group insurance?
The premiums for coverage under a franchise agreement may be written for more than the usual rates for such insurance.
Which of the following regarding the pre-existing condition PCIP is true?
The state of California has transitioned their PCIP to the Federal early run PCIP. False: Has expanded as a requirement of the fordable care act. Is an integral component of the affordable care act. Allows California residents to enroll in the program regardless of health.
Which of the following provisions applies in the event of a miss statement of age for a covered employee of the group life policy?
There shall be an equitable adjustment of premium or in the amount of insurance.
What is a solicitor employed to do for policy other than life?
To aid a property and casualty agent or broker in transacting insurance.
What is he purpose of creating minimum underwriting standards for those testing positive AIDS?
To avoid discrimination between individuals in the same rating class who have been diagnosed with AIDS.
Which of the following actions is considered part of the insurance sales process?
Transaction of matter subsequent to execution of the contract and arising out of it.
All of the following are included as definitions of "transact" as applied to insurance except:
Underwriting Included in the definition of transact: Solicitation. Negotiations preliminary to execution. Execution of a contract have insurance.
When does a license become inactive for a broker?
Upon the termination of all appointments, or all endorsements.
Which circumstances in a pretext interview determine if the questions are permissible?
When insured is consulted by a person who hides his true identity on purpose when Friday for a claim is suspected.
When can a person act as an agent of the insurer?
When the insurer has filed with the commissioner a notice of appointment.
In which situation is a person or other entity that provides coverage for medical expenses not subject to the jurisdiction of the insurance department?
When they are subject to the jurisdiction of another agency of this or another state or the federal government.
Can any life insurer issue group life insurance with premium rates less than the usual rates for such insurance?
Yes they may do so on any group plan with or without annuities.
Our dependence eligible for any premium refunds or dividends paid under a policy disability insurance?
Yes. Insured employees are generally eligible as well as their dependents.
It is unlawful to do any of the following except:
You can encourage an injured worker to claim benefits by making for cause to make a knowingly false, fraudulent or material representation.