Simulated Exam

A producer was found guilty of a 3rd violation of the Insurance Code. What would be the monetary penalty he will have to pay?

$10,000

A producer violates the solicitating regulations can be ordered to pay a fine for each violation up to..

$2,000

Applicants for an individual producer license must submit proof of completing 24 hours of continuing education credits during the previous

2 years

How long is the free-look period with a Medicare supplemental policy?

30 days

If a producer has been convicted of a crime, he/she must notify the Commissioner within

30 days

Ray had an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

50/50- After the deductible has been paid, the insurance company will pay a specified amount for a physician's visit, while the insured pays the remaining percentage. This is called "coinsurance".. Plans will often be listed in a fraction format, with the 1st # representing the amount that will be paid by the insurer. THe less the insurer must be with coinsurance payments, the lower the premiums will be. Therefore, Ray should chose the 50/50 plan.

A medicare supplement contract cannot define a "pre-existing condition" more restrictively than a condition for which medical advice was given or treatment recommended within how many months of the effective date of coverage?

6 months

How long is an open enrollment period of Medicare supplement policies?

6 months- An open enrollment period is a 6-month period that guarantees the applicants the right to buy Medigap once they first sign up for Medicare Part B.

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

90 day and if not reasonably possible it can not limit 1 year

Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within

90 days

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days

All of the following are correct about the required provisions of a health insurance policy EXCEPT

A reinstated policy provides immediate coverage for an illness.- Accidental injury is covered immediately, but not to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.

A deductible is

A specific dollar amount that the insured must pay first before the insurance company will pay the policy benefits- The purpose of a deductible is to have the insured absorb the smaller claims, while the coverage provided under the policy will absorb the larger claims. The higher the deductible, the lower the premium.

Which is NOT covered under LTC?

Acute care in a hospital- LTC policy may provide coverage for home health care, adult day care, hospice care, or respite care.

What is reinsurance?

An agreement between a ceding insurer and assuming insurer- The originating company that procures insurance on itself in another insurer is called the ceding insurer. The other insurer is called the assuming insurer.

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority- All insurer (domestic, foreign, alien) must obtain a certificate of authority before transacting insurnace within a given state.

Which of the following establishes minimum standard for any policy that will be marketed as a Medicare supplement policy?

Commissionner

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the applicaiton and pay the inital premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration clause- the consideration clause specifies that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance.

A waiver of premium provision may be included with which kind of health insurance policy?

Disability income- A waiver of premium rider is generally included with GR and NC IDI policies. It is a valuable provision bc it exempts the insured from paying the policy's premium during period of total disability.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer- Dividends paid to a policy holder of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.

Which of the following is an eligibility requirement for social security disability income benefits?

Full insured status- SS disability benefits are only available if the worker is fully insured. Benefits are provided only after a 5-month waiting period.

In insurance terms, if a person has a chromosomal defect that may predispose him/her to a disease, this is called

Genetic characteristic

As is pertains to group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former EE's expense-COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium.

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?

Guaranteed

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost

Is not covered- An insurance company will pay the usual, reasonable, or customary amount for a given procedure based upon the average charge for that procedure

Under workers compensation, which of the following benefits are NOT included?

Legal benefit- Under WC, medical and rehabilitation benefits, income benefits, and death benefits are all included,

The company has issued a policy and delivered it to Producer B on May 1st, Monday. BY what date must the policy be delivered to the insured?

May 10th (within 10 calendar days)-All policies, certificates, or other evidence of insurance that are received by an insurance producer must be delivered/mail to the insured within 10 CAL days of the receipt by the producer.

An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks his ankle. What coverage will appply?

No coverage will apply since the injury could have been foreseen- An accidental means clause states that if the insured meant to do whatever caused their injury, no coverage applies since the resulting injury could have been foreseen.

Qualified medical expenses paid for participants in a MSA

Non taxable- EE use the funds from an MSA to cover health insurance deductibles during the year. MSA funds are taxable only when distributions are made for reasons other than qualified medical expenses.

Premium payments for personally-owned disability income policies are

Not tax deductible

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?

Part A and B of Medicare

Which of the following provisions is mandatory for health insurance policies?

Physical examination and autopsy- This provision is required by law. Recurrent disability, unpaid premiums, and intoxicants/narcotics are all optional provisions.

Regarding the taxation of Business Overhead policies,

Premiums are deductible, and benefits are taxed- Premium paid for BOE are tax deductible as a business expense. However, the benefits received are taxable to the business as received.

Which of the follow is NOT required information a producer must provide before soliciting insurance?

Producer contact information- insurance producers who solicit insursnce must first identify themselves (to each person solicited) by name, as well as the name of the insurer or insurance producer they represent, and the nature of their relationship with the insurer or producer being represented.

The annual contribution limit of a Dependent Care FSA is set by

The IRS

What program was established by NJ to guarantee access to health coverage for individuals and small employers, regardless of health status, age, claims history, and other risk factors?

The Individual Health Coverage Program- NJ established the Individual Health Coverage Program to guarantee access to health coverage for individuals and small employers, regardless of health status, age, claims history, or any other risk factor.

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

The group plan will not pay because the EE was injured at work- It is assumed WC would be provided for coverage.

Which provision states that the insurance company must pay Medical Expense Claims immediately?

Time of payment of claims- The time of payment of claims provision requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy.

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are

Totally tax deductible- Sole props and partners may deduct 100% of the cost of a medical expense plan provided to them and their families because they're considered self-employed individuals, not employees.