State Insurance Exam
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
A) 10% B) 30% C)40% D) 60% D) 60%
An employer responsible for paying part or all of the premium for a group life or group health plan cannot willfully fail to pay the premium without first giving the employees how many days' advance notice?
A) 15 B) 30 C) 45 D) 60 C) 45
When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide proof of dependency in order for the dependent to remain covered under the policy?
A) 15 Days B) 31 Days C) 60 Days D) 10 Days B) 31 Days
Which of the following terms describes a specific dollar amount of the cost of mare that must be paid by the member?
A) Cost Share B) Prepayment C) Contractual Cost D) Copayment D) Copayment
An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?
A) Payment of claims B) Unpaid Premium C) Legal Action D) Proof of Loss B) Unpaid Premium
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
A) Presumptive Disability B) Dismemberment Disability C) Partial Disability D) Residual Disability A) Presumptive Disability
When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should:
A) Replace the policy with a new one B) Return any unearned premium C) Increase the premium D) Adjust the benefit in accordance with the decreased risk. D) Adjust the benefit in accordance with the decreased risk
As it pertains to group health insurance, COBRA stipulated that:
A) Retiring employees must be allowed to convert their group coverage to individual policies. B) Terminated employees must be allowed to convert their group coverage to individual policies. C) Group coverage must be extended for terminated employees up to a certain period of time at the employers expense. D) Group coverage must be extended for terminated employees up to a certain period of time at the employees expense. D) Group coverage must be extended for terminated employees up to a certain period of time at the employee's expense
Under the Affordable Care Act, which classification applies to health plans based on the amount of covered cost?
A) Risk Classification B) Metal Level Classification C) Guaranteed and Non-guaranteed D) Grandfathered and Nongrandfathered B) Metal Level Classification
If an insurer becomes insolvent, which of the following would pay benefits to policyholders?
A) The NAIC B) The State C) A federal Reserve Fund D) The Guaranty Association D) The Guaranty Association
Which statement regarding qualifications for Social Security Disability benefits is NOT true?
A) The individual must meet the definition of disability B) The individual must have proper insured status C) The individual must be at least 65 years old. D) The individual must satisfy the waiting period. C) The individual must be at least 65 years old
What is a definition of a Unilateral contract?
A) if one party makes a condition, the other party can counteroffer B) One-sided: only one party makes an enforceable promise C) Two or more parties go into a contract understanding there may be an unequal exchange of value D) One author: The company wrote the contract; the insured must accept it as written B) One sided: only one party makes an enforceable promise
An insured was involved in a car accident. After the accident is determined to be her fault, the police gave her a breathalyzer test to determine whether or not she had been drinking alcohol before the accident. Her blood alcohol level is over the legal limit. What type of health benefits will her health insurance policy pay for her injuries is the policy includes the narcotics and intoxicants provision?
A) oNly post-hospitalization benefits B) Full Benefits C) Partial Benefits D) No Benefits D) No Benefits
The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of:
A) 19 B) 21 C) 26 D) 30 C) 26
In health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there?
A) 5 B) 10 C) 12 D) 15 B) 10
Which of the following would be required in order to obtain a duplicate license due to a loss of the original one?
A) A payment of a fine doubled the amount of the original application fee B) A written request to the Commissioner and payment of fees C) A written examination and payment of fees D) A request to the appointing insurer B) A written request to the Commissioner and payment of fees
A top agenda for a national insurer is competing in a company contest for a grand prize of $25,000. The age found that prospects like getting "Rebates" from other consumer services companies, so the agent decided to pay the first month's premium as an incentive for buying the policy. This would be considered:
A) A rebate or refund of premiums and is a violation of marketing laws B) Aggressive marketing strategy and will help the agent win the contest C)A form of reimbursement of overcharged premiums and is acceptable D) A rebate of premiums paid and constitutes a valuable program for the client A) A rebate or refund of premiums and is a violation of marketing laws
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?
A) Adjust the claim benefit to reflect the insured true age B) Deny any claims and cancel the policy C) Deny paying a claim based on misrepresentation D) Pay the full amount of a claim because the contestable period has ended A) Adjust the claim benefit to reflect the insured's true age
A licensee decides to terminate his residency in this state. Which of the following would be an appropriate action?
A) Allowing the license to expire B) Notifying the NAIC C) Notifying the commissioner within 10 days D) Delivering the license to the commissioner within 30 days D) Deliver the license to the commissioner within 30 days
While a claim is pending, an insurance company may require:
A) An indépendant examination only once every 45 days. B) An indépendant examination as often as reasonably required. C) The insured to be examined only within the first 30 days. D) The insured to be examined once annually. B) An indépendant examination as often as reasonably required.
Which of the following is NOT true regarding partial disability?
A) An insured would qualify if he couldn't perform some of his normal job duties. B) This is a form of insurance that covers part-time workers C) The insured can still report to work and receive benefits. D) Benefit payments are typically 50% of the total disability benefit. B) This is a form of insurance that covers part-time workers.
In cases when an applicant for insurance is blind or deaf, the insurer underwriting the policy may do which of the following?
A) Apply the same standards as are used for applicant whose sight and hearing are not impaired B) Charge a different rate for the same coverage based on increased risk C) Refuse to insure the applicant because of adverse risk D) Limit the amount of type of coverage available to the applicant A) Apply the same standards as are used for applicants whose sight and hearing are not impaired
Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?
A) Benefits Received by the employee are free from federal income tax. B) Premiums paid by the employer are deductible as a bussiness expense C) Employee paid premiums may be deducted if certain conditions are met D) Employee benefits are tax deductible the year in which they are received. D) Employee benefits are tax deductible the year in which they were received
Under which of the following organizations are the practicing providers compensated on a see-for-service basis?
A) Blue Cross/ Blue Shield B) Open Panel C) PPO D) HMO C) PPO
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
A) Cancel the policy B) Increase the premium C) Exclude coverage for on-the-job injury D) Adjust the benefit in accordance with the increased risk. D) Adjust the benefit in accordance with the increased risk
Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?
A) Convert to an individual insurance policy within 31 days so she won't have to provide evidence of insurability B) COBRA C) Apply for social security benefits D) Apply for coverage under the same group policy that covers Kevin B) COBRA
Which benefit is based on the persons Primary Insurance Amount (PIA)
A) Death benefit in a universal life policy. B) Accidental Death benefit C) Long-Term Care Benefit D) Social Security Disability Benefit D) Social Security Disability Benefit
Which type of insurance provides funds for. business organization to purchase the business interest of a disabled partner?
A) Disability Buy- Sell B) Disability Interest Buy-Out C) Corporate Transfer D) Corporate Disability A) Disability Buy-Sell
Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of the premium paid by the employer?
A) Disability Income B) Major Medical C) Dental Expense D) Basic Medical Expense A) Disability Income
Which of the following statements is correct concerning taxation of long-term care insurance?
A) Excessive benefits may be taxable. B) Benefits maybe taxable as ordinary income C) Premiums may be taxable as income D) Premiums are not deductible in any case. A) Excessive benefits may be taxable
Items stipulated in the contract that the insurer will not provide coverage for are found in the:
A) Exclusions B) Insuring Clause C) Benefit Payment Clause C) Consideration Clause A) Exclusions
Which of the following insurance providers must be nonprofit and sell insurance only to its members?
A) Fraternal B) Service C) Mutual D) Reciprocal A) Fraternal
Rose bought three policies from the same insurer. Her benefits have exceeded the maximum allowed by the insurer. Which of the following will happen?
A) Full distribution of each policy's benefits B) Termination of two of the policies C) Termination of all of the policies D) Pro rata benefit reduction D) Pro rata benefit reduction
Any agent, broker, or limited representative who acts for a person other than himself negotiating a contract of insurance, for the purpose of receiving the premium, is deemed to be:
A) In violation of the free credit act B) An agent of the company C) A designated representative of the agent D) A managing partner of the insured B) An agent of the company
Which of the following is NOT true of a major-medical health insurance policy?
A) It usually has a maximum benefit amount. B) The benefits are subject to deductibles. C) It is designed to cover hospital and medical expenses of a catastrophic nature D) It is designed to pay on a first dollar of expense basis. D) It is designed to pay on a first dollar of expense basis.
Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?
A) Legal Actions B) Conformity with State Statutes C) Incontestability D) Insurance with Other Insurers B) Conformity with State Statutes
Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage?
A) Limited Risk Policy B) Specified Disease Policy C) Credit Disability D) Special Risk Policy D) Special Risk Policy
Stating that an insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association is:
A) Mandatory B) Only required of some lines of insurance C) Permitted D) An unfair trade practice A) An unfair trade practice
Which of the following would basic medical expense coverage NOT cover?
A) Maternity B) Hospice C) Surgeons Services D) Mental Illness C) Surgeon's Services
The Medical Information Bureau (MIB) was created to protect:
A) Medical examiners that perform insurance physical examinations B) Insurance companies from adverse selection by high risk persons C) Insurance departments from lawsuits by policyowners D) Insureds from unreasonable underwriting requirements by the insurance companies B) Insurance companies from adverse selection by high risk persons.
Which of the following provisions specifies the policyowner's right to transfer the policy's ownership?
A) Modifications B) Assignment C) Right to Examine D) Consideration B) Assignment
An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has an appendectomy and files the claims to both insurers. Neither company is notified in advance that the insurer has other coverage. What should each insurer pay?
A) Nothing. The insurer lied about the dual nature of his coverage, so the insurers are not responsible for covering the claims. B) The full amount C) A proportionate amount D) Only one should pay the full amount C) A proportionate amount
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insureds employment is called:
A) Occupational Coverage B) Workers Compensation C) Nonoccupational Coverage D) Unemployment Coverage C) Nonoccupational Coverage
A woman obtains health coverage through the Marketplace on October 1st. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?
A) Pregnancy may be covered with the insurer's special approval B) Pregnancy will be covered immediately. C) Pregnancy will only be covered if an additional premium is paid. D) Pregnancy will not be covered as a pre-existing condition. B) Pregnancy will be covered immediately.
Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization?
A) Provide medical services at a reduced cost. B) Provide medical services only from physicians in the network. C) Provide the subscriber a choice of physicians D) Provide the subscriber a choice of hospitals B) Provide medical services only from physicians in the network
A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called:
A) Recurrent Disability B) Business Overhead Expense C) Credit Accident and Health Coverage D) Partial Disability B) Business Overhead Expense
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insureds loss of earnings after recovery from a disability?
A) Recurrent Disability B) Partial Disability C) Income Replacement D) Residual Disability D) Residual Disability
Which of the following would be a qualifying event as it relates to COBRA?
A) Termination of employment due to downsizing B) Termination of employment for stealing C) Eligibility for coverage under another group plan D) Eligibility for Medicare A) Termination of employment due to downsizing.
Which is true regarding obtaining underwriting sources?
A) The insurer does not need to inform the applicant of how the information is gathered; informing only of the source is sufficient B) The insurer only needs to inform the applicant of how the information is being gathered; it is not necessary to disclose the sources C) It is illegal to obtain information from outside sources in order to determine an applicants insurability. D) The applicant must be informed of the sources contacted and how the information is being gathered. D) The applicant must be informed of the sources contacted and how the information is being gathered.
Which of the following is NOT a feature of a noncancellable policy?
A) The insurer may terminate the contract only at renewal for certain conditions. B) The premiums cannot be increased beyond the amount stated in the policy. C) The guarantee to renew coverage usually applies until the insured reaches certain age. D) The insured has the right to renew the policy for the life of the contract. A) The insurer may terminate the contract only at renewal for certain conditions
Under which of the following circumstances would a pretext interview be permissible?
A) The insurer needs to obtain confidential information B) The insurer suspects criminal activity and fraud C) The applicant for insurance fails to provide pertinent information to underwriters D) A third party is conducting the interview B) The insurer suspects criminal activity and fraud
Which of the following is not true of Disability Buy-Sell Coverage?
A) The policies provide funds for the business organization to purchase the business interest of a disabled person B) Benefits are considered taxable income to the business C) It is typically written to cover partners or corporate officers of a closely held business D) Premium payments are not deductible to be business. B) Benefits are considered taxable income to the business
Which of the following will vary the length of the grace period in health insurance policies?
A) The term of the policy B) The mode of the premium payment C) The length of any elimination period D) The length of time he insured has been insured B) The mode of premium payment
Which of the following statements is most correct concerning the changing of an irrevocable beneficiary?
A) They may be changed at any time. B) They can never be changed. C) They may be changed only on the anniversary date of the policy. D) They can be changed only with the written consent of the beneficiary. D) They can only be changed with the written consent of that beneficiary
What provision states that the insurance company must pay Medical Expense Claims immediately?
A) Time of Payment of Claims B) Payment of Claims C) Legal Actions D) Relation of Earnings to Insurance A) Time of Payment of Claims
All of the following identify purposes of the Insurance Information and Privacy Act EXCEPT:
A) To establish fair and marketable advertisement procedures B) To establish standards for collection, use and disclosure of information C) To minimize intrusiveness of insurance collection practices D) To limit the disclosure of information collected in connection with insurance A) To establish fair and marketable advertisement procedures
Discrimination between individuals of the same class in the amount of premiums or rates charged for any policy of insurance is:
A) Used in specific cases where formal underwriting is too impractical B) Considered prudent underwriting for all insurers C) Prohibited by law D) Common among insurers to avoid adverse selection C) Prohibited by law
Which of the following is NOT covered under a Basic Hospital Expense Coverage?
A) X-Ray Charges B) Surgeons Fees C) Hospital room and board D) Lab Charges B) Surgeons Fee's