Virginia Laws and Rules - Life Insurance Exam

Chuck and Shaquille are both licensed agents in the same line of insurance. Chuck provides Shaquille with a referral that results in a sale. Commissions on this sale will likely be

shared by both agents

An agent's insurance records must be provided to the State Corporation Commission

upon request of the State Corporation Commission

In Virginia, which of the following records are not required to be maintained by an agent?

Premium quotes for policies not accepted

Under Federal Law, which of the following actions may result in a producer becoming imprisoned?

Producer embezzling funds from an insurer

Which of these is NOT an Unfair Claims Settlement Practice?

Refusing to pay persons bringing false or fraudulent claims

Which of the following has the power to suspend or revoke an agent's license?

State Corporation Commission

A(n) _____________ settlement allows a terminally ill individual to sell their life insurance policy at a discount to pay for medical bills.

Viatical

If an agent replaces a client's existing life insurance policy with a new one, which of these actions is advisable?

Wait until the new policy is issued and delivered before surrendering existing policy

A domestic insurance company in Virginia MUST

be formed under Virginia insurance laws

Tom the agent negotiates an agreement that unreasonably restrains the business of insurance. He has likely committed a violation of insurance law that falls under

boycott, coercion, and intimidation

If dividend option choices are offered on a whole life insurance policy, the policy must

contain a statement that dividends are NOT guaranteed

An annuity contract may be returned for a full refund during the

free look period

Before an individual is permitted to act as an insurance agent, he/she must hold a valid insurance license and be ____________ by an authorized insurer.

appointed

Every ________ year(s), an agent's license in Virginia must be renewed.

2 years

A customer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report MUST be advised as such. Which of the following does this statute originate from?

Fair Credit Reporting Act

A life insurance policy can be backdated before the application date for up to how many months?

6 Months

When determining the suitability of an annuity for a consumer, the insurance provider is obligated to

Make reasonable efforts to fit the annuity with the consumer's needs

According to the Federal Fraud and False Statements Act, which of these is considered to be an intentional violation?

Making false entries in a company's books

Any person who unknowingly violates Virginia insurance law may be punished for each violation by a penalty not to exceed

$1,000 with $10,000 Cap

An agent who informs an applicant that there are no exclusions in an insurance policy has engaged in

Misrepresentation

Licensed agents in Virginia are authorized to

solicit, receive, and forward applications to the insurer

An insurance company or agent must respond to an insured's request to access personal information collected on him/her by the insurer within how many days?

30 days

An insurance company or agent must respond within ____ days to an insured's request to access personal information collected on him/her by the insurer.

30 days

Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?

31 days

An agent must maintain customer records for _______ year(s) following the completion date of the insurance transaction.

5 years

A life insurance policy loan in Virginia cannot exceed an interest rate of

8%

Which of these is NOT considered advertising? A policy illustration, An AM Best company rating, A direct mailing by an insurer, or An agent's oral sales presentation?

An AM Best company rating

Which of the following is NOT a valid reason for an insurer to contest a life insurance policy during the policy's first two years of existence?

Misstatement of age

James the producer has sold a life insurance contract to a client without using an illustration, even though his insurer offers one. For this particular transaction l, the applicant

Must sign a statement that no illustration was provided

Paul is an agent who is licensed in Virginia but a resident of Maryland. P is considered to be what kind of agent?

Nonresident

Which of these would likely be considered an Unfair Claims Settlement Practice?

Offering settlements that are less than the fair value to offset insurer expenses

A licensee who must complete continuing education as a requirement for license renewal must do so every _____ year(s).

2 years

In Virginia, once a life insurance policy has been in force for ____ year(s), it becomes incontestable.

2 years

If replacement was involved in the sale of a life insurance policy, an agent must provide a replacement notice no later than the

application date

An example of misrepresentation is

falsifying the terms, benefits, advantages, or conditions of an insurance policy

According to the State Corporation Commission, the purpose of licensing prospective agents in the state of Virginia is

qualifying the agent to represent an authorized insurer for soliciting and negotiating their insurance products

A life insurance policyowner sells her policy to a third party in a viatical settlement. Under this transaction the policy owner

receives an amount less than the policy's death benefit

An agent who willfully violates the insurance code may, after a hearing, pay up to how much per violation as a penalty?

$5,000

If an individual violates a cease and desist order issued by the State Corporation Commission, the individual will be subject to a fine of

$5,000

The free look period provided in a life insurance policy is usually ____ days?

10 days

The free look period provided in a life insurance policy is usually how many days?

10 days

Carlos' agent license has been suspended due to non-renewal. He may apply for reinstatement within the ______ month period following the date when the license should have been renewed.

12 month period

The maximum prison sentence given under federal law for unfair and deceptive insurance practices is

15 years

What means the attempt made by an agent to intimidate or use force?

Coercion

Which of these is NOT considered a Federal punishment for unfair and deceptive insurance practices?

Community service

What action may the Bureau of Insurance take when it finds that a license applicant is not competent or untrustworthy?

Decline to issue the license

In a speech to a local association, an agent incorrectly stated that XYZ Insurance Company is in financial difficulty and not paying claims. The agent may be guilty of

Defamation

How often must the Commission examine each domestic insurance company?

Every 5 years

John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions?

Given written consent by the state insurance regulatory agency

If the State Corporation Commission believes that an agent is incompetent or untrustworthy, it has the authority to perform all of the following functions EXCEPT?

Incarcerate the agent

Which of the following situations would qualify an insured to receive funds from an accelerated (living) benefit rider?

Insured is expected to remain in a nursing home for life

The ___________ is required to notify the State Corporation Commission in the event of appointment termination.

Insurer

An insurable interest in each other's lives may exist in absence of an economic interest when the individuals are

Marriage Partners

Which of the following would prevent a person from obtaining a Virginia resident agent license?

Residing in a state outside of Virginia

Which is a role of the replacing insurer during a life insurance replacement transaction?

Send notice of the proposed replacement transaction to the existing insurer

Which of the following entities does NOT establish regulations for variable insurance products?

State attorney general

Which of the following must clearly be illustrated in ALL sales material for market value adjusted annuities?

The market value adjustment can be either upward or downward

According to federal fraud and false statements regulation, what is required for a prohibited person to transact insurance business in this state?

Written consent from the state insurance regulatory agency

An ____ is a person appointed by an insurer that represents the company and presents policies on its behalf.

agent

An agent does NOT need to notify the Bureau of Insurance of a? a) change of address; b) name change; c) change in financial status; or d) felony conviction

change in financial status

If a group is considering applying for a group life policy, it MUST?

have a minimum number of eligible persons

In Virginia, false advertising is an example of

misrepresentation

When an insurer discovers (during the claim process) that the insured's age was accidentally misstated on the life insurance application, the insurer will likely

pay an amount the premiums would have purchased at the insured's actual age?

In Virginia, any person action as an agent for an unlicensed insurer is

permissible only if acting as a licensed surplus lines broker

An agent has indicated to a potential client that the proposed life insurance policy is covered by the Virginia Life, Accident, and Sickness Insurance Guaranty Association. This action taken by the agent is

prohibited by law

A cease and desist order issued against an agent

prohibits a specific practice listed in the order

A life insurance agent has the authority to

solicit, receive and forward applications to the insurer

An agent may be personally liable if he or she engages in acts

that are not part of the agency or agent contract

When testing for the Human Immunodeficiency Virus (HIV), Virginia law requires a consent form?

that discloses who may receive a copy of the results

The Virginia Life, Accident, and Sickness Insurance Guaranty Association protects an insured in the event of

the insurer's insolvency

Persuading an insured, to the insured's detriment, to switch policies is called?

twisting

Misrepresenting pertinent policy provisions relating to coverage after a loss is a(n)

unfair claims settlement practice