*4 TB - Insurance Regulations

Question 0

The responsibility of the federal government in regulating the insurance industry is limited to:

Monitoring the ethical conduct of individual insurance adjusters

Fair labor standards and anti-trust matters

Monitoring financial solvency of insurance companies

Reviewing and approving rates, polices, and forms

Answer 0

Fair labor standards and anti-trust matters!

Question 1

The responsibility to regulate the insurance industry belongs to:

I. The state government

II. The federal government

III. The state insurance department

I only

III only

I and II only

I, II, and III

Answer 1

I and II only

Both federal and State government regulate the insurance industry

Question 2

An insurance company that is formed and domiciled under the laws of a particular state is an example of a (n):

Domestic Insurer

Foreign Insurer

Domiciled Insurer

Alien Insurer

Answer 2

Domestic Insurer

Question 3

Which of he following is a requirement for obtaining an agents or adjusters license?

Must be 21 years of age

Must have completed at least two years of college course work

Must have an insurance producers license in the state

Must satisfy the insurance commissioners of trustworthiness

Answer 3

Must satisfy the insurance commissioners of trustworthiness

Question 4

The unethical act of persuading a policy owner to drop a policy so key for the purpose of selling another policy is known as:

Twisting

Rebating

Defamation

Misrepresentation

Answer 4

Twisting

Question 5

An insurer that refuses to pay claims without conducting a reasonable investigation based upon all available information is guilty of:

Twisting

Unfair claim settlement practices

A felony

Misrepresentation

Answer 5

Unfair claim settlement practices

Question 6

An insurer that distributes a statement that misrepresents the benefits, advantages, conditions, or terms of any insurance policy would be guilty of:

Unfair claim settlement practices

Misrepresentation and false advertising

Defamation

Coercion

Answer 6

Misrepresentation and false advertising

Question 7

Should an agent or adjusters have a change of address, the obligation to notify the insurance department lies with:

I. The company that employs the adjuster or company that appoints the agent

II. The licensee

III. The licensee’s Supervisor

I and II

I only

II only

I, II, and III

Answer 7

II only

Question 8

An incorporated insurance company with its capital divided into shares is the definition of:

A mutual company

A domestic company

A stock company

A foreign company

Answer 8

A stock company

Question 9

The insurance dept has been advised that an agent is guilty of an insurance code violation. The commissioner will:

Call for a hearing

Revoke the license pending a hearing

Revoke the license

Fine the agents insurance company

Answer 9

Call for a hearing

Question 10

Which of the following would be considered an Unfair Trade Practice?

Twisting

Rebating

Coercion

All are Unfair Trade Practices

Answer 10

All are Unfair Trade Practices

Question 11

Which of the following is NOT considered to be an unfair claims practice?

Misrepresenting pertinent facts or uninsured policy provisions relating to coverages at issue

Refusing to pay a claim without conducting a reasonable investigation based upon all available information

Attempting to settle claims on basis of an application that was altered without notice to or the knowledge of the insured

Failing to honor an uncovered claim

Answer 11

Failing to honor an uncovered claim

Question 12

Although their liability is clear, B.B.S., Insurance company routinely delays all claim payments for 90 days, and in doing so:

Avoids a lot of little nuisance claims

Substantially eliminates fraudulent claims

Is guilty of an unfair claim settlement practice

Avoids any acts of illegal discrimination between claimants

Answer 12

Is guilty of an unfair claim settlement practice

Question 13

Which of the following would be considered unfair or deceptive acts by an adjuster?

Requesting that a first party claimant signs a release that extends beyond the subject matter which gave rise to the claim payment.

Advising the claimant the their rights may be impaired if a form of release is not completed within a specified period of time unless for the purpose of notification of statue of limitations.

Issuing check or draft, in a partial settlement of a loss or claim under specific coverage that contains language that releases the insurer or insured from total liability

All of the above

Answer 13

All of the above

Question 14

A act of terrorism must be “certified” to be such an act by:

The president of the United States

The senate

The House of Representatives

The secretary of the treasury

Answer 14

The secretary of the treasury

Question 15

All of the following events are considered acts of terrorism, except:

Acts of riot and civil commotion

Acts considered dangerous to human life, property or infrastructure

Acts resulting in damage within or outside the United States

Acts committed by an individual or individuals acting on behalf of any foreign person or foreign interest

Answer 15

Acts of riot and civil commotion

Question 16

In order to be certified as an act of terrorism under the Federal Terrorism Act, property and casualty losses must exceed _______ for any one event:

$500,000

$1,000,000

$3,000,000

$5,000,000

Answer 16

$500,000

Is the treshold for the act to apply

Question 17

None of the following can be covered by the Federal Terrorism Act insurance program, except:

Most commercial property and casualty risks

Federal crop insurance

Personal insurance policies

Health and Life insurance policies

Answer 17

Most commercial property and casualty risks

These can be covered

Question 18

No act will be certified by the secretary as an act of terrorism under the federal terrorism act if:

The act is not committed as part of the course of war declared by congress

The act is one of terrorism is defined by the act

The losses that occur relate to commercial property risks

The losses that occurs relate to life insurance

Answer 18

The losses that occurs relate to life insurance

Question 19

All of the following are considered acts of rebating, except:

An agent provides all-expenses paid cruise to a client and his wife in exchange for writing the coverage on his national chain of restaurants

An agent sends holiday greeting cards to all the clients on his mailing list

An adjuster receives a monthly check from an auto body repair shop for recommending the repair shop to clients who have a claim

All of the these situations are considered acts of rebating

Answer 19

An agent sends holiday greeting cards to all the clients on his mailing list

Question 20

Under the extension of the Terrorism Risk Act of 2007 the federal government will share in the losses for a certified act of terrorism if:

Total losses for all insurer exceed $100 million dollars

An insurer is responsible for the first 20% of losses as a detectable, and then the government will pay 85% of remaining claim amounts

All of the above

Answer 20

All of the above

Question 21

The federal law enacted to control the ways financial institutions and insurance companies deal with the private information of individuals is:

The FAIR plan

The Gramm-Leach-Bliley Act

The CAN-Spam Act

the Fair Credit Reporting Act

Answer 21

The Gramm-Leach-Bliley Act