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Life insurance > Chap. 7 > Flashcards

Chap. 7 Flashcards

1
Q

Q: What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
Q: On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

A

A: Misrepresentation

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2
Q

Q: Who is responsible for the costs associated with the examination of insurers?

A

A: The insurer who is being examined

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3
Q

Q: If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

A

A: Cease and desist order

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4
Q

Q: Who is an insurance agent?

A

A: A person authorized to sell, solicit and negotiate insurance contracts

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5
Q

Q: What are the most common penalties for violations of insurance statutes?

A

A: A cease and desist order, a fine, and license suspension or revocation

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6
Q

Q: Who can usually be granted a temporary license?

A

A: Producer’s spouse or designee in case the licensed producer dies or becomes disabled

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7
Q

Q: When can the Commissioner or Director examine insurers?

A

A: Whenever deemed necessary, but at least once every few years (please check your state regulations for specific time requirement)

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8
Q

Q: What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

A

Twisting

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9
Q

Q: What is the purpose of a cease and desist order?

A

A: To prevent a producer or insurer from further violating laws for transacting insurance

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10
Q

Q: To whom may a certificate of authority be issued?

A

A: To an insurer authorized to transact business in this state

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11
Q

Q: For what reason can a temporary license be issued?

A

A: For continuation of business in case the licensed producer dies or becomes disabled

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12
Q

Q: Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?

A

A: Discrimination

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13
Q

Q: If an insurer meets the state’s financial requirements and is approved to transact business in the state, it is considered what type of insurer?

A

A: Authorized or admitted

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14
Q

Q: If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

A

A: Defamation

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15
Q

Which of the following would be considered an insurance transaction?

A

Receiving an application for insurance

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16
Q

Which of the following shows the types of insurance an insurer is permitted to transact?

A

Certificate of Authority

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17
Q

When a new insurance company wishes to transact business in the state, it must do all of the following EXCEPT

A

Obtain approval of each of its corporate officers and executives.

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18
Q

Q: Who must be notified of a producer’s change of address?

A

A: The Department of Insurance (Commissioner/Director/Superintendent)

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19
Q

Q: What type of licensee represents the insured?

A

A: Broker

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20
Q

Q: What are producers required to do in order to renew their license?

A

A: Complete continuing education hours and pay a renewal fee

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21
Q

Q: An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?

A

A: Rebating

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22
Q

Q: Who is considered a nonresident agent?

A

A: An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state

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23
Q

Q: What type of licensee represents the insurance company?

A

A: The agent

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24
Q

Q: If an insurer holds a Certificate of Authority, it is known as what type of insurer?

A

A: Authorized or admitted

25
Q

Q: In general, who can be excluded from producer licensing and examination requirements?

A

A: Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical).

26
Q

Q: Who may share in the commission from the sale of a life insurance policy?

A

A: Only producers properly licensed for the type of insurance transaction

27
Q

Q:In life insurance, producers are permitted to share or split commissions, providing that

A

A:Both are properly licensed for the line of insurance.

28
Q

Insurance institutions and producers must provide notice of their information gathering practices to applicants and policyholders no later than

A

The time the policy is delivered.

29
Q

An application for a life insurance policy was rejected because of information disclosed in an inspection report. The applicant reviewed the consumer reporting agency’s file and found they collected incorrect information concerning his personal life. He can legally require the reporting agency to

A

Reinvestigate.

30
Q

Which of the following is a qualification for a producer’s license?

A

Must be at least 18 years old

31
Q

A producer’s insurance license was due for renewal but she failed to pay the required license renewal fee. Seven months later, the producer decided to pay her renewal fee. How much can she expect to pay in addition to the renewal fee?

A

$100

32
Q

The necessary proof of loss claim is submitted to an insurer. Assuming the claim is complete, how long does the insurer have to pay the claim without additional interest?

A

30 days

33
Q

Which of the following qualifications for selling insurance in the state of Arizona is NOT correct?

A

The applicant must have two letters of recommendation attesting to trustworthiness, reliability, and good reputation.

34
Q

A newly licensed producer decided to hold a cookout for friends and family. At the event, the producer gave a short presentation about his company and specific insurance products that they offer. Some interest was generated. In this scenario, the producer was

A

Soliciting

35
Q

Which of the following would NOT be accepted as a document showing that an applicant for a license is in the United States legally?

A

A valid credit card with a major United States credit company

36
Q

The producer or broker must keep at the place of business the usual and customary records pertaining to insurance transactions for at least

A

Three years.

37
Q

When an insurance agency published an advertising brochure, it emphasized the company’s financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?

A

False financial statement

38
Q

An insured falsely reports the theft of a valuable item in order to collect payment from the insurance policy. This is an example of

A

Fraud.

39
Q

In order to solicit or issue insurance through a vending machine, producers must display evidence of their authority nearby. Which of the following does NOT need to be included in this notice?

A

The insurer’s phone number

40
Q

Property and casualty producers can usually do something for their clients that life and health producers cannot provide. What is this service?

A

Bind coverage

41
Q

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

A

Illegal

42
Q

An insurance policy or countersignature endorsement must be signed by any of the following EXCEPT

A

Director of Insurance.

43
Q

Which of the following is NOT a qualification for obtaining a producer’s license?

A

Must be retained by a licensed insurance agency

44
Q

In Arizona, the Director of Insurance serves

A

At the pleasure of the Governor.

45
Q

On a rainy night, a producer gets into an automobile accident and is injured. He is considered to be physically disabled and unable to work. His wife, currently unemployed, is now the family’s sole source of income. What could the Director issue her so she can continue her husband’s business?

A

A temporary producer’s license

46
Q

If an insurance company sends e-mail solicitations to potential customers, and if a customer chooses to opt out of the list, then how much time will the company have to remove the person from solicitation lists?
Q:According to CAN-SPAM, once a person requests to be excluded from a commercial e-mail list, this request must be honored within

A

10 days.

47
Q

Transacting insurance could include all of the following EXCEPT

A

Designing insurance advertisements.

48
Q

Producers in Arizona may do all of the following EXCEPT

A

Bind coverage for their clients.

49
Q

If a producer changes his or her residential address, the Director must be notified of the change within how many days?

A

30

50
Q

An insurer may charge a service fee beyond the premium for motor vehicle insurance policies that insure

A

7 cars

51
Q

Every producer must maintain a place of business in Arizona

A

Accessible to the public.

52
Q

Which of the following lines of authority describes property and casualty insurance sold for noncommercial purposes?

A

Personal Lines

53
Q

Which of the following is an example of a “gene product”?

A

Gene fragments

54
Q

If any insurer believes an act of fraud is being committed, the insurer should

A

File a report with the Director.

55
Q

A temporary license typically lasts for how many days in Arizona?

A

180

56
Q

In order to get a nonresident license in this state a producer must

A

Apply and pay a fee to a nonresident state that reciprocates.

57
Q

If the Director believes that a producer may be in violation of an insurance law or regulation, what may be issued that would legally force the producer to stop committing the violation?

A

Cease and desist order

58
Q

What is the maximum civil penalty for violating Insurance Information and Privacy Protection laws?

A

$10,000

Life insurance (8 decks)

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