Chapter 2

Question 1

An insurer must furnish to a claimant forms for filing proof of loss within _____ days
upon receiving a notice of claim:

Answer 1

✔️✔️-15 days

Question 2

Written notice for a health claim must be given to the insurer ____ days after the
occurrence of the loss:

Answer 2

✔️✔️-20 days

Question 3

How much does Medicare Part B pay for physician fees?

Answer 3

✔️✔️-80%

Question 4

Tom has a rider on his disability income policy that guarantees the right to increase his
benefits without a medical exam. What kind of rider is this?

Answer 4

Guaranteed insurability rider

Question 5

One definition of replacement is “the act of replacing an existing insurance policy with
another.” Replacement is:

Answer 5

✔️✔️-Closely regulated and required full
disclosure

Question 6

Ambiguities in an insurance policy are always resolved in favor of the:

Answer 6

✔️✔️-Insured

Question 7

Which would NOT be considered in underwriting a health insurance risk?

Answer 7

✔️✔️-Marital status

Question 8

If a health insurance claim is not promptly paid, legal action may be taken against the
insurer after:

Answer 8

✔️✔️-60 days from the date proof of loss is furnished

Question 9

An accident and health policy that provides reimbursement benefits makes them
payable to the:

Answer 9

✔️✔️-Insured

Question 10

According to Arkansas law, when must a producer deliver the outline of coverage to a
medicare supplement applicant?

Answer 10

✔️✔️-At the time of application

Question 11

Which is the best way to describe controlled business?

Answer 11

✔️✔️-Policies
written on people that a producer has influence over

Question 12

An insurance producer must notify the commissioner of a change in legal name, email
or address:

Answer 12

✔️✔️-Within 30 days of change

Question 13

This mandatory health policy provision states that the policy, including endorsements
and attached papers, constitutes:

Answer 13

✔️✔️-The entire insurance contract
between the parties

Question 14

Insurable interest does NOT occur in which of the following relationships?

Answer 14

✔️✔️-Business owner/client

Question 15

Craig submits a $500 claim for medical expenses with a past due premium of $100, the
insurer pays $400. Which of the uniform optional provisions covers this situation?

Answer 15

✔️✔️-Unpaid premium

Question 16

A pharmacy benefit covers prescription drugs derived from a list called a:

Answer 16

✔️✔️-Drug formulary

Question 17

How often must a Commissioner examine each domestic insurance company?

Answer 17

✔️✔️-Every 5 years

Question 18

Which of the following is a legal entity created for the sole purpose of providing
affordable group health coverage to its participants?

Answer 18

✔️✔️-Multiple
Employer Welfare Arrangement (MEWA)

Question 19

Which is NOT considered to be included in a health benefit plan?

Answer 19

✔️✔️-
Hospital Indemnity Plan

Question 20

The monthly benefit for an individual disability income policy is usually limited to a
percentage of the insured’s income in order to avoid:

Answer 20

✔️✔️-Over
insurance

Question 21

Which of the following is considered to be a POS plan?

Answer 21

✔️✔️-Managed
care plan

Question 22

A health insurance policy that allows an insurer to change the policy owners premiums,
but NOT cancel the policy is called a(n):

Answer 22

✔️✔️-Guaranteed renewal
policy

Question 23

An accident and health insurer has just received written proof of loss from one of its
insureds. The insured must now wait 60 days before:

Answer 23

✔️✔️-Bringing
legal action against the insurer

Question 24

Which of the following is NOT a reason for the commissioner to deny or refuse a
producer license application?

Answer 24

✔️✔️-Unintentionally misrepresented a
material fact on the application

Question 25

Which of the following is NOT an unfair claim settlement practice?

Answer 25

✔️✔️-Needing written documentation of claim details

Question 26

A nonparticipating policy will:

Answer 26

✔️✔️-Not pay dividends

Question 27

Jonas has disability insurance through his employer. The employer pays 75% of the
premium, and Jonas pays the other 25%. What is Jonas’s tax liability for any benefits
paid from the disability plan?

Answer 27

✔️✔️-Taxes must be paid on 75% of all
benefits received

Question 28

In what form do disability income policies typically pay benefits?

Answer 28

✔️✔️-
Periodic income

Question 29

The DO NOT CALL registry offers exemptions for calls placed from all of the following
EXCEPT:

Answer 29

✔️✔️-Insurance sales calls

Question 30

Signatures for an insurance application MUST be obtained by the producer from all of
the following sources EXCEPT:

Answer 30

✔️✔️-The beneficiary

Question 31

Premium mode is a term used to describe the:

Answer 31

✔️✔️-Frequency of the
premium payment

Question 32

Medicare A does not pay for medical benefits provided for treatment in a skilled nursing
facility beyond: -

Answer 32

✔️✔️-100 days

Question 33

Which of the following is NOT considered advertising? -

Answer 33

✔️✔️-A.M Best
company ratings

Question 34

The waiver of premium does NOT include which provision?

Answer 34

✔️✔️-All
future premiums are waived if the insured recovers from the disability

Question 35

A dread disease policy is considered to be a type of

Answer 35

✔️✔️-Limited
health insurance policy

Question 36

Which type of long-term care benefit would be most appropriate for a stroke victim who
requires speech therapy administered at her home?

Answer 36

✔️✔️-Home
healthcare

Question 37

The Arkansas Insurance Department may take each of the following actions EXCEPT:

Answer 37

✔️✔️-Incarceration

Question 38

Bill requires some nursing care/supervision but NOT full time care. Which of these
nursing home options would best serve him?

Answer 38

✔️✔️-Assisted living

Question 39

What is issued to each employee of an employer health plan?

Answer 39

✔️✔️-
Certificate

Question 40

A beneficiary change can occur:

Answer 40

✔️✔️-Normally, at any time

Question 41

What is the tax liability for employer contributions in Health Savings Accounts (HSA’s)?

Answer 41

✔️✔️-No tax payment needed

Question 42

All insurers must be members of what organization, as a condition of their authority to
transact insurance in Arkansas?

Answer 42

✔️✔️-Arkansas Life and Disability
Insurance Guaranty Association

Question 43

The deeds and actions of a producer indicate what kind of authority?

Answer 43

✔️✔️-Apparent

Question 44

A 70 y/o insured individual has suffered from kidney failure for the past 24 months. She
is covered by her spouses large-group employer plan. How will Medicare be utilized in
this situation?

Answer 44

✔️✔️-Will be the 2nd insurer & pay for claims not fully
covered by the group plan

Question 45

According to the life insurance contract law, insurable interest exists

Answer 45

✔️✔️-At the time of the application

Question 46

Who is the individual paid on a fee-for-service basis?

Answer 46

✔️✔️-Provider

Question 47

Medical Expense Insurance would cover:

Answer 47

✔️✔️-Injury occurring at the
insured’s residence

Question 48

After an insured gives notice of loss, what must he/she do if the insurer does not furnish
forms? -

Answer 48

✔️✔️-File written proof of loss

Question 49

In group health care, what is the purpose of the coordination of benefits provision?

Answer 49

✔️✔️-Determines what is paid by the primary & secondary insurers in the
event of a claim

Question 50

Simon purchased a fixed immediate annuity. His payment amount will be dependent
upon principle, interest and the contracts ______: - Correct Answer ✔️✔️-Income period
What kind of life insurance policy issued by a mutual insurer provides a return of
divisible surplus?

Answer 50

✔️✔️-Participating life insurance policy