Chapter 8: South Carolina Laws and Rules Pertinent to Insurance

Question 1

How often must the director examine each domestic insurance company?

Answer 1

Every 5 years

Question 2

When a licensee’s address has changed, who must be notified of this change?

Answer 2

department of insurance

Question 3

Which of the following is NOT a duty of the director?

Answer 3

establish rates for the insurers

Question 4

Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?

Answer 4

Submit to the replacing insurer a list of the policies to be replaced

Question 5

After a health insurance policy ahs been in force for ___ years, the policy is incontestable (except for fraud).

Answer 5

2

Question 6

Which entity is responsible for regulating continuing education requirements in SC?

Answer 6

department of insurance

Question 7

A license may be denied, suspended, or revoked if the licensee

Answer 7

is found guilty of misrepresentation

Question 8

An example of false advertising would be

Answer 8

an insurer exaggerating its dividends in a magazine advertisement

Question 9

Tia the producer is recommending to a prospect that an existing life insurance policy be replaced with a new one from her insurer. If this transaction moves forward, which of the following does NOT need to be provided to the prospect at or before the policy is delivered?

Answer 9

replacing insurer’s financial statements

Question 10

Insurance companies that are organized in countries outside the United States are referred to as

Answer 10

Alien

Question 11

Convincing a prospective insured to buy an insurance policy based on exaggerations is called

Answer 11

misrepresentation

Question 12

Merchandise with the insurer’s logo is allowed to be given for advertising purposes as long as the value does not exceed

Answer 12

$25. Anything given with the value over $25 is considered to be a form of inducement and is illegal

Question 13

An insurance policy may NOT be cancelled by the insurer (except for fraud) after ___ years from policy issue.

Answer 13

2

Question 14

Proof of loss on a health insurance claim must be submitted to an insurer within ___ days after the insured’s date of loss

Answer 14

90

Question 15

All long-term care policies sold in SC are REQUIRED to pay the SAME daily benefit amount for “at home” care as compared to

Answer 15

the daily amount paid for nursing home care

Question 16

A producer must notify the director within ______ days of a felony conviction

Answer 16

30

Question 17

An insurer may exclude preexisting conditions on a Medicare supplement policy for _____ months

Answer 17

6

Question 18

An eligible employee can be excluded from group health coverage for up to ____ months if he/she is considered a “late enrollee.”

Answer 18

18

Question 19

Long-term care insurance policies sold in South Carolina are NOT required to cover

Answer 19

substance addiction

Question 20

ABC insurance company fails to pay death proceeds after satisfactory proof of loss was submitted. ABC must then begin paying interest on the death proceeds after ____ days of receiving proof of loss.

Answer 20

30

Question 21

On the test

South Carolina’s 10-day free-look period for life insurance policies begin at the

Answer 21

date of delivery

Question 22

An individual accident and health insurance policy is REQUIRED to contain a(n)

Answer 22

payment of claims provision

Question 23

If the cause of death appears to be accidental, an insurer may require a(n)

Answer 23

autopsy

Question 24

Which type of insurance company allows their policyowners to elect a governing body?

Answer 24

Mutual

Question 25

The director is appointed by the ______.

Answer 25

Governor

Question 26

The typical free look period for life insurance policies sold in SC is ____ days

Answer 26

10

Question 27

Within ____ days after policy delivery, an individual life insurance policy can be returned for a 100% premium refund.

Answer 27

10

Question 28

Victoria’s producer license was initially issued on July 18, 2017. Her birthday is June 9, 1982. Her license will renew

Answer 28

June 30, 2019. Producer licenses are renewable every two years on or before the last day of the producers birth month

Question 29

Which of the following is the BEST example of insurance fraud?

Answer 29

Purposely withholding material information from an insurer
Suggesting an insurance policy is like a share of stock
**A deliberate lie by an insured to the insurer to obtain a lower premium

Question 30

An insurer in REQUIRED to offer which of the following to each long term care applicant at the time of purchase?

Answer 30

Inflation protection.

Question 31

According to the Affordable Care Act, which of the following coverages in NOT required?

Answer 31

Coverage for cosmetic surgery

Question 32

In South Carolina, which of the following is considered an unfair trade practice?

Answer 32

Coercion

Question 33

The branch of dentistry which deals with the replacement of missing parts is called

Answer 33

Prosthodontics. Branch of dentistry concerned with the design, manufacture and fitting of artificial replacements for teeth and other parts of the mouth

Question 34

A carrier for a small group health plan may refuse to renew the plan if the employer

Answer 34

fails to pay the premium

Question 35

The free-look period for life insurance policies issued in south Carolina is ____ days

Answer 35

10

Question 36

questions like this on test

When does the free look provision for accident and health insurance begin?

Answer 36

date the policy is delivered to the insured

Question 37

After _____ years from date of issue, a policy can no longer be cancelled by the insurer for misstatements (except for fraud).

Answer 37

2

Question 38

A form of medical health insurance covering the treatment and care of gum disease is called

Answer 38

dental expense insurance

Question 39

Which of the following is NOT a circumstance to which a temporary producer license can be issued?

Answer 39

Prospective agent who is waiting to take the state licensing examination

Question 40

In order to conduct insurance transactions in SC a(n) ______ MUST be appointed.

Answer 40

producer

Question 41

A hearing must be held before a producer’s license can be suspended or revoked. Prior to the hearing, the Director is required to

Answer 41

give written notice to the producer

Question 42

Which of the following does restorative dental treatment cover?

Answer 42

crowns

Question 43

An example of an unfair claims settlement practice is

Answer 43

turning down a claim without providing the basis of denial

Question 44

Defamation occurs when a producer makes a false statement intended to

Answer 44

malign another insurer

Question 45

An insurer may legally defer payment of a cash surrender value for up to

Answer 45

6 months

Question 46

A medicare supplement policy can be cancelled by the insurer for

Answer 46

nonpayment

Question 47

The fair credit reporting act protects consumers

Answer 47

with guidelines regarding credit reporting and distribution

Question 48

A producer has influenced an existing policyowner to convert an existing whole life policy to reduced paid up insurance. The producer then sells the policy owner a new universal life policy. This transaction is called a(n)

Answer 48

replacement

Question 49

Under the affordable care act (ACA), health coverage is provided for dependents up to the age of.

Answer 49

26