Health Insurance

Question 1

Mutual companies

Answer 1

owned by policyowners, issue participating
policies which pay policy dividends to their policyowners. May sell
life and/or health insurance.

Question 2

Stock companies

Answer 2

do NOT issue participating policies, and pay
stock dividends to stockholders. May sell life and/or health
insurance.

Question 3

Home service companies

Answer 3

issue industrial life and health insurance

in relatively small face amounts.

Question 4

Medical Care Service Providers

Answer 4

blend features of insurance
companies and medical care providers. Includes HMOs, PPOs,
BC/BS

Question 5

Buyer’s Guide

Answer 5

explains the general features, benefits, and conditions

of the type of insurance being considered.

Question 6

Indemnity vs. Valued Contracts

Answer 6

• Indemnity: Reimburse loss (health insurance, property insurance)
• Valued: Pay policy face amount (life insurance)

Question 7

Representations vs. Warranties

Answer 7

-Applicant’s truthful statements on application considered representations
-Misrepresentations discovered within contestable period may void
contract

Question 8

When marketing Medicare supplement policies in Georgia, an insurer must

Answer 8

• develop marketing procedures to ensure that any comparison of its policies by agents is fair and accurate;
• develop marketing procedures to prevent the sale or issuance of excessive insurance;
• display a notice on the first page of every policy that says “Notice to buyer: This policy may not cover all of your medical expenses”;
• reasonably try to determine whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of that insurance; and
• develop a means by which examiners can audit the insurer’s marketing procedures.