Key Facts Flashcards
The transfer of PURE risk in consideration for a premium
insurance
The chance of loss without any chance of gain
Pure Risk
risk with the possibility for gan or loss and is NOT insurable
Speculative Risk
The Chance of loss
risk
a condition that could result in a loss
exposure
something that increases the chance of loss
hazard
The presence of a physical _______ increases the chance of a loss occuring.
hazard
a cause of loss, such as a fire
peril
To be insurable, losses myst be _______
calculable
the law of ________ allows insurers to predict claims more accurately
large numbers
The more people in the group, the more accurate the predictions are. (applies to groups of people, not individuals)
the law of large numbers
Most insurers buy ______ to protect themselves in the event of catastrophic loss.
resinsurance
True or False: Insurance laws are required to be uniform from one state to another.
False
A type of insurer that may pay dividends to its shareholders.
stock insurer
stock payouts from a stock insurer _____ guaranteed.
are not / may not be
An insurance company that s managed by an attorney-in-fact
reciprocal
An unincorporated association of individuals who insure each other
reciprocal insurer
The _______ offers insurance primarily based upon social needs, such as flood insurance and workers compensation, but does not offer insurance for the purpose of preventing fraud.
government
An insurance company who has their home office in another state
foreign
An insurer incorporated outside of the U.S. who sells insurance in the U.S.
Alien
A _____ may be personally liable when violating the producer’s contract.
producer
Represents the insurance company, not the insured.
producer
Own their own accounts and are not insurance company employees
independent producers
Producers have _____, ______, and ______ authority
express, implied, apparent
The authority a producer has that is written in his or her contract.
express
A producers binding authority (if any) is ______ (written dwn) in the producer’s contract with the ______ the producer represents
expressed / insurer
The authority no expressly (written) granted, but is actual authority the producer has to transact normal business activities
implied authority
Elements of a legal contract (COAL)
consideration, offer, acceptance, legal purpose and capacity
Offer and acceptance, or mutual agreement is required for a __________
valid contract
Advertising the availability of insurance is considered to be an offer. True/False
False
A specific and definite proposal to enter into a contract.
Offer
The consideration on a policy need not be ____
equal
A policy may not be ____ due to unequal consideration.
voided
under what clause must something of value be exchanged
consideration clause
Because insurance contracts are contracts of ____, policy ambiguities always favor the insured.
adhesion
Insurance policies are considered to be _____ contracts, in that only one party makes an enforceable promise to the insurer.
unilateral
States that the purpose of insurance is to restore the insured to the same position as before the loss occured.
principle of indemnity
States that all parties to an insurance transaction are honest
principle of utmost good faith
the truth to the best of one’s knowledge
representation
a sworn statement of truth, guaranteed to be true
warranty
a breach of warranty may ____ a contract
void
the failure to disclose a material fact
concealment
When an insurer voluntarily gives up the right to obtain information that they are entitled to
waiver
Insurance covers what two types of perils
accident and sickness
covers both on-and-off the job injuries (for those not covered by workers comp)
occupational coverage
covers off the job injuries only (for those covered by workers comp)
Non-occupational coverage
A policy that will pay the capital sum for loss of a limb, in addition to any medical insurance coverage that may apply.
AD&D
________ insurance will pay an insured’s car payments if the insured is sick or injured and cannot work.
credit disability
Policies that do not require individual applications, nor are certificates of insurance issued to those covered
blanket policies
a disability policy that may be written to cover passengers on a common carrier, an employee group, student group, debtor group or sports team.
blanket policy
True / False: Health insurance underwriters may discriminate based on an applicant’s health history.
True
An application must be ________ and will become a part of the policy when?
in writing / when issued
If an application is approved and a policy is issued, the producer must collect the _____ along with a statement of ____________
premium, statement of continued good health
Health insurance underwriters often order an ____________ report in order to determine an applicant’s current medical condition.
attending physician’s
Issuing a ________ starts coverage right away if all conditions have been satisfied.
conditional receipt
Mandatory provisions such as grace period protect the _______. Optional provisions, such as probationary periods, protect the _________
insured, insurance company
Except for fraud, health insurance policies are incontestable after they have been in force for ____
2 years
True or False; the probationary period is different from the time limit on certain defenses provision (incontestability)
True
The max. probationary period is usually ______ and the incontestability provision is usually _______
12 months / 2 years
Under this clause, the company may contest a claim for the first 2 years, but not thereafter unless i can prove fraud.
Incontestability clause
The incontestability clause protects whom?
insurance company
Insurance companies are reluctant to charge fraud since is requires _______ and is difficult to prove.
proof of intent
The time limit of certain defenses clause is another name for what?
The incontestability clause
If a reinstatement application is required, an _____ is reinstated when the company says or after ______, whichever comes first.
insured; 45 days
When an insured is reinstated, a ______ probationary period starts for ______ only
45 day, sickness
If no reinstatement application is required, an insured is reinstated effective when?
upon payment of the late premium to either the company or the producer.
Under what provision, if a claim is not paid immediately the claimant must wait how many days before filing a lawsuit for failure to pay?
legal actions, 60 days
Health insurers should pay individual claims as soon as possible, as specified in what provision?
Timely payment of claims
provision that allows the claims dept time to investigate. (Max time ____ days.)
timely payment of claims, 60
Claims may be denied if they occur after _______
policy expiration
Insurers do not have to pay _______ claims
unsubstantiated
After receipt of notice of a claim the insurer must do what?
Send out claim forms
If claims forms are not provided by the insurer within the time frame required, the insured can do what?
Submit proof of loss in writing
Which provision allows the insurer to change the benefit amount or premium should the insured change occupations during the coverage period?
change of occupation
Under the misstatement of age clause, is is the _____ that are adjusted, not the ______
benefits / premiums
Principle that prevents an insured from collecting more than they actually lost
principle of indemnity
A clause found in most disability income policies which requires insurers to share a claim proportionately
insurance with other insurers
If an insured pays the overdue premium on a lapsed health insurance policy and does not hear from the insurer, the insured is automatically reinstated in ________
45 days
What provision states that if an insured has a claim in the grace period, the insurer may subtract the overdue premium for the amount of the claim paid.
unpaid premium provision
under the unpaid premium provision, if an insured has a claim in the grace period, the insurer may subtract the overdue _______ from the amount of the claim paid.
premium
A cancellable health insurance policy may be canceled by whom?
The insurer or the insured
______ must be refunded to an insured who was canceled midterm.
unearned premium
a _____ refund is sent when the company cancels. A _____ refund is sent when the insured cancels.
pro-rata / short-rate
What effect will canceling have on an unpaid claim.
no effect
Which provision would allow an insurer to deny coverage if the insured became injured or died while committing a felony?
illegal occupations
a health insurance policy that can be non-renewed by the insurer at the end of any policy period
optionally renewable
a policy where the insurance company cannot change the coverage or the rates, but it does not have to offer renewal
noncancellable policy
With a noncancellable policy the insurance company does not have to offer renewal but it cannot change ____ or ____
rates / coverage
if a policy is _____ and ______ the company cannot change anything and it must offer renewal
noncancellable and guaranteed renewable
a policy where the insurance company cannot change the coverage, but it can change the rates by class (not individually)
guaranteed renewable
a guaranteed renewable policy is renewable at the option of the ______ (by paying the premium) up to a certain age (usually ____), but the insurer may change ____ by class.
insured, 65, rates
a policy that must be renewed if the insured meets the specified conditions
conditionally renewable
the typical definition of total disability on a disability income policy states that the insured is considered to be totally disabled if the insured cannot perform his or her own job for ________, and any job that the insured is suited to do thereafter.
2 years
Those collecting disability income insurance benefits may be required to take a physical exam every _____ at the _____ expense in order to prove they are still diabled.
6 months, insurers
Those who suffer from ____ disabilities, such as loss of eyesight, are not required to take a physical exam in order to prove they are still diabled.
presumptive
The primary purpose of ______ is replacement of lost wages, should the insured become disabled
disability income insurance
The most important factor to consider when writing disability income insurance is what?
The amount of wages that could be lost
On a disability income policy , a longer elimination (waiting) period will do what to the premium.
reduce
Like a deductible, but stated in terms of time rather than in dollars
waiting period
in disability the Waiting period starts when?
onset of disability
Short-term disability policies have ____ elimination and benefit periods than long-term disability
shorter
If a disability income policy has a 7 day elimination period and the insured is sick for 15 days, the insured would receive benefits for how many days.
8 days
The probationary period starts when?
When the policy is first issued.
a prior injury that reoccurs again. The elimination (waiting) period is _____
recurrent disability, waived
a disability that never goes a way
residual
Residual coverage pays the difference between what?
What you used to make and what you can make now.
If a disability policy contains an ______ means clause, there is no coverage if an insured is injured doing what?
something they meant to do
If a disability contains this clause, coverage applies as long as the injury was unintentional and unforseen.
accidental bodily injury clause
a rider on a disability income policy that allows the insured to purchase additional coverage at certain intervals, regardless of health.
guaranteed purchase option
a rider on a disability income policy that is designed to keep the policy limit up with the rate of inflation
cost of living
group disability income is written to cover a ____ of an employee’s gross earned income
percentage
GROUP disability income is written to cover only a percentage of an employee’s ________
percentage
INDIVIDUAL disability income is written to cover only a percentage of an insured’s ________
net (after tax) income
indemnifies the business for the loss of services of a key employee due to disability
key person
will cover the ongoing expenses of a self-employed person, such as rent or salaries, while the sole proprietor is disabled. _____ are tax deductible, but ______ are taxable
business overhead insurance ; premiums; benefits
a disability buy/sell policy could be structured to pay a monthly benefit to a coporation for up to ______ while waiting to see if a disabled person recovers. If not, then _____ is paid as a partnership buyout.
1 year, lump-sum
OASDHI stands for what
old age, survivors, disability and health insurance
acronym for social security
OASDHI
social security disability income benefits are ____ to obtain than benefits provided by private disability income insurers
harder
To have a fully insured status under social security for disability benefits, a worker must have contributed to social security for at least _____ quarter ( ___ years)
40 / 10
a disabled person must have what in order to be eligible for social security disability benefits
fully-insured status
The waiting period for social security disability benefits is ___
5 months
Social security disability benefits require that a disabled person cannot _____ and that the disability is expected to last _____ or ______
work ANY job; at least 1 year; result in death
Major medical insurance is considered to be a ______ plan
comprehensive
The purpose of _______ is to eliminate unnecessary treatment, thereby _____ premiums.
preadmission certification / lowering
Medical expense policies are required to cover the insured’s newborn child from _____
the moment of birth
On medical expense insurance, the scheduled benefit limit shows _____________.
The most that the insurer will pay
The term health care service organization (HCSO) may be used in place of the term _______
HMO - health maintenance organization
makes referrals, authorizes treatment, provides general care, and acts as the gatekeeper between members and their healthcare providers
HMO Primary Care Physician
Health care service organizations (HCSOs) stess _________
preventive care
HCSO’s pay reimbursements directly to the _____, not to the _____
provider / insured
When a doctor works in an independent group clinic on behalf of an HCSO is is known as what
a group practice model
HMO primary care physicians may include thos in family practice, pediatrics, obsterics, and gynecoogy, but not _____
internists
True / False; HMO’s usually dont cover adult hearing exams as a preventive care service
True
Except for ______, HMO must be provided in-network
emergencies
HMOs cover out-of-network emergency treatment without ________, although providers must ______ after the treatment has been rendered.
pre-authorization, notify the HMO
The term managed care includes medical services provided by HMO’s, PPOs and POS (point-of-service) plans, but does not include _______.
Indemnity plans
medical expense claims are often paid on a _______ basis
fee for service
______ policies often have a comprehensive calendar year deductible.
major medical expense
In utilization management, pre-certification is different than a concurrent review because ______ is done prior to treatment.
pre-certification
______ expense plans cover in-hospital only, with first dollar coverage. There is no ______ or ______ but coverage is subject to ______ (maximum) limits
Basic Medical, deductible, coinsurance, inside
_______ and _________ plans have deductibles and coinsurance requirements.
Major medical, comprehensive major medical (not basic)
The stop loss feature on a major medical policy applies after the insured ________.
pays the deductible
The stop loss feature, limits the amount of _______ the insured has to pay on a large claim
coinsurance
Medical expense policies are usually written as _______ which means the company can cancel at anytime as long as it gives _________
cancellable, advance notice
medical expense policies usually contain a _______ period that applies to pre-existing conditions, meaning they wont be covered if…. _____
probationary, they occur during this period
limits the total amount the family must pay during the year no matter how many family members become sick or injured
family deductible
assignment of benefits provision Facilitates claims handling by allowing the insurer to pay benefits directly to ______
the provider
When calculating how much the company will pay on a claim, always subtract the _______, first then apply the ______ percentage
deductible, coinsurance
PPO subscribers who go out of network for services will receive _______ benefits
reduced
To encourage an insured who is covered by POS plan to seek coverage in network, out of network coverage is often subject to _________ deductibles
higher deductibles
on medical expense plans a mandatory _________ requirement will result in fewer claims
second opinion
a carry-over deductible applies to claims that occur during _________ of the calendar year.
the last 3 months
the carry over from a carry over deductible carries over and applies to the next year’s ________
deductible
on noncontributory group plans ____ % of eligible employees must enroll.
100
On contributory group plans, usually ____ % of the eligible employees must enroll.
75
group participation requirements are designed to help prevent _____
adverse selection
a group insurance contract is between the _____ and the _______
employer, insurance company
In group insurance, the employer is issued a ______ policy and employees are issued individual ________
master policy, certificates of insurance
The state in which a group contract is ________ is generally held to have jurisdiction over all certificates of insurance issued under the contract.
delivered to the policyholder
Group underwriting takes into consideration the ______ of the group, the _____ of the group, and ______ factors.
age, health, persistency
Group coverage must be written for the benefit of _________ and cannot discriminate in favor of ________ workers
employees, highly paid
although there are strict regulatory requirements related to what an insurer can and cant do in regard to small group Insurance, an insurer ______ legally nonrenew or cancel a small group plan if the employer _______________.
can; stops paying the premium
offers group coverage employers in the same industry
METs (multiple employer trusts)
association group insurance has higher ________ than other types of group health insurance and is more subject to ________
administrative costs; adverse selection
dependents are elibible to enroll in a group plan when an employee _______
becomes eligible to enroll
employees ________ for group coverage even after attaining age 65
remain eligible
True/False; employers who have 20 employees are required to offer the same health benefits to employees and their spouses who are age 65 or older that they offer to younger employees.
True
Under _____ employers with 20 or more employees must allow terminated employees and their dependents to continue their group coverage by paying 102% of the group rate.
COBRA
True/False; When an employee elects COBRA, the coverage is exactly the same as it was in the group. It is not reduced in any way.
Truth
under cobra, The maximum period of coverage continuation for termination of employment or a reduction in hours of employment is ________
18 months
under cobra, The dependents of a deceased or disabled employee may continue group coverage for another _____ months
36
Qualifying events include. D—–, D—–, t of E
Death, disability, termination of employment
If an employee elects to continue group coverage under COBRA, the employer may still convert to an individual policy without a _________when Cobra coverage ends.
physical exam
In dental insurance, it would create an _________ situation for an insurer to offer more than one open enrollment period during the year
adverse selection
To prevent adverse selection, most dental insurance is written on a _____ basis
group
Dental insurance has ________ on diagnostic and preventive care
no deductible
Dental insurance covers _________ care, such as fillings, inlays and crowns
restorative
Dental insurance covers endodontics services, such as ________
root canals
Dental insurance covers ____ problems, which is known as periodontics
gum
Under dental insurance ________ includes bridgework.
prosthodontics
The treatment of problems related to growth and development of the jaw using fabricated appliances, most often braces.
orthodontics
On an integrated medical/dental plan, the deductible may be satisfied by either _____ or ______ expenses
medical, dental
Dental ______ plans may be written as either scheduled (basic) or non-scheduled (comprehensive)
indemnity
_____ dental insurance plans have first-dollar coverage, without a _____ or ______
basic, deductible, coinsurance
_______ dental plans are similar to major medical expense plans, with a deductible and coinsurance
comprehensive
True/False: Dental insurance may also be written as a prepaid service plan in the same manner as an HMO
True
True/False: Most dental insurance plans cover cosmetic dentistry
false
True/False: certain persons under age 65, who are disabled or have suffered kidney failure are also eligible for medicare
true
On medicare, the difference between what the doctor bills and what medicare pays
excess charge
Medicare Part A covers
Hospitals
Medicare Part B covers
Doctors
Medicare part A only pays for up to ______ days of inpatient psychiatric hospital services during the beneficiarys lifetime.
190 days
Medicare part A cover skilled nursing facility care after a ______ minimum hospital stay, but not _____ care in a nursing home
3 day, custodial
Medicare Part A covers a skilled nursing facility stay for up to _____ days in each benefit period
100
Part ____ Medicare is partially funded by user premiums
B
Medicare Part ___ has coinsurance (80/20) and a deductible
B
The medicare part B is calculated as a percentage of Medicare’s _______, not the amount the doctor charges.
approved amount
Medicare Part ___ has a premium, coninsurance, and a deductible which have amounts that are set how often?
B, Annually
In medicare Part B the amount paid by social security is dependent upon the ____ of the insured
PIA - primary insurance amount
Those who enroll in part C of Medicare do not need to purchase a ________
medicare supplement
medicare Part C
medicare advantage
Part ____ is the part of medicare that provides managed care
C
In order to be eligible for Part D medicare, one must be enrolled in medicare Part ___, or in parts ___ and ____
A, A and B
Part D Medicare covers ___
Rx (D for drug)
Medicare supplements are sold by _____ companies and their agents
private insurance
There is a ___ month open enrollment period for buying a medigap policy
6
True or False: persons age 65 or older cannot be denied medigap coverage for health problems during open enrollment
True
True or False: Medicare supplement plans are required to be approved by medicare
False
Only ______ medigap plans may be offered
standard
Medicare supplements are required to cover Medicare’s part A and B ______ and the first ____ pints of blood transfusion as basic or ____ benefits
coinsurance, 3, core
True/False: it is unlawful to sell someone more than one medigap policy
True
The max probationary period on medicare supplements policies is ___ months
6
When selling a medicare supplement, agents must give out an outline of coverage no later than ________ and must obtain signed ____ from the applicant.
the time of application, receipt
Medicare supplements have a ___ day free look period
30
True / False: replacing one medicare supplement policy is permitted as long as it is not detrimental to the insured.
True
True/False: Medicare supplement policies need to contain guidelines for medicare eligibility
false
Medicaid eligibility is based upon _______. is there an age limit?
financial need. No
Medicaid is funded by ____, local, and ____ monies
state, federal
Medical welfare, available to low-income individuals and families.
Medicaid
When an insured needs care, but not 24-hour care supervised by a doctor, the insured needs ______
Long term care
Long Term care policies have a ____ day free look period
30
Long term care insurance is underwritten based upon the applicant’s ability to perform _____
ADLs (activities of daily living)
____ include mobility, dressing, bathing, toileting, eating.
ADLs
True/False: LTC policies must cover alzheimers disease
True
True/False: LTC insurance covers acute care
false
True/False: LTC policies may not condition benefits on a prior hospital stay.
True
______ include coverage for physical therapy, nursing care, home health aides, and homemaker services
LTC home health care services
LTC coverage which covers meals, meaningful activities, and general supervision of adults in a professionally staffed non-residential facility
adult daycare
LTC coverage that allows family members a reprieve or break from their caregiving responsibilities
Respite Care
The period of time that a long term care policy will provide custodial care in a nursing home
benefit period
LTC policies usually pay a ________ per day, while an insured is confined to a custodial nursing home.
fixed amount
________ coverage includes home health care, adult day care, and hospice care.
optional LTC
LTC rider that will refund some or all of the insured’s premiums to the insured’s estate or beneficiary if the insured dies prior to the age of 65
return of premium
Insurers who write LTC insurance are usually required by state law to allow the insured to name a ______ who the insurance company would contact if the insured forgets to pay the premium
third party
LTC insurers must include coverage for inflation protection unless the applicant _________
rejects it in writing
______ may exclude pre-existing illness, acute care, mental disorders, alchoholsim, drug addiction, war related illness and self-inflicted injuries, but may not exclude alzheimers disease
LTC Policies
True/False: on qualified LTC policies, insureds may add a nonforfeiture benefit.
True
True or false: premiums for individual disability income or AD&D policies are tax deductible.
False
Premiums paid on an individual disability income policy are or are not tax deductible? Benefits paid are taxable or tax free?
are not, tax free
A self-employed sole proprietor may tax deduct ____ of the premiums paid for medical expense insurance.
100%
True/False: Individual health insurance benefits are not taxable.
True
Premiums paid for individual medical expense and qualified LTC insurance are tax deductible to the extent that they exceed 10% of an individuals ______
AGI - Adjusted gross income
On group disability income insurance, if the employer pays 60% of the premiums, what percentage of the benefits payable would be taxable to the employees
60%
If an employee pays 100% of the premium for group diesability income insurance, how many of the benefits paid are taxable?
none
Premiums paid by an employer for a group health policy (such as medical expense or disability income) are or are not tax deductible, since they are fringe benefits for the employees.
are tax-deductible
On group accidental death and dismemberment (AD&D) insurance, benefits are or are not taxable if the employee pays the premium? If the employer pays the premium?
not taxable regardless of who pays premiums
indemnifies the business for the loss of services of a key employee due to disability.
Key person disability
in regards to key person disability insurance, are premiums tax deductible? Are Benefits taxable?
premiums: not tax deductible
benefits: not taxed
Under the terms of a partnership buy/sell agreement, the proceeds of the policy are paid to the _______.
owner of the policy
an agreement that provides insurance against a disabled business partner
partnership disability buy/sell
On a partnership disability buy-out policy are premiums tax deductible? Are benefits Taxed.
premiums: not deductible
benefits: not taxed
On an HRA (health reimbursement account), participants have ________ group medical expense insurance coverage, but the HRA is partially funded by ________
high deductible, their employer
Available to any employer or individual who has a high deductible health plan (HDHP)
HSA (Health savings accounts)
HSA contributions are made with ________ dollars, earnings grow on a __________ basis, and distributions used to pay qualified medical expenses are _______
before-tax dollars
tax deferred
tax free
Employer contributions to an employee’s HSA are excludable from the employee’s _______, up to the max contribution limit for that employee.
federal gross income
True/ false: an employee can deduct the employer’s HSA contributions.
False
True/false: HSA contributions are not federally taxable to the employee.
True
True/False: HSA contributions are not federally taxable to the employee nor are they subject to withholding from wages for federal income tax or other employment taxes.
True
True/False: HSA contributions by employers are considered a type of benefit and are therefore tax-deductible or the employer.
True
True/False: HSA’s are subject to year-end tax penalties
false
Contributions to an HSA cannot exceed the participant’s ______, and are subject to _______
deductible, max limits
Medical savings accounts (MSAs) may be set up only by whom?
small employers or individuals
Contributions to an MSA (medical savings account) made by an eligible individual are limited to a percentage of what?
the annual deductible
a nonprofit insurer who usually sells life and health insurance to its own members only
fraternal insurer
an insurer who has a certificate of authority from the director
authorized / admitted
Policies issued by stock insurers and never pay dividends to policy holders
non-participating
policies which are issued by mutual insurers and may pay dividends to policy holders
participating
all insurers except _____ and _____ need a certificate of authority from the idaho insurance director in order to sell insurance in the state
surplus lines and reinsurance carriers
transacting insurance includes ____, _____, _____
soliciting, selling, negotiating
Those who transact _____ are subject to the provisions of the state insurance code.
insurance
Domestic, foreign, and alien insurers need to obtain _______ from the director in order to lawfully transact insurance in this state, unliss they are surplus lines insurers.
certificate of authority
An insurer that is organized (incorporated) in Idaho
domestic
an insurer that is organized in another state
Foreign
an insurer that is organized in another country
alien
The director is appointed by the _____ for a term of __ years
governor, 4
The director’s main duty is to enforce and administer insurance laws to protect the ______
public
True/False: the director does not make laws or pass statutes, the legislature does.
True
The director may ____ policy forms if they are misleading, difficult to understand, or unfairly _______
disapprove, discriminatory
Although insurers may have to file their ____ with the director for approval or disapproval, the director does not make _____
rates
All ___________ forms must be filed with the director before they can be used.
insurance policy
The director must examine (audit) all domestic insurers at least once ever ___ years
5
True/false: the director has the power to examine and investigate every person engaged in the business of insurance in this state
true
The director may examine (audit) and insurer _______ to protect the public
whenever neceassry
______ must pay all expenses related to the cost of an examination (audit)
insurers
If an insurer discovers that one of their producers has violated insurance code, they must notify both the _____ and the _______
producer, director
The director must hold a hearing within _______ of receiving a request from a person who is aggrieved by his actions
30 days
If the director suspects that a producer has violated the insurance code, they must provide the licensee and his appointing insurers at least _____ days in advance notice of the hearing as well as the charges.
20 days
True/False: the director has the power to issue administrative orders, such as cease and desist orders
true
A final action of the director at a hearing is subject to _____, also known as judicial review.
appeal
The director, after a hearing, may suspend a producer’s license for up to _____ .
12 months
The director, after a hearing may _____ to issue or renew the license of a producer who commits unfair trade practice.
revoke or refuse
In addition to suspension or revokation, each violation of the insurance code may be punishable by a fine of up _____ for individuals ( _____ for agencies or insurers) or imprisonment in the county jail for a period of up to _______ or both, at the court’s discretion
$1000, $5000, 6 months
The director may levy a find of up to _______ on any person who transacts insurance without a license
$15,000
No producer may represent an insurer unless they are ______ by that insurer.
appointed
When an appointment is terminated, the insurer must notify both the ______ and _____ within ____ days of termination.
director, producer, 30
True/False: although producers must have at least one appoinment, they may have as many appointments as they want
true
A producer’s license is the property of ______ and if terminated, must be returned.
the state
True/false: producers may transact insurance while their license is expired.
false
True/False: Limited lines producers, such as those who sell only credit inurance, may be exept from taking the state licensing exam if their insurer develops and approved training program.
True
True/False; Producers may have a resident license in more than one state.
False
With a resident Idaho producer’s license, an individual can sell insurance in Idaho only. The producer would need a _________ to sell in other states.
nonresident license
To obtain a resident license in Idaho, the licensee must be ________. No idaho exam required.
licensed in their home state.
Producers may have as many as _____ nonresident licenses.
49
Idaho nonresident producers are required to satisfy the __________ requirements of their home state
CE
to obtain a producer’s license an applicant must be at least age ____, be ______, pay the required nonrefundable fees, and pass the required exam.
18, fingerprinted,
The directory may suspend for up to _____, or _____ any license, after a hearing, if the licensee is found guilty of a felony
12 months, revoke
The director may not suspend or revoke a producer’s license without first doing what?
giving the opportunity to attend a hearing.
The director may not reissue a license to any person whose license has been revoked for at least _______
one year
failing to pay child support or state income taxes may lead to what?
producer’s license suspension
True / false: being found guilty of a misdemeanor is grounds for license suspension or revocation
False, only if the misdemeanor reveals dishonesty
The director may not suspend or revoke a license without first doing what?
giving them the opportunity to attend a hearing
a producer acts in a _____ responsibility when handling premiums
fiduciary
Any producer who misappropriates fiduciary funds to his own use will be guilty of what?
felony
Insurers must pay covered claims within _____ after receipt of proper proof of loss.
30 day
No person may pay a commission to an _________ producer, and no person may accept a commission unless they are properly ______ for that line of insurance.
unlicensed, licensed
A retired producer may receive deferred commissions for selling insurance, as long as …..
they were properly licensed at the time of sale
a producer must report to the director any ______ or _______ taken against the producer in the past 30 days
administrative action, ciminal prosecution
Any minor who is at least ______ may contract for insurance on the own life, health, property, liabilities, or other interests.
15 years old
True/False: It is an unfair trade practice to state that an insurance policy is similar to shares of stock.
True
It is an unfair claims practice to deny a claim without conducting a ________
reasonable investigation
It is an unfair trade practice to project____________ when selling nonparticipating policies.
future dividends
giving part of one’s commission to a client as an inducement to the sale and is an unfair trade practice
rebating
any type of inducement (such as paying part of one’e commission to a client) to buy or renew insurance that is not stated in the policy
rebating
Dividends are or are not considered to be rebates, being that the policy states that the insured might receive them.
are not
Misrepresentation is an unfair trade practice, including misrepresenting the financial condition of any insurer, which is also known as _______
defamation
includes misrepresinting the benefits, conditions or terms of a policy that is comparable to one a producer are trying to sell
misrepresentation
making incomplete comparisons for the purpose of inducing policy replacement
Twisting
Replacement is not unlawful, but _____ is an unfair trade practice, since it is a form of misrepresentation
twisting
Rates are made by insurers, based upon the _______ nature of the insurance business.
competitive
being maliciousy critical of the financial condition of any insurer or producer.
defamation
occurs when a financial institution requires a customer to purchase insurance from a particular insurere or producer as a condition to loan approval
coercion
It is _________ when an insurer provides different benefits or charges different rates for individuals in the same class
unfair discrimination
It is considered to be _____ when a producer gives a client false info in connection with a new application
misrepresentation
the intent to deceive
fraud
Any insurer who has facts to support a belief that a faudulent claim has been made must report the incident to the _____ who will report any alleged violations of the law to the ________
director, prosecuting attorney
persons convicted of insurance fraud may be _____ and/or ______ and may be ordered to ______ the insurer for financial lostt
imprisoned, fined, reimburse
If the director suspects a producer of using unfair or deceptive practices, he or she may do what.
ask the producer to appaear and show cause, as why their license should not be suspended or revoked
If a producer violates their fiduciary duty by stealing customer funds (embesslement), the director may turn the fats of the case over to whom for criminal prosecution
state attorney general or county attorney
A contact on which participating parties exchange unequal amounts. Ie. Insurance contracts because the amount an insured will pay is is unequal to the amount the insurer will pay in the event of loss.
Aleatory
A federal requirement that employers who have 25 or more employees, who are within the service area of a qualified HMO, who pay minimum wage and offer a health plan must offer HMO coverage as well as an indemnity plan.
Dual choice
Employer health plans must provide primary coverage for individuals with end stage renal disease before Medicare becomes primary for how many months?
30
The provision that provides for the sharing of expenses between the insured and the insurance company
Coinsurance
The planned assumption of risk, or acceptance of responsibility for loss by an insured through the use of deductibles, copayments, or self insurance.
Retention
An agreement between an insured and insurer where the insurer agreed to indemnify the insured for specific losses in exchange for premium.
The insurance contract
The max number of activities of daily living impairments an insurer may require in this state to trigger long term care benefits
3
If a carrier decides to nonrenew all of its health benefit plans fmdelivered in the state the carrier will not be allowed to write new business in the individual market for how many years?
5
The minimum number of credits required for partially insured status for social security disability benefits.
6
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
Presumptive disability
What kind of coverage is characterized by High maximum limits, blanket coverage, coinsurance, and a deductible?
Major Medical Expense Policy
What kind of plans were characterized by first dollar coverage (no deductible) and low dollar limits, meaning they offered no protection against catastrauphic expenses.
Basic medical expense plans
Under the AD&D coverage, what type of benefit will be paid to the beneficiary in the event of the insureds accidental death?
Principal Sum
I’m what kind of setting are Daily needs and pain relief provides for hospice patient but curative measures are not?
Cost-containment
Bronze pays — %
Silver pays — %
Gold pays — %
Platinum pays — %
60
70
80
90
Adults under what age and individuals who cannot obtain affordable coverage may be able to cover catastrophic plans that cover essential benefits.
30
When an insurer offers services like pre admission testing, second opinions regarding surgery, and preventative care, what term describes this?
Case management provision
To be eligible under hipaa regulations, how long should an individual converting to an individual health plan have been covered under the previous group plan?
18 months
The amount of the deductible, the coinsurance percentage, the stop-loss amount, and the max amount of benefit all help to determine what in regards to major medical policies.
Premiums
When health care insurers negotiate contracts with health care providers to provide services for subscribers at a favorable cost it is called a —-
Preferred provider organization (PPO)
A joining together by employers to provide health benefits for employees. Provides benefits for a number of member groups.
MEWA (multiple employer welfare arrangement)
According to OBRA, what is the minimum number of employees required to constitute a large group?
100
Most LTC policies are _______ _______; however insurers do have the right to increase the premiums.
Guaranteed renewable
What Act requires that large group health plans must provide primary coverage for disabled individuals under the age of 65 who are not retired?
OBRA
A form of cafeteria plan.
Funded by salary reduction.
Subject to use-or-lose rule.
FSA
Under which employer provided plan are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?
Disability income
True/false: benefits paid out from an LTC policy are received income tax free.
True
An insurer has how long to notify director of a fraudulent claim?
60 days
If a producers license has been revoked or non renewed a new license may be denied for a how long.
1 to 5 years
True/false: the terms of a policy will state whether the policy is assignable and to what extent.
True
Proof of a dependent child’s incapacity cannot be required more than how often?
Every 12 months
An insurer must receive proof of a dependents incapacity within how many days of the limiting age?
31 days
A small employer must have under how many employees?
50
All disability policies covering injured or sick newborns must also cover adopted newborns who are placed with the adoptive insured within how many days of birth. More than this many days and the coverage begins at time of placement.
60 days
Which renewal provision must be included in a long term care policy?
Guaranteed renewable
A purchaser of an individual LTC policy has the right to return for a full refund if done within how many days of DELIVERY?
30
An insurers disability income policy includes an additional monthly benefit rider. How many years can the insured expect to receive payment from the insurer before social security benefits begin.
1
All of these conditions meet eligibility requirements for what?
- an individual who doesn’t qualify for Medicare
- the gap of coverage is a period of 63 days or less
- an individual who was previously covered by group health for at least 18 months
- an individual who has used up cobra
Conversion to an individual policy
An insured has Medicare part D coverage. Upon reaching the initial benefit limit, what percentage of the rx cost is the insured responsible for paying?
25%
Which of the following is not considered to be a basic benefit of an HMO?
Hospital inpatient, prescription drugs, preventive services, outpatient medical, emergency, diagnostic lab, out-of-area coverage.
Prescription drugs
What documentation grants express authority to an agent?
Agents contract with principal
Im forming an insurance contract, when does acceptance usually occur?
When and insurer’s underwriter approves coverage
In insurance, the offer is usually made by the applicant when?
When the fill out the application
Under “own-occupation”, if the insured cannot perform their CURRENT job for how long will disability benefits be issued?
2 years
Under “own-occupation” if the insured is capable of performing another job utilizing similar skills, how are benefits paid out?
Receive disability for two years, then no longer paid
True/false: hipaa prohibits employers from establishing waiting periods and pre-existing conditions exclusions.
False
True/false: hipaa guarantees the right to buy individual policies to eligible individuals.
True
True/false: hipaa prohibits discrimination against employees based on their health status.
True
True/false: hipaa does not limit exclusions for pre-existing conditions.
False
A member of an HMO can receive emergency care outside of their area. However, an effort will be made to her the member back into the service area so that care can be provided by _________ __________ physicians.
Salaried member
What is the max period that an insurer would pay benefits in accordance with a monthly benefit rider?
1 year
The additional monthly benefit rider stipulates that the insurer will pay benefits comparable to what ______ ______ would pay. After a year’s time, the insurer needs the benefit and assumes that _______ ________ will then begin the benefit payment.
Social security; social security
The grace period for health insurance is — days if paid weekly, — days if paid monthly, and — days for all other modes.
7, 10, 31
A policy must include coverage for mammograms if it includes coverage for what.
Mastectomies.
If a policy contains a maternity deductible, the deductible applies only the the expenses resulting from what.
C-section
The life and disability insurance guaranty association maintains funds in all of the following type of accounts except:
Annuities, disability insurance, casualty insurance, life insurance
Casualty
After passing the state exam, an individual must apply for a license within how many days?
180; 6 months
Which type of agent authority is also known as perceived authority.
Apparent
What is the shortest possible elimination period for group short term disability benefits provided by an employer?
0 days
Under the affordable care act a special enrollment period allows an individual to enroll in a qualified health plan which in how many days of a qualifying event?
60
Under Medicare, treatment in a skilled nursing facility is covered in full for the first — days. From days — to —!the patient must pay the daily copayment. After — days there are no Medicare benefits paid.
20, 21-100, 100
Permissable calling hours for telemarketers are
8am to 9pm
On the FIRST page of a policy and lists losses that will be covered by the insurer.
Insuring Clause
True/false: the agents report/statement is included in the entire contract.
False
A self employed person is considering purchasing health insurance that would protect them in the event of serious sickness or accident but they feel they can handle any small health care expenses. What kind of policy would you likely recommend?
Major medical as is has high limits, copayments, blanket coverage and a deductible.
A limited health j durable policy that will pay a lump sum to an insured diagnosed with a heart attack, stroke, or renal failure.
Critical illness insurance
A coverage for specified diagnosis which pays a specified amount per day if the insured is hospitalized.
Dread disease
An applicant completes an application for a disability policy and pays the initial premium. The producer gives the aoplicant a conditional receipt. Insurance coverage for the applicant will become effective when?
Immediately. The insurance company accepts the risk.
True/false: an employee insured through a MET has a right of conversion upon leaving the group coverage.
False
Under the mandatory uniform provision proof of loss, the claimant must submit proof of loss within what time period after the loss?
90 days
True/false: group MEDICAL AND DENTAL expense benefits are received income tax free.
True
HMO’s are known as what type of plans?
Service
Diabetes is an example of what kind of hazard?
Physical
Which of the following acts stated that the government would not negotiate insurance as long as the states did an adequate job of regulating the industry.
MF - McCartney Ferguson
Guaranteeing future dividends is considered to be an unfair deceptive act known as…
Misrepresentation
An important fact about the financial status of an insurer was deliberately withheld. Which term best describes this action?
False financial statement
