Laws and Regs

Question 1

not being properly licensed

a. acting as an insurance producer, limited insurance rep or temp ins producer without proper licensing =
b. acting as a licensed person without proper licensing and misappropriating premium monies

Answer 1

class A misdemeanor
class 4 felony

Question 2

an ins co who has not given the state ins director proper notice of termination of an agency contract or license when required is subject to

Answer 2

civil penalty, suspension of license or revocation of license

Question 3

financing premiums without a premium finance company license is subject to

Answer 3

civil penalty up to $1000 per violation

Question 4

violating an order issued by the state insurance director as a result of an examination or hearing (3)

Answer 4

1. license may be suspended or revoked
2. fine up to 10000
3. held guilty of a business offense

Question 5

unfair methods of competition 2

Answer 5

fine of not less than $100 - not more than $5000

may be ordered to cease and desist

Question 6

rebating is a

Answer 6

class B misdemeanor

Question 7

Prohibited activities

4

Answer 7

a. civil penalty of $5000 per offense, but not more than 20k
b. suspension of license (temp)
c. revocation of license (permanent). can reapply every 3 yrs
d. application for license may be denied

Question 8

misappropriation of premiums

4

Answer 8

a. prohibited activity penalties
b. class A misdemeanor
c. class 4 felony
d. class 3 felony

Question 9

the insurance director can administratively charge a person with ____ penalties. criminal penalties must be prosecuted by either the state attorney general or a local states attorney through the courts

Answer 9

administrative

Question 10

insurance producer license fee

Answer 10

180 per 2 years

Question 11

business entity license fee

Answer 11

150 per 2 yr

Question 12

limited lines ins producer license fee

Answer 12

50 per year paid by ins co

Question 13

temp ins producer license fee

Answer 13

50

Question 14

license reinstatement fee

Answer 14

180

Question 15

six basic qualities needed to be professional

a. unselfishness (___)
b. professional societies or ____
c. codes of professional ___
d. a formal body of specialized, technical ___
e. a broad or general ___ or background
f. Qualifying ____

Answer 15

altruism
associations
ethics
knowledge
education
examination

Question 16

illinois insurance guaranty fund

a. illinois admitted life/health insurance cos to guarantee payment of ____ and ____
b. the purpose of the guaranty fund is to protect ______ and to assure quick settlement of claims
c. this fund will pay per policyholder either:
1. 300k in ins benefits in life ins benefits, or
2. 300k in health ins benefits

Answer 16

claims and benefits

policyholders

Question 17

illinois HMO guaranty assoc

the maximum benefits it will pay to or on behalf of one person is ____

Answer 17

500k

Question 18

advertising and sales promotion of life insurance regulation

a. the name of the ____ ___ must be clearly identified
b. no ad should use the terms ‘investment’, investment plan, profit sharing, to mislead a purchaser to believe that they will receive something other than a ___ ins policy or some other benefit not available to everyone
c. introductory, special, or initial offerings must not imply that a policy will receive substantial advantages not available at a later date unless such is a fact
d. dividends- participating policies pay dividends out of ___
1. dividends are never ____
e. ____ must be genuine, represent the current opinion of the author and be applicable to the policy advertised.. and financial interests must be disclosed

Answer 18

insurance company
life
surplus
guaranteed
testimonials

Question 19

life insurance policy illustrations rule

a. this rule provides standards for both ___ and ____ life insurance policy illustrations
b. if an illustration shows non-guaranteed benefits, such as dividends or cash values, must be clearly labeled as non guaranteed
c. the ins co must provide each policyowner with an _____ ___

Answer 19

individual group

annual report

Question 20

a ____ ____ must be provided to prospective customers with an ins producer proposes new life insurance.

Answer 20

buyer’s guide

Question 21

life insurance replacement regulation

a. a replacement is considered to be occurring whenever new life insurance is being purchased and it is known that the producer that as part of the transaction existing life insurance has been:
1. surrendered and a ____ option exercised
2. borrowed against in an amount of __% or more of the loan value
b. exemptions are not considered a replacement when
1. the new life insurance is being issued as a result of the insured exercising a conversion provision contained in the original policy or the new life ins is being issued to replace a conditional or binding receipt
c. duties of a producers when a replacement is to take place. a producer must:
1. present the applicant a “notice regarding replacement of life insure or annuity’ in the form specified by state insurance department regulations

Answer 21

nonforfeiture

25

Question 22

correlated sale of mutual funds and life ins regulation

a. when selling life ins and mutual funds together as a package sale:
1. the right to purchase life ins separate from mutual funds must be disclosed
2. the life insurance premium must be disclosed separate from other charges
3. the amount of life ins death benefit must be shown separately from other benefits which may accrue at the death of the insured
b. a ___ ____ license is required to sell mutual funds

Answer 22

security representative

Question 23

accelerated life ins benefits regulation

a. life ins benefits on a policy containing an accelerated benefit cannot be reduced by any more than the amount of the benefit paid in advance plus the current yield on 90 day treasury bills, or the current max policy loan interest rate
b. the policyowner or ____ holder and any____ ____ must consent to the payment of the accelerated benefit

Answer 23

certificate, irrevocable beneficiary

Question 24

viatical settlements regulation

a. viatical settlement providers must provide full disclosure to viators as to insurance, tax, and other financial ___ of entering into the viatical setllement
b. viatical settlement providers must report ____ to the director of ins a list of viatical settlement contracts they have entered
c. when a viatical settlement agreement is completed, the viatical settle provider pays the agreed purchase price to a trust or escrow account

Answer 24

consequences

Question 25

the state ____ standards rule establishes requirements that individual accident/health policies issued or delivered in IL must meet

Answer 25

minimum

Question 26

after a policy has been in effect for two years, coverage may not be ____ except for fraud

Answer 26

rescinded