Michigan Laws And Rules

Question 1

Andy the insured had made a deliberate lie to the insured in order to obtain a lower premium. This action is considered an act of

Answer 1

Fraud

Question 2

Tim purchases an insurance policy from a producer. The producer must present to Tim a notice detailing privacy policies and practices. After this initial notice, Tim must provide another notice

Answer 2

Annually

Question 3

In the Michigan Insurance Code, Chapter 45, insurance fraud defines financial loss as all of the following EXCEPT
A) loss of earnings
B) additional premiums
C) out-of-pocket expenses
D) repair and replacement costs

Answer 3

B) additional premiums

Question 4

Which of the following is considered to be an act of misrepresentation?
A) sharing commissions with other licensed producers
B) replacing an existing policy with a new one
C) giving back part of a producer’s commission as an incentive for a sale
D) falsifying the terms, benefits, advantages, or conditions of an insurance policy

Answer 4

D) falsifying the terms, benefits, advantages, or conditions of an insurance policy

Question 5

Michigan requires that a licensee complete _____ hours of continuing education on the subject of ethics every reporting period

Answer 5

3

Question 6

In the state of Michigan, a licensed producer

Answer 6

Represents the insurer

Question 7

An individual applying for a Michigan resident producer license must have completed the required pre-licensing education within _____ months of license application

Answer 7

12

Question 8

The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within _____ days

Answer 8

30

Question 9

An example of an unfair claims settlement practice is

Answer 9

Failing to promptly provide a reasonable explanation for the denial of claims

Question 10

A producer may give an insurance applicant an article of merchandise having an invoice value of _____ or less

Answer 10

$5

Question 11

Which of the following is an example of a producer’s fiduciary duty?
A) recording receipt and remittance of premiums due to the insurance company
B) determine the rate classification of the insured
C) reviewing policy summary of benefits
D) witnessing applicant’s signature

Answer 11

A) recording receipt and remittance of premiums due to the insurance company

Question 12

ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful insurance practice known as

Answer 12

Illegal inducement

Question 13

Which of these is NOT subject to false advertising regulations?
A) gifts
B) brochures
C) billboards
D) letters

Answer 13

A) gifts

Question 14

An insurance producer license is required for which of the following?
A) an office manager who sets sales appointments for an agency’s producers
B) an officer of a Fortune 500 insurance company
C) a business entity soliciting insurance
D) the head underwriter of a large insurer

Answer 14

C) a business entity soliciting insurance

Question 15

A life insurance policy sold in Michigan may be contested by the insurer ONLY during the first _____ year(s) of the contract

Answer 15

Two

Question 16

Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?
A) keep replacement records on file for at least 10 years
B) notify the existing insurer of the proposed replacement
C) submit to the replacing insurer a list of policies to be replaced
D) offer the insured a 60-day free-look period

Answer 16

C) submit to the replacing insurer a list of policies to be replaced

Question 17

A producer is hired to sell insurance for an insurer. Upon submission of the agency contract application, the producer MUST be appointed by the insurer within _____ days

Answer 17

15

Question 18

An example of intimidation is

Answer 18

Using threat or force to restrict fair trade in the transaction of insurance

Question 19

According to the Taft-Hartley Act, group insurance premium payments made by an employer MUST be paid to the

Answer 19

Trust

Question 20

A producer’s fiduciary duty requires that

Answer 20

Premiums are forwarded to the insurer on a timely basis

Question 21

A life insurance applicant in Michigan may backdate the application for up to _____ month(s)

Answer 21

6

Question 22

A Universal Life policy owner must receive a notice of cash surrender value at LEAST every

Answer 22

Year

Question 23

Which of these BEST describes the illegal act of twisting?
A) publishing any false financial statement regarding a person or entity
B) replacing an insurance policy from one insurer to another based on misrepresentation
C) using threat or force to restrict fair trade in the transaction of insurance
D) unfairly discriminate against a person in any way on an insurance-related matter

Answer 23

B) replacing an insurance policy from one insurer to another based on misrepresentation

Question 24

The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as

Answer 24

Twisting

Question 25

A foreign insurance company doing business in Michigan

Answer 25

Is a company domiciled under the laws of another state

Question 26

Under which circumstance do consumer privacy regulations allow an insured’s financial information be released?

Answer 26

An authorized agency makes a written request to the insurer during an insurance fraud investigation

Question 27

In Michigan, legal action may be taken against an insurer for up to ____ years for failing to pay a life insurance claim after proof of loss was submitted

Answer 27

6

Question 28

Under which circumstance may a minor receive proceeds from a death benefit?

Answer 28

The minor must have an appointed guardian

Question 29

Which of the following is an example of the illegal act of defamation?
A) offering a premium rebate, gift, or a special advantage of any kind to consumers as an inducement to purchase a contract of insurance
B) making a statement that is false or maliciously critical of the financial condition of an insurer
C) replacing an insurance policy from one insurer to another based on misrepresentation
D) using threat or force to restrict fair trade in the transaction of insurance

Answer 29

B) making a statement that is false or maliciously critical of the financial condition of an insurer

Question 30

Gina the producer cause financial harm to an insured. Which of these actions may the Commissioner take?

Answer 30

Revoke Gina’s license after a hearing concludes a violation has occurred