Michigan Laws And Rules Flashcards
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
Fraud
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
Annually
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
B) additional premiums
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
D) falsifying the terms, benefits, advantages, or conditions of an insurance policy
Michigan requires that a licensee complete _____ hours of continuing education on the subject of ethics every reporting period
3
In the state of Michigan, a licensed producer
Represents the insurer
An individual applying for a Michigan resident producer license must have completed the required pre-licensing education within _____ months of license application
12
The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within _____ days
30
An example of an unfair claims settlement practice is
Failing to promptly provide a reasonable explanation for the denial of claims
A producer may give an insurance applicant an article of merchandise having an invoice value of _____ or less
$5
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
A) recording receipt and remittance of premiums due to the insurance company
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
Illegal inducement
Which of these is NOT subject to false advertising regulations?
A) gifts
B) brochures
C) billboards
D) letters
A) gifts
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
C) a business entity soliciting insurance
A life insurance policy sold in Michigan may be contested by the insurer ONLY during the first _____ year(s) of the contract
Two
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
C) submit to the replacing insurer a list of policies to be replaced
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
15
An example of intimidation is
Using threat or force to restrict fair trade in the transaction of insurance
According to the Taft-Hartley Act, group insurance premium payments made by an employer MUST be paid to the
Trust
A producer’s fiduciary duty requires that
Premiums are forwarded to the insurer on a timely basis
A life insurance applicant in Michigan may backdate the application for up to _____ month(s)
6
A Universal Life policy owner must receive a notice of cash surrender value at LEAST every
Year
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
B) replacing an insurance policy from one insurer to another based on misrepresentation
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as
Twisting
A foreign insurance company doing business in Michigan
Is a company domiciled under the laws of another state
Under which circumstance do consumer privacy regulations allow an insured’s financial information be released?
An authorized agency makes a written request to the insurer during an insurance fraud investigation
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
6
Under which circumstance may a minor receive proceeds from a death benefit?
The minor must have an appointed guardian
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
B) making a statement that is false or maliciously critical of the financial condition of an insurer
Gina the producer cause financial harm to an insured. Which of these actions may the Commissioner take?
Revoke Gina’s license after a hearing concludes a violation has occurred
