Module 9: IC Rules and Code of Ethics Flashcards
- A life insurance company earns income from two main sources
A. premium income and investment income
B. mortgage income and premium income
C. dividend income and interest income
D. mortgage income and dividend income
A
- Policy reserves are future obligations on the part of
A. the Insurance Commission
B. the Insurance Company
C. the beneficiary
D. the policyowner
B
- Insurance companies which are owned by the policyowners
are examples of
A. stock companies
B. mutual companies
C. family corporation
D. open-end companies
B
- Stock companies are owned by
A. policyowners
B. stockholders
C. creditors
D. government
B
- Which of the following statements is correct?
A. advertising by life insurance agents is prohibited
B. all information about a client or a prospective client has to be treated
as confidential
C. the agents should always recommend the amount and type of policy to
a prospective client which would be profitable for the company
D. when an agent advertises his services in the press, he is not allowed to
state the name of his company
B
- All of the following statements regarding a life insurance
application are correct except,
A. it must be signed by the applicant
B. usually it will be made a part of the policy contract
C. misstatements of material facts could void the policy during the
contestable period
D. statements made on the applications are warranties
D
- Prior to granting a license, the IC requires proof of
A. a clean record of employment
B. a reasonable educational background
C. a prospective agent’s character and reputation
D. all of the above
D
- The IC has the power to adjudicate insurance claims against
insurance companies for any single claim not exceeding
A. P1,000,000
B. P250,000
C. P100,000
D. P500,000
C
- Which one of the following statements is correct?
A. an insurance agent’s license will be renewed when the
commissioner is satisfied that the information in the application is
accurate and all requirements are met
B. an insurance agent’s license is valid only for one month
C. an insurance agent’s license is valid during the lifetime of the agent
D. an insurance agent’s license will be renewed when the corresponding
application and fee are received by the Insurance Commissioner
A
- The insurance industry is under government regulations
because
A. it is required to account for money spent in company operations
B. it pays high taxes
C. it affects public interest
D. it is a charitable institution
C
- Which one of the following statements is correct?
A. an agent is allowed to share commissions when selling a whole life
policy but not when selling a term policy
B. an agent is allowed to share commissions with another licensed
agent or agents but with no one else
C. sharing the commission with any other person is called twisting
D. an agent is not allowed to share commissions with any person
B
- Which one of the following statements is correct?
A. rebating of premiums can only be authorized by the head office of
the insurer
B. a life insurance is not allowed to identify on his letterhead the name
of the insurer he represents
C. life insurance agents are allowed to act for two insurers at the same
time under the same license
D. rebating of premiums by an insurance agent is prohibited
D
- Persuading a policyowner, directly or indirectly, to surrender
or lapse a policy in one company and replacing it with a policy
in another company is
A. rebating
B. twisting
C. knocking
D. discounting
B
- Rebating is
A. dating the policy a month in advance
B. giving false information
C. twisting
D. premium discrimination against policyholders
D
- An insurance agent’s license can be revoked for
A. fraudulent practices
B. violation of any provision of the Insurance code
C. misrepresentation in the application for license
D. any or all of the above
D
- One example covered under the ethical practices and
procedures is
A. keep all policyholders information confidential
B. always recommend a will
C. never drink in front of a client
D. always pick up the first premium with the application for insurance
A
- The term knocking means
A. promising to pay to two annuitants a fixed annual income as long as
both survive
B. making derogatory remarks about competing underwriters (field) or
companies
C. the number of years that persons at a given age will live on the average
as shown by the mortality table
D. none of the above
B
- The following are unethical practices in the solicitation and
procurement of insurance except
A. misleading estimates of the dividends or shares of surplus to be
received thereon
B. inducing a policyholder to lapse, forfeit or surrender a policy he holds
for another company
C. misrepresenting the terms of any policy issued by any insurance
company or the benefits or advantages promised thereon
D. obtaining or attempting to obtain a license by fraud or
misrepresentation
D
- Twisting is
A. paying the premium on one policy by surrendering the dividends of
another policy
B. the replacement of a policy in one company with another policy in
another company
C. an attempt made by an insurance company to secure the services of
an agent from another company
D. an offense which does not apply to variable concepts
B
- The misstatement of facts by either of the parties of
insurance to the other whether in writing or orally preliminary
and in reference to making the insurance contract is
A. knocking
B. overloading
C. misrepresentation
D. twisting
C
- Selling a person more insurance than what is warranted by
his sources is called
A. overloading
B. twisting
C. rebating
D. knocking
A
- An agent is prohibited from doing all the following except:
A. alter an application without the applicants prior written approval
B. convince a prospective client to cancel his policy in one insurance
company in order to buy a policy in the insurance company
represented by the agent
C. refund some of his commission to his client
D. make complete comparisons of policies he sells and those offered by
competing insurance companies
D
- Inducing an insured to lapse or forfeit his insurance
A. is not allowed by the conditions of the contract
B. is always to the advantage of the policyholder
C. is an offense in the great majority of cases
D. is a matter left entirely to the discretion of the agent
C
