multi choice cards Flashcards
Which of the following is NOT a duty of the Director of Insurance?
Regulate the affairs of the Department of Insurance
Conduct hearings
Create Missouri insurance laws
Prescribe forms and procedures
The Director of Insurance does not create insurance laws. Instead, the Director has the authority to make any rules necessary to enforce the insurance laws of this state. State laws are enacted by the state legislature.
Which of the following is NOT a penalty for refusing to testify in a Department hearing?
Being held in contempt
Being required to appear before the Director
Being assessed a civil penalty up to $5,000 per violation
Being ordered to testify in circuit court
Being assessed a civil penalty up to $5,000 per violation
The circuit court may impose a civil penalty up to $50,000 for each violation.
If disciplinary action against a producer resulted in monetary relief of $200 or less, the producer's record will be expunged after \_\_\_\_\_ years. 3 5 7 10
5, All records of disciplinary actions against an insurance producer that result in forfeiture or other monetary relief of $200 or less, and place no other legal duty upon the producer, will be expunged after 5 years.
The Director may conduct a financial examination of an insurer whenever necessary but no less often than every \_\_\_\_\_ years. 3 5 7 10
5, The Director or any authorized examiners may conduct an examination of any company as often as is deemed appropriate, but a financial examination of every insurer licensed in Missouri must be conducted at least once every 5 years.
Which of the following is true about the Missouri insurance cease and desist order?
It is the only method used to prevent an insurance unfair trade practice
Violation may result in a minimum fine of $100,000
Any collected fine provides relief to mistreated consumers
An alternative to a cease and desist order is federal court action
Any collected fine provides relief to mistreated consumers
Money received from the Director’s enforcement proceeding and imposition of penalties is placed in a “Consumer Restitution Fund,” used to provide relief to mistreated consumers.
Within how many days must an insurer notify the Director it has appointed a producer? 15 30 45 60
30
Which of the following statements about producer licenses is TRUE?
Resident producer licenses renew every 2 years
Resident and nonresident producer licenses renew every 3 years
Surplus lines licenses renew every year
Nonresident surplus lines licenses are not issued in Missouri
Resident producer licenses renew every 2 years in Missouri.
Which of the following is NOT a qualification for obtaining an insurance producer license?
Being at least 18 years old
Paying a $200 license fee
Passing a licensing exam
Not committing a prohibited act
Paying a $200 license fee
The producer license fee is $100.
How many hours of approved continuing education must Missouri insurance producers complete during a license renewal period? 10 12 14 16
16
When must a producer notify the Director of any change in legal address? Never Within 15 days Within 30 days Within 90 days
Within 30 days
A producer’s license may be revoked for all of the following reasons, except:
Knowingly violating a state insurance law
Being convicted of a crime involving moral turpitude
Learning another producer stole money
Having an insurance license suspended in another state
Learning another producer stole money
In order to have a license suspended, the producer must be personally guilty of misappropriating money belonging to an insured or insurer.
If the Department of Insurance denies a producer license application, the applicant may request a hearing within how many days of the denial? 15 30 45 60
30
Making a false statement about the benefits or the nature of an insurance policy is what unfair trade practice?
Misrepresentation
Defamation
Twisting
Unfair discrimination
Making any false statement about the benefits or true nature of an insurance policy is misrepresentation.
A producer is guilty of what unfair trade practice when making a derogatory statement about a competing insurer’s financial condition?
Intimidation
Defamation
Coercion
Twisting
Defamation is making a false or maliciously critical statement regarding the financial condition of any person, with the intent to injure such person.
Under Missouri law, what standard of care and conduct is required of producers when receiving money from, or on behalf of, insurers or policyholders?
Legal capacity
Care of a trustee
Fiduciary responsibility
Financial duty
Producers have fiduciary responsibilities to both their insurers and clients under Missouri insurance code
All of the following are true about personal insurance transactions, except:
The producer must inform the applicant within 30 days if no insurer can be found to issue coverage
The producer may use any professional designation to instill confidence about the sale of insurance to seniors
The producer must handle every application and request for amendment as soon as possible
The producer must inform the insured if the insurer needs information prior to renewal/policy change
The producer may use any professional designation to instill confidence about the sale of insurance to seniors
It is a dishonest or unethical practice for a producer to use a professional designation that implies that the insurance producer has special certifi cation in advising a client in connection with the solicitation, sale, or negotiation of an insurance product.
An insurer is permitted by law to pay commissions to each of the following individuals, except:
Licensed producer who negotiates an insurance contract
Licensed producer with a compensation agreement based on loss experience
Property and casualty producer for the sale of life insurance
P&C producer for the sale of surplus lines insurance
Property and casualty producer for the sale of life insurance
Commission may only be paid to a producer who is duly licensed, at the time of sale, for the line of insurance sold.
The Association covers existing claims prior to the determination of insolvency or that are submitted within how many days after the determination of insolvency? 10 30 60 90
Covered claims must be submitted no later than 30 days after the determination of an insurer’s insolvency.
The Association’s funds are divided into 4 separate accounts. Which of the following is NOT one of those accounts?
Homeowner insurance account
Workers’ Compensation insurance account
Automobile insurance account
Missouri mutual and extended Missouri mutual insurance company account
No homeowners insurance account exists.
The FAIR Plan provides property insurance to which of the following persons?
One who owns a vacant home
One who is unable to obtain property insurance through the standard market
One who owns property with unrepaired fire damage
One who owns a business building in very poor physical condition
One who is unable to obtain property insurance through the standard market
The FAIR Plan provides insurance for applicants who are unable to purchase basic property insurance through the standard market; property that is vacant, in poor condition, or with unrepaired loss damage are specifically ineligible for coverage.
Which of the following is NOT true about the Missouri FAIR Plan?
All admitted property insurers in Missouri must participate in the FAIR plan
Property to be insured must meet reasonable underwriting standards
Perils covered under the FAIR Plan are normally limited to fire and extended coverage
Licensed producers may bind coverage and accept premium payments
Licensed producers may bind coverage and accept premium payments
Producers are not contracted by the FAIR Plan and do not have the authority to bind coverage of accept premium payments on behalf of the FAIR Plan.
The coverage period for a wedding present floater may not exceed how many days after the wedding day? 90 60 30 120
A personal property floater covers wedding presents up to 90 days after the day of the wedding.
Before cancelling a property insurance policy for non-payment of premium, an insurer must give the insured how many days' written notice? 10 30 45 60
An insurer terminating a property insurance policy for non-payment of premium, or because the insured committed arson, must give the insured 10 days’ notice.
Which of the following binders WAS issued legally?
A 3-day binder for which no premium was charged
A binder that was replaced by a policy with a different effective date
A binder that was not replaced by a policy; the binder fee of $50 was waived
A binder that was not replaced by a policy; the binder fee of $10 was waived
A binder that was not replaced by a policy; the binder fee of $10 was waived
When a binder is issued and is not replaced by a policy, the insurer may waive the binder fee if it is $20 or less.
Which of the following is NOT considered proof of financial responsibility in Missouri?
An insurance agent’s verbal statement
An insurance ID card issued by an insurer
A bond filed with the state
A certificate of self-insurance
An insurance agent’s verbal statement
In Missouri, acceptable proof of financial responsibility is an insurance certificate or ID card issued by an admitted insurer, a bond or certificate of deposit with the state, and a certificate of self-insurance.
What are the minimum limits of financial responsibility required by the state of Missouri?
5/10/10
10/20/40
25/50/10
50/100/25
Minimum limits of financial responsibility in Missouri are 25/50/10.
An auto insurer may non-renew an auto insurance policy for all of the following reasons, except:
The driver’s license of the named insured’s resident son was revoked
The named insured driver’s license was revoked
Non-payment of premium
The named insured’s chauffeur’s license was suspended
The driver’s license of the named insured’s resident son was revoked
An insurer cannot non-renew because of the license revocation of a household member; however, it may issue an operator exclusion endorsement.
Within how many days must an insurer notify a claimant it is either accepting or denying the claim? 10 15 21 30
15
Within 15 working days of receiving all necessary documentation that establishes the nature and extent of a claim, insurers must notify the claimant whether the claim accepted or denied
An employer required to provide Workers' Compensation in Missouri has a MINIMUM of how many employees? 5 10 15 20
5
In Missouri, an employer must provide Workers’ Compensation coverage if it has 5 or more employees; an exception exists for employers who exist
Within how many days must an employee report a workplace injury to the employer? 2 10 30 180
30
Employees must report workplace injuries within 30 days or risk not having the injury be covered by Workers’ Compensation insurance.
Which of the following employees is EXEMPT from the Missouri Workers’ Compensation Law, unless an employer elects to insure him/her?
A landscaper
A mechanic
A car salesman
A butler
butler
Domestic employees who work in private households, such as chauffeurs and butlers, are exempt from WC law.
In Missouri, what is the weekly rate of compensation under WC law?
100% of the average weekly wage
66 2/3% of the average weekly wage
33 2/3% of the actual weekly wage
25% of the actual weekly wage
The weekly rate of compensation under Missouri WC law is 66 2/3% of the employee’s average weekly wage.
What are the maximum limits of coverage provided under a policy issued by the Missouri Medical Malpractice Joint Underwriting Association?
$5 million per occurrence
$3 million per occurrence
$1 million per claimant and $3 million for all claimants in a policy year
$1 million per claimant and $1 million for all claimants in a policy year
$1 million per claimant and $3 million for all claimants in a policy year
The maximum policy limits offered by the JUA are $1 million per claimant in a policy year and an aggregate of $3 million for all claimants in a policy year.
A producer’s license will not be revoked for which of the following?
Convicted of a crime of moral turpitude
Knowledge of misappropriation of money
Knowingly violate a state insurance law
Licenses suspended in another state
Knowledge of misappropriation of money
In order to have a license suspended, the producer must be personally guilty of misappropriating money belonging to an insured or insurer.
The coverage period for a wedding present floater may not exceed how many days after the wedding day?
30
60
120
90
90
In order to self-insure professional liability risks, at least how many medical professionals must apply to the Director?
10
5
3
1
3
At least three duly licensed medical professionals residing in Missouri may associate in order to apply to the Director for a license to self-insure its professional liability risks by designating a registered agent, provide a plan of operation, and advise if the bylaws will be incorporated into the association’s policies.
Which of the following employees is EXEMPT from the Missouri Workers’ Compensation Law unless his employer elects to insure him?
Tim, a car salesman
Ted, a butler
Mike, a landscaper
Don, a mechanic
Ted, a butler
The guaranty association will cover existing claims prior to the determination of insolvency or arising within how many days after the determination of insolvency?
90
60
10
30
30
Thirty days after the determination of insolvency, the guaranty association will pay claims that are unpaid as a result of the insolvency of a member insurer, but will not pay if a claim is made over 18 months after the insurer becomes insolvent.
Choose the false statement about the FAIR Plan policy.
An inspection of the property will be made
If the insured has 2 losses within a 12-month period, the policy will be non-renewed
The policy term is 12 months and renews automatically
The policy provides coverage up to $200,000 for a dwelling
If the insured has 2 losses within a 12-month period, the policy will be non-renewed
If there are 2 losses within a 12-month period, a higher deductible will be imposed, and if there are no losses for 5 consecutive years, the deductible may be reduced.
Choose the statement about automobile subrogation that is false.
Expenses cannot be deducted from a recovery
An outside attorney may collect expenses from the recovery
The insured’s deductible is not considered in the subrogation demands
Recovery is shared proportionately with the first-party claimant
The insured’s deductible is not considered in the subrogation demands
Upon the claimant’s request, insurers will include the first-party claimant’s deductible, if any, in subrogation demands.
Anyone who owns and operates an auto in Missouri must be able to show proof of financial responsibility by providing which of the following?
Copy of the insurance policy
Bond
Insurance agent’s name and phone number
Insurance bill
Bond
Proof of financial responsibility includes a certificate of insurance, such as an insurance ID card provided by the insurer, a bond or certificate of deposit of money or securities, or a certificate of self-insurance.
A producer is guilty of _________ when he makes a derogatory statement about a competing insurer’s financial statement.
Twisting
Coercion
Defamation
Intimidation
Defamation
is making a false or maliciously critical statement regarding the financial condition of any person, with the intent to injure such person.
Which cancellation reason regarding the commercial line of business requires 90 days’ notice?
Violation of policy terms
Insurer’s insolvency
Loss of reinsurance
Termination of a line of business
Termination of a line of business
An insurer may terminate an entire line or class of commercial casualty insurance by giving the Director 90 days’ notice before mailing notices to the insured(s). The other choices require only 60 days’ notice to the insured.
An insurer can pay commissions to any agent, except:
Agent receiving varied commissions based on loss experience
Agent who has a written agreement with the insured to be paid a certain commission
Licensed producer who negotiates an insurance contract
Agent who assumes less than 5% of the insurance risk
Agent who assumes less than 5% of the insurance risk
An insurer may not use a compensation arrangement that transfers any portion of the insurance risk to the producer, but it may vary commissions based on the loss experience of the policies the producer has written.
Which of the following is true about the Missouri insurance cease or desist order?
Any collected fine provides relief to mistreated consumers
It is the only recourse to stop an insurance unfair trade practice
Violation may result in a minimum fine of $100,000
An alternative to a cease or desist order is federal court action
Any collected fine provides relief to mistreated consumers
Money received from the Director’s enforcement proceeding and imposition of penalties is placed in a ‘Consumer Restitution Fund,’ used to provide relief to aggrieved consumers.
What are the maximum limits of coverage provided under a policy issued by the Missouri Medical Malpractice Joint Underwriting Association?
$5 million per occurrence
$1 million per claimant and $1,000,000 for all claimants in a policy year
$1 million per claimant and $3 million for all claimants in a policy year
$3 million per occurrence
$1 million per claimant and $3 million for all claimants in a policy year
The maximum policy limits offered by the JUA are $1 million per claimant in a policy year and an aggregate of $3 million for all claimants in a policy year.
Making a false statement about the benefits or the nature of an insurance policy is what unfair trade practice?
Defamation
Unfair discrimination
Twisting
Misrepresentation
Misrepresentation
Making any false statement about the benefits or true nature of an insurance policy is misrepresentation.
Under Missouri law, what standard of care and conduct is required of producers when receiving money from, or on behalf of, insurers or policyholders?
Legal capacity
Care of a trustee
Fiduciary responsibility
Financial duty
Fiduciary responsibility
Producers have fiduciary responsibilities to both their insurers and clients under Missouri insurance code.
An insurer is permitted by law to pay commissions to each of the following individuals, except:
Licensed producer who negotiates an insurance contract
Licensed producer with a compensation agreement based on loss experience
Property and casualty producer for the sale of life insurance
P&C producer for the sale of surplus lines insurance
Property and casualty producer for the sale of life insurance
Commission may only be paid to a producer who is duly licensed, at the time of sale, for the line of insurance sold.
The Missouri Automobile Insurance Plan provides auto coverage to which of the following individuals?
A person under the age of 18 who owns a car
A person who is not able to obtain auto insurance through ordinary markets
A person who has been cancelled three times for nonpayment of premium
A person who needs only the basic state limits
A person who is not able to obtain auto insurance through ordinary markets
The Missouri Automobile Insurance Plan provides basic coverage for individuals who have been unable to obtain auto insurance through normal markets, and all insurers selling auto insurance in Missouri must participate.
Which of the following is not true about binders?
A binder charge of $20 or less may be made at the insurer’s option
Binders that replace policies must provide coverage from the date of coverage under the binder
Binders provide a rate advantage
A binder charge must be made if it is not replaced by an insurance policy
Binders provide a rate advantage
The use of binders written to cover property or casualty risks may not result in a rate advantage to any party.
Which of the following is NOT a duty of the Director of Insurance?
Conduct hearings
Create Missouri insurance laws
Prescribe forms and procedures
Regulate the Department of Insurance affairs
Create Missouri insurance laws
How many hours of approved continuing education must Missouri insurance producers complete during a license renewal period?
14
16
10
12
16
An auto insurer may non-renew an auto insurance policy for all of the following reasons, except:
Non-payment of premium
The named insured’s chauffeur’s license was suspended
The named insured driver’s license was revoked
The driver’s license of the named insured’s resident son was revoked
The driver’s license of the named insured’s resident son was revoked
An insurer cannot non-renew because of the license revocation of a household member; however, it may issue an operator exclusion endorsement.
The Association’s funds are divided into 4 separate accounts. Which of the following is NOT one of those accounts?
Automobile insurance account
Homeowner insurance account
Workers’ Compensation insurance account
Missouri mutual and extended Missouri mutual insurance company account
No homeowners insurance account exists.
If the Department of Insurance denies a producer license application, the applicant may request a hearing within how many days of the denial?
15
30
60
45
30
The applicant may request a hearing within 30 days of the receipt of denial of a license by the Department of Insurance.
How often does a producer’s license renew?
Biennially (once every 2 years)
Quinquennially (once every 5 years)
Triennially (once every 3 years)
Annually (once a year)
Biennially (once every 2 years)
Which of the following is NOT a penalty for refusing to testify in a Department hearing?
Being held in contempt
Being assessed a civil penalty up to $5,000 per violation
Being ordered to testify in circuit court
Being required to appear before the Director
Being assessed a civil penalty up to $5,000 per violation
The circuit court may impose a civil penalty up to $50,000 for each violation.
Within how many days must an insurer notify the Director of the appointment of an agent?
60
45
30
15
30
Which of the following is NOT a qualification for obtaining an insurance producer license?
Paying a $200 license fee
Passing a licensing exam
Being at least 18 years old
Not committing a prohibited act
$200 fee
The producer license fee is $100.
What are the minimum limits of financial responsibility required by the state of Missouri?
25/50/10
50/100/25
10/20/40
5/10/10
25/50/10
Within how many days of notification of a claim must an insurer provide the insured assistance in the claim process?
10
20
14
30
10
Every insurer, upon receiving notification of claim, must within 10 working days provide necessary claim forms, instructions and reasonable assistance so that first-party claimants can comply with the policy conditions and the insurer’s requirements.
The Association covers existing claims prior to the determination of insolvency or that are submitted within how many days after the determination of insolvency?
A
60
B
30
C
10
D
90
Covered claims must be submitted no later than 30 days after the determination of an insurer’s insolvency.
The Association’s funds are divided into 4 separate accounts. Which of the following is not one of those accounts?
A
Homeowners insurance account
B
Automobile insurance account
C
Missouri mutual and extended Missouri mutual insurance company account
D
Workers’ Compensation insurance account
A
Homeowners insurance account
Which of the following binders WAS issued legally?
A
A binder that was not replaced by a policy; the binder fee of $50 was waived
B
A 3-day binder for which no premium was charged
C
A binder that was not replaced by a policy; the binder fee of $10 was waived
D
A binder that was replaced by a policy with a different effective date
A binder that was not replaced by a policy; the binder fee of $10 was waived
Which of the following is not considered proof of financial responsibility in Missouri?
A
An insurance agent’s verbal statement
B
A certificate of self-insurance
C
A bond filed with the state
D
An insurance ID card issued by an insurer
An insurance agent’s verbal statement
An auto insurer may nonrenew an auto insurance policy for all of the following reasons, except:
A
Nonpayment of premium
B
The named insured’s chauffeur’s license was suspended
C
The driver’s license of the named insured’s resident relative was revoked
D
The named insured driver’s license was revoked
D
The named insured driver’s license was revoked
If the Director issues a summary order due to violations, the producer may request a hearing within how many days of notice of the order?
A
15
B
45
C
30
D
60
c30
Which of the following is not true about personal insurance transactions?
A
The producer must handle every client’s application and amendments as soon as possible
B
The producer must inform the applicant if an insurer is not willing to insure the applicant
C
The producer may use a professional designation to assure the applicant that the producer is specially trained to sell the policy
D
The producer must inform the insured if the insurer needs information prior to a renewal
C
The producer may use a professional designation to assure the applicant that the producer is specially trained to sell the policy
It is a dishonest or unethical practice for a producer to use a professional designation that implies that the insurance producer has special certification in advising a client in connection with the solicitation, sale, or negotiation of an insurance product.
After the policy has been in effect for 60 days, insurer may cancel a Homeowners policy based on which of the following?
A
An insured is 67 years old
B
The insured is self-employed
C
The property is deteriorating
D
The property is in an urban neighborhood
C
The property is deteriorating
An insurer may cancel a Homeowners policy if the hazard has significantly increased, such as the home deteriorating due to the insured’s neglect. Cancelling a Homeowners policy after 60 days solely based on factors such as the insured’s age, location, or occupation would be considered unfair discrimination.
Making a false statement about the benefits or the nature of an insurance policy is what unfair trade practice?
A
Misrepresentation
B
Unfair discrimination
C
Defamation
D
Twisting
Misrepresentation
Making any false statement about the benefits or true nature of an insurance policy is misrepresentation.
Uninsured/Underinsured Motorist coverage may do which of the following?
A
Require arbitration when settling a claim
B
Reduce benefits payable under medical payments
C
Provide auto liability limits in excess for the state minimum
D
Deny a claim based on the insolvency of another insurer
C
Provide auto liability limits in excess for the state minimum
The minimum auto liability limits for Uninsured/Underinsured Motorists Coverage are 25/50. An insured may elect to have higher coverage limits.
The Guaranty Association will cover existing claims prior to the determination of insolvency or arising within how many days after the determination of insolvency?
A
90
B
60
C
10
D
30
D
30
30 days after the determination of insolvency, the Guaranty Association will pay claims that are unpaid as a result, but will not pay if a claim is made over 18 months after the insurer becomes insolvent.
Which of the following BEST describes the initial eligibility requirements for a nonresident producer license in Missouri?
A
Be in good standing with their home state
B
Agreement to meet continuing education requirements
C
Pay any required fees
D
Pay any required fees and be in good standing with their home state
D
Pay any required fees and be in good standing with their home state
A producer must meet continuing education requirements in order to keep their license, but this question asks for the BEST answer regarding basic eligibility.
What is the purpose of the Missouri Basic Property Insurance Inspection and Placement Program?
A
To provide a mean to purchase high valued property insurance when it cannot be obtained through standard markets
B
To provide a means to purchase competitive commercial general liability insurance
C
To provide a means to purchase competitive property insurance
D
To provide a means to purchase basic property insurance when it cannot be obtained through standard markets
D
To provide a means to purchase basic property insurance when it cannot be obtained through standard markets
The FAIR Plan is designed to provide a means to purchase basic property insurance when it cannot be obtained through standard markets.
Which of the following is not true about binders?
A
A binder charge must be made if it is not replaced by an insurance policy
B
Binders that replace policies must provide coverage from the date of coverage under the binder
C
A binder charge of $20 or less may be waived at the insurer’s option
D
Binders provide a rate discount for the insured
D
Binders provide a rate discount for the insured
The use of binders written to cover property or casualty risks may not result in a rate advantage to any party.
