NC Statutes and Regulations Flashcards
What is the primary statute governing life insurance in North Carolina?
The North Carolina General Statutes, Chapter 58.
True or False: Life insurance policies in North Carolina must be written in clear and understandable language.
True.
Fill in the blank: The North Carolina Department of Insurance is responsible for __________ life insurance regulations.
enforcing.
What is the minimum age for an individual to enter into a life insurance contract in North Carolina?
15 years old.
What does the term ‘insurable interest’ mean in the context of life insurance?
It refers to the requirement that the policyholder must have a legitimate interest in the life of the insured.
True or False: In North Carolina, life insurance premiums can vary based on the insured’s health status.
True.
What must insurers provide to policyholders regarding policy provisions?
A summary of policy provisions and any exclusions.
Multiple Choice: Which of the following is NOT a type of life insurance recognized in North Carolina? A) Whole Life B) Universal Life C) Term Life D) Variable Annuity
D) Variable Annuity.
What is the grace period for premium payments in most life insurance policies in North Carolina?
31 days
Fill in the blank: Life insurance policies must include a __________ provision, allowing policyholders to reinstate their policy under certain conditions.
reinstatement.
What is the primary purpose of the Life and Health Insurance Guaranty Association in North Carolina?
To protect policyholders in case an insurance company becomes insolvent.
What type of life insurance policy provides coverage for a specified period?
Term Life Insurance.
Multiple Choice: Which of the following is a requirement for life insurance advertisements in North Carolina? A) Must be misleading B) Must be truthful C) Must be vague D) None of the above
B) Must be truthful.
What is the purpose of the ‘free look’ period in life insurance policies?
To allow policyholders to review the policy and cancel it within a specified time frame for a full refund.
Fill in the blank: The contract between the policyholder and the insurer is called a __________.
policy.
True or False: Life insurance companies in North Carolina can deny coverage based on the applicant’s race.
False.
What must life insurance policies include regarding beneficiaries?
A designation of beneficiaries and the method of payment upon the insured’s death.
Multiple Choice: Which of the following is a common exclusion in life insurance policies? A) Suicide B) Accidental Death C) Natural Causes D) Terminal Illness
A) Suicide.
What does ‘underwriting’ refer to in the context of life insurance?
The process by which an insurer evaluates the risk of insuring a potential policyholder.
True or False: Insurers in North Carolina must notify policyholders of any changes to their policy terms.
True.
What is a common requirement for a life insurance claim to be paid?
Proof of death of the insured.
Fill in the blank: The __________ protects consumers by providing information about their rights under life insurance policies.
Consumer Insurance Services.
What does the term ‘conversion privilege’ in a life insurance policy mean?
The right to convert a term policy to a permanent policy without evidence of insurability.
Multiple Choice: Which of the following is a type of permanent life insurance? A) Whole Life B) Temporary Life C) Limited Life D) Group Life
A) Whole Life.
True or False: Life insurance policies in North Carolina can have a contestability period.
True.
What is the purpose of a ‘rider’ in a life insurance policy?
To add additional benefits or coverage options.
Fill in the blank: A policyholder can designate a __________ to receive the death benefit.
beneficiary.
What is required for a life insurance policy to be legally binding?
Acceptance of the offer and payment of the premium.
C.L.O.A.C
Consideration, Legal Purpose, Offer, Acceptance, Competent Parties
True or False: Life insurance proceeds are generally subject to state income tax in North Carolina.
False.
What is the maximum age for a child to be a dependent beneficiary under a life insurance policy in North Carolina?
Typically 26 years old.
What does ‘cash value’ refer to in a whole life insurance policy?
The savings component that accumulates over time and can be borrowed against.
Multiple Choice: Which entity regulates life insurance companies in North Carolina? A) The Federal Government B) The State Legislature C) The Department of Insurance D) The Supreme Court
C) The Department of Insurance.
Fill in the blank: The __________ is a document that outlines the terms and conditions of a life insurance policy.
policy contract.
True or False: Life insurance agents in North Carolina must be licensed.
True.
What is a ‘beneficiary designation’?
A formal statement indicating who will receive the death benefit from a life insurance policy.
What is the purpose of a ‘waiver of premium’ rider?
To ensure premiums are waived if the policyholder becomes disabled.
Multiple Choice: In North Carolina, what is the standard contestability period for life insurance policies? A) 1 year B) 2 years C) 3 years D) 5 years
B) 2 years.
Fill in the blank: The __________ must be clearly stated in life insurance policies to avoid misunderstandings.
exclusions.
True or False: North Carolina allows life insurance policies to be sold without a written application.
False.
What is the primary role of the North Carolina Insurance Commissioner?
To oversee and regulate the insurance industry in North Carolina.
Duties include: executing all NC insurance laws, furnishing reporting forms to insurance companies, reviewing annual statements, conducts investigations of domestic insurers once every five years, and reports violations to attorney general.
Fill in the blank: Life insurance companies must provide a __________ to policyholders explaining their rights and obligations.
policy summary.
What is the ‘right to examine’ provision in life insurance policies?
Commonly referred to as ‘free-look period,’ It allows policyholders to review their policy and return it for a full refund within a specified period.
Multiple Choice: Which of the following is NOT a factor in determining life insurance premiums? A) Age B) Gender C) Marital Status D) medical history
C) Marital Status.
Anyone acting without the proper insurance license
may be deemed guilty of a misdemeanor.
Name the document
states whether personal information may be collected from persons other than individual proposed for coverage; the types of personal information that may be collected; circumstances under which disclosures may be made without prior authorization; and a description of the person’s rights.
The Insurance Information Notice
If an applicant is given a binding receipt, when does coverage become effective?
On the date the receipt is given.
Any person in any financial statement willfully misstating information, that person is guilty of
- Class I felony;
- entity on whose behalf statement was made is subject to $2,000-$10,000 fine
Penalty for false statement
Acting without the proper insurance license.
guilty of Class 1 mis.
Any person who is not licensed and who is required by law or administrative rule to secure a license pays an application fee of ____ to the Commissioner.
$50
90 days
Licensed producers from another state that move to NC must apply within 90 days after establishing legal residence.
True or False: The commissioner may place on probation, suspend, revoke, or refuse to renew any license issued, after notice and hearing, if a producer or insurer willingly fails to provide required notification.
True
