Texas Life Laws And Rules Quiz

Question 1

An employee is covered under a company group life plan with a $50,000 death benefit. What is the maximum amount a spouse may be insured for under this program?

Answer 1

$25,000

Question 2

And insured may assign up to __________ of policy ownership under an individual life insurance policy

Answer 2

100%

Question 3

Credit life insurance is:

Answer 3

Insurance issued on a debtor to cover outstanding loan balances

Question 4

During a sales presentation for a participating life insurance policy, and agent must:

Answer 4

Make a prospect understand that dividends are not guaranteed

Question 5

How long can a cash surrender value payment be deferred by the insurance company under the non-forfeiture law?

Answer 5

Six months

Question 6

If an insured’s age was misstated on a life insurance contract, the Misstatement of age provision requires that any death benefit payable would be

Answer 6

An amount that the premiums paid would have purchased at the current age

Question 7

In Texas, an individual life insurance policy is required to have a grace period of

Answer 7

31 days

Question 8

__________ of continuing education must be completed in the classroom or classroom equivalent

Answer 8

50%

Question 9

In Texas, how long must the policy be in force before an insurance company must pay death benefits for suicide?

Answer 9

Two years

Question 10

A certificate of __________ permits an insurance company to transact business in Texas

Answer 10

Authority

Question 11

A domestic insurance company in Texas is considered a company that:

Answer 11

Is incorporated and formed in Texas

Question 12

A foreign insurance company conducting insurance business in Texas

Answer 12

Was formed under the laws of another state

Question 13

In Texas, which of these statements regarding the suicide clause is true?

Answer 13

An insurer may not use suicide as a defense against Payment after the second year

Question 14

Which action will a life insurance company most likely take if an insured dies and discovered that the insured age was Miss stated on the application?

Answer 14

Pay an amount the premiums would have purchased at the insured’s actual age

Question 15

Which of the following groups may not be insured by a group life insurance policy?

Answer 15

Individuals who are related by blood

Question 16

A promotional advertising item is not considered a rebate unless it has a value equal to or less than what amount?

Answer 16

$25

Question 17

Which of the following is not a required provision in group life policies?

Answer 17

Right to loan

Question 18

A temporary agents license issued by the commissioner of insurance is valid for up to _____ days

Answer 18

90

Question 19

Which of the following is not included in a life insurance illustration?

Answer 19

Company’s mortality table

Question 20

ABC insurance company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering

Answer 20

Unfair methods of competition

Question 21

All of these statements about the commissioner of insurance are true except

Answer 21

The commissioner must be elected

Question 22

Which of these provisions is not required in life insurance policies?

Answer 22

Extended term

Question 23

An example of false advertising would be

Answer 23

An insurer exaggerating its dividends in a magazine advertisement

Question 24

An example of rebating would be

Answer 24

Returning a portion of a premium as inducement to purchase insurance

Question 25

An insurance agent has a fiduciary responsibility to all of the following except

Answer 25

Other agents

Question 26

An insurance company organized under New York laws and license to do business in Texas is considered a(n)

Answer 26

Foreign company

Question 27

An insurer is not required to provide information on fraudulent claims if requested by

Answer 27

An insured

Question 28

As a condition for a loan, a bank requires a borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Answer 28

Coercion

Question 29

B, an insurance agent, tells his clients that their rights may be impaired if they fail to complete a release from within a given period of time. B may be found guilty of

Answer 29

Coercion

Question 30

How long does an insurance company appointment remain in force?

Answer 30

Until terminated

Question 31

How often must an insurance agent license normally be renewed?

Answer 31

Every two years

Question 32

The phrase “transacting business” includes

Answer 32

Collecting premiums

Question 33

What is an organization that solicit insurance only to its members?

Answer 33

Fraternal benefits society

Question 34

What is required for an agent whose license has been revoked?

Answer 34

Wait at least five years before applying for a new license

Question 35

When will a hearing be held after a notice of hearing, alleging participation in an unfair or deceptive act, is served to a licensee or insurer by the commissioner?

Answer 35

No sooner than six days

Question 36

Which of the following actions does the commissioner of Insurance not have the power to conduct?

Answer 36

Activate insurance companies’ financial reserves

Question 37

Which of the following is a requirement for obtaining a Texas insurance agent’s license?

Answer 37

Be honest, trustworthy, and reliable

Question 38

Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas?

Answer 38

The agent

Question 39

Who owns a stock insurance company?

Answer 39

Stockholders

Question 40

Why would the insurance commissioner examine the records of an insurance company?

Answer 40

To determine the solvency of the company