Life & Health Law 1

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Life & Health Law 1 1. Florida law requires continuing education for all agents. Which of the following is true concerning an agent who has five years experience and has earned the Chartered Life Underwriter designation? The agent needs 24 hours of continuing education The agent needs 20 hours of continuing education The agent needs 10 hours of continuing education No continuing education is needed 2. Which is true about the agents' change of address rule? 1. Agent must notify the DOI within 60 days. 2. The agent must notify the DOI within 31 days. 3. There is a $250 fine for violating this rule. 4. The agent must notify the DOI of his/her change of company 1 only 2 only 1 & 3 1,3, & 4 3. When a stock company issues both par and non-par policies, it is referred to as doing business: on a dual plan on a mixed plan as a combination plan none of the above 4. What would cause the Chief Financial Officer to conduct a hearing? If he feels you have engaged in twisting If he heard you had participated in illegal activities If he has reasonable cause to believe you have defamed an insurance company If he feels you are engaged in actively misrepresenting insurance coverage to the public 5. All the following types of Insurance companies may be approved to operate in nearly all states EXCEPT: Fraternal Insurance Companies Mutual Insurance Companies. (issue Par. Policies). Lloyds of London Stock Insurance Companies (issue Non Par. Policies). 6. The following penalties may be imposed upon an agent by the Chief Financial Officer EXCEPT: $1,000 for failure to answer a subpoena Up to $50,000 for violation of a cease & desist order Assess fines equal to the agent's earned commission in a fraudulent case Revocation of the agent's company contract 7. Define a Capital Stock Insurance Company: Any insurance company incorporated in and having its home office in this state An insurance company incorporated in some other state having its executive or home office in this state An insurance company with a stated amount of capital stock owned by stockholders who compose the company and direct it by means of officers and directors An insurance company owned and controlled by the policyholders and directly managed by a board of trustees, or directors, who are chosen by the policyholders 8. Florida law requires anyone convicted of a felony to report this to the Office of Insurance regulation with-in: 10 days 30 days 45 days 60 days 9. Which of the following is NOT classified under the four principle areas of the Florida Insurance law: The payment of commissions to agents The qualifications & licensing requirements of the agents The rights of policyowners & beneficiaries Policy Provisions 10. Which of the following acts could constitute defamation? Using a reporting agency, such as Standard & Poors, to illustrate a company's ability to pay future obligations copying, for circulation, a newspaper article regarding a company's unstable financial condition none of the above 11. Hoggie was licensed in March of 1995 and appointed in April of the same year. In March of 1996 Hoggie gave up his appointment but maintained his license with the intent of returning to the business at a later time. What must Hoggie do to get reappointed in March of 2000. apply to the insurance company for reappointment pay all late fees and reapply for the appointment retake the examination continue to flip burgers and forget about it 12. Grounds for refusal, revocation or suspension of an agent's license includes: Material misstatement in the application for licensure demonstrating incompetence attaining a license for the purpose of writing controlled business All of the above 13. A licensed insurance company that is domiciled in, and is permitted to do business in, the licensing state is called: A fraternal company A permitted company An authorized company A domestic company 14. The two major factors used to determine the legal reserve required for life insurance policies include: I. The type of company II. Mortality Tables III. The Morbidity Table IV. The assumed interest rate I and II II and III III and IV II and IV 15. The Gramm-Leach-Bliley Act of 1999, also known as the Financial Services Modernization Act, protects which of the following as to privacy of personal financial information? information of individuals used for personal, family, or household purposes businesses key-person insurance all of the above 16. Fraternal Benefit Societies are required to do all of the following except: be non-profit have a lodge system operate as a society, corporation or association to provide the insured with a policy 17. Adding on coverages without the knowledge of the insured/applicant is an example of: excess charges sliding rebating excess insurance 18. An agent may be permitted to do all the following (EXCEPT) Show a proposal for a company with which he is not appointed if he is licensed for that line of business Write excess business with outside companies other than his or her parent company Show a proposal from another company to applicants which have been rejected by his parent company Receive commissions from companies for which he is not yet appointed 19. When are unauthorized entities most likely to engage in the business of insurance? During Soft cycles During Hard cycles During the transition from soft to hard cycles During the transition from hard to soft cycles 20. Which of the following statements concerning an agent's license is /are correct? 1. The insurance license is perpetual unless revoked or suspended 2. The insurance license will terminate if one year elapses without being appointed 3. Is suspended automatically with a bankruptcy 4. Is subject to biannual review by the appointing company 1 only 1 & 2 2 & 3 all the above 21. Which of the following would not be considered controlled business. An agent writing: business solely on his family business on his partner business on his employees business on his neighbor 22. Miami Mutual rewards their clients with a matching deposit of 10% into their annuity when they open an account. Which statement below is correct? this is rebating and would be allowed this is rebating and would not be allowed 23. Circulating untrue statements about an insurance company would be classified under Florida law as: Misrepresentation Defamation Both 24. Of the following terms, which best describes the act of replacing existing life insurance with a new life insurance policy based upon incomplete or incorrect representations? Twisting Rebating Embezzlement Concealment 25. Willful violation of the Insurance code is a: third degree felony second degree misdemeanor first degree felony first degree misdemeanor 26. A licensed and appointed agent may share his commission with: A licensed agent An appointed agent A licensed and appointed agent with the same company A licensed and appointed agent who works in the same line of business 27. Which of the following is not an example of an insurable risk? the loss must be catastrophic the loss must be do to chance the loss must be predictable the loss must be measurable 28. An agent who has been licensed for 7 years must have how many hours of continuing education? 20 hours every 2 years including 3 hours of ethics 20 hours every 2 years including 3 hours of unauthorized insurers 24 hours every two years 10 hours every year 29. Fines and penalties for violating provisions of the life agents qualification laws include: Denial, suspension, revocation and non-renewal of license Misdemeanor fine of not less than $500 nor more than $3500 Imprisonment for not more than six months as well B above All of the above 30. A Single-Employer based, fully self insured health plan covering the employers, employees and their dependents is directly regulated by: The State Government The Federal Government Both the State and the Federal Government Neither the State or Federal Government 31. All of the following are characteristics of a mutual insurance company except: management elects the board of directors the policyowners are the owners of the company dividends, if any, are paid to the policyowners it must be incorporated in order to operate 32. Which of the following would make rebating a prohibited practice? rebating to all in the same actuarial class maintaining copies of all rebating schedules for the most recent 3 years maintaining copies of all rebating schedules for the most recent 5 years rebating without regard to discrimination 33. Which areas of insurance have most frequently been plagued with unauthorized insurers: Health Insurance Life Insurance Annuities Property Insurance 34. Fraud can involve the unintentional concealment of a non-material fact on an application. True False 35. Will the annual premium required for a 3% reserve interest assumption be greater or smaller than for a 3 1/2% reserve interest assumption? Smaller Greater Not enough information to answer The annual premium has nothing to do with interest assumption 36. Which of the following statements concerning a mail order company in Florida is not true? the company must be authorized to do business in the state the policy must be delivered by a licensed agent a mail order company requires no personal agent solicitation does not require an appointed agent 37. Monies collected by an agent are held by the agent in what capacity? Holder Creditor Debtor Fiduciary of trust 38. Defamation is all the following EXCEPT: The act of defamation is considered a tort Punishable as a second degree misdemeanor It can be written (Libel) It can be spoken (Slander) 39. Which of the following is not true concerning "stock" insurance companies? They sell only non-participating policies They sell both par and non-par policies They seek a profit for their stockholders They may operate on the mixed plan 40. All of the following are penalties provided for the violation of any of the provisions of the agents' qualification laws except: A minimum fine of $500 and not more than $5000 A minimum fine of $500 and not more than $3500 Imprisonment of not more than 6 months Suspension or revocation of the agents' license 41. The Financial Services Commission consists of all the following except: The Chief Financial Officer The Governor The Agriculture Commissioner The Insurance Commissioner 42. Which of the following are true? 1. Notification to the Department of Insurance within 60 days of change of address. 2. Notification to the Department of Insurance within 30 days of change of company. 3. Loss of licensure as a result of 1 year non-appointment. 4. Loss of licensure as a result of 4 year non-appointment 1 & 2 1 & 3 1 & 4 2 & 4 43. All of the following would be found under the unfair trade practices act except: false advertising coercion discrimination rebating 44. An individual becomes licensed, then appointed by a domiciled insurance company. He subsequently writes insurance on all his relatives. Which statement would be correct? this is called controlled business and is encouraged, family members would rather deal with someone they know this is controlled business and could subject the agent to revocation of his license 45. Embezzlement includes all of the following EXCEPT: None of the following are exceptions Converting premiums to the agents own use Converting a claim payment to the agents own use Converting policy loan values to the agents own use 46. Define a legal reserve: The amount set aside by Federal Reserve Bank as required by law Future liabilities to policyholders A leeway provision None of the above 47. Alcoholism or drug addiction would be considered which of the following hazards? physical moral morale all of the above 48. The agencies of state government involved in the regulation of the Insurance business in the state of Florida are: The state legislature The Department of Financial Services The state courts all of the above 49. Under certain circumstances, an agent is allowed to place business and be paid commissions by an insurance company without actually being licensed by that company. Which law allows for this? the reinsurance provision the 1035 exchange law the exchange of business law none of the above 50. Which of the following, regarding insurance company financial conditions is/are true? 1. a company must file annual financial statements 2. a company must file a financial statment every 3 years 3. the Office of Insurance Regulation will carry out a complete examination of a company's financial condition annually 4. the Office of Insurance Regulation will carry out a complete examination of a company's financial condition every 3 years 1 & 3 1 & 4 2 & 3 2 & 4 51. The Department of Financial Services is concerned with: 1. Assets and investments of insurance companies 2. The types and degree of risk of investments made by insurance companies 3. Examinations of records 4. Limiting the dollar amount that can be invested in different types of investments 1, 2, 3, 4 1, 2, 3 1, 2, 4 1, 2 52. The Specific duties of the Chief Financial Officer are all of the following EXCEPT: Enforce the Insurance Laws and Codes of Florida Assist companies in their marketing practices Investigate reported violations of insurance laws Conduct hearings of agents suspected of unfair trade practices 53. Which of the following statements is/are true regarding misrepresentation? An innocent misrepresentaion of a material fact is grounds to void a contract A fraudulent misrepresentation of an immaterial fact would not necessarily void the contract If convicted of misrepresentation, person would be guilty of a second degree misdemeanor All of the above 54. All the below are characteristics of a mutual company EXCEPT: Owned and controlled by policy owners Makes a profit for stockholders The policyholders elect a board of trustees or directors to manage the firm Pays dividends from surplus 55. A CPA may do which of the following with-out being licensed in the state? advising clients of the need to obtain insurance advising clients as to the amount of insurance needed advising clients of the 'line of insurance' needed all of the above 56. All the following are major areas in which the Chief Financial Officer and the Office of Insurance regulation are involved except: rate regulation applicable to life insurance regulating policy forms, provisions and rates supervising the methods of obtaining insurance policing against unauthorized insurance activities 57. Giving a prospect or policy owner anything of significant value as an inducement to buy insurance is called: Discounting Misrepresentation Rebating Twisting

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