WorksheetsCh. 7 Insurance Regulation
Total questions: 24
Worksheet time: 12mins
Who is an insurance agent?
A person authorized to advise clients on insurance coverage only
A person authorized to sell and service insurance policies
A person authorized to sell, solicit and negotiate insurance contracts
A person authorized to manage insurance claims and benefits
Who must be notified of a producer’s change of address?
The insurance carrier that appointed the producer
The National Association of Insurance Commissioners
The Department of Insurance (Commissioner/Director/Superintendent)
The licensing examination provider
If an insurer meets the state’s financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Licensed and registered
Certified and approved
Authorized or admitted
Domestic or resident
What are producers required to do in order to renew their license?
Submit proof of active appointments and pay a renewal fee
Retake the state licensing examination
Complete continuing education hours and pay a renewal fee
Reapply for licensure with the Department of Insurance
Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?
Unfair underwriting
Rate manipulation
Discrimination
Rating variance
What are the most common penalties for violations of insurance statutes?
License suspension and mandatory restitution
Administrative fines and corrective action plans
A cease and desist order, a fine, and license suspension or revocation
Criminal prosecution and imprisonment
What type of licensee represents the insurance company?
Broker
Consultant
The agent
Producer-at-large
Who is responsible for the costs associated with the examination of insurers?
The Department of Insurance
The state treasury
The insurer who is being examined
Policyowners of the insurer
If the Commissioner or Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?
Immediate license revocation
Administrative penalty order
Cease and desist order
Suspension notice
Who may share in the commission from the sale of a life insurance policy?
Any individual who assisted in the transaction
Employees of the insurer involved in policy issuance
Only producers properly licensed for the type of insurance transaction
Any licensed producer regardless of line of authority
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
False advertising
Incomplete disclosure
Misrepresentation
Coercive marketing
When can the Commissioner or Director examine insurers?
Only upon receipt of consumer complaints
At the insurer’s license renewal
Whenever deemed necessary, but at least once every few years
At the request of the insurer
In general, who can be excluded from producer licensing and examination requirements?
Employees performing sales support functions
Employees handling underwriting decisions
Insurance company officers, directors, or employees who do not transact insurance and do not receive commissions
Employees responsible for policy issuance
If a producer makes maliciously critical statements about another insurer, what is the illegal practice called?
False advertising
Misrepresentation
Defamation
Unfair comparison
Who can usually be granted a temporary license?
A newly hired producer awaiting licensure
A producer who failed the licensing exam
Producer’s spouse or designee in case the licensed producer dies or becomes disabled
Any employee designated by the insurer
An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?
Inducement
Incentive marketing
Rebating
Misrepresentation
What is the purpose of a cease and desist order?
To permanently revoke a producer’s license
To impose criminal penalties
To prevent a producer or insurer from further violating laws for transacting insurance
To require restitution to policyowners
Who is considered a nonresident agent?
An agent licensed in multiple jurisdictions
An agent who does not maintain an office in the state
An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state
An agent appointed by an out-of-state insurer
To whom may a certificate of authority be issued?
Any insurer applying for licensure
Any domestic insurer
To an insurer authorized to transact business in the state
Any insurer meeting minimum capital requirements
If an insurer holds a Certificate of Authority, it is known as what type of insurer?
Licensed insurer
Certified insurer
Authorized or admitted
Approved surplus insurer
What type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or replace a policy?
Rebating
Coercion
Twisting
Defamation
What type of licensee represents the insured?
Agent
Producer
Broker
Solicitor
For what reason can a temporary license be issued?
To allow time to complete education requirements
To permit sales during the application process
For continuation of business in case the licensed producer dies or becomes disabled
To assist during peak sales periods
On its advertisement, a company claims that it has funds available for claims that are not actually accessible. What is the company guilty of?
False advertising
Financial misstatement
Misrepresentation
Defamation
