Florida Insurance Laws Quiz & Flashcards for Policyowners

Questions and Answers

An individual covered under a Group Life insurance policy is considered to be a(n)

certificate holder

The act of an insurance company publishing misleading information about its policy's provisions is called

false advertising

Which of the following employer tasks does a Professional Employer Organization normally handle?

Administration functions (correct)

Marketing

Insurance underwriting

Sales

According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with

a Buyer's Guide and Policy Summary Signup and view all the answers

An example of an unfair claims settlement practice is

turning down a claim without providing the basis of denial Signup and view all the answers

Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract

once each year Signup and view all the answers

What could an agent be found guilty of if they told a claimant that his rights might be impaired if he does not complete a release form within a specified time?

Coercion Signup and view all the answers

According to Florida's life insurance replacement laws, what must a policyowner be provided with when it's requested?

a written Comparison and Summary Statement Signup and view all the answers

The Life and Health Insurance Guaranty Association is funded by

admitted insurance companies through assessments Signup and view all the answers

The Bureau of Unclaimed Property is overseen by the

Chief Financial Officer Signup and view all the answers

What is J guilty of if he induced an insured through misrepresentation to surrender an existing insurance policy?

Twisting Signup and view all the answers

Which document must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy?

Notice to existing and replacing insurers of intention to replace Signup and view all the answers

What corrective action would the Department of Financial Services likely order an agent to take if they made an improper sale of an annuity?

Pay monetary restitution to the client Signup and view all the answers

An insurance company can contest a life insurance contract due to application fraud within

2 years Signup and view all the answers

In Florida, what is the maximum percentage of controlled business an agent may produce?

50% Signup and view all the answers

Within how many days must a licensee notify the Department of Financial Services of a change in address?

30 Signup and view all the answers

Which professional organization has its code of ethics incorporated into Florida law?

National Association of Insurance and Financial Advisors (NAIFA) Signup and view all the answers

How can an agent-in-charge have more than one location?

Only if the agent-in-charge is present when insurance activity occurs Signup and view all the answers

An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ____ company.

domestic Signup and view all the answers

Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?

Misrepresentation Signup and view all the answers

In Florida, agents are allowed to engage in rebating if

offered to all insureds in the same actuarial class Signup and view all the answers

Agents that have been licensed for less than six years must complete __ hours of continuing education every two years.

24 Signup and view all the answers

What is the major contrast between a mutual insurance company and a stock insurance company?

Stock company is owned by its shareholders. Mutual company is owned by its policyholders. Signup and view all the answers

Which of the following situations does NOT apply to the Florida Replacement Rule? (Select all that apply)

An existing policyholder purchases an additional policy from the same insurer Signup and view all the answers

What would be an example of an unfair claims practice?

Failing to effectuate prompt, fair, and equitable settlements of a claim. Signup and view all the answers

What is an insurer domiciled and incorporated in Florida called?

Domestic company. Signup and view all the answers

Which of the following is NOT considered rebating? (Select all that apply)

Sharing commissions with an agent licensed in the same line of business Signup and view all the answers

Which of the following is NOT a consequence for placing business with an unauthorized insurer? (Select all that apply)

First degree misdemeanor Signup and view all the answers

In Florida, a health policy that is paid on a quarterly basis requires a grace period of how many days?

31 days. Signup and view all the answers

If an agent makes a false or incomplete statement during an insurance transaction, he/she could be found guilty of what?

Misrepresentation. Signup and view all the answers

What is the purpose of the coordination of benefits (COB) provision?

To avoid duplication of benefit payments. Signup and view all the answers

What is the Florida Replacement Rule?

A rule that requires agents to follow established procedures when recommending changes in existing coverage. Signup and view all the answers

When is a Group Health policy required to provide coverage for a newborn child?

At the moment of birth. Signup and view all the answers

What is Florida's definition of life insurance replacement?

A transaction in which a new policy is bought and an old policy is terminated. Signup and view all the answers

What does the Florida Employee Health Care Access Act require?

Small group benefit plans are to be issued on a 'guarantee-issue' basis. Signup and view all the answers

What do families pay that are covered by the Florida Healthy Kids Corporation?

A portion of the premium. Signup and view all the answers

When replacing or exchanging an annuity, what must the agent disclose to the annuitant?

The possible tax ramifications as a result of the transaction. Signup and view all the answers

Which factor is NOT considered by the Department of Financial Services to determine if an agent's home is an insurance agency?

The amount of premium collected at this location. Signup and view all the answers

All of the following will result in the suspension of an agent's license EXCEPT (Select all that apply)

Acting with fiduciary responsibility Signup and view all the answers

What type of insurance company is domiciled in England but conducts business in Florida?

Alien. Signup and view all the answers

Employers with less than how many employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA)?

<ol start="20"> <li></li> </ol> Signup and view all the answers

What is the purpose of the Life and Health Insurance Guaranty Association?

Protects policyowners against insolvent insurance companies. Signup and view all the answers

What is one definition of replacement in terms of insurance?

The act of replacing an existing insurance policy with another. Signup and view all the answers

What can lead to an agent's license being suspended or revoked?

Writing primarily controlled business. Signup and view all the answers

What is the minimum age at which a person can sign a life insurance application?

15 years. Signup and view all the answers

A life policy loan in Florida cannot charge a fixed rate of interest higher than what?

10%. Signup and view all the answers

What is an example of unfair discrimination in insurance?

Offering different terms of coverage for different policyowners having the same risk classification. Signup and view all the answers

Which two entities regulate variable annuities?

The Department of Financial Services and the Securities Exchange Commission. Signup and view all the answers

What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida law?

0%. Signup and view all the answers

Group Life policies in Florida must allow for conversion to what?

An individual policy for a stated period of time. Signup and view all the answers

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

Twenty. Signup and view all the answers

What are adjustable rates for life policy loans in Florida based on?

Moody's corporate bond index. Signup and view all the answers

In Florida, coverage for newborns begins 'from the moment of birth' and continues for how long?

18 months. Signup and view all the answers

A license may be denied, suspended, or revoked if the licensee has been found guilty of what?

Misrepresentation. Signup and view all the answers

What is an example of an unfair trade practice?

An agent making a material misrepresentation to the insured. Signup and view all the answers

What is the maximum waiting period for a pre-existing condition under a Medicare Supplement policy?

6 months. Signup and view all the answers

According to Florida law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy?

The premiums for the handicapped child are not paid Signup and view all the answers

Why are Association Plans that provide health benefits regulated by the state?

They are insured by an authorized insurer. Signup and view all the answers

What is an example of sliding in insurance practices?

Charging for an additional product without the applicant's consent. Signup and view all the answers

What is the main reason for regulating the insurance industry?

Maintain the solvency of insurance companies. Signup and view all the answers

Which health policy provision states that the agent does not have the authority to change the policy?

Entire Contract. Signup and view all the answers

What must the insurer provide a prospective buyer?

Buyer's Guide and Policy Summary. Signup and view all the answers

Nonprofit life insurance providers covered under Florida law are known as what?

Fraternal life insurance organizations. Signup and view all the answers

What does an applicant who pays the initial premium at the time of application typically receive?

Conditional receipt. Signup and view all the answers

Which unfair trade practice involves making malicious statements about another person's financial condition?

Defamation. Signup and view all the answers

What is true about a stock insurance company?

It is owned exclusively by its shareholders. Signup and view all the answers

What powers does the Financial Services Commission hold?

They may hold hearings for any reason deemed necessary. Signup and view all the answers

When must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?

At the time of application. Signup and view all the answers

Which of the following provisions is NOT required in a Medicare Supplement policy according to Florida law?

Limitation on pre-existing conditions for up to 12 months Signup and view all the answers

According to Florida law, how many insureds are required for a Group Life insurance policy?

No minimum. Signup and view all the answers

Which of the following situations are NOT subject to Florida life insurance laws?

Insurance companies' day-to-day operations Signup and view all the answers

Study Notes

Insurance Company Types

Mutual Insurance Company: Owned by policyholders.
Stock Insurance Company: Owned by shareholders.

Florida Replacement Rule

Applies to policies being reissued, replaced, or subjected to extensive borrowing.
Does NOT apply when an existing policyholder buys an additional policy from the same insurer.

Claims Practices

Unfair Claims Practice: Failing to settle claims promptly and fairly.
Misrepresentation: Providing false or incomplete statements in insurance transactions.

Company Types in Florida

Domestic Company: Insurer incorporated within Florida.
Alien Company: Insurer domiciled outside the U.S. but operates in Florida.
Foreign Company: Insurer formed under the laws of another U.S. state.

Rebate Regulations

Sharing commissions with agents in the same line of business is NOT considered rebating.
Returning premiums as inducements or offering value for business are forms of rebating.

Penalties for Unauthorized Business

Possible consequences include third-degree felonies and revocation of insurance licenses.
Exception: First-degree misdemeanor is not a possible consequence.

Grace Periods and Coverage Rules

Health Policies: Quarterly paid policies have a 31-day grace period.
Coverage for newborns begins at birth.

Policies and Acts

Life Insurance Replacement: Involves terminating an old policy for a new one.
Florida Employee Health Care Access Act: mandates guarantee-issue for small group benefits.

Disclosure Requirements

Agents must disclose potential tax ramifications when replacing annuities.
Must provide a Buyer's Guide and Policy Summary to prospective clients.

Health Insurance Provisions

Group health policies must provide coverage for newborns immediately after birth and must be extended for 18 months.
Notice of Claim: Health policyholders need to notify insurers within 20 days of loss.

Financial Regulations

Life and Health Insurance Guaranty Association: Protects policyholders against insurer insolvency, funded by insurance company assessments.
Department of Financial Services: Holds hearings for various infractions including unlicensed transactions.

License Regulations

Agents lose their license if they write controlled business, misrepresent, or fail to deliver necessary documents.
A suspension period without being appointed lasts 48 months.

Additional Key Facts

Insurance policies must have a contestability period of 2 years in Florida.
Agents must notify employees if a group policy is canceled.
Variable annuity policyholders must be notified about accumulated values annually.

Fair Practices and Education

Unfair trade practices include making false statements about competitors (defamation) and coercing applicants.
New agents must complete 24 hours of continuing education every two years.

Other Insurance Insights

The minimum age for signing a life insurance application is 15.
Adjustable rates for life insurance loans in Florida are based on Moody's corporate bond index.
Advertising gifts to clients must not exceed $25.### Insurance Concepts and Regulations
Individuals guilty of twisting manipulate a client's decision to replace a life insurance policy, typically through misleading information.
Agents must submit a Notice to Existing and Replacing Insurers when replacing an existing life insurance policy.
An agent (K) found guilty of improper sale of an annuity may be ordered to pay monetary restitution to the affected client by the Department of Financial Services.
Insurers can contest a life insurance contract due to application fraud for up to 2 years after the policy is issued.
In Florida, an agent is restricted to producing a maximum of 50% of their business as controlled business.
Licensees are required to notify the Department of Financial Services of any change in address within 30 days.
The National Association of Insurance and Financial Advisors (NAIFA) has its code of ethics incorporated into Florida law, guiding agent activities.
An agent-in-charge can manage multiple locations only if they are present during any insurance-related activities.
A domestic company refers to an insurance company incorporated under the laws of the state where its headquarters is located.
Misrepresentation occurs when an agent falsely claims that a policy's dividends are guaranteed to a client.
In Florida, agents may engage in rebating as long as the offer is extended to all insureds within the same actuarial class.
Agents licensed for less than six years must complete 24 hours of continuing education every two years to maintain their license.

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Explore key concepts and definitions related to Florida insurance laws and rules through these informative flashcards. Perfect for students preparing for insurance exams or professionals seeking to refresh their knowledge of the insurance field in Florida.

Florida Insurance Laws Flashcards