Indiana Medical Expense Policies - Chapter 8
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Questions and Answers

What is a producer?

  • Adjuster
  • Solicitor
  • Producer (correct)
  • Representative

    • The coordination of benefits (COB) provision exists in order to:

  • Avoid excessive hospitalization
  • Maximize patient care
  • Avoid duplication of benefit payments (correct)
  • Lower insurance premiums

    • P is a producer who is licensed in Indiana, but a resident of Michigan. In Indiana, P is considered to be a(n) _____ producer.

    nonresident

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

    <p>Coercion</p> Signup and view all the answers

    An example of an Unfair Claims Settlement Practice would be:

    <p>Denying an insured's claim without indicating the basis of denial</p> Signup and view all the answers

    Which of the following is a standard provision of the conversion privileges in a Group Life policy?

    <p>Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis</p> Signup and view all the answers

    A group life insurance policy can be converted to an individual whole life policy under which circumstance?

    <p>Employment termination</p> Signup and view all the answers

    An example of rebating would be:

    <p>Splitting commissions with a policyholder</p> Signup and view all the answers

    What must a producer sign when an existing life insurance policy is being reissued with a reduction in cash value?

    <p>Notice Regarding Replacement</p> Signup and view all the answers

    An applicant for a resident insurance producer's license MUST meet which of the following requirements?

    <p>Complete a pre-licensing examination</p> Signup and view all the answers

    Health policies sold in Indiana are REQUIRED to begin medical coverage of a newborn beginning at:

    <p>The moment of birth</p> Signup and view all the answers

    If a producer commits an act of coercion or intimidation, how would the producer's insurance company be held responsible for this act?

    <p>If the insurer approves of the act</p> Signup and view all the answers

    Which of the following is NOT required in the Outline of Coverage for a health insurance policy?

    <p>Projection of the policy's future costs</p> Signup and view all the answers

    If a new life insurance policy is replacing an existing one, the insured is given the right to return for a full refund of at least ___ days after policy delivery.

    <p>20</p> Signup and view all the answers

    Insurance companies that are organized in countries outside the United States are referred to as:

    <p>Alien</p> Signup and view all the answers

    An example of false advertising would be:

    <p>An insurer exaggerating its dividends in a magazine advertisement</p> Signup and view all the answers

    Which of the following statements is CORRECT about the Indiana Life and Health Insurance Guaranty Association?

    <p>It protects Indiana insurance policyowners in the event an insurance company becomes insolvent</p> Signup and view all the answers

    In Indiana, what is the maximum percentage of controlled business a producer may produce over a twelve-month period?

    <p>25%</p> Signup and view all the answers

    T is an insurance license applicant who intends to primarily engage in insurance transactions on himself and his family. If the Insurance Department is made aware of this, T will most likely:

    <p>Not be issued a license</p> Signup and view all the answers

    In a viatical settlement, how much does the policyowner receive for a life insurance policy?

    <p>Amount less than the death benefit</p> Signup and view all the answers

    A business entity acting as an insurance producer MUST:

    <p>Designate at least one licensed producer to be responsible for the entity's compliance with the insurance laws and rules</p> Signup and view all the answers

    The Insurance Commissioner may suspend, revoke, or refuse to renew a producer's license for which of the following reasons?

    <p>Producer has used fraudulent, coercive, or dishonest practices</p> Signup and view all the answers

    All of these are powers of the Commissioner EXCEPT:

    <p>Incarcerate a producer</p> Signup and view all the answers

    An example of rebating would be:

    <p>Offering a client something of value not stated in the contract in exchange for their business</p> Signup and view all the answers

    The Insurance Commissioner is authorized:

    <p>To enforce state laws relating to insurance</p> Signup and view all the answers

    Which of the following is NOT a situation that involves life insurance policy replacement?

    <p>Converting a term policy to a permanent policy with the same insurer</p> Signup and view all the answers

    Life insurance replacement regulation protects the interests of:

    <p>The policyowner</p> Signup and view all the answers

    Eligible employees must be added to group health coverage NO LATER than ____ days after their first day of employment.

    <p>90</p> Signup and view all the answers

    The free-look period for life insurance policies issued in Indiana is ____ days.

    <p>45</p> Signup and view all the answers

    In Indiana, the MAXIMUM fine that the Commissioner can impose on a producer or company who violates a cease and desist order is per violation.

    <p>$25,000</p> Signup and view all the answers

    Life insurance replacement regulation protects the interests of:

    <p>The policyowner</p> Signup and view all the answers

    What is required for Producers to sell Long Term Care (LTC) in Indiana?

    <p>Eight hours of post licensing education specifically devoted to LTC</p> Signup and view all the answers

    Who is responsible for determining if Long-Term Care coverage is appropriate to meeting an applicant's needs?

    <p>Producer</p> 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 _____ days after a covered loss.

    <p>20</p> Signup and view all the answers

    Which of the following permits an insurance company to transact business in Indiana?

    <p>Certificate of authority</p> Signup and view all the answers

    P's individual health policy is now in the Grace Period. P's coverage will remain in force if:

    <p>The premium is paid</p> Signup and view all the answers

    With whom may a producer share commissions with?

    <p>A licensed producer with the same license type</p> Signup and view all the answers

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

    <p>Individuals who are related by blood</p> Signup and view all the answers

    All Long-Term Care policies purchased in Indiana MUST contain a free-look period of:

    <p>30 days</p> Signup and view all the answers

    A domestic insurance company in Indiana MUST:

    <p>Be incorporated and formed in Indiana</p> Signup and view all the answers

    Which of the following statements concerning individual medical expense policies sold in Indiana is NOT true?

    <p>A provision must be contained that guarantees reinstatement.</p> Signup and view all the answers

    Kathy has a family health insurance policy where any dependent children she has are removed from the policy once they have reached a certain age. What is this policy known as?

    <p>Limiting Age</p> Signup and view all the answers

    To continue health coverage for a newborn, the policy owner must notify the insurer of the birth and provide the first premium payment within how many days?

    <p>31 days</p> Signup and view all the answers

    An example of rebating would be?

    <p>Returning a portion of a premium as inducement to purchase insurance.</p> Signup and view all the answers

    Insureds in the same risk classification being charged different premiums by an insurance company is committing which illegal act?

    <p>Unfair Discrimination</p> Signup and view all the answers

    A life insurance policy can be backdated before the application date for up to how many days?

    <p>6 months</p> Signup and view all the answers

    All of the following statements are true regarding a child qualifying for coverage under the Indiana children's health insurance program, EXCEPT?

    <p>Must have been born in the United States to qualify.</p> Signup and view all the answers

    Which of the following is considered to be misrepresentation?

    <p>A producer guaranteeing a policy's dividends.</p> Signup and view all the answers

    The Indiana children's health insurance program (CHIP) provides children of need with health benefits until the child reaches what age or becomes financially ineligible?

    <p>19</p> Signup and view all the answers

    What would be an accurate definition of 'controlled business'?

    <p>Insurance business that is written on the producer's own life, property, or interests.</p> Signup and view all the answers

    A(n) ______ insurance company is one formed in a country other than the United States.

    <p>alien</p> Signup and view all the answers

    The insurance commissioner is authorized to enforce state law relating to insurance.

    <p>True</p> Signup and view all the answers

    Which of the following is NOT required to meet Minimum Essential Coverage (MEC) standards under the Affordable Care Act (ACA)?

    <p>Worker's Compensation</p> Signup and view all the answers

    In the event of employment termination, a person covered by a group policy also has the right to convert such coverage to an individual policy within how many days without proving insurability?

    <p>31 days</p> Signup and view all the answers

    When a life insurance application is completed, a policy summary must be given to the applicant. The policy summary MUST include?

    <p>the premium cost for basic coverage applied for</p> Signup and view all the answers

    Which of the following is NOT an unfair claim settlement practice?

    <p>Needing written documentation of claim details.</p> Signup and view all the answers

    A producer must complete how many hours of continuing education biennially to maintain the license?

    <p>24 hours</p> Signup and view all the answers

    Which of the following is a requirement to be eligible for a group health policy?

    <p>Group must be formed for a purpose other than obtaining insurance.</p> Signup and view all the answers

    In Indiana, which of the following is considered an unfair competition practice?

    <p>Coercion</p> Signup and view all the answers

    A group life insurance policy can be converted to an individual whole life policy under which circumstance?

    <p>Employment termination</p> Signup and view all the answers

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

    <p>An insured</p> Signup and view all the answers

    A health insurance policy contains a provision stating that the producer does not have the authority to change the policy or waive any of its provisions. Which policy provision is this?

    <p>Entire Contract</p> Signup and view all the answers

    The Affordable Care Act (ACA) provides coverage to dependents up to what age?

    <p>26</p> Signup and view all the answers

    According to Indiana law, group life insurance conversion privileges must NOT?

    <p>Require evidence of insurability.</p> Signup and view all the answers

    Insureds in the same risk classification are being charged different premiums by an insurance company. The insurer is committing the illegal act of?

    <p>Unfair Discrimination</p> Signup and view all the answers

    How often must an insurance producer's license in Indiana be renewed?

    <p>Every two years</p> Signup and view all the answers

    ABC Insurance Company fails to pay death proceeds after satisfactory proof of loss was submitted. ABC must then begin paying interest on the death proceeds after how many days of receiving proof of loss?

    <p>30 days</p> Signup and view all the answers

    If a new Medicare supplement policy involves the replacement of existing coverage, it must be noted on which document?

    <p>On the application</p> Signup and view all the answers

    In order to terminate a producer's appointment, the insurer MUST?

    <p>Send notice of the termination to the commissioner</p> Signup and view all the answers

    Under a small group health plan, when are babies covered?

    <p>At birth</p> Signup and view all the answers

    The Commissioner is appointed by the?

    <p>Governor</p> Signup and view all the answers

    Which unfair competition practice involves a producer suggesting that an insurance policy is like a share of stock?

    <p>Misrepresentation</p> Signup and view all the answers

    P is a producer who is licensed in Indiana but a resident of Michigan. In Indiana, P is considered to be a(n)?

    <p>Nonresident</p> Signup and view all the answers

    A producer must notify the insurance commissioner within how many days of an address change?

    <p>30 days</p> Signup and view all the answers

    According to Indiana law, how long is the free look period for a Medicare supplement policy?

    <p>30 days</p> Signup and view all the answers

    According to Indiana's mammography coverage statute, which of these benefits are considered mandatory in every medical expense policy?

    <p>One mammogram every year for women aged 40 and older.</p> Signup and view all the answers

    A(n) ______ sells insurance advice for free?

    <p>consultant</p> Signup and view all the answers

    Which of these provisions is NOT required in individual life insurance policies sold in Indiana?

    <p>Extended Term</p> Signup and view all the answers

    An example of an unfair claims settlement practice would be?

    <p>Misrepresenting insurance policy provisions affecting a loss.</p> Signup and view all the answers

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

    <p>Alien</p> Signup and view all the answers

    The Legal Action provision in Indiana stipulates that the insured must wait how many days after submitting proof of loss to initiate a lawsuit?

    <p>60 days</p> Signup and view all the answers

    An example of rebating would be?

    <p>Offering a client something of value not stated in the contract in exchange for their business.</p> Signup and view all the answers

    When does the Free-Look provision for health insurance begin?

    <p>Date the policy is delivered to the insured</p> Signup and view all the answers

    Why would the Insurance Commissioner issue a temporary license?

    <p>To allow a producer to sell for an unauthorized insurer.</p> Signup and view all the answers

    To be classified as a small employer, an employer must employ:

    <p>2-50 employees</p> Signup and view all the answers

    A licensee must notify the Commissioner within how many days of an address change?

    <p>30 days</p> Signup and view all the answers

    An example of an unfair claims settlement practice would be?

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

    An insurer distributes public brochures that contain a false statement regarding a competitor's ability to pay claims. This act is considered an example of?

    <p>Defamation</p> Signup and view all the answers

    Which of the following is NOT considered rebating?

    <p>Sharing commissions with a producer licensed in the same line of business.</p> Signup and view all the answers

    What is Indiana's definition of life insurance replacement?

    <p>A transaction in which a new policy is bought and an old policy is terminated</p> Signup and view all the answers

    An applicant MUST receive an Outline of Coverage when an application is taken for a(n):

    <p>Medicare Supplement policy</p> Signup and view all the answers

    In Indiana, what is the maximum percentage of controlled business a producer may write in a twelve-month period?

    <p>25%</p> Signup and view all the answers

    A(n) _______ of authority permits an insurance company to transact business in Indiana.

    <p>certificate</p> Signup and view all the answers

    Which of the following will happen if a licensed resident insurance producer moves to another state?

    <p>Producer's license shall terminate immediately.</p> Signup and view all the answers

    Convincing a prospective insured to buy an insurance policy based on exaggerations is considered to be a form of?

    <p>Misrepresentation</p> Signup and view all the answers

    During the course of an insurance business transaction, who does the producer legally represent?

    <p>Insurance company</p> Signup and view all the answers

    XYZ Corp was issued a group health policy for its employees. Under this plan, what must happen?

    <p>A policy must be issued to XYZ, and a certificate must be issued to each employee.</p> Signup and view all the answers

    An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation is considered?

    <p>an insurance agent</p> Signup and view all the answers

    Study Notes

    Medical Expense Policies in Indiana

    • Health policies with monthly payments have a 10-day grace period.
    • Maximum incontestable period for individual medical expense policies is two years.
    • Reinstatement provisions must be included in health policies.

    Health Insurance Policy Terms

    • "Limiting age" refers to the age at which dependent children are removed from a family health insurance policy.
    • For newborns, the policyholder must notify the insurer of the birth and provide the first premium within 31 days.

    Unfair Practices in Insurance

    • Rebating includes returning a portion of a premium as an inducement to purchase insurance.
    • Charging different premiums to insureds in the same risk classification constitutes unfair discrimination.
    • Misrepresentation occurs when a producer guarantees policy dividends.

    Life Insurance Standards

    • Life insurance policies can be backdated up to six months from the application date.
    • The free-look period for Medicare supplement policies is 30 days.

    Child Health Insurance Program (CHIP)

    • CHIP provides health benefits until the child turns 19 or becomes financially ineligible.
    • Coverage for children requires residency in Indiana and must meet specific income criteria.

    Producer Licensing and Education

    • Producers must complete 24 hours of continuing education every two years.
    • Producers must notify the insurance commissioner of address changes within 30 days.

    Group Health Policies

    • Groups must be formed for purposes other than obtaining insurance to qualify for group health policies.
    • Babies are covered at birth under small group health plans.

    Unfair Claims Settlement Practices

    • Failing to settle claims promptly and fairly can be considered an unfair claims settlement practice.
    • Insurers must begin paying interest on death proceeds 30 days after proof of loss submission.

    Replacement and Conversion Rights

    • An individual life insurance policy can be converted from a group policy upon employment termination without requiring evidence of insurability.
    • Controlled business reflects insurance written on the producer's interests and cannot exceed 25% of business in a year.

    Authority and Regulation

    • The insurance commissioner enforces state law relating to insurance and must be notified within 15 days for producer appointment terminations.
    • Insurers are not obliged to provide fraud information to an insured upon request.

    Special Provisions

    • The Legal Actions provision requires insureds to wait 60 days after proof of loss submission to initiate a lawsuit, with a filing period of up to three years.
    • Under the Affordable Care Act, dependents can remain covered under a parent's policy until age 26.

    Other Key Definitions

    • An alien insurance company operates in the U.S. but is formed in another country.
    • Coercion involves requiring a borrower to buy insurance from a specific company, which is an unfair practice.### Employment and Insurance Regulations
    • Employment Termination: Can impact insurance coverage and eligibility, particularly in group policies.
    • Nonpayment of Premiums: May lead to policy cancellation or termination.
    • Policy Reinstatement: Often possible if premiums are paid within a specified period after default.
    • Decrease in Employer Revenue: Can affect the ability to maintain group health coverages.

    Insurance Practices

    • Rebating: Offering something of value not stated in the contract to a client is considered rebating.
    • False Advertising: Insurers cannot exaggerate dividends in advertisements, which is a form of misleading representation.

    Licensing and Compliance

    • Life Insurance Policy Replacement: If an existing policy is reissued with a lower cash value, a producer must sign the Notice Regarding Replacement.
    • Producer's License Requirements: Completing a pre-licensing examination is mandatory for applicants.
    • Controlled Business Limitations: In Indiana, producers can generate a maximum of 25% of their business from controlled clients in a year.

    Health Insurance Regulations

    • Coverage for Newborns in Indiana: Health policies must begin coverage from the moment of birth.
    • Group Health Insurance Enrollment: Eligible employees must be added to group health coverage within 90 days of starting employment.
    • Free-Look Period for Policies: Life insurance policies in Indiana have a free-look period of 20 days.

    Consumer Protection

    • Insurance Guaranty Association: Protects policyowners in Indiana if an insurance company goes bankrupt.
    • Consumer Rights in Replacement: Policyowners are protected during the replacement of life insurance policies to ensure they are informed and not misled.

    Producer Obligations

    • Compliance Responsibility: Business entities must have a designated licensed producer responsible for ensuring compliance with insurance laws.
    • Commission Sharing: Producers can only share commissions with other licensed producers of the same type.

    Violations and Penalties

    • License Suspension: A producer may face suspension or revocation for engaging in fraudulent practices.
    • Cease and Desist Violations: The maximum fine for violating a cease and desist order in Indiana is $25,000 per violation.

    Long-Term Care (LTC) Insurance

    • Training Requirements: Producers need eight hours of post-licensing education focused on LTC to sell these policies.
    • Determining Appropriate Coverage: It is the responsibility of the producer to assess if LTC coverage meets an applicant's needs.

    Miscellaneous

    • Grace Period for Premiums: Coverage remains in force if the premium is paid during the grace period after a loss occurs.
    • Group Life Insurance Eligibility: Individuals related by blood cannot be included under group life policies.
    • Domestic Insurance Companies: Must be incorporated and formed in Indiana to operate legally.

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    Description

    This quiz focuses on Chapter 8 of the Indiana law regarding individual medical expense policies. It explores true statements and exceptions related to grace periods, incontestable periods, and contract components. Test your knowledge and understanding of the legal framework surrounding health insurance in Indiana.

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