Insurance Regulations and Compliance Quiz

Questions and Answers

The initial amount of credit life insurance may NOT exceed

An amount set by statute and adjusted regularly for inflation

The amount to be repaid under the contract (correct)

The borrower's monthly income

The borrower's annual income

How often must producers in this state complete continuing education requirements?

Every 5 years

Annually

Every 2 years (correct)

Every 3 years

How many days does an insurer have to respond to a written communication from a claimant?

90 days

30 days (correct)

20 days

10 days

If the policyowner defaults on any premium payment for a life insurance policy, the insurer must notify the policyholder in writing as to the policyholder's options. This notification form must be provided to the policyholder within

3 months Signup and view all the answers

According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls?

8am until 9pm Signup and view all the answers

Which of the following is TRUE about credit life insurance?

Creditor is the policyowner Signup and view all the answers

If a telemarketer wants to make an unsolicited sales call to a potential customer, what is the earliest time the telemarketer can call the prospect's residence?

8 am Signup and view all the answers

Which of the following entities established the Do-Not-Call Registry?

The Federal Trade Commission Signup and view all the answers

Renewal fees for all licenses are the same as the initial license. However, late application for renewal of a license requires a fee of

Double the original license fee Signup and view all the answers

If a producer allows his or her license to lapse, what is the maximum time period during which the producer can reinstate the license without having to retake the examination?

12 months Signup and view all the answers

When an individual life insurance policy is being replaced by an insurer using an agent, the policyowner must be given an unconditional right to a full refund of premiums if the policy is returned within

20 days Signup and view all the answers

According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?

60% Signup and view all the answers

Which of the following is included on the certificate for credit life insurance?

The effective date and termination date Signup and view all the answers

All of the following are exempt from the licensing requirement EXCEPT

Employee of insurance company involved in the effectuation of the insurance contract Signup and view all the answers

Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?

100% Signup and view all the answers

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority Signup and view all the answers

Before an insurer pays fees or commissions to an agent, which of the following must happen?

The Commissioner must approve the agent's appointment Signup and view all the answers

When would a 20-pay whole life policy endow?

When the insured reaches age 100 Signup and view all the answers

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT

LTC policies are marketed effectively to prospective insureds Signup and view all the answers

What characteristic makes whole life permanent protection?

Coverage until death or age 100 Signup and view all the answers

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal life Signup and view all the answers

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract Signup and view all the answers

Regarding the taxation of Business Overhead policies,

Premiums are deductible and benefits are taxed Signup and view all the answers

Which of the following is true regarding health insurance coverage for a state resident whose policy has lapsed as a result of military service activation?

The policy may be reinstated to the same status within 30 days of discharge from the military service Signup and view all the answers

What is the purpose of a conditional receipt?

It is intended to provide coverage earlier than the date of issuance of the policy. Signup and view all the answers

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?

Adjust the benefit in accordance with the increased risk Signup and view all the answers

All of the following are correct about the required provisions of a health insurance policy EXCEPT

A reinstated policy provides immediate coverage for an illness Signup and view all the answers

Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within

90 days Signup and view all the answers

In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?

Conversion factor Signup and view all the answers

Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

A policy summary Signup and view all the answers

What is the purpose of establishing the target premium for a universal life policy?

To keep the policy in force Signup and view all the answers

Study Notes

Credit Life Insurance

The initial amount cannot exceed the total amount repayable under the contract.
In credit life insurance, the creditor is the policyowner and beneficiary, while the debtor is the insured.

Continuing Education for Producers

Producers must complete at least 24 hours of continuing education every 2 years, including 3 hours in ethics.

Insurer Communication

Insurers must respond to written communications from claimants within 30 days of receipt.
If a policyowner defaults on premium payments, notification about options must be sent within 3 months.

Telemarketing Regulations

Permissible calling hours for telemarketers are between 8am and 9pm.
Unsolicited calls can only be made starting at 8 am.

Insurance Licensing and Renewals

Late renewal applications for licenses require a fee of double the original license fee.
A lapsed producer's license can be reinstated without retaking an exam within 12 months.

Health Insurance Policies

Under the bronze plan of the PPACA, the insurance covers 60% of healthcare costs.
Preventive care must be fully covered (100%) without cost sharing under the Affordable Care Act.

Policy Refunds and Termination

Policyowners have an unconditional right to a full refund of premiums if the policy is returned within 20 days.
The effective and termination dates must be included on credit life insurance certificates.

Taxation and Business Overhead Policies

Premiums for Business Overhead policies are deductible, but benefits received are taxable.

Military Service and Health Coverage

Policyholders activated for military service can reinstate coverage within 30 days of discharge without medical underwriting.

Conditional Receipts

Conditional receipts provide coverage earlier, starting at application or medical examination, if the applicant is insurable.

Occupational Changes and Benefits

If an insured changes to a more hazardous occupation, adjustments to benefits may be made based on the increased risk.

Health Insurance Policy Provisions

Proof-of-loss forms must be sent within 15 days, and a grace period of 31 days is standard in annual pay policies.

Accidental Death Benefits

Accident death benefits are payable if death occurs within 90 days of the accident.

Relative Value System

The conversion factor is the total amount payable per point in a relative value system for procedures.

Policy Summaries

A policy summary must include premium amounts, cash values, surrender values, and death benefits for specific policy years.

Target Premium Purpose

The target premium helps ensure a universal life policy remains in force throughout its lifetime by covering the cost of insurance.

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Description

Test your knowledge on key aspects of insurance regulations, including credit life insurance, continuing education for producers, insurer communication requirements, and telemarketing laws. This quiz will cover essential rules that insurance professionals must adhere to for compliance.