Texas Laws and Rules Chapter 8 Flashcards

Questions and Answers

A plan through the Marketplace may be purchased by?

Any legal resident (correct)

Only citizens

Those with a work visa

Those imprisoned

What must an agent do during a sales presentation for a participating life insurance policy?

Make a prospect understand that dividends are not guaranteed.

How long must an HMO hold an open enrollment period after the initial enrollment period?

31 days

Which of the following is NOT a required provision in group life policies?

Right to Loan Signup and view all the answers

Under what circumstances can a license be denied, suspended, or revoked?

If the licensee is found guilty of misrepresentation in obtaining the license. Signup and view all the answers

Which of the following is a valid reason for an enrollee to be cancelled by a Health Maintenance Organization (HMO)?

Nonpayment of coverage Signup and view all the answers

How long does an insurance company appointment remain in force?

Until terminated Signup and view all the answers

What is the monetary penalty for willfully violating a cease-and-desist order?

Fine up to $500 Signup and view all the answers

What may B, an insurance agent, be found guilty of if he tells clients their rights may be impaired for not completing a release form?

Coercion Signup and view all the answers

What action will a life insurance company most likely take if an insured dies and their age was misstated on the application?

Pay an amount the premiums would have purchased at the insured's actual age. Signup and view all the answers

Which of the following is a requirement for obtaining a Texas insurance agent's license?

Be honest, trustworthy, and reliable Signup and view all the answers

What is an example of an unfair claims settlement practice?

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

For what reason may a Medicare Supplement policy be cancelled?

The premium has not been paid by the insured. Signup and view all the answers

A temporary agent's license issued by the Commissioner of Insurance is valid for up to _____ days.

90 Signup and view all the answers

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

An insured Signup and view all the answers

A certificate of _______ permits an insurance company to transact business in Texas.

authority Signup and view all the answers

ABC Insurance Company is actively engaging in boycott, coercion, and intimidation. What are they committing under Texas insurance laws?

Unfair methods of competition. Signup and view all the answers

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

Individuals who are related by blood Signup and view all the answers

What defines a foreign insurance company conducting business in Texas?

Was formed under the laws of another state. Signup and view all the answers

Which action does the Commissioner of Insurance NOT have the power to conduct?

Activate insurance companies' financial reserves Signup and view all the answers

An employee is covered under a company group life plan with a $50,000 death benefit. What is the maximum amount a spouse may be insured for under this program?

$25,000 Signup and view all the answers

Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas?

The agent Signup and view all the answers

What is required for an agent whose license has been revoked?

Wait at least 5 years before applying for a new license. Signup and view all the answers

______ of continuing education MUST be completed in the classroom or classroom equivalent.

50% Signup and view all the answers

What must an applicant receive when an application is taken for a Medicare Supplement policy?

An Outline of Coverage Signup and view all the answers

Who approves an Evidence of Coverage form issued by a Health Maintenance Organization (HMO)?

The commissioner Signup and view all the answers

With whom may an agent legally share commissions?

Another agent with the same line of insurance. Signup and view all the answers

Which statement about health coverage for newborns is NOT true?

Coverage is limited to only congenital defects Signup and view all the answers

An insured may assign up to ______ of policy ownership under an individual life insurance policy.

100% Signup and view all the answers

Study Notes

Insurance License and Regulations

Legal residents, except those imprisoned, may purchase plans through the Marketplace.
For life insurance sales presentations, agents must clarify that dividends are not guaranteed.
Every 12 months after the initial enrollment, Health Maintenance Organizations (HMOs) must offer a 31-day open enrollment period.
Group life policies do not require a right to loan provision.
A license may be denied, suspended, or revoked if misrepresentation is detected in obtaining it.
Nonpayment of coverage is a valid reason for an enrollee being canceled by an HMO.
Insurance company appointments remain in force until terminated.

Compliance and Violations

A monetary penalty for willfully violating a cease-and-desist order can be as high as $500.
Coercion can occur if an agent misrepresents rights related to release forms.
If an insured's age is misstated, companies will pay benefits based on what premiums would have purchased at the correct age.
Obtaining a Texas insurance agent's license requires honesty, trustworthiness, and reliability.
Unfair claims settlement practices include denying claims without providing a basis for denial.

Insurance Policies and Coverage

Medicare Supplement policies can be canceled for non-payment of premiums.
Temporary licenses issued by the Commissioner of Insurance are valid for a maximum of 90 days.
Insurers are not required to provide information on fraudulent claims upon request from an insured.
A certificate of authority is required for insurance companies to operate in Texas.
Engaging in boycott, coercion, or intimidation constitutes unfair competition under Texas laws.

Group and Life Insurance Specifics

Individuals related by blood cannot be insured under a group life insurance policy.
A foreign insurance company in Texas is one formed under another state's laws.
The Commissioner of Insurance cannot activate a company's financial reserves.
A spouse can be insured for a maximum of $25,000 under a group life plan that provides a $50,000 death benefit.
When an agent sells a policy through an unauthorized insurer, the agent alone is liable for losses sustained by the insured.

Agent Requirements and Education

An agent whose license is revoked must wait at least 5 years before applying for a new one.
Fifty percent of continuing education must be completed in a classroom setting or its equivalent.
An Outline of Coverage must be provided when an application for a Medicare Supplement policy is taken.
Evidence of Coverage forms from HMOs require approval from the commissioner.
Agents can legally share commissions only with other agents authorized in the same line of insurance.

Coverage Specifics for Newborns and Policy Assignments

Health coverage for newborns is not limited to congenital defects; it typically covers a wider range of health needs.
An insured may assign up to 100% of policy ownership under an individual life insurance policy.

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Description

This quiz covers key concepts and regulations from Chapter 8 of Texas Laws and Rules. Use these flashcards to test your understanding of life insurance policies, HMOs, and enrollment procedures. Perfect for exam preparation or quick reviews.