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XCEL Chapter 11 - Laws and Rules

Terms in this set (132)

In Maryland, an insurance producer cannot sell, solicit, or negotiate policies for an insurer unless there is an agreement in place between the producer and insurer. This agreement is called a(n)
appointment
what kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting order than an acute care unit of a hospital?
long-term care
Twisting is
the unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation.
All of these activities require an individual to hold a producer's license EXCEPT
providing referrals
An insurance producer is BEST defined as
a person who has a contract with an insurance company to represent it
Proceeds payable under a life insurance contract to a policyowner in anticipation of death or upon the occurrence of specified life-threatening conditions as defined by the policy are best described as
accelerated benefits
which of the following life events would allow an uninsured employee to qualify for special enrollment in a small employer health benefit plan?
Adoption of a child
Who is required to notify the producer in the event of appointment termination?
Insurer
All of these may be an unfair claims practice EXCEPT
Refusing to pay persons bringing false or fraudulent claims
An example of misrepresentation is
providing incorrect, misleading, incomplete, or materially untrue information in the license application
All of the following are typically included in a life insurance policy illustration EXCEPT
Names of the beneficiaries
Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Maryland?
Health Insurance Producer License
At minimum, a carrier is required to offer which of the following health benefit plans to small employers?
The standard plan
A producer's renewal date for his/her resident insurance license is on or before
the last day of the licensee's birth month
A domestic insurance company in Maryland MUST
be formed under Maryland insurance laws
Which of the following is required for an insurer to conduct business in this state?
Certificate of Authority
Under a small group health plan, an insurer is required to provide a newly-married employee at least ____ days to add the new spouse to the plan.
60 days enrollment period
a producer's license must be renewed every ____ year(s).
2
Maria the insurance producer completes a sale by collecting the required signatures on the application and obtaining the initial premium. Afterwards, she deposits the check into her personal checking account. Maria has committed what crime?
Fraud
Kiara filled out a life insurance application and was given a policy illustration that showed future premiums being paid out of nonguaranteed values. This illustration MUST disclose that
she may need to resume premium payments depending on actual results
a producer's secretary who solicits prospects on the telephone
must be licensed as a producer
An order issued by the commissioner that prohibits a specific practice listed in the order is called a
cease and desist order
Which of the following is NOT a reason for the Commissioner to deny or refuse a producer license application?
Unintentionally misrepresented a material fact on the application
A Buyer's Guide and Policy Summary
must be delivered with or prior to policy delivery
The food and drug administration approves prescription drugs for treatment as stated on the drugs labeling. The prescription of a drug for treatments other than what's labeled is known as _____ use
off-label
A life insurance policy sold in Maryland can be cancelled for nonfraudulent misstatements for up to
2 years
An insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a(n)
rebate - which is illegal
when collecting insurance premiums from a client, a producer MUST
forward premiums to the insurer on a timely basis
Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a(n)
Unfair claim settlement practice
A person who, for a fee, gives advice or recommendations on benefits provided by an insurance contract is called
an advisor
An advertisement for an insurance product may contain
the insurer's name
Any advertisement that mentions a dollar amount, period of time for which any benefit is payable, cost of policy, policy benefit, or the loss for which the benefit is payable MUST disclose
the exceptions, reductions, and limitations affecting the basic provisions of the policy
the identity of the ___ must be made clear in every health insurance advertisement.
insurer
The ___________ must be notified of a licensee's address change within 30 days of such change.
Commissioner
A life insurance replacement gives the policyowner the right to return the policy for a 100% refund within _____ days of policy delivery.
30
Producers must complete a total of ___ Continuing Education hours for each two-year licensing period.
24
An ____ ____ sells, solicits, or negotiates insurance contracts for compensation.
insurance producer
Which of the following unfair trade practices involves a producer who makes public malicious statements about an insurer's financial condition?
Defamation
Two producers may share a commission ONLY if
they are both licensed in the same line of business
Insurance producer Kelly offers insured a $500 shopping card if an insurance product is purchased through her. What is this an example of?
Rebating
A producer who sells an individual life insurance policy in Maryland MUST deliver to the policyowner a(n)
Policy Summary and Buyer's Guide
A producer's license may only be suspended or revoked if the producer
has been afforded the right to a hearing
One role of the commissioner is to
enforce state insurance laws
The Maryland Insurance Commissioner
counsels and advises the governor on all matters assigned to the Maryland Insurance Administration
A Maryland insurance producer solicits an insurance policy. In the event of a controversy between the insured and the company, the producer is considered to represent the
company
How often must the Commissioner examine each domestic insurance company?
every 5 years
which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?
Submit to the replacing insurer a list of the policies to be replaced
An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of
Misrepresentation - also known as oral statements
In the state of Maryland, a licensed producer
represents the insurer
A producer must notify the Commissioner within ____ days of any felony conviction.
30
A producer is meeting with a client to determine whether an annuity would be suitable for purchase. Which of the following topics needs to be discussed with this client?
Financial objectives
a life insurance policyowner is allowed ___ days upon policy delivery to return the policy for a full premium refund.
10
A(n) _______ insurance company is one that was formed under the laws of another country outside of the U.S.
alien
Prior to conducting an HIV-related test, the insurer must obtain a(n)
written authorization from the proposed insured
who regulates the quality of care provided by a health maintenance organization (hmo)
secretary of the Department of health and Mental Hygiene
an insurer formed according to the legal requirements of another country is called a(n)
alien insurer
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as
twisting
The Commissioner must examine the financial affairs of each admitted insurer operating in Maryland at least once every how many years?
5
Upon receiving a producer complaint, the Commissioner may immediately
issue a cease and desist order
which of the following is not a circumstance to which a temporary producer license can be issued?
Prospective producer who is waiting to take the state licensing examination
How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?
3 years
Recording the receipt and distribution of premiums due to an insurer is considered a proucer's _____________ responsibility.
fiduciary
An insurer may pay a commission in which of the following scenarios?
To a licensed producer who is appointed with the insurer
Which of the following basics is a producer's fiduciary responsibility?
Collecting premiums and paying them to the insurance company
A(n) ______ negotiates an insurance contract on behalf of an insurer.
producer
The renewability provision for an individual long-term care insurance policy must be located on the policy form's
first page
Commissions may ONLY be paid to
licensed an duty appointed producers
ABC Insurance company transfers part of their risk to XYZ insurance company. This situation is called
reinsurance
who is eligible for insurance under a group policy issued to a labor union?
Every member of that union
a producer may be disciplined by the commissioner for which of the following actions?
Misappropriation of premium funds
A viatical settlement broker may NOT
make any transactions before being approved for a license
Any advertisement that mentions a dollar amount, period of time for which any benefit is payable, cost of policy, policy benefit, or the loss for which the benefit is payable MUST disclose
the exceptions, reductions, and limitations affecting the basic provisions of the policy
an insurance producer who replaces an existing policy by making false written or oral statements is committing the act of
twisting
a producer does NOT have a fiduciary responsibility to
the Guaranty Association
Jim recently sold his whole life insurance policy under a viatical settlement contract. The proceeds of this contract could be subject to the claims of
creditors
A minor may receive a life insurance policy's death benefit ONLY
if the minor has an appointed guardian
Which of the following is NOT a qualification to be licensed as a producer?
High School diploma
Which of the following actions by a producer would NOT result in a license suspension or revocation?
Producing an inadequate amount of new premium
A producer has recently died and leaves behind a spouse. In order for the producer's insurance business to continue, the Commissioner may issue to the producer's spouse a(n)
temporary insurance license
as of january 1, 2014 small group health insurance can be rated on the basis of
tobacco use
Tim's individual life insurance policy has just recently lapsed. His policy may be reinstated at any time within _____ years.
3
which of the following is an example fraud?
A producer who knowingly submits a false statement in support of a claim
How many days notice must the Commissioner give prior to a hearing?
10 days
To conduct insurance business in this State, an insurer must be issued a certificate of authority. The entity which issues the certificate of authority is the
Commissioner
Replacement regulation is designed to protect
Policyowners from misrepresentations and loss of benefits
Which type of contract may NOT be issued by an insurance company?
HMO contract
A temporary producer license in Maryland is valid for up to
15 months
In Maryland, a Producer may have his/her license revoked for which of the following acts?
Signing a prospect's name without their knowledge or presence
Which of the following is NOT required in an order from the Commissioner?
The Governor's signature
Maryland requires that a licensee completes ___ hours of continuing education on the subject of ethics every reporting period
3
A Buyer's Guide MUST
have it's content approved by the commissioner
under the Maryland health insurance plan, comprehensive health benefits are provided to
medically uninsurable residents
All of these are responsibilities of the Commissioner EXCEPT
Endorsing insurers
Twisting is an illegal act which involves
misrepresentation
A licensee must notify the Commissioner of an address change within ___ days of the change.
30
An individual life insurance policy can be contested by the insurer only during the first _________ year(s) of the contract
two
the life and health guaranty corporation provides funds to carry out its powers and duties by assessing
member insurers
How long after its effective date will an individual life insurance policy become incontestable?
2 years
Which of the following is not considered to be an act of fraud?
collecting a charge for insurance that is less than the charge applicable to that insurance
A(n) ______ insurance company is one that was formed under the laws of a state other than Maryland
foreign
Producers must complete a total of ___ Continuing Education hours for each two-year licensing period.
24
ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful insurance practice known as
illegal inducement
________ is the authority given to a producer to sell, solicit, or negotiate insurance on behalf of the insurer.
Appointment
A producer has committed an insurance crime that violates US Code 1033 (interstate commerce). who would be responsible for the prosecution of this crime?
US Attorney General
A life policy loan in Maryland cannot charge a fixed rate of interest higher than
8%
A producer may begin to solicit insurance ONLY when
appointed by an insurer
How often must an insurance producer's license in Maryland be renewed?
Every two years
An example of rebating is
a producer who shares commissions with a client
an existing health benefit plan offered by a small employer may be replaced by a SHOP exchange navigator only if the small employer
is eligible for a federal tax credit through the SHOP exchange
if a producer has been engaged in an administrative action by any governmental agency, within how many days following the final deposition must the producer report the action to the commissioner?
30
Within how many days must a producer report to the Commissioner any administrative actions made against him/her?
30
Replacement can be BEST described as
exchanging a new policy for one already in force
Which of the following is NOT a requirement for soliciting insurance in Maryland?
At least 21 years old
Which of these is NOT an Unfair Claims Settlement Practice?
Providing claim payments to insureds under the guidelines of the insurance contract
In maryland, full time employee of a small employer must work an average of at least ___ per week.
30 hours
All of the following is considered a form of advertising EXCEPT
An insurer's AM Best rating
Terminally-ill life insurance policyowners may sell their policy at a discount to a third party. This type of agreement is called a
viatical settlement
A(n) ______ company is owned by its shareholders
stock
Written notice of a health insurance claim should be given to the insurer within __ days after the occurrence of any loss covered by the policy.
20
A separate converted policy may, at the option of the insurance company, be issued to cover a(n)
dependent
john the insurance producer has an insurance license that expires in 6 months. if he files an application for renewal before the expiration date, his license will
remain in effect until a new one is issued
Violations of US Code Title 18 section 1033, may result in
Fine and/or imprisonment
Producer commissions may NOT be paid to
licensed producers not appointed by an insurer
All of these types of benefits may be covered by a nonprofit health service plan except
disability income
Advertising Regulations exist to
assure full and truthful disclosures to the public
What is the required action to be taken by a Maryland licensee before operating under an assumed business name?
Notify Commissioner
All of the following actions are considered rebating EXCEPT
sharing commissions with other licensed and appointed agents
The Fair Credit Reporting Act protects consumers
with guidelines regarding credit reporting and distribution
During the examination of an insurer's books and records by the Commissioner, the insurer
must not impede the examination
A producer who is licensed in Maryland but resident in another state is called a
nonresident producer
A producer MUST maintain insurance transaction records for a minimum of ___ years.
5
The promise of a discount in premium as an inducement to purchase insurance is known as
rebating
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