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Florida Laws and Rules Pertinent to Insurance CH. 8

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

Explanation of the policy’s benefits

Listing of the policy’s exclusions and limitations

Projection of the policy’s future costs

Explanation of the policy’s renewal and cancellation provisions

Projection of the policy’s future costs

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?

Five

Ten

Twenty

Thirty

Twenty

What do Dread Disease policies cover?

A specific disease or illness

All diseases or illnesses

Only terminal illnesses

Only heart-related diseases

A specific disease or illness

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

Foreign

Domestic

Alien

Transatlantic

Alien

A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits?

Unemployment

Banking

Retirement

Insurance

Insurance

Which of these is NOT a legal entity for selling life insurance in Florida?

Independent agency system

Risk management advisers

Career agency system

Personal producing general agency

Risk management advisers

According to Florida law, group life insurance conversion privileges must NOT

allow the converted policy to exceed 75% of the original group life amount

allow a time period to convert group life coverage to an individual life policy

require a rate increase

require evidence of insurability

require evidence of insurability

According to Florida law, which of the following statements accurately describes an admitted mail order insurance company?

It may solicit insurance business by mail without the assistance of a licensed agent

It may solicit insurance business by mail only with the assistance of a licensed Florida agent

Admitted mail order insurance companies are illegal in Florida

Admitted mail order insurance companies cannot solicit insurance business outside the state of Florida

It may solicit insurance business by mail without the assistance of a licensed agent

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

Group Life coverage can only be converted if the employer pays for the individual policy

Group Life coverage can normally be converted to an individual policy within 6 months

Group Life coverage can only be converted by providing evidence of insurability

Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis

Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis

Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?

Policy summary

Conditional receipt

Buyer’s guide

Illustration

Buyer’s guide

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

30%

40%

50%

60%

50%
In Florida, an agent’s controlled business may NOT exceed a maximum of 50%.

Association Plans that are designed to provide health benefits to their members are regulated by the state because

they are insured by an authorized insurer

they conduct business in Florida

they provide a service to their members

they require a certain level of member participation

they are insured by an authorized insurer

Which of the following is NOT a consequence for placing business with an unauthorized insurer?

Third degree felony

First degree misdemeanor

Insurance license revoked

Responsible for unpaid claims

First degree misdemeanor

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT

An agent’s commission

Policyowner’s rights

Policy provisions

An agent’s licensing requirements

An agent’s commission

T is an employee covered under a Group Life policy. If T’s employment is terminated, the conversion privilege gives T the right to convert

to an individual policy, only by providing evidence of insurability

to an individual policy, only if the employer pays the premiums

to an individual policy upon employment termination

to an individual policy with a higher amount of coverage

to an individual policy upon employment termination

What is Florida’s definition of Life insurance replacement?

A transaction in which coverage on an existing policy is increased

A transaction in which group life coverage is converted to an individual policy

A transaction in which a new policy is bought and an old policy is terminated

A transaction in which a policyowner reinstates a lapsed policy

A transaction in which a new policy is bought and an old policy is terminated

A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy’s face value.

viatical settlement provider

broker

insurer

viator agent

viatical settlement provider

Which of the following documents 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

A list of all policies the agent has replaced in the last 3 years

A statement made by the agent that NAIC guidelines have been met during the replacement process

A copy of the agent’s insurance license

Notice to existing and replacing insurers of intention to replace

A stock life insurance company that issues both participating and nonparticipating policies is doing business on

a mixed plan

a diverse plan

a multiple plan

an assorted plan

a mixed plan

If a policyowner does not pay the premium by the due date, the

policy must be reinstated

policyowner is automatically assessed a late charge

insurance company cancels the policy

policyowner can make the premium payment during the grace period

policyowner can make the premium payment during the grace period

The Florida Employee Health Care Access Act was established to make

group health insurance available to employers with up to 50 employees

health insurance affordable for families with children

individual health insurance available to all Floridians

health insurance affordable to retired individuals

group health insurance available to employers with up to 50 employees

Employers with less than __ employees are affected by Florida’s Health Insurance Coverage Continuation Act (Mini COBRA).

40

30

20

10

20

Florida’s 14-day free-look period for life insurance policies begins at the

date of delivery

date of approval

date of application

date of physical examination

date of delivery

Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.

3

4

5

6

5

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

avoid duplication of benefit payments

avoid excessive hospitalization

lower insurance premiums

maximize patient care

avoid duplication of benefit payments

A long-term care lapse notice must be delivered to both the applicant and

secondary addressee

beneficiary

personal physician

MIB

secondary addressee

Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client.

$25

$50

$75

$100

$25

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

the commissions to be paid as a result of the transaction

the possible tax ramifications as a result of the transaction

the insurer’s A.M. Best rating

proof of appointment by the agent

the possible tax ramifications as a result of the transaction

The Financial Services Commission may hold hearings

for any reason deemed necessary

only when a felony is involved

when approved by the NAIC

only if there is a complaint filed

for any reason deemed necessary

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

Only if the locations are in Florida

By keeping all locations within a close proximity

An agent-in-charge can only have one location

Only if the agent-in-charge is present when insurance activity occurs

Only if the agent-in-charge is present when insurance activity occurs

Which of the following acts is an agent NOT authorized to do on behalf of an insurer?

Accept premiums from policyowners

Complete insurance applications

Authorize claim payments

Ask health related questions

Authorize claim payments

A license may be denied, suspended, or revoked if the licensee

engages in replacement of an existing policy

is found guilty of misrepresentation

does not meet a sales quota

files for bankruptcy

is found guilty of misrepresentation

Under an Individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured?

Annually

Weekly

Monthly

Daily

Monthly

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

Coercion

Fraud

Misrepresentation

Sliding

Misrepresentation

An example of false advertising would be

Paid testimonials from celebrity endorsements

An insurer exaggerating its dividends in a magazine advertisement

An agent spending more than $25 on marketing gifts for a client

An insurer advertising in an insurance trade journal

An insurer exaggerating its dividends in a magazine advertisement

Which of the following is NOT considered rebating?

Sharing commissions with an agent licensed in the same line of business

Returning premium to a client as an inducement for purchasing a policy

Giving something of value to an insured in exchange for their business

Offering special dividends

Sharing commissions with other licensed agents is not considered rebating.

Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock?

Twisting

Intimidation

Misrepresentation

Sliding

Misrepresentation

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

coercion

false advertising

twisting

intimidation

false advertising

One definition of replacement is “the act of replacing an existing insurance policy with another”. Replacement is

legal and requires no disclosure

closely regulated and requires full disclosure

not legal in the state of Florida

allowed only if the policy originated outside the state of Florida

closely regulated and requires full disclosure

S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?

Legal Actions

Insurance with other insurers

Entire Contract

Reinstatement

Entire Contract

J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?

Twisting

Defamation

Coercion

Rebating

Coercion

A foreign insurance company doing business in Florida

is not subject to Florida insurance laws

is a company that was formed under the laws of another state

is a company that was formed under the laws of another country

is only authorized to write business outside the United States

is a company that was formed under the laws of another state

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

domestic

alien

foreign

authorized

domestic

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

7%

8%

9%

10%

10%

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

The handicapped child has reached the limiting age

The premiums for the handicapped child are not paid

The handicapped child becomes a full-time student

The family moves outside the provider network

The premiums for the handicapped child are not paid

An example of an unfair trade practice is

an agent making a material misrepresentation to the insured

an agent writing less than 50% of their total sales from controlled business

replacing an old life insurance policy with a new one

denying payment of a claim within a reasonable time after proof of loss statements were provided

an agent making a material misrepresentation to the insured

K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions would the Department of Financial Services likely order K to take?

Sell the client a more appropriate annuity

Pay monetary restitution to the client

Provide a written apology letter

Pay a penalty of three times the client’s loss

Pay monetary restitution to the client

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

30

60

90

120

30

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

Insurance companies’ day-to-day operations

Insurance companies’ life policy replacement requirements

Insurance companies’ setting of life insurance policy rates

Insurance companies’ guidelines for paying a life insurance claim

Insurance companies’ day-to-day operations

All of the following are Nonforfeiture Options EXCEPT

Cash Surrender Option

Extended Term Option

Reduced Paid-Up Option

Automatic Premium Loan Option

Automatic Premium Loan Option

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

7 days

10 days

31 days

45 days

31 days

According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?

At the time of application

At the time of policy delivery

Within 14 days of the time of application

Within 14 days of policy delivery

At the time of application

Which entity approves the insurance policy forms used in Florida?

National Association of Insurance Commissioners (NAIC)

Department of Financial Services (DFS)

Financial Services Commission (FSC)

Office of Insurance Regulation (OIR)

Office of Insurance Regulation (OIR)

Group Life policies in Florida are required to contain a conversion privilege that allows for conversion

with evidence of insurability

to an individual policy for a stated period of time

only if the premiums are paid by the employer

to an individual policy at anytime

to an individual policy for a stated period of time

A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy’s face value.

viatical settlement provider

broker

insurer

viator agent

viatical settlement provider

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