Insurance Laws in Florida: Key Concepts and Regulations, Exams of Law

Download Insurance Laws in Florida: Key Concepts and Regulations and more Exams Law in PDF only on Docsity! 8 - Florida Laws and Rules Pertinent to Insurance A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast? - Correct answerStock company is owned by its shareholders. Mutual company is owned by its policyholders. Which of the following situations does NOT apply to the Florida Replacement Rule? *An existing policy is reissued with a reduction in cash value *A new policy is issued while an existing one is surrendered *An existing policy is subject to extensive borrowing * An existing policyholder purchases an additional policy from the same insurer - Correct answerAn existing policyholder purchases an additional policy from the same insurer Florida's Replacement Rule applies to all of these situations EXCEPT "An existing policyholder purchases an additional policy from the same insurer". An example of an unfair claims practice would be - Correct answerfailing to effectuate prompt, fair, and equitable settlements of a claim In Florida, an insurer domiciled and incorporated in this state is called a(n) - Correct answerdomestic company 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 - Correct answerSharing commissions with an agent licensed in the same line of business 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 - Correct answerThe Correct answer is "First degree misdemeanor". All of these are possible consequences for placing business with an unauthorized insurer EXCEPT the conviction of a first degree misdemeanor. In Florida, a health policy that is paid on a quarterly basis requires a grace period of - Correct answer31 days During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of - Correct answermisrepresentation The coordination of benefits (COB) provision exists in order to - Correct answeravoid duplication of benefit payments The purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments. In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the - Correct answerFlorida Replacement Rule When is a Group Health policy required to provide coverage for a newborn child? - Correct answerAt the moment of birth What is Florida's definition of Life insurance replacement? - Correct answerA transaction in which a new policy is bought and an old policy is terminated What is required in the Florida Employee Health Care Access Act? - Correct answerSmall group benefit plans are to be issued on a "guarantee-issue" basis What do families pay that are covered by the Florida Healthy Kids Corporation? - Correct answerA portion of the premium When replacing or exchanging an annuity, the agent must disclose to the annuitant - Correct answerthe possible tax ramifications as a result of the transaction An agent must disclose the possible tax consequences of replacing or exchanging an existing annuity or life insurance policy. Which of the following factors is NOT considered when the Department of Financial Services determines if an agent's home is an insurance agency? - Correct answerThe amount of premium collected at this location All of the following will result in the suspension of an agent's license EXCEPT - Correct answeracting with fiduciary responsibility What type of insurance company is domiciled in England, but conducts business in Florida? - Correct answerAlien Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA). - Correct answer20 Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called - Correct answerFraternal life insurance organizations An applicant who pays the initial premium at the time of application is typically given a(n) - Correct answerconditional receipt A conditional receipt is normally given to an applicant who pays the initial premium at the time of application. Which of the following unfair trade practices involves an agent who makes malicious statements about another person's financial condition? - Correct answerDefamation A stock insurance company - Correct answeris owned exclusively by its shareholders The Financial Services Commission may hold hearings - Correct answerfor any reason deemed necessary According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant? - Correct answerAt the time of application According to Florida law, group life insurance conversion privileges must NOT - Correct answerThe Correct answer is "require evidence of insurability". Florida's insurance law that governs group life insurance conversion privileges provides that the individual policies do not require evidence of insurability. Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent - Correct answeronly if the child is incapable of employment and chiefly dependent on the policyowner How many hours of continuing education must a newly licensed agent complete every two years? - Correct answer24 A foreign insurance company doing business in Florida - Correct answeris a company that was formed under the laws of another state Who owns a stock company? - Correct answerIts stockholders Who is a mutual insurance company owned by? - Correct answerIts policyholders What would be an accurate definition of "controlled business"? - Correct answerInsurance business that is written on the agent's own life, property, or interests Defamation occurs when an agent makes a false statement intended to - Correct answermalign another insurer Defamation is an unfair trade practice involving false, maliciously critical, or derogatory statements intended to injure a person or company engaged in the insurance business. Which of the following activities will NOT result in the suspension of an agent's license? - Correct answerWorking for a foreign insurer Which action could result in a hearing being ordered by the Department of Financial Services? - Correct answerPerforming insurance transactions without a license An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed - Correct answertwisting Twisting is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies. Which of the following is a standard provision of the conversion privileges in a Group Life policy? - Correct answerThe Correct answer is "Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis". Conversion at regular rates on an attained-age basis without a medical exam is a standard provision for conversion privileges in Group Life policies. All of the following are Nonforfeiture Options EXCEPT - Correct answerAutomatic Premium Loan Option According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? - Correct answerMarital status J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken? - Correct answerAll of the employees must be notified of the cancellation either by the insurance company or through J An insurer must notify each certificate holder (employee) when the master policy has expired or is being cancelled. The insurer may take such action through the policyholder (employer). Which type of insurance company allows their policyowners to elect a governing body? - Correct answerMutual In Florida, an element of an insurance transaction would be - Correct answerThe Correct answer is "issuing an insurance contract". The issuance of an insurance contract is considered to be an element of an insurance transaction. Which of these is NOT a legal entity for selling life insurance in Florida? - Correct answerRisk management advisers All of these are a prerequisite for becoming a licensed agent EXCEPT - Correct answerGraduate from high school Under an Individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured? - Correct answerMonthly Claims on an individual disability policies must be paid out at monthly intervals, at minimum. 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? - Correct answerCoercion In Florida, most life insurance policies have a contestability period of - Correct answer2 years Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product? - Correct answerBuyer's guide A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy's face value. - Correct answerviatical settlement provider A stock life insurance company that issues both participating and nonparticipating policies is doing business on - Correct answerThe Correct answer is "a mixed plan". When a stock life insurance company issues both participating and nonparticipating policies, the company is doing business on a mixed plan. In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom? - Correct answerThe Correct answer is "The state where they are conducting business". Domestic, foreign, or alien companies must be authorized by each state where they conduct business. Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client. - Correct answer$25 A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time? - Correct answer48 months A long-term care lapse notice must be delivered to both the applicant and - Correct answersecondary addressee How can an agent-in-charge have more than one location? - Correct answerOnly if the agent-in-charge is present when insurance activity occurs Multiple locations are allowed as long as the agent-in-charge is present when insurance activity occurs. An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ____ company. - Correct answerdomestic Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed? - Correct answerThe Correct answer is "Misrepresentation". An agent who tells a client that dividends are guaranteed may be guilty of misrepresentation. In Florida, agents are allowed to engage in rebating if - Correct answeroffered to all insureds in the same actuarial class Agents that have been licensed for less than six years must complete __ hours of continuing education every two years. - Correct answer24 Which entity approves the insurance policy forms used in Florida? - Correct answerOffice of Insurance Regulation (OIR) Which of the following is NOT required in the Outline of Coverage for a health insurance policy? - Correct answerProjection of the policy's future costs Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years. - Correct answer5 Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against? - Correct answerPeople that smoke Which of the following is an example of an Unfair Trade Practice? - Correct answerCoercion Florida's 14-day free-look period for life insurance policies begins at the - Correct answerdate of delivery In Florida, the underwriting and issuance of a master group health policy requires that all employees - Correct answerare eligible to participate, regardless of their individual health history T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as - Correct answerThe Correct answer is "fiduciary responsibility". Fiduciary responsibility involves an agent handling funds of a client or insurance company honestly and fairly, and not using them for the agent's own purposes. Insurance companies that are organized in countries outside the United States are referred to as - Correct answeralien How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated? - Correct answer45 A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination? - Correct answer31 days All of the following are eligibility requirements for an association group EXCEPT - Correct answerContributory plans require a minimum of 25 participants . A minimum of 100 participants is required for a contributory plan. During the application process, the agent's primary responsibility is to - Correct answerThe Correct answer is "the insurance company". The agent's primary responsibility in the application process is to the insurer. W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim? - Correct answerThe proceeds would be reduced based on whatever the premium would have been if purchased at age 59 Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? - Correct answer30 According to Florida law, which of the following statements accurately describes an admitted mail order insurance company? - Correct answerIt may solicit insurance business by mail without the assistance of a licensed agent Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer? - Correct answerMisrepresentation Convincing a prospective insured to buy an insurance policy based on exaggerations is called - Correct answermisrepresentation In Florida, deceptive advertising is considered to be - Correct answera form of misrepresentation What percentage of eligible persons must a policy cover in a noncontributory group? - Correct answerIn a noncontributory group, the policy must cover 100% of eligible persons. Which of the following areas of state regulation is NOT protected by the savings clause in ERISA? Insurance Commerce Banking Securities - Correct answerCommerce All of these areas of state regulation are protected by the savings clause in ERISA EXCEPT for commerce. Which of the following provisions is NOT required in HMO contracts/certificates? - Correct answerSeven-day grace period Correct. A grace period of no less than 10 days must be expressly included in an HMO contract. In Florida, monthly-premium health insurance policies must provide a grace period of at least - Correct answer10 days In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies? Optometrists Pediatricians Dentists Naturopaths - Correct answerHealth insurance policies in Florida must cover payment to all of these practitioners EXCEPT naturopaths. If a policyowner does not pay the premium by the due date, the - Correct answerpolicyowner can make the premium payment during the grace period An example of rebating would be - Correct answeroffering a client something of value not stated in the contract in exchange for their business Rebating can be defined as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract. Which of the following is considered to be misrepresentation? - Correct answerAn agent guaranteeing a policy's dividends