Insurance Regulations in California, Exams of Nursing

Download Insurance Regulations in California and more Exams Nursing in PDF only on Docsity! PSI LIFE ACCIDENT HEALTH EVALUATED EXAM QUESTIONS AND ANSWERS Which is an ACCURATE statement regarding benefits of Medicare supplement and Medicare select plans? 1 The insurer is able to cancel, or deny renewal of an existing policy, based solely on the health of the insured. 2 There is no restriction for benefits after the coverage has been in effect for six months when involving a preexisting condition. 3 The coverage for a loss from an illness or disease is treated differently than for a loss resulting from an injury due to an accident. 4 The coverage for a spouse cannot be terminated for any reason, including for nonpayment of premiums. - CORRECT ANSWER -2 There is no restriction for benefits after the coverage has been in effect for six months when involving a preexisting condition. How is the insurance commissioner chosen? 1 Elected by the people. 2 Appointed by the Governor 3 Selected by a vote in the House and the Senate. 4 Randomly selected from a list of qualified candidates. - CORRECT ANSWER -1 Elected by the people. An insurance agent is a person who transacts all of the following types of insurance EXCEPT: 1 annuities. 2 homeowners. 3 auto insurance. 4 life insurance. - CORRECT ANSWER -4 life insurance. The California Legislature declared all of the following when creating the Healthy Families Program EXCEPT: 1 that most uninsured children come from low-income families. 2 lack of educational resources for children and their parents leads to increased medical expenses. 3 When the company has confirmed all of the statements and issued a binding contract. 4 Two years after the date of the application when a conditional receipt has been issued. - CORRECT ANSWER -2 After this policy been in force for a period of two years during the lifetime of the insured. Which statement describes the intent of the California Financial Information Privacy Act? 1 It enables and authorizes the Gramm-Leach-Bliley Act into California legal system. 2 It permits civil lawsuits against financial institutions who violate the Gramm-Leach-Bliley Act. 3 It provides greater privacy protections than those provided in the federal Gramm-Leach-Bliley Act. 4 It permits greater flexibility to financial institutions than privacy protections enacted in Gramm-Leach- Bliley Act. - CORRECT ANSWER -3 It provides greater privacy protections than those provided in the federal Gramm-Leach-Bliley Act. All of the following are TRUE about the rules regarding the sale of life insurance and annuities to seniors age 65 or older EXCEPT 1 the senior is entitled to have others present during any presentation by an agent, broker or insurer. 2 all insurance brokers, agents, or insurers owe a prospective insured at 65 years or older a duty of honesty, good faith, and fair dealing. 3 the agent, broker or insurer is required to show a copy of their insurance license with name, address, and phone number when conducting business in the senior's home. 4 advance notice must be provided to the senior disclosing and identifying details of the visit and the agent or broker prior to the scheduled meeting. - CORRECT ANSWER -3 the agent, broker or insurer is required to show a copy of their insurance license with name, address, and phone number when conducting business in the senior's home. All of the following are a duty of an insurer in regards to claims on file and record documentation EXCEPT 1 maintaining claim data so that an insurer shall be able to provide the claim number, line of coverage, and other pertinent data. 2 recording the date the licensee received, date(s) the licensee processed and date the licensee transmitted or mailed every material and relevant document in the file. 3 maintaining any sales material, which had a material impact on the claims process. 4 maintaining claim files that are accessible, legible, and claim of duplication. - CORRECT ANSWER -3 maintaining any sales material, which had a material impact on the claims process. "Person" means all of the following EXCEPT 1 an association. 2 a corporation. 3 a business trust. 4 an organizational trust. - CORRECT ANSWER -4 an organizational trust. Which of the following may be insured against? 1 Disability. 2 Accidental death. 3 Wagering losses. 4 Catastrophic losses. - CORRECT ANSWER -3 Wagering losses. When is it allowable for a written application for any disability policy to be altered? 1 by the insurer, for administrative purposes only, when it is clear that the applicant has not made the insertions 2 1 Negotiations on contract modifications. 2 Negotiations regarding an agent contract/ 3 Negotiations following execution. 4 Negotiations preliminary to execution. - CORRECT ANSWER -4 Negotiations preliminary to execution. Which of the following provisions of free insurance offered as an incentive to purchase or rent property is TRUE? 1 It is permitted with no charge. 2 It requires a separate charge or fee. 3 If offered as a guarantee of the performance of goods, it is prohibited. 4 If issued by credit unions or with newspaper subscriptions, it is limited under Statute 777.2. - CORRECT ANSWER -2 It requires a separate charge or fee. When is a person acting as a licensee allowed to act as an agent of the insurer? 1 when the agent has completed the licensing paperwork and submitted it to the insurer 2 when the insurer has filed with the commissioner a notice of appointment 3 when the insurer has provided the agent with applications 4 when the agent has received oral approval from the insurer to transact business - CORRECT ANSWER -2 when the insurer has filed with the commissioner a notice of appointment Which is an INACCURATE statement regarding a life settlement contract? 1 The owner receives a guarantee of the future settlement value. 2 It includes a finance loan made for a policy on or before the issuance of the policy. 3 The loan proceeds are used to solely pay premiums for the policy and any expenses incurred. 4 The owner agrees to sell the policy or any portion of the death benefit following the policy issue. - CORRECT ANSWER -3 The loan proceeds are used to solely pay premiums for the policy and any expenses incurred. What makes a comprehensive long-term care policy unique from other long-term care policies? 1 Provides for both institutional and home care. 2 Provides for all the expenses incurred from long-term care. 3 Provides both life and long-term care for the insured individual. 4 Gives the insured the option of creating a paid up policy by paying in advance. - CORRECT ANSWER -1 Provides for both institutional and home care. Which are assets that are in excess of an insurer's liability for reported losses, expenses, taxes, and reinsurance of outstanding risks? 1 capital stock 2 capital assets 3 paid-in capital 4 excess investment - CORRECT ANSWER -3 paid-in capital Which of the following actions is considered part of the insurance sales process? 1 Rescission of the contract. 2 every licensee shall immediately, but in no more than 15 calendar days, furnish them a complete response. 3 every license or claims agent shall immediately transmit notice of claim to insurer. 4 every insurer shall within15 calendar days acknowledge receipt and provide to the claimant the necessary forms. - CORRECT ANSWER -1 every licensee or claims agent shall transmit notice of the claim to the insurer in no more than 5 calendar days. What does concealment, whether intentional or unintentional, entitle the injured party to? 1 Once the policy has been accepted, it may only be cancelled by the insured under very specific circumstances. 2 The insurer may rescind the contract on the basis of misrepresentation, concealment, or fraud by the insured. 3 Legal damages, not in excess of double the premiums paid. 4 A waiver of responsibility to meet contractual obligations. - CORRECT ANSWER -2 The insurer may rescind the contract on the basis of misrepresentation, concealment, or fraud by the insured. According to CIC Section 1711, an organization ceases to exist as an entity eligible to hold a license EXCEPT 1 upon dissolution of a corporation. 2 upon the termination of all contracts. 3 upon dissolution of a copartnership. 4 upon the termination of an association. - CORRECT ANSWER -2 upon the termination of all contracts. Which are accepted practices for the sale and replacement of Medicare Supplement policies? 1 Using the terms "Medicare Supplement" , "Medigap" and "Medicare Wrap-Around" without limitation. 2 Cold lead advertising, which allows marketing without disclosing that contact will be made by an insurance agent or broker. 3 Offering a fair and accurate comparison of the product offered with any current insurance policies the prospective customer may have. 4 High pressure tactics, through the use of an explicit or implied threat designed to frighten or threaten the prospective client into taking action. - CORRECT ANSWER -3 Offering a fair and accurate comparison of the product offered with any current insurance policies the prospective customer may have. Which is an INACCURATE statement regarding blanket life insurance? 1 The premium is remitted by the policyholder. 2 The policy is for the benefit of the policyholder. 3 The insurance is written under a policy issued to a newspaper, magazine or other periodical. 4 The policy insures without any requirement of individual enrollment or individual commitment. - CORRECT ANSWER -2 The policy is for the benefit of the policyholder. When examination of an insurer shows the insurer to be insolvent and a danger to the public, which authority is granted to the Commissioner by the CIC? 1 The commissioner must make application to the Superior Court and obtain a court order. 2 The commissioner may take possession of offices, books and property immediately without court order. 3 The Superior Court shall authorize a receiver at the request of the Commissioner without delay. 4 The commissioner shall file a petition with the United States Secretary of the Treasury for appointment of a receiver. - CORRECT ANSWER -2 The commissioner may take possession of offices, books and property immediately without court order. 4 establish accounting procedures within 1 year to verify compliance with the insurance statutes of California. - CORRECT ANSWER -2 complete a total of 10 hours of continuing education if licensed before January 1st, 2002. Which is an INACCURATE statement regarding underwriting based on genetic testing? 1 The proposed insured must pay for the cost of the testing. 2 The proposed insured must provide informed consent prior to the testing. 3 The test results can be provided to the proposed insured, or to their physician to whom the individual should consult. 4 The purpose is to create standards classified by risks to avoid discrimination among proposed insureds with similar genetic markers. - CORRECT ANSWER -1 The proposed insured must pay for the cost of the testing. What happens under a misstatement of age clause on a disability policy? 1 The policy would be terminated and all premiums would be returned to the policy owner. 2 The policy would be terminated and all premiums would be retained by the insurance company. 3 All amounts payable under this policy shall be what the premium originally would have purchased and been paid at the correct age. 4 Prior to any benefits being payable, the insured shall rate and pay the difference in premiums based u - CORRECT ANSWER -1 The policy would be terminated and all premiums would be returned to the policy owner. Can any life insurer issue group life insurance with premium rates less than the usual rates for such insurance? 1 Yes, when the Department of Insurance has requested they do so. 2 Yes, if the insurer has filed an exemption form to do so. 3 Yes, they may do so on any group plan, with or without annuities. 4 No, there are no circumstances when this is allowed. - CORRECT ANSWER -3 Yes, they may do so on any group plan, with or without annuities. When an insured under age 60 purchases a new policy, how much time do they have to cancel and receive a full refund of premiums? 1 The insured has 90 days to decide they want to cancel a new policy and receive a partial refund of premiums paid. 2 The insured has only 5 days and not more than 20 days to inform the insurer they want to cancel a new policy and receive a full premium refund. 3 The insured has 60 days to cancel, but the insurer is not required to refund the full premium amount paid for the policy. 4 The insured has a period of not less than 10, and not more than 30 days, during which they may cancel and receive a full refund for the premiums paid. - CORRECT ANSWER -4 The insured has a period of not less than 10, and not more than 30 days, during which they may cancel and receive a full refund for the premiums paid. All of the following are requirements for an applicant to be licensed as a life & disability insurance analyst EXCEPT 1 having a thorough knowledge of life or disability insurance products. 2 having been employed by an insurance company. 3 being a fit and proper person to hold the license applied for. 4 being of good business reputation and of good general reputation. - CORRECT ANSWER -2 having been employed by an insurance company. Who is the California Life and Health & Guarantee Association is regulated by? 1 Rescind insurance. 3 Supplemental benefits. 4 Reduced cost insurance. - CORRECT ANSWER -2 Rescind insurance. Which is an INACCURATE statement regarding standards to avoid unfair underwriting for applicants at risk for auto immune deficiency, human immunodeficiency virus, or AIDS related conditions? 1 Insurers must maintain strict confidentiality regarding personal information obtained as the results of any medical testing. 2 Insurers are permitted to schedule AIDS and HIV testing without the specific consent of the individual applying for insurance. 3 Insurers must establish performance standards to avoid making unfair distinctions between individuals in the same underwriting class. 4 Establish standards that allow for adequate assessment through underwriting to determine if a life or health policy can be issued to the applicant. - CORRECT ANSWER -2 Insurers are permitted to schedule AIDS and HIV testing without the specific consent of the individual applying for insurance. In which situation is a person or other entity that provides coverage for medical expenses NOT subject to the jurisdiction of the insurance department? 1 When coverage is only offered to members of associations, unions and similar groups. 2 When the amount of coverage is limited to under $500,000. 3 When they have received an exemption from the insurance commissioner. 4 When they are subject to the jurisdiction of another agency of this or another state or the federal government. - CORRECT ANSWER -4 When they are subject to the jurisdiction of another agency of this or another state or the federal government. What is the purpose of creating minimum underwriting standards for those testing positive for Acquired Immune Deficiency Syndrome, Human Immunodeficiency Virus or Aids Related Complex? 1 to ensure the premiums are comparable to those paid by individuals without those conditions 2 to allow underwriting to administer the tests to determine if the proposed insured has a condition without the consent of the individual 3 to avoid discrimination between individuals in the same rating class who have been diagnosed with the condition of AIDS, ARC or HIV 4 to allow the insurers to provide state of the art treatment for proposed insured individuals who have tested positive for AIDS, ARC or HIV - CORRECT ANSWER -3 to avoid discrimination between individuals in the same rating class who have been diagnosed with the condition of AIDS, ARC or HIV Which of the following may insurers use in their underwriting? 1 ancestry 2 family medical history 3 genetic characteristics 4 national origin - CORRECT ANSWER -2 family medical history Which of the following is TRUE of the conversion privileges for the insured in group life insurance? 1 The coverage amount without proof of insurability can be changed. 2 The option to name a new beneficiary can be exercised by the owner. 3 The owner can change the ownership of the policy but not the name of a beneficiary. 4 The policy can be transferred into an endowment or liquidated for its proceeds by the owner. - CORRECT ANSWER -2 The option to name a new beneficiary can be exercised by the owner. coverage for a minor child under age 18 or a corporate owned policy on an employee 4 coverage for any person upon whose life any estate or interest vested in him is dependent - CORRECT ANSWER -3 coverage for a minor child under age 18 or a corporate owned policy on an employee All of the following are TRUE regarding regulation and use of an agency name EXCEPT 1 the use of the name must not mislead the public in any way. 2 the company must file with the commissioner and request approval of the name. 3 a name would not be denied on the basis of being too similar to other company names. 4 the name may not imply the agency offers services for which it is not licensed or approved. - CORRECT ANSWER -3 a name would not be denied on the basis of being too similar to other company names. What do all long-term care insurers, agents, and brokers owe to the policyholder or prospective policyholder? 1 a duty of honesty, good faith, and fair dealing 2 a duty to provide courteous and confidential service 3 a duty to provide the best price available for the coverage 4 a duty of integrity, compassion, and considerate service - CORRECT ANSWER -1 a duty of honesty, good faith, and fair dealing After what time period is the policy considered to have been delivered in an acceptable way if premiums have been paid? 1 after 6 months if the premiums have been paid 2 after 1 year if the premiums have been paid by the insured 3 30 days after the first premium has been received by the insurer 4 only if a written receipt is obtained at the time of delivery, regardless of paid premiums - CORRECT ANSWER -1 after 6 months if the premiums have been paid Which is an INACCURATE statement regarding inflation protection for long-term care insurance? 1 Increases are compounded annually at a rate not less than 5 percent. 2 Guarantees the insured individual the right to periodically increase benefit levels. 3 The protection covers a specified percentage of actual or reasonable charges, and includes a maximum specified indemnity amount. 4 Insurers shall offer to each policyholder or certificate holder the option to add an inflation protection feature with their policy at the time of purchase. - CORRECT ANSWER -3 The protection covers a specified percentage of actual or reasonable charges, and includes a maximum specified indemnity amount. How long does an employee in a group insurance policy have to exercise the conversion privilege after employment is terminated? 1 0 days with no eligible coverage once the employment is terminated 2 31 days to use the conversion privilege and begin an individual life insurance policy. 3 90 days to convert to an individual policy equal to the coverage under the group policy 4 6 months to exercise the conversion privilege after termination if the employee was ill-treated - CORRECT ANSWER -2 31 days to use the conversion privilege and begin an individual life insurance policy. What are the requirements for notices required by any provision of the insurance code to a person unless expressly provided otherwise? 1 They should be made by telephone on a recorded line. 2 If a policy is issued, the agent is required to forfeit any commission unless appointed. 3 The insurer is required to report the agent appointment within 21 days of the policy issue. 4 If a policy is issued, the insurer is considered to have authorized the agent to act on its behalf. - CORRECT ANSWER -4 If a policy is issued, the insurer is considered to have authorized the agent to act on its behalf. All of the following define insolvency EXCEPT 1 revocation of certificate of authority by the commissioner. 2 inability of the insurer to fully reinsure all outstanding risks. 3 impairment of minimum paid-in capital required in the aggregate. 4 inability of the insurer to meet its financial obligations when they are due. - CORRECT ANSWER -1 revocation of certificate of authority by the commissioner. A policy shall specify all of the following EXCEPT 1 the property or life insured. 2 the parties between whom the contract is made. 3 the period during which the insurance is to continue. 4 the method in which the coverage amount was calculated. - CORRECT ANSWER -4 the method in which the coverage amount was calculated. Losses arising from all of the following conditions may be excluded from group life policies EXCEPT 1 aviation. 2 acts of war. 3 military service. 4 natural disasters. - CORRECT ANSWER -4 natural disasters. When can a person act as an agent of the insurer? 1 when the agent participates in an insurer workshop 2 when the agent receives a compliance illustration from the insurer 3 when the insurer has accepted contracting paperwork from the agent 4 when the insurer has filed with the commissioner a notice of appointment - CORRECT ANSWER -4 when the insurer has filed with the commissioner a notice of appointment What happens if an owner requests an immediate investment of monies in a variable annuity policy be returned during the 30 day cancellation period? 1 The owner shall forfeit any money invested. 2 The owner shall receive the market value at the time of the cancellation. 3 The owner shall receive a refund of premium but nothing earned during cancellation period. 4 The owner shall receive a full refund of premium, plus the market value, minus any commission fees. - CORRECT ANSWER -2 The owner shall receive the market value at the time of the cancellation. All of the following are TRUE for commissions paid to an agent for the sale of a Medicare supplement policy EXCEPT 1 gifts, bonuses, prizes, awards or finder's fees given for sales or renewals are not considered compensation. 2 commissions paid for replacing policies shall not exceed the commission paid for renewing policies. What is the name of the process in which an insurer selects, classifies, and determines the rate to be charged for the insurance applied for? - CORRECT ANSWER -Underwriting When a life insurance policy does not pass the ______-pay test, it becomes classified as a MEC. - CORRECT ANSWER -7 What is the name of the person named in the annuity contract to potentially receive any residual benefits? - CORRECT ANSWER -beneficiary The premium charged for new policies obtained by exercising the Guaranteed Insurability Rider is based upon the: - CORRECT ANSWER -Attained age of the insured To be permitted to operate as a Life Settlement Broker, a life insurance producer must be licensed as a life agent for at least: - CORRECT ANSWER -1 year There is a conversion period of _______ days in which the employee may, upon termination of eligibility and without evidence of insurability, convert group benefits to an individual policy. - CORRECT ANSWER -31 Which one of the following is not eligible for Cal-COBRA? 1 Self-Insured Plans 2 Indemnity Policies 3 HMO's 4 PPO's - CORRECT ANSWER -1 Self-Insured Plans If the premium can fluctuate at the policyowner's discretion, meaning it can be increased, decreased, or even skipped at any premium due date, what premium paying method was used? 1 Adjustible 2 Special 3 Modified 4 Flexible - CORRECT ANSWER -4 flexible Which provision in a health insurance plan is used to avoid overinsurance when a person is covered by more than one plan? - CORRECT ANSWER -coordination of benefits If money is paid when a change of ownership in a life insurance policy takes place, this is generally known as a ____________. - CORRECT ANSWER -transfer for value Which of the following annuities is known for having the highest surrender charge percentages and the longest surrender charge time periods? 1 Market Value Adjustment Annuities 2 Indexed Annuities 3 Fixed Annuities 4 Variable Annuities - CORRECT ANSWER -2 Indexed Annuities Joe has a whole life policy with a guaranteed insurability rider. He was 21 at the time the policy was issued. If he exercises all of the options at the ages specified under the typical rider, how many policies will he end up with? - CORRECT ANSWER -7 _______________ is the process of selection, classification and rating, and determining if someone is insurable. - CORRECT ANSWER -home office underwriting Jamie has a $200,000 permanent policy and cannot continue making the premium payments. She still, however, wants the peace of mind of being covered for the same $200,000 in death benefit although it may be for an abbreviated period of time. The Nonforfeiture Option Jamie should choose is: - CORRECT ANSWER -extended term If the Insurance Commissioner has reason to believe that a producer has engaged in unfair competition, he/she is required to: - CORRECT ANSWER -Advise the producer that he/she is entitled to a public hearing A loss exposure is best defined as: - CORRECT ANSWER -the possibility of a loss Notice of claim is required within _____ days of loss. - CORRECT ANSWER -20 Beneficiary - CORRECT ANSWER -Annuitant Under most circumstances, within how much time is an insurer expected to affirm or deny a claim? - CORRECT ANSWER -40 days In a replacement transaction, why should the existing policy not be terminated until the replacing policy is issued and delivered? - CORRECT ANSWER -Potential of new evidence of insurability being required Which of the following might be considered a physical hazard? 1 The insured's attitude that good housekeeping is not important 2 the storage of all flammables in fireproof containers 3 Dishonesty on the part of the insured 4 The storage of flammables near a furnace - CORRECT ANSWER -The storage of flammables near a furnace When will a primary care physician refer a HMO member to a specialist? - CORRECT ANSWER -Usually after all other treatments have been exhausted ____________ is the initial step of the total process of insuring a health risk. - CORRECT ANSWER -field underwriting When the number of similar units increase, the predictability of loss improves according to: - CORRECT ANSWER -the law of large numbers Which of the following term policies costs the most, all other factors being equal? 1 Renewable and non-convertible 2 Renewable and convertible 3 Nonrenewable and convertible 4 Nonrenewable and non-convertible - CORRECT ANSWER -renewable and convertible Causing a person to give up an existing contract through surrender, lapse, or other forfeiture is known as: - CORRECT ANSWER -twisting What is the maximum number of appointments a producer may accept? - CORRECT ANSWER -unlimited A ____________ places insurance with a non-admitted insurer when insurance cannot be placed with an admitted insurer - CORRECT ANSWER -surplus lines producer When the life insurance policy's cash value equals the face amount of the policy and the proceeds are paid to the policyowner, this is known as the policy's _________. - CORRECT ANSWER -endowment As specified by the California Insurance Code, the validity of a group policy cannot be contested, except for nonpayment of premiums, after it has been in force for how long? - CORRECT ANSWER -2 years Mortgage or credit life refers to what type of life insurance coverage? - CORRECT ANSWER -decreasing term A(n) ___________ designed to produce leads must prominently disclose that 'an insurance agent will contact you', if that is the case. - CORRECT ANSWER -advertisement The mortality rate is based on mortality tables which show life expectancy and the death rate per _______ people living in the U.S. - CORRECT ANSWER -1,000 The Commissioner of Insurance has the power to: - CORRECT ANSWER -Revoke a producer's license A ______________ Insurance Company is directed by officers and directors and has a stated amount of capital stock owned by stockholders - CORRECT ANSWER -Stock The 24-Hour Care Coverage product may NOT include the __________________ - CORRECT ANSWER - sale of life insurance Offering any kind of insurance as an inducement to the purchase of property or services without a separate fee charged to the insured for the insurance is a violation and is considered: - CORRECT ANSWER -free insurance A Straight Whole Life Policy has a _________ __________ premium and face value for the life of the insured - CORRECT ANSWER -level guaranteed Under the California Annuity Suitability Education Requirements, a life-only agent who sells annuity products to individual consumers must complete an initial _____-hour training course prior to soliciting for sales. - CORRECT ANSWER -8 If an individual enrolls during the Medicare supplement plan _____ enrollment period, the insurer cannot use medical underwriting, refuse coverage, charge a higher premium, or impose a waiting period for pre-existing conditions. - CORRECT ANSWER -open When is an entity buy-sell agreement plan used? - CORRECT ANSWER -When the entity buys life insurance on each of the owners All of the following are correct regarding renewable term insurance, except: 1 No permanent cash or loan value 2 Can be written separately or with other types of insurance 3 Will expire after a specified period or attained age 4 Evidence of insurability is required to renew the policy - CORRECT ANSWER -4 Evidence of insurability is required to renew the policy All of the following are restricted from entering into an insurance contract, except: 1 Minors 2 Incompetent Parties 3 Retired persons 4 Someone under the influence of drugs or alcohol - CORRECT ANSWER -3 Retired persons Bert is the owner and insured of a permanent life insurance policy he purchased 20 years ago. He has never missed a premium payment. He would like to buy a new car but his bank account is running low. How can he obtain the necessary funds while still maintaining coverage? - CORRECT ANSWER -Take a policy loan from the insurer Proof of loss is required within _____ days of loss. - CORRECT ANSWER -90 The __________ provision specifies what an insured must do, if a policy has lapsed, in order to put it back in force. - CORRECT ANSWER -reinstatement Under a Key Employee Disability Income Policy, the employer is all of the following, except: 1 Recipient of the proceeds 2 Premium payor 3 Insured 4 Policyowner - CORRECT ANSWER -3 Insured Social Security pays an eligible surviving spouse (or minor child) a one-time benefit of $________ upon the death of a covered worker. - CORRECT ANSWER -225 All health plans, group and individual, offered through a Health Insurance Exchange must provide, at a minimum, essential health benefits in ______ categories of care and services. - CORRECT ANSWER -10 In California what entity may opt for a self-insured medical, disability, and death benefit plan? - CORRECT ANSWER -employers The insurance contract is a(n) ___________ contract because it is an agreement that one party pays on behalf of another party under specified circumstances, such as when a loss occurs. - CORRECT ANSWER - indemnity An Essential Health Benefits package provides levels of coverage offered through all health exchanges, based on all of the following plans, except: 1 Silver 2 Gold 3 Platinum 4 Copper - CORRECT ANSWER -copper Permanent insurance is designed to provide coverage for a ___________. - CORRECT ANSWER -lifetime The California Insurance Code is enacted by: - CORRECT ANSWER -California legislation It is prepaid through FICA taxes and is automatic when that worker qualifies for social security benefits 3 All recipients pay a monthly premium 4 Provides coverage for outpatient services. - CORRECT ANSWER -2 It is prepaid through FICA taxes and is automatic when that worker qualifies for Social Security retirement benefits ('fully insured') When a producer exceeds the authority expressed in the agency contract and the insurer does not take action, which of the following types of authority is created? - CORRECT ANSWER -apparent Many insurers pay benefits based on the average fee charged in a geographical area. This is referred to as: - CORRECT ANSWER -Usual Customary and Reasonable By requiring a minimum medical loss ratio, an insurance company provides greater value to its policyholders when a ________ percentage of premiums is used for healthcare costs versus administrative expenses or profits. - CORRECT ANSWER -higher A licensed life agent may __________ on behalf of a life insurer for which the life agent is not specifically appointed. - CORRECT ANSWER -Present a proposal for insurance to a prospective policyholder An insurer considers all of the following when determining the fixed annuity payments, except: 1 Expenses 2 Stock market value 3 Interest rates 4 The accumulation amount - CORRECT ANSWER -2 Stock market value A small business owner used her life insurance policy as collateral for a bank loan. The face amount of the whole life policy was $100,000 and the original amount of the loan was $20,000. If the outstanding loan balance at the time the small business owner died was $10,000, how much will the policy's named beneficiary receive? - CORRECT ANSWER -$90,000 If a policy is not approved as applied for, the insurer may make a: - CORRECT ANSWER -counteroffer The arrangement under a Buy-Sell Agreement in which each party purchases insurance on the life of his/her partner(s) is called a(n): - CORRECT ANSWER -cross purchase plan What is the primary purpose of the California Insurance Guarantee Association? - CORRECT ANSWER -to protect insureds from insurers that become insolvent Karen, age 50, withdraws $1,000 from her Health Savings Account (HSA) for a purpose other than a qualified medical expense. As a result of this action: - CORRECT ANSWER -The $1,000 is taxed as ordinary income, with an additional $200 penalty tax applied After receiving a claim, the insurer must correspond with the claimant at intervals of not less than how many days until the claim is resolved? - CORRECT ANSWER -30 Any premium rate adjustments and increases for a Medicare Supplement insurance policy must be provided to the insured in writing by the insurer at least _____ days prior to the effective date of the change. - CORRECT ANSWER -30 Which statement concerning individual health policy renewal provisions is most correct? 1 The more favorable the renewal provision to the insured, the higher the cost 2 Renewal provisions only apply to property and casualty contracts and are not included under individual A&H policies 3 The renewal provision has no impact on the cost of the policy to the insured 4 The more favorable the renewal provision to the insured, the lower the cost - CORRECT ANSWER -1 The more favorable the renewal provision to the insured, the higher the cost A Property & Casualty Broker-Agent who is also licensed as a Life-Only agent may not charge a fee to a consumer for: - CORRECT ANSWER -Analyzing a person's universal life insurance policy Under the PPACA, insurers must provide health insurance to any person, regardless of: - CORRECT ANSWER -Medical history or current state of health he California Insurance Code requires all producers who meet with prospective clients age 65 and older in their homes for the purpose of transacting life insurance, annuities, or disability insurance products to first provide a written notice of the first meeting which producers must retain a copy of in their files for a minimum of ______ years. - CORRECT ANSWER -5 Which of the following is not covered with Medicare Part A? 1 Outpatient care 2 Small employers with less than 100 employees may also purchase coverage through the exchange. 3 Health insurance products offered through each Exchange must be available in the same form to consumers purchasing coverage outside the Exchange. All health plans and insurers participating in Covered Californa must also offer plans at the federally designated bronze, silver, gold and platinum levels off the Exchange. 4 Minimum coverage plans are designed to cover excessive medical bills that occ - CORRECT ANSWER -4 Minimum coverage plans are designed to cover excessive medical bills that occur above the limit that an insured would be able to manage financially and are offered to those up to age 65, or those individuals who prove they are without affordable coverage options or are experiencing financial hardship (offered up to age 30, not 65) An applicant for life insurance pays the agent the initial premium and receives a Conditional Receipt in return. If the policy was to be issued as substandard, but the applicant dies prior to policy issue, what is the result? - CORRECT ANSWER -The insurer will refund any premiums paid The name used to indicate the insured's age at time of policy renewal is the ________ age. - CORRECT ANSWER -attained Managed Care Organizations that offer a Medicare Advantage Plan require the subscriber to select a _____________ to manage health care needs. - CORRECT ANSWER -Primary Care Physician Originally, Medicare was for U.S. citizens age _______ and over. - CORRECT ANSWER -65 What does the following refer to? Administered by the state using federal guidelines; funded federally and by states for poor persons of all ages; for poor persons 65+, disabled, or blind, may qualify for nursing home benefits - CORRECT ANSWER -Medicaid If a Medicare Supplement policy replaces another Medicare Supplement policy that has been in force for _____ months or more, the replacing insurer cannot impose an exclusion or limitation based on a preexisting condition. - CORRECT ANSWER -6 The __________ enrollment period begins when a person past age 65 who was covered by an employer sponsored group health plan is no longer covered by the plan (whether the person elects COBRA continuation or not). - CORRECT ANSWER -special Which of these is a Mandatory Uniform Provision? 1 Illegal Occupation 2 Misstatement of Age 3 Conformity with State Statutes 4 Legal Actions - CORRECT ANSWER -4 Legal Actions (the rest are optional provisions) This rider will provide paid-up coverage if the insured cancels or lapses the policy due to nonpayment of premium. - CORRECT ANSWER -Nonforfeiture The _________ Enrollment Period provides an open enrollment period from January 1 to March 31 each year for those who did not enroll in Medicare Part B when they first became eligible. - CORRECT ANSWER -General Medi-Cal expenditures on behalf of persons in institutional settings and all expenditures on behalf of persons age _____ and older are subject to 'asset recovery' under federal Medicaid rules following the death of the individual. - CORRECT ANSWER -55 Medicare Part B provides coverage for: - CORRECT ANSWER -Outpatient hospital (emergency room/urgent care) treatment Beth has a contract stating she must be disabled for 3 months before benefits will begin to be paid. This 3-month period is known as the: - CORRECT ANSWER -Elimination Period Under the Uniform Individual Accident and Sickness Policy Provisions, what happens when a health policy contains provisions that have gone out of compliance because of changes in state law? - CORRECT ANSWER -The policy will be construed as if it conformed to the law Under the Entire Contract provision, the agreement between the insured and the insurer does not include: - CORRECT ANSWER -Statements made to the applicant by the producer during the application process Under the Legal Actions Mandatory Uniform Provision, an insured must wait at least _____ days after providing proof of loss before he or she can take legal action against the insurer. - CORRECT ANSWER - 60 days With a managed health care plan all _________ care must be covered as if it were provided on an in- network basis. - CORRECT ANSWER -emergency