NJ Health State Insurance Exam Questions with 100% Correct Answers Verified
Latest Update
DOMAIN 1: GENERAL INSURANCE CONCEPTS & PRODUCER REGULATIONS
Q1. An insurance producer must file a Branch Office registration form with the
New Jersey Department of Banking and Insurance (DOBI) at least how many days
before beginning operations at that location?
A) 15 days
B) 30 days
C) 45 days
D) 60 days
Answer: B) 30 days
Rationale: NJ law requires producers to register any branch office with the
Commissioner a minimum of 30 days before conducting business from that
location. This allows the state to maintain accurate records of all insurance-selling
locations .
,Q2. According to HIPAA, a 10% excise tax is normally applied to an early
withdrawal from an IRA. This tax will NOT be applied if the withdrawal is used for
medical expenses that exceed what percentage of the individual's adjusted gross
income?
A) 5.0%
B) 6.5%
C) 7.5%
D) 8.0%
Answer: C) 7.5%
Rationale: HIPAA provides an exception to the early withdrawal penalty for
medical expenses exceeding 7.5% of AGI. This allows individuals to access
retirement funds penalty-free when facing significant medical costs .
Q3. A producer's secretary who solicits prospects for insurance over the phone is
an example of:
A) Legal producer activity
B) An illegal act called twisting
C) A legal act of solicitation
D) An illegal act requiring immediate termination
,Answer: C) The secretary is acting illegally as they are not licensed
Rationale: In New Jersey, any person who solicits insurance must hold a valid
insurance license. A secretary making calls to solicit business is engaged in
unlicensed activity and violates NJ insurance laws .
Q4. An insurance company may ONLY pay a sales commission to:
A) Individuals who are residents of this state for at least 5 years
B) Individuals who are registered with the NAIC
C) Individuals licensed by the state
D) Individuals who are gainfully employed by that insurance company
Answer: C) Individuals licensed by the state
Rationale: Commissions can only be paid to properly licensed individuals. This
protects consumers by ensuring that only qualified, regulated professionals
receive compensation for insurance sales .
, Q5. When a producer, domiciled in New York, elects New Jersey as their resident
state while maintaining an office location in NJ, he is acting as:
A) A non-resident licensee in NJ
B) A resident licensee in NJ
C) A foreign producer in NJ
D) An alien producer in NJ
Answer: B) A resident licensee in NJ
Rationale: A producer who maintains a principal place of business or residence in
New Jersey is considered a resident producer, even if originally from another
state. This status requires holding a NJ resident license .
Q6. A licensed producer is required to notify the Commissioner of any change of
address within how many days?
A) 10 days
B) 15 days
C) 30 days
D) 60 days
Latest Update
DOMAIN 1: GENERAL INSURANCE CONCEPTS & PRODUCER REGULATIONS
Q1. An insurance producer must file a Branch Office registration form with the
New Jersey Department of Banking and Insurance (DOBI) at least how many days
before beginning operations at that location?
A) 15 days
B) 30 days
C) 45 days
D) 60 days
Answer: B) 30 days
Rationale: NJ law requires producers to register any branch office with the
Commissioner a minimum of 30 days before conducting business from that
location. This allows the state to maintain accurate records of all insurance-selling
locations .
,Q2. According to HIPAA, a 10% excise tax is normally applied to an early
withdrawal from an IRA. This tax will NOT be applied if the withdrawal is used for
medical expenses that exceed what percentage of the individual's adjusted gross
income?
A) 5.0%
B) 6.5%
C) 7.5%
D) 8.0%
Answer: C) 7.5%
Rationale: HIPAA provides an exception to the early withdrawal penalty for
medical expenses exceeding 7.5% of AGI. This allows individuals to access
retirement funds penalty-free when facing significant medical costs .
Q3. A producer's secretary who solicits prospects for insurance over the phone is
an example of:
A) Legal producer activity
B) An illegal act called twisting
C) A legal act of solicitation
D) An illegal act requiring immediate termination
,Answer: C) The secretary is acting illegally as they are not licensed
Rationale: In New Jersey, any person who solicits insurance must hold a valid
insurance license. A secretary making calls to solicit business is engaged in
unlicensed activity and violates NJ insurance laws .
Q4. An insurance company may ONLY pay a sales commission to:
A) Individuals who are residents of this state for at least 5 years
B) Individuals who are registered with the NAIC
C) Individuals licensed by the state
D) Individuals who are gainfully employed by that insurance company
Answer: C) Individuals licensed by the state
Rationale: Commissions can only be paid to properly licensed individuals. This
protects consumers by ensuring that only qualified, regulated professionals
receive compensation for insurance sales .
, Q5. When a producer, domiciled in New York, elects New Jersey as their resident
state while maintaining an office location in NJ, he is acting as:
A) A non-resident licensee in NJ
B) A resident licensee in NJ
C) A foreign producer in NJ
D) An alien producer in NJ
Answer: B) A resident licensee in NJ
Rationale: A producer who maintains a principal place of business or residence in
New Jersey is considered a resident producer, even if originally from another
state. This status requires holding a NJ resident license .
Q6. A licensed producer is required to notify the Commissioner of any change of
address within how many days?
A) 10 days
B) 15 days
C) 30 days
D) 60 days
