NJ Health and Accident Latest Questions
and Answers | Professional Prep | Grade
A+
Q: What is the role of the Department of Banking and Insurance (DOBI) -✓✓ A: It
regulates the banking and insurance industries in New Jersey
Q: Who appoints the Commissioner of the Department of Banking and Insurance -✓✓
A: The Governor, with advice and consent of the Senate
Q: What is the role of the Commissioner of Insurance -✓✓ A: The Commissioner has
the power to investigate, administer oaths, regulate insurers for insolvency,
suspend/revoke licenses, and impose penalties for violations
Q: What is the maximum penalty for the first violation of insurance regulations -✓✓ A:
$5,000
Q: What is the maximum penalty for each subsequent violation of insurance regulations
-✓✓ A: $10,000
Q: How long before a hearing must the notice be delivered to the person/entity under
investigation -✓✓ A: At least 10 days after the notice is delivered
Q: What happens if an insurance company becomes insolvent -✓✓ A: The
Commissioner will suspend its Certificate of Authority
Q: What is an insurance producer -✓✓ A: A person who produces business for the
insurer, such as an agent, broker, or general agent
Q: What must an insurance consultant do before receiving fees from an insurance
prospect -✓✓ A: Obtain a signed written memorandum stating the amount of
compensation
Q: What is the requirement for a business entity acting as an insurance producer -✓✓ A:
The business entity must be licensed in New Jersey
Q: How many hours of pre-licensing education are required for life insurance in New
Jersey -✓✓ A: 20 hours
Q: How many hours of pre-licensing education are required for accident and health
insurance -✓✓ A: 20 hours
, Q: What are the continuing education requirements for resident producers -✓✓ A: 24
hours every 2 years, with 3 hours in ethics
Q: How long is a temporary license valid in New Jersey -✓✓ A: 180 days
Q: What are the reinstatement requirements for a lapsed license -✓✓ A: Submission of
a reinstatement application, late renewal fee, and proof of continuing education
completion
Q: What is a certificate of authority -✓✓ A: A certificate allowing an insurer to transact
business in New Jersey
Q: Define "Reinsurance" -✓✓ A: Reinsurance is when an insurer buys insurance for
itself from another insurer
Q: What is a retrocession -✓✓ A: When a reinsurer transfers part of its risk to another
reinsurance company
Q: What is controlled business -✓✓ A: Insurance policies written on individuals or
companies that the producer has direct influence over, such as family members or
employers
Q: What is the maximum percentage of a producer's commission that can come from
controlled business -✓✓ A: 50% in a 12-month period
Q: What is a domestic insurance company -✓✓ A: A company incorporated under the
laws of the state in which its home office is located
Q: What is an alien insurance company -✓✓ A: A company chartered in a country other
than the US
Q: What is the difference between a stock and a mutual insurance company -✓✓ A: A
stock company is owned by shareholders, while a mutual company is owned by
policyholders
Q: What is twisting in insurance -✓✓ A: Replacing an insurance policy based on
misrepresentation
Q: What is the penalty for violating a cease and desist order -✓✓ A: A penalty of up to
$5,000
Q: Define "unfair discrimination" in insurance -✓✓ A: Discriminating against a person in
any insurance-related matter unfairly, such as charging different rates for people in the
same actuarial class
and Answers | Professional Prep | Grade
A+
Q: What is the role of the Department of Banking and Insurance (DOBI) -✓✓ A: It
regulates the banking and insurance industries in New Jersey
Q: Who appoints the Commissioner of the Department of Banking and Insurance -✓✓
A: The Governor, with advice and consent of the Senate
Q: What is the role of the Commissioner of Insurance -✓✓ A: The Commissioner has
the power to investigate, administer oaths, regulate insurers for insolvency,
suspend/revoke licenses, and impose penalties for violations
Q: What is the maximum penalty for the first violation of insurance regulations -✓✓ A:
$5,000
Q: What is the maximum penalty for each subsequent violation of insurance regulations
-✓✓ A: $10,000
Q: How long before a hearing must the notice be delivered to the person/entity under
investigation -✓✓ A: At least 10 days after the notice is delivered
Q: What happens if an insurance company becomes insolvent -✓✓ A: The
Commissioner will suspend its Certificate of Authority
Q: What is an insurance producer -✓✓ A: A person who produces business for the
insurer, such as an agent, broker, or general agent
Q: What must an insurance consultant do before receiving fees from an insurance
prospect -✓✓ A: Obtain a signed written memorandum stating the amount of
compensation
Q: What is the requirement for a business entity acting as an insurance producer -✓✓ A:
The business entity must be licensed in New Jersey
Q: How many hours of pre-licensing education are required for life insurance in New
Jersey -✓✓ A: 20 hours
Q: How many hours of pre-licensing education are required for accident and health
insurance -✓✓ A: 20 hours
, Q: What are the continuing education requirements for resident producers -✓✓ A: 24
hours every 2 years, with 3 hours in ethics
Q: How long is a temporary license valid in New Jersey -✓✓ A: 180 days
Q: What are the reinstatement requirements for a lapsed license -✓✓ A: Submission of
a reinstatement application, late renewal fee, and proof of continuing education
completion
Q: What is a certificate of authority -✓✓ A: A certificate allowing an insurer to transact
business in New Jersey
Q: Define "Reinsurance" -✓✓ A: Reinsurance is when an insurer buys insurance for
itself from another insurer
Q: What is a retrocession -✓✓ A: When a reinsurer transfers part of its risk to another
reinsurance company
Q: What is controlled business -✓✓ A: Insurance policies written on individuals or
companies that the producer has direct influence over, such as family members or
employers
Q: What is the maximum percentage of a producer's commission that can come from
controlled business -✓✓ A: 50% in a 12-month period
Q: What is a domestic insurance company -✓✓ A: A company incorporated under the
laws of the state in which its home office is located
Q: What is an alien insurance company -✓✓ A: A company chartered in a country other
than the US
Q: What is the difference between a stock and a mutual insurance company -✓✓ A: A
stock company is owned by shareholders, while a mutual company is owned by
policyholders
Q: What is twisting in insurance -✓✓ A: Replacing an insurance policy based on
misrepresentation
Q: What is the penalty for violating a cease and desist order -✓✓ A: A penalty of up to
$5,000
Q: Define "unfair discrimination" in insurance -✓✓ A: Discriminating against a person in
any insurance-related matter unfairly, such as charging different rates for people in the
same actuarial class
