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NEW MEXICO HEALTH AND LIFE
INSURANCE EXAM| ACTUAL QUESTIONS
WITH ANSWERS
Financial Status (Independent Rating Services) - correct-answer -AM Best
Fitch
Standard and Poor's
Moody's
Weiss
Six types of insurance - correct-answer -Property insurance
Casualty insurance
Annuity
Accident and health or sickness
Variable life and variable annuity products
Credit insurance
Marketing (Distribution) Systems - correct-answer -4 basic distribution systems
used to market insurance: ▬Captive: -Insurer contracts with independ agents to
represent & sell for only that insurance comp, Typically paid on a commission
basis. - Insurance company owns & control all accounts, policy records, &
renewals. ▬Direct writer: -Direct writing agent is an employee of the comp, may
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be paid a salary, commission or both. - Insurance comp owns & controls all
accounts, policy records, and renewals. ▬Direct response: -This system does not
use agents, but instead solicits through direct mail or telemarketing. -Insurance
comp owns & controls all accounts, policy records, and renewals. ▬ Independent
Agent: -Independent contractor who contracts with several different companies to
represent & sell insurance for those companies - receives only commission. Agent
owns & controls the accounts, policy records, and renewals.
Insurer as Principal - correct-answer -The insurer is the source of the authority in
which the agent must abide, as stipulated in the agency contract. This means that
the insurer is responsible for the agent's acts, as long as they remain in the
bounds of the contract.
Insurance producer/insurer
relationship - correct-answer -
Authority and powers of insurance producers - correct-answer -Express-written in
the contract
Implied-Not written but assumed needed to do to conduct regular business
Apparent-
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Responsibilities to the applicant/insured - correct-answer -The producer has
responsibilities that are owed to applicants and/or insureds. He or she will:
1. act only in the best interests of his or her clients
2. only provide accurate and up-to-date information and advice to customers
about policies and coverages
3. aid with the accurate completion of applications and any other accompanying
documentation
4. service policies as necessary and according to the desires of the insured
5. process any coverage changes or cancellations
6. act only within the scope of authority that has been given them by the insurer.
Elements of a Legal Contract - correct-answer -1. Agreement - offer and
acceptance
2. Consideration
3. Competent parties
4. Legal purpose
NEW MEXICO HEALTH AND LIFE
INSURANCE EXAM| ACTUAL QUESTIONS
WITH ANSWERS
Financial Status (Independent Rating Services) - correct-answer -AM Best
Fitch
Standard and Poor's
Moody's
Weiss
Six types of insurance - correct-answer -Property insurance
Casualty insurance
Annuity
Accident and health or sickness
Variable life and variable annuity products
Credit insurance
Marketing (Distribution) Systems - correct-answer -4 basic distribution systems
used to market insurance: ▬Captive: -Insurer contracts with independ agents to
represent & sell for only that insurance comp, Typically paid on a commission
basis. - Insurance company owns & control all accounts, policy records, &
renewals. ▬Direct writer: -Direct writing agent is an employee of the comp, may
,2|Page
be paid a salary, commission or both. - Insurance comp owns & controls all
accounts, policy records, and renewals. ▬Direct response: -This system does not
use agents, but instead solicits through direct mail or telemarketing. -Insurance
comp owns & controls all accounts, policy records, and renewals. ▬ Independent
Agent: -Independent contractor who contracts with several different companies to
represent & sell insurance for those companies - receives only commission. Agent
owns & controls the accounts, policy records, and renewals.
Insurer as Principal - correct-answer -The insurer is the source of the authority in
which the agent must abide, as stipulated in the agency contract. This means that
the insurer is responsible for the agent's acts, as long as they remain in the
bounds of the contract.
Insurance producer/insurer
relationship - correct-answer -
Authority and powers of insurance producers - correct-answer -Express-written in
the contract
Implied-Not written but assumed needed to do to conduct regular business
Apparent-
, 3|Page
Responsibilities to the applicant/insured - correct-answer -The producer has
responsibilities that are owed to applicants and/or insureds. He or she will:
1. act only in the best interests of his or her clients
2. only provide accurate and up-to-date information and advice to customers
about policies and coverages
3. aid with the accurate completion of applications and any other accompanying
documentation
4. service policies as necessary and according to the desires of the insured
5. process any coverage changes or cancellations
6. act only within the scope of authority that has been given them by the insurer.
Elements of a Legal Contract - correct-answer -1. Agreement - offer and
acceptance
2. Consideration
3. Competent parties
4. Legal purpose
