TENNESSEE LAWS AND RULES QUESTIONS AND ANSWERS ALREADY PASSED

TENNESSEE LAWS AND RULES QUESTIONS AND ANSWERS ALREADY PASSED "Which of the following would best describe the actions of an insurer who promises the cheapest premium rates in the United States? -rebating -defamation -sliding -false advertising - CORRECT ANSWER -false advertising" "How long is a temporary license valid? -45 days -90 days -120 days -180 days - CORRECT ANSWER -180 days" "When a life insurance application is completed, a Policy Summary must be given to the applicant. The policy summary MUST include -the insurer's AM best rating -the producer's address -cash value rate -the premium cost for basic coverage applied for - CORRECT ANSWER -the premium cost for basic coverage applied for" "A business entity can be defined as a(n) -agency that must only operate outside of Tennessee -agency that must only operate inside of Tennessee -association or a limited liability company -business that requires approver by the Attorney General to transact business - CORRECT ANSWER -association or a limited liability company" "Insurance contract may be sold, solicited, or negotiated by an insurance producer ONLY upon -filing an application for licensure -passing the licensure examination -issuance of license -becoming an appointed producer of an insurer - CORRECT ANSWER -becoming an appointed producer of an insurer" "A provision that the policy, application, and all attachments shall constitute the ___ between the parties -grace period -entire contract -notice of claim -proof of loss - CORRECT ANSWER -entire contract" "A licensed producer can be BEST described as a(n) -someone who places insurance advertisements in a newspaper -underwriting officer of an insurance company -individual who places insurance on behalf of anyone seeking insurance -administrator answering calls for an insurance agency - CORRECT ANSWER -individual who places insurance on behalf of anyone seeking insurance" "What authority does the Commissioner have over Tennessee producers? -the Commissioner may mandate the financial restructuring of insolvent insurers -the Commissioner may levy fees on policy applications to defray operating costs -the Commissioner may establish guidelines for continuing education as a part of the producer license renewal procedure -the Commissioner may require adjacent states to adopt reciprocal agreements for nonresident producer licenses - CORRECT ANSWER -the Commissioner may establish guidelines for continuing education as a part of the producer license renewal procedure" "All of these are powers of the Commissioner EXCEPT -hold hearings -enforce insurance laws -incarcerate a producer -issue subpoenas - CORRECT ANSWER -incarcerate a producer" "If an insurance producer applicant is required to pass a written examination, what is also required? -a fingerprint-based criminal background check -a college degree -applicant is at least 21 years old -the applicant's credit report - CORRECT ANSWER -a fingerprint-based criminal background check" "When does the Free-Look provision for health insurance begin? -date of sales appointment -date the policy is delivered to the insured -date the sales appointment was set -date the policy was issued - CORRECT ANSWER -date the policy is delivered to the insured" "A Long-Term Care policy sold in Tennessee MUST be -conditionally renewable -optionally renewable -guaranteed renewable -noncancellable - CORRECT ANSWER -guaranteed renewable" "The Tennessee Insurance Guaranty Association -is regulated by the National Association of Insurance and Financial Advisors (NAIFA) -is an agency of the federal government -has voluntary membership from admitted Tennessee insurance companies -protects Tennessee insurance policyowners in the event an insurance company becomes insolvent - CORRECT ANSWER -protects Tennessee insurance policyowners in the event an insurance company becomes insolvent" "Who determines the education credits needed for a producer's continuing education? -the insurer who appointed the producer -National Association of Insurance and Financial Advisors (NAIFA) -the governor -Commissioner of Commerce and Insurance - CORRECT ANSWER -Commissioner of Commerce and Insurance" "How often must the Commissioner examine each domestic company? -every 2 years -every 3 years -every 4 years -every 5 years - CORRECT ANSWER -every 5 years" "All of these insurance subjects qualify for continuing education credits in Tennessee EXCEPT -taxation of life insurance -motivating producers -estate planning -group health plans - CORRECT ANSWER -motivating producers" "The Insurance Commissioner is REQUIRED to do which of the following before holding a hearing that could lead to the suspension of a producer's license -give written AND oral notice to the producer -give written notice to the producer -give written AND oral notice to the producer's insurance company -give oral notice to the producer's insurance company - CORRECT ANSWER -give written notice to the producer" "P's individual health policy is now in the grace period. P's coverage will remain in force if -no claim is presented -the premium is paid -the insured proves insurability -the insured does not leave the state - CORRECT ANSWER -the premium is paid" "In Tennessee, an insurer that is incorporated in New Jersey and conducts business in Tennessee is called a(n) -alien insurer -foreign insurer -dual insurer -domestic insurer - CORRECT ANSWER -foreign insurer" “In Tennessee, the MAXIMUM fine that the Commissioner can impose on a procedure is ___ per violation -$500 -$1,000 -$1,500 -$2,000 - CORRECT ANSWER -$1,000" "All of these are considered a producer's breach of fiduciary duty EXCEPT -misappropriation of premiums -conversion of premiums -improper withholding of premiums -allowing premiums to be submitted electronically - CORRECT ANSWER -allowing premiums to be submitted electronically" "XYZ Corp was issued a group Accident and Health Policy for its employees. Under this plan, a -certificate must be issued to XYZ and a policy must be issued to each employee -certificate must be issued to XYZ and each employee -policy must be issue to XYZ and a certificate must be issued to each employee -policy must be issued to XYZ and each employee - CORRECT ANSWER -policy must be issue to XYZ and a certificate must be issued to each employee" "The Commissioner would like to hold a hearing against a producer. Before the hearing is held, a notice -must be sent by registered or certified mail to the producer's address on file -must be sent to the insurer's home office -must be delivered in person -is not required - CORRECT ANSWER -must be sent by registered or certified mail to the producer's address on file" "J applies for an insurance policy. What BEST describes the particular terms of this policy? -AM best statement -policy summary -provisional page -buyer's guide - CORRECT ANSWER -policy summary" "If a producer commits an act of coercion or intimidation, how would the producer's insurance company be held responsible for this act? -if the insurer only suspends the producer, not terminate -if the insurer reduces the commission level of the producer -if the insurer approves of the act -if the insurer does not make a public announcement of the act - CORRECT ANSWER -if the insurer approves of the act" "An individual health insurance policy is REQUIRED to contain a(n) -subrogation provision -payment of claims provision -other insurance provision -waive of premium provision - CORRECT ANSWER -payment of claims provision" "An insurance producer could be found guilty of rebating by -offering better insurance coverage to an existing policyholder -sharing commissions with a client who has purchased insurance -recommending a policyholder convert existing term life insurance to an individual whole life policy -offering a discount for a client being a nonsmoker - CORRECT ANSWER -sharing commissions with a client who has purchased insurance" "When a Medicare Supplement policy is delivered to a policyholder, which of the following MUST accompany the policy? -producer's address -outline of coverage -insurer's AM best rating -outline of policy-loss ratios - CORRECT ANSWER -outline of coverage" "Who would qualify for a temporary license in Tennessee? -an individual who has recently failed the state exam -a nonresident producer in another state who wishes to conduct business in Tennessee -a producer with a recently expired license -a surviving spouse of a deceased producer - CORRECT ANSWER -a surviving spouse of a deceased producer" "Which of the following is NOT a requirement to sell, solicit, or negotiate Long-Term Care insurance? -be a licensed producer for life or health -complete a one-time 8 hour long-term care specific training course -complete 4 hours of long-term care continuing education -complete a one-time 4 hour course on estate planning - CORRECT ANSWER -complete a one-time 4 hour course on estate planning" "Which of these is NOT a fair marketing practice when an existing insurance policy is being replaced? -offer the same coverage for a lower price -reduce the cost by lowering the commission -reduce the cost by raising the deductible as long as the insured is notified -offer better coverage for the same price - CORRECT ANSWER -reduce the cost by lowering the commission" "An agent needs to complete ___ of continuing education every ___ years -25; 2 -24; 3 -24; 2 -25; 2 - CORRECT ANSWER -24; 2" "All of these statements regarding referrals are true EXCEPT -the Commissioner may establish by rule a maximum amount for each referral -the person making the referral may not discuss the specific policy terms and conditions -referral fees may not be tied to the purchase of insurance -referral fees must be filed and approved with the Commissioner of Insurance - CORRECT ANSWER -referral fees must be filed and approved with the Commissioner of Insurance" "Which of the these is a valid Tennessee regulation for referral fees? -referral fees can be unlimited in amount -if the referral sale involves replacement, the Notice Regarding Replacement form is not required -referral fees may only be paid in the event a policy is purchased -the Commissioner may establish by rule a maximum amount for each referral - CORRECT ANSWER -the Commissioner may establish by rule a maximum amount for each referral" "A producer MUST leave a buyer's guide with an applicant for which type of policy? -group life insurance -annuity -universal life insurance -credit life insurance - CORRECT ANSWER -universal life insurance" "Which of the following is an example of defamation? -making statements that encourage the purchase of term life insurance over whole life insurance -publishing a newsletter that makes reference to reputable brokers in the area -circulating brochures that falsely denounce the financial condition of an insurer -issuing pamphlets containing false information about term life insurance - CORRECT ANSWER -circulating brochures that falsely denounce the financial condition of an insurer" "Which of the following is the purpose of the Tennessee Guaranty Association? -avoid excessive delay in payment -avoid a loss to policyholders and claimant due to the insolvency of an insurer -charged to distribute the costs of protection to all insurers -all of the above - CORRECT ANSWER -all of the above" "The Tennessee Guaranty Association is subject to review and regulation by the Commissioner. A financial statement must be submitted no later than ___ of each year -January 3rd -February 13th -March 30th -April 30th - CORRECT ANSWER -March 30th" "For a change to a health policy to be valid, what is required? -the producer must approve of the changes -changes in the policy must be approved by an executive officer of the insurer -changes must be notarized by the Commissioner and attached to the policy -the producer must take an affidavit from the policyowner - CORRECT ANSWER -changes in the policy must be approved by an executive officer of the insurer" "