Michigan Life, Accident, and Health || with Complete
Solutions.
The Commissioner of Insurance is appointed by the Governor for a term of correct answers 4
years
All of the following are examples of insurance transactions except:
A. soliciting applications for insurance
B. delivering policies
C. licensing of producers
D. collecting premiums correct answers Correct answer: C - licensing of producers
A temporary license issued to close the affairs of a deceased producer may be issued for up to
_____ days at the discretion of the Commissioner correct answers 180 days
Continuing Education (CE)
______ hours of CE every two years
______ hours must be in Ethics
______ day grace period to complete CE correct answers 24 total hours every two years
3 hours in ethics
90 day grace period
Michigan Life and Health Insurance Guaranty Association correct answers Protects policy
holders against failure insolvent insurers
Controlled business correct answers It is permitted provided it does not exceed 15% of the
premiums written in a 12-month period
To motivate a buyer to sign an application for insurance, a producer promises a gift equal to 50%
of the commission. This is an example of __________. correct answers Rebating
Defamation correct answers A written statement that is false and derogatory that is designed to
injure someone's reputation.
The maximum fine for knowingly violating a cease and desist order is $________ and
__________________. correct answers $10,000 and possible license revocation
Insurance counselor correct answers Provides advice concerning an insurance policy and charges
a fee for that advice.
An applicant who has been denied an insurance license has _____ days to request a hearing to
protest the denial. correct answers 30 days
True / False
A producer may share commissions with another licensed producer correct answers True
,True / False
A producer may not share commissions with a licensed nonresident producer correct answers
False
If, after a hearing, the Commissioner believes a producer knowingly violated insurance licensing
laws, the Commissioner can: correct answers Fine the producer a max of $2,500 per violation
A producer has a fiduciary responsibility to all of the following: correct answers - Insured on
cancelled policies
- Insurer, for premiums due
- Prospective purchaser of insurance, when the application is rejected.
Why can't a producer barter or trade an insurance contract for goods and services? correct
answers The insurance product is not the producer's to barter; it belongs to the insured.
How often must the Commissioner examine the books, records, and documents of domestic
insurers? correct answers At least once every 5 years
A producer has _____ days to respond to charges of violating insurance laws. correct answers 30
days.
If a producer is convicted of routinely misrepresenting benefits in insurance policies, he may be
fined up to $_______ for all violations. correct answers $25,000
Under what type of policy does an insured have to be notified if current policy values are
insufficient to maintain the policy, given guaranteed interest and expense rates? correct answers
Universal Life Insurance
An advertisement for a life insurance policy must include all of the following: correct answers -
information material to the insurance policy
- a description of the type of policy advertised
- the identity of the insurer
Implying that policy dividends are guaranteed as an inducement for an insured to drop an
existing policy and purchase a new policy is an example of _____________. correct answers
Twisting
The minimum number of lives that must be covered under a group life insurance policy in
Michigan is ______. correct answers 2 lives.
The maximum life insurance policy loan interest that may be charged on a fixed interest loan is
______%. correct answers 8%
In life insurance, all advertisements must be kept by the insurer for at least ________ months.
correct answers 48 months
, The maximum life insurance policy loan interest that may be charged on an adjustable rate loan
is ______%. correct answers 18%
True/ False
A long-term care policy can exclude all of the following:
- Alcoholism
- Drug addiction
- Alzheimer's disease
- Self-inflicted injury correct answers False
A long-term care policy can exclude all alcoholism, drug addiction, and self-inflicted injury.
Alzheimer's disease cannot be excluded.
True/False
A long-term care application must include questions that reveal when the proposed coverage will
replace other existing health or long-term care coverage. correct answers True
True/False
A Medicare supplement policy can indemnify against losses resulting from accidents on a
different basis than losses resulting from sickness. correct answers False - Medicare supplements
must indemnify the same way for accidents and sickness.
True/False
A Medicare supplement policy must cover intermediate outpatient care for substance abuse.
correct answers True - Intermediate care for substance abuse includes inpatient treatment for
drug addiction and alcohol abuse
In Michigan, the free-look or trial examination period for a LTC policy is ______ days. correct
answers 30
True/False
All LTC policy owners must be offered a cost-of-living benefit adjustment option. correct
answers True
Health insurance is in force for newborns from birth and notification must be given within _____
days of birth for coverage to extend beyond that point. correct answers 31 days
An individual that is continually insured under a group policy for at least ____ months may
convert to an individual policy upon policy termination. correct answers 3 months
A person becomes eligible for the federal Medicare program at the age of ____. Coverage must
be requested within _____ days before or after the applicant's birthday. correct answers 65 years
old, 90 days
The Medicare maximum preexisting condition exclusion period is ____ months. correct answers
6 months
Solutions.
The Commissioner of Insurance is appointed by the Governor for a term of correct answers 4
years
All of the following are examples of insurance transactions except:
A. soliciting applications for insurance
B. delivering policies
C. licensing of producers
D. collecting premiums correct answers Correct answer: C - licensing of producers
A temporary license issued to close the affairs of a deceased producer may be issued for up to
_____ days at the discretion of the Commissioner correct answers 180 days
Continuing Education (CE)
______ hours of CE every two years
______ hours must be in Ethics
______ day grace period to complete CE correct answers 24 total hours every two years
3 hours in ethics
90 day grace period
Michigan Life and Health Insurance Guaranty Association correct answers Protects policy
holders against failure insolvent insurers
Controlled business correct answers It is permitted provided it does not exceed 15% of the
premiums written in a 12-month period
To motivate a buyer to sign an application for insurance, a producer promises a gift equal to 50%
of the commission. This is an example of __________. correct answers Rebating
Defamation correct answers A written statement that is false and derogatory that is designed to
injure someone's reputation.
The maximum fine for knowingly violating a cease and desist order is $________ and
__________________. correct answers $10,000 and possible license revocation
Insurance counselor correct answers Provides advice concerning an insurance policy and charges
a fee for that advice.
An applicant who has been denied an insurance license has _____ days to request a hearing to
protest the denial. correct answers 30 days
True / False
A producer may share commissions with another licensed producer correct answers True
,True / False
A producer may not share commissions with a licensed nonresident producer correct answers
False
If, after a hearing, the Commissioner believes a producer knowingly violated insurance licensing
laws, the Commissioner can: correct answers Fine the producer a max of $2,500 per violation
A producer has a fiduciary responsibility to all of the following: correct answers - Insured on
cancelled policies
- Insurer, for premiums due
- Prospective purchaser of insurance, when the application is rejected.
Why can't a producer barter or trade an insurance contract for goods and services? correct
answers The insurance product is not the producer's to barter; it belongs to the insured.
How often must the Commissioner examine the books, records, and documents of domestic
insurers? correct answers At least once every 5 years
A producer has _____ days to respond to charges of violating insurance laws. correct answers 30
days.
If a producer is convicted of routinely misrepresenting benefits in insurance policies, he may be
fined up to $_______ for all violations. correct answers $25,000
Under what type of policy does an insured have to be notified if current policy values are
insufficient to maintain the policy, given guaranteed interest and expense rates? correct answers
Universal Life Insurance
An advertisement for a life insurance policy must include all of the following: correct answers -
information material to the insurance policy
- a description of the type of policy advertised
- the identity of the insurer
Implying that policy dividends are guaranteed as an inducement for an insured to drop an
existing policy and purchase a new policy is an example of _____________. correct answers
Twisting
The minimum number of lives that must be covered under a group life insurance policy in
Michigan is ______. correct answers 2 lives.
The maximum life insurance policy loan interest that may be charged on a fixed interest loan is
______%. correct answers 8%
In life insurance, all advertisements must be kept by the insurer for at least ________ months.
correct answers 48 months
, The maximum life insurance policy loan interest that may be charged on an adjustable rate loan
is ______%. correct answers 18%
True/ False
A long-term care policy can exclude all of the following:
- Alcoholism
- Drug addiction
- Alzheimer's disease
- Self-inflicted injury correct answers False
A long-term care policy can exclude all alcoholism, drug addiction, and self-inflicted injury.
Alzheimer's disease cannot be excluded.
True/False
A long-term care application must include questions that reveal when the proposed coverage will
replace other existing health or long-term care coverage. correct answers True
True/False
A Medicare supplement policy can indemnify against losses resulting from accidents on a
different basis than losses resulting from sickness. correct answers False - Medicare supplements
must indemnify the same way for accidents and sickness.
True/False
A Medicare supplement policy must cover intermediate outpatient care for substance abuse.
correct answers True - Intermediate care for substance abuse includes inpatient treatment for
drug addiction and alcohol abuse
In Michigan, the free-look or trial examination period for a LTC policy is ______ days. correct
answers 30
True/False
All LTC policy owners must be offered a cost-of-living benefit adjustment option. correct
answers True
Health insurance is in force for newborns from birth and notification must be given within _____
days of birth for coverage to extend beyond that point. correct answers 31 days
An individual that is continually insured under a group policy for at least ____ months may
convert to an individual policy upon policy termination. correct answers 3 months
A person becomes eligible for the federal Medicare program at the age of ____. Coverage must
be requested within _____ days before or after the applicant's birthday. correct answers 65 years
old, 90 days
The Medicare maximum preexisting condition exclusion period is ____ months. correct answers
6 months
