Life, accident and health insurance Texas General Lines - EXAM 2024 update

Life, accident and health insurance Texas General Lines - EXAM 2024 update Life, accident and health insurance Texas General Lines - EXAM 2024 update Email me if you need answers LIFE SECTION 1 - LIFE SECTION 1 1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover a 20- year-amortized $50,000 business-improvement loan. Which of the following plans would adequately protect Ms. Timms at the minimum premium outlay? - A- $50,000 Whole Life policy B- $50,000 Level Term policy for 20 years C- $50,000 20 Pay Life policy D- $50,000 Decreasing Term policy for 20 years 2) A 45-year old customer who is seeking to supplement his retirement income at age 65 would not buy a: - A- Deferred Annuity B- Equity Indexed Annuity C- Variable Annuity D- Immediate Annuity 3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash value will equal the face amount of the policy when he reaches the age of: - A- 60 B- 70 C- 100 D- 30 4) Which of the following is an example of a Limited-Pay Life policy? - A- Universal life B- Whole Life C- Life Paid-Up at Age 65 D- Renewable Term to Age 70 5) Which of the following policies provides the greatest amount of protection for an insured's premium dollar as well as some cash accumulation? - A- Annuity B- Whole Life C- Term D- Limited-Pay Life 6) Which of the following individual policy conversions is usually permitted without any evidence of insurability? - A- Conversion to a lower-premium plan B- Conversion from a Whole Life policy to a Term policy C- Conversion from a Term policy to a Whole Life policy D- Conversion to a larger amount of insurance 7) Which of the following is NOT correct regarding Ordinary Whole Life policies? - A- The premiums payments are owed annually until you die or reach age 100 B- The cash value grows more quickly in the beginning years of the policy C- Coverage lasts for your own life D- Ordinary Whole Life is a type of permanent insurance 8) Which of the following statements is true about the premium payment schedule for a Whole Life policy? - A- Premiums are payable for a designated period of time only, after which coverage is no longer provided B- Premiums are payable until the insured's retirement only, after which coverage is continued automatically until the insured's death C- One premium, in the amount of the insured's choice, is payable at the time of application, and the balance of the premiums is deducted from the face amount of the policy at the time of the insured's death D- Premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death 9) A life insurance policy that covers two parties, but only pays when the last party dies is known as: - A- Joint Life B- Contingent Life C- Other insured Life D- Survivorship Life 10) Which of the following contracts requires that a series of benefit payments be made at specified intervals? - A- 20-Pay Life B- Modified Whole Life C- Annuity D- Ordinary Whole Life 11) If a client wants cash value life insurance with a flexible premium and an adjustable death benefit that will allow the policy owner a choice of various cash value investment options, he should buy: - A- Variable Life B- Universal Life C- Adjustable Life D- Variable/Universal Life 12) If a person wants to invest a lump sum in an annuity that may appreciate along with market and economic conditions, they should buy a: - A- Flexible premium Annuity B- Fixed Annuity C- Deferred Annuity D- Variable Annuity 13) You have a client that is a real estate agent. Which of the following types of permanent protection is best for this type of client? - A- Variable life B- Universal life C- Survivorship life D- Adjustable life 14) In order to sell variable life insurance you must be registered with which of the following? - A- The SEC B- The State C- The NYSE D- The NASD 15) Which of the following is an example of a Limited-Pay Life policy: - A- Traditional Whole Life B- Endowment at 65 C- 10 year Renewable Term Life D- 20-Pay Life 16) An insurance producer selling a Variable Annuity whose cash value depends on the performance of an underlying investment account must be registered with: - A- The National Association of Insurance Commissioners B- The National Association of Life Underwriters C- The Chartered Life Underwriters D- The Financial Industry Regulatory Authority (FINRA, formerly the NASD) 17) A business owner with a fluctuating income who wants a life insurance policy that can be changed to suit economic conditions should buy: - A- Variable Life B- Modified Whole Life C- Adjustable Life D- Interest-sensitive Whole Life 18) An Annuity is designed to provide which of the following financial features? I. The liquidation of principal and interest II. Favorable tax treatment III. The creation of an estate - A- I, II, and III B- I and II C- I and III D- II and III 19) Which of the following statements about a Renewable Term policy is true? - A- It is renewable at the option of the insurance company B- It is renewable at the option of the insured C- It is renewable at the option of the insurance company, with proof of insurability D- It is renewable at the option of the insured, with proof of insurability 20) Most Term Life insurance: - A- Is convertible to permanent Whole Life without a physical exam B- Has a guaranteed cash value C- Is renewable with evidence of insurability D- Is renewable to age 100 21) A life insurance policy whose cash value will fluctuate depending upon the performance of a separate account is: - A- Limited-pay Life B- Universal Life C- Ordinary Life D- Variable Life 22) A life insurance policy that combines term insurance protection, a flexible premium, and cash value accumulation is: - A- Increasing Term Life B- Variable/Universal Life C- Universal Life D- Variable Life 23) Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources? - A- Term B- Limited Pay policy C- Whole Life D- Annuity 24) At age 30, Tom Morris wishes to purchase a Whole Life policy. His producer explains that he can pay for the policy in several ways. One method is called 20-Pay Life, and another, Straight Life. Tom wishes to know which plan will accumulate cash value at a faster rate in the early years of the policy. Which of the following would be the producer's most appropriate response? - A- "20-Pay Life will accumulate cash value faster." B- "The rate of cash-value accumulation depends on the profitability of the insurance company." C- "Straight Life will accumulate cash value faster." D- "Both plans will accumulate cash value at the same rate." LIFE SECTION 2 - LIFE SECTION 2 1) Which of the following statements about the Reinstatement provision is true? - A- It provides for reinstatement of a policy regardless of the insured's health B- It requires the policy owner to pay, with interest, all premiums that are in arrears in order for the policy to be reinstated C- It permits reinstatement within 10 years after a policy has lapsed D- It guarantees the reinstatement of a policy that has been surrendered for cash 2) The time period covered by the Free Look provision of a Life insurance contract starts: - A- When the insured receives the contract and a "right to look" receipt B- When the contract is received in the agency office and given to the producer C- When the insured receives the contract and makes the first premium payment, if needed D- When the contract is issued and mailed to the agency office from the home office of the insurance company 3) Dividend projections may be included in a proposal for Life insurance when which of the following is true? - A- There is a clear statement that payment of future dividends is not guaranteed B- The applicant has requested that they be included C- The projected amounts do not exceed the dividends previously paid by the same insurance company D- The projected amounts are calculated on the basis of the Commissioners Standard Ordinary Mortality Tables 4) The Life insurance rider that will pay the insured's premium after a period of disability due to accident or sickness is: - A- Guaranteed Insurability B- Accidental Death and Dismemberment C- Waiver of Premium D- Automatic Premium Loan 5) Which of the following is a Non-forfeiture Option that provides continuing cash value buildup? - A- Extended Term B- Deferred Annuity C- Reduced Paid-Up D- Cash Surrender 6) A rider that keeps a policy from lapsing due to non-payment of premium by borrowing from the cash value is: - A- Reduced Paid-Up Option B- Extended Term Option C- Automatic Premium Loan D- Mode of Payment 7) Which of the following Settlement Options might provide payments that exceed the proceeds of the policy and the interest earned? - A- Interest Only B- Fixed Period C- Life Annuity D- Fixed Amount 8) A client buys a $50,000 Whole Life policy on himself and wants to add $25,000 in Term coverage for his spouse. He should add which of the following riders to his policy? - A- Spousal Rider B- Family Rider C- Other Insured Rider D- Additional Insured Rider 9) All of the following are considered to be owner's rights under a Life insurance policy, EXCEPT: - A- Changing an irrevocable beneficiary B- Changing a dividend option C- Taking a policy loan D- Selecting a settlement option prior to death 10) If the insured dies 5 years after he bought a Life insurance policy and the insurer determines that there was material misrepresentation on his application, they will: - A- Pay the claim B- Pay only a portion of the claim C- Deny the claim D- Deny the claim but refund the premium 11) The life insurance policy provision that prevents the insurer from modifying a policy after it has been issued is the: - A- Incontestability Clause B- Entire Contract Clause C- Consideration Clause D- Insuring Clause 12) Which of the following statements is true about exercising a Guaranteed Insurability option: I. The new insurance is available at the original issue age rate II. Evidence of insurability is not required III. The insured can exercise the option at any time after the age of 21 IV. The maximum purchase is specified in the contract - A- III and IV B- I and II C- II and IV D- I, II, and III 13) In a policy insuring the life of a child, which of the following allows the premiums to be waived in the event of the death or disability of the person responsible for premium payments? - A- Reduced Paid-Up option B- Payor Benefit Rider C- Waiver of Premium provision D- Reduction of Premium option 14) Which of the following is true about the Misstatement of Age provision - A- It allows the insurer to adjust benefits B- It allows the insurer to change the premium C- It allows the insurer to void the contract D- It allows the insurer to contest a claim during the first 2 15) Which of the following statements about a typical Suicide clause in a Life insurance policy is true? - A- Suicide is excluded for a specific period of years and covered thereafter B- Suicide is excluded as long as the policy is in force C- Suicide is covered for a specific period of years and excluded thereafter D- Suicide is covered as long as the policy is in force 16) A $10,000 Life insurance policy with a Triple Indemnity clause has been in force for three years. The insured is injured in a train wreck and dies in a hospital five months later. The death proceeds payable under the policy would be: - A- $20,000 B- $ -0- C- $30,000 D- $10,000 17) Grandma owns a policy on her grandchild. Which rider would kick in if Grandma should die tomorrow? - A- Guaranteed Insurability Rider B- Waiver of Premium Rider C- Payor Benefit Rider D- Child Term Rider 18) Dividend projections may be included in a proposal for Life insurance: - A- When there is a clear statement that they are not guaranteed B- Only upon the request of the applicant C- When they are required to be applied to future premiums due D- When past results are used as the basis for future projections 19) What Life insurance policy provision applies if a policy lapsed last year and the insured wants it back? - A- Assignment B- Reinstatement C- Non-forfeiture D- Grace Period 20) A customer buys a $25,000 Life insurance policy with a $25,000 Accidental Death Benefit rider attached. If he dies of cancer, how much will his policy pay? - A- Nothing B- $25,000 C- $50,000 D- $75,000 21) The contingent beneficiary will receive policy proceeds when: - A- No beneficiary has been designated B- The insured pre-deceases all designated beneficiaries C- The primary beneficiary pre-deceases the insured D- The insured pre-deceases the primary beneficiary 22) If the insured understated his age and the error is discovered after the insured's death, the insurance company will: - A- Deny the claim under the Incontestability clause B- Refund all premiums paid plus accumulated interest C- Pay the claim, less a deduction for the amount of the underpaid premium D- Pay the amount that the premium paid would have purchased at the correct age 23) The clause that states the insurer's promise to pay the policy benefits in accordance with the contract's provisions is the: - A- Incontestability Clause B- Insuring Clause C- Beneficiary Clause D- Consideration Clause 24) Which of the following is true about the Insuring Clause? - A- It contains the insurer's enforceable promise to pay covered claims B- It states the policy owner's rights C- It states that the insurer may contest a claim for material misrepresentation D- It requires that the application be attached to the policy 25) A client applied for Life insurance on October 1st. The application was approved and the policy was issued on October 10th. It was delivered to the customer on October 18th. When did the Free Look start? - A- October 31st B- October 18th C- October 10th D- October 1st 26) Which of these is a rider that would ensure you can purchase additional insurance coverage, at specified ages, regardless of health? - A- Payor Benefit Rider B- Guaranteed Insurability Rider C- Waiver of Premium Rider D- Child Term Rider 27) A beneficiary designation that prevents the policy owner from making certain changes in the policy is: - A- Primary B- Irrevocable C- Revocable D- Contingent 28) Margaret May wants to name her husband as the beneficiary of her Life policy; however, she wishes to retain all of the rights of ownership. Mrs. May should name her husband as: - A- Revocable beneficiary B- Irrevocable beneficiary C- Tertiary beneficiary D- Secondary beneficiary 29) On Life insurance, the purpose of the Entire Contract Clause is to: - A- Limit the policy to the contract plus the application, if attached B- Spell out the rights of the policy owner C- Require that the insurer attach the application to the policy at issue D- Spell out the rights of the beneficiary 30) The Life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the: - A- Misstatement of Age clause B- Insuring clause C- Incontestability clause D- Reinstatement clause 31) The provision in a Life insurance policy that provides protection against unintentional policy lapse is known as the: - A- Automatic Premium Loan provision B- Payor clause C- Waiver of Premium benefit D- Reduction of Premium option 32) The purpose of the Grace Period is to: - A- Give the beneficiary time to prove that insurable interest exists B- Protect the policy owner against unintentional lapse C- Protect the insurer against adverse selection D- Give the insurer time to determine the cause of death 33) Jim gets married and wants to add his new spouse to his existing Life insurance policy. Which rider should he add? - A- Guaranteed Insurability Rider B- Other Insured Rider C- Payor Rider D- Term Rider 34) An insured died during the Grace Period of her Life insurance policy and had not paid the required annual premium. The insurance company is obligated to pay which of the following to the beneficiary? - A- The face amount of the policy less any earned premiums B- The full face amount of the policy C- The cash value of the policy, if any D- A refund of any premiums paid 35) A client buys a Life insurance policy on July 1st and dies by suicide 6 months later. The insurance company will: - A- Deny the claim B- Deny the claim, but refund the premium C- Pay the claim in full D- Pay half of the claim 36) To add coverage for a child to your Whole Life policy you would purchase which of these riders? - A- Payor Benefit Rider B- Guaranteed Insurability Rider C- Waiver of Premium Rider D- Child Term Rider 37) Which of the following statements about the Misstatement of Age provision in a Life insurance policy is true? - A- If the insured's age has been overstated, it provides that a premium refund and the face amount of the policy will be payable B-If the insured's age has been understated, it provides that a death benefit smaller than the face amount of the policy will be payable C- It becomes inoperative after the expiration of the policy's Contestable period D- It is an optional provision 38) An insurance company will grant an advance from the cash value of a Life insurance policy when the policy owner requests which of the following? - A- An automatic premium loan B- A low-interest dividend loan C- A policy loan D- A loan from Extended Term Insurance LIFE SECTION 3 - LIFE SECTION 3 1) An insured's premium for Life insurance is based mainly upon their: - A- Risk classification B- Gender C- Occupation D- Age 2) A prospect's statements made in the application for insurance constitute a part of which of the following? - A- Subrogation Clause B- Incontestability Clause C- Co-insurance Clause D- Consideration Clause 3) In the formation of a Life insurance contract, the special significance of a Conditional Receipt is that it: - A- Serves as proof that the producer has determined the applicant to be fully insurable for coverage by the insurance company B- Is intended to provide coverage on a date earlier than the date of the issuance of the policy C- Is given by the producer only to applicants who fully prepay all scheduled premiums in advance of policy issue D- Guarantees the applicant that a policy will be issued in the amount applied for in the application 4) Life insurance becomes effective when: - A- When the insurer receives the application at their home office B- When the conditions in the conditional receipt are satisfied C- The applicant writes the check and receives a conditional receipt D- When the producer signs the application 5) A producer submits a completed and signed application to the underwriter along with the first premium check. After checking the results of the physical exam, the underwriter issues a 'rated' policy. Which of the following will not be required: - A- A statement that the applicant's health has not changed since the physical exam B- Additional premium to be collected at policy delivery C- A new completed and signed application D- An explanation of the rating or premium surcharge to the client 6) Insurable interest must exist: - A- At the time of loss B- In order to be named as beneficiary C- At the time of application D- Continuously 7) All of the following are a part of a Life insurance policy, EXCEPT the: - A- Conditional Receipt B- Incontestability Clause C- Copy of the application D- Insuring Clause 8) Once completed and signed by the applicant, a producer may change an application: - A- With consent of his manager B- If the applicant initials the change C- With the verbal consent of the applicant D- At anytime 9) An applicant has been denied insurance coverage because of information contained in a consumer report. According to the Fair Credit Reporting Act, all of the following statements are true about this situation, EXCEPT: - A- The applicant has the right to obtain a copy of the consumer report directly from an insurance company that used the report B- The reporting agency cannot issue any report containing adverse information about the applicant that predates the report by more than seven years, except in the case of a bankruptcy, which may be reported for a 14-year period C- The applicant has the right to obtain disclosure of the substance of the information in the consumer report from the reporting agency D- The applicant has the right to obtain the identity of other inquirers who have obtained consumer reports on him within the past six months from the reporting agency 10) On May 8th a prospect filled out an application for a life insurance policy but paid no premium. The insurance company approved the application on May 14th and issued the policy on May 15th. The producer delivered the policy on May 26th and collected the first premium. The coverage became effective on: - A- May 26th B- May 8th C- May 15th D- May 14th 11) An insurable interest must exist when: - A- A Life insurance policy is cancelled B- Death benefits become payable C- Policy ownership is transferred D- At all times 12) A producer takes an application from a proposed insured without receiving payment of the first premium. The insurance company issues the policy and, when the producer visits the proposed insured to deliver it, she realizes that the health of the applicant has deteriorated significantly since the application was taken. The producer should: - A- Rate the policy and obtain any additional premium required B- Refuse to deliver the policy or to accept any premium offered C- Obtain the premium from the prospect and send it to the company immediately D- Deliver the policy as it was issued 13) With proper notice and authorization, insurers may report underwriting information that an applicant lists on their application for Life insurance to the: - A- State insurance department B- Fair Credit Reporting Association C- Anyone who requests it D- Medical Information Bureau (MIB) 14) Statements made by an applicant for a Life insurance policy that are supposed to be true are referred to as: - A- Information B- Representations C- Facts D- Warranties 15) A producer completes an application for Life insurance and sends it to the underwriter who approves it and issues the policy. When is coverage effective: - A- Immediately B- When the producer delivers the policy and picks up the premium C- On the date the client signed the application D- On the date the underwriter approved the application 16) If an applicant for a Life insurance policy is found to be a substandard risk, the insurance company is most likely to: - A- Refuse to issue the policy B- Require a yearly medical exam C- Charge an extra premium D- Lower its insurability standards 17) When giving a client a conditional receipt, which of the following is true? - A- You never collect a premium until you deliver the policy B- The coverage will begin at earliest as of the date of application or when the client passes a physical, whichever is later C- Coverage begins as of date of application D- In order for coverage to begin the applicant must pay all premiums 18) If an existing client of a producer wants to buy another Life insurance policy, the producer should: - A- Submit an unsigned application to the insurer referring to existing underwriting information B- Have the customer come in and complete and sign a new application C- Complete and sign the application on behalf of the customer D- Advise the customer that no physical exam is required since he is an existing client 19) Which of the following is true when the insurer issues a 'rated' policy: - A- Coverage is effective immediately B- It is considered to be acceptance of the risk C- No additional premiums will be due D- It is considered to be a counteroffer 20) A producer sends a completed and signed application along with the check for the initial premium to the underwriter, who notices that the applicant forgot to sign the check. When would coverage start? - A- The date of the conditional receipt B- On the date the application was signed C- When the producer delivers the policy and picks up a signed check along with a Statement of Continued Good Health D- When the underwriter received the application and unsigned check 21) Which federal law governs consumer investigative reports: - A- Telephone Communication Protection Act B- Privacy Protection Act C- Fair Credit Reporting Act D- Employee Retirement Income Security Act 22) If an application for Life insurance is not complete: - A- The insurer will reject it B- The insurer will issue the policy and request additional information C- The insurer will return it to the producer D- The insurer will consider it to be void LIFE SECTION 4 - LIFE SECTION 4 1) A plan under which the surviving partners of a partnership agree to buy the interest of a deceased partner is known as a: - A- Surviving Shareholder plan B- Buy and Sell Agreement C- Key Employee Life policy D- Deferred Compensation plan 2) Carl Burk, whose wife is his business partner, buys a Life insurance policy on his wife's life. Because of this third-party ownership, the beneficiary should be the: - A- Policy owner's children B- Policy owner's estate C- Policy owner D- Policy owner's wife 3) When a company requires that their employees pay part of the premium for the Group Life insurance coverage, it is known as a _ group: - A- Contributory B- Nonparticipatory C- Participatory D- Noncontributory 4) Albert Metz, who has $2,000 of Group Life insurance, has just terminated his employment. Mr. Metz has how many days in which to convert his group coverage to individual coverage? - A- 28 B- 21 C- 15 D- 31 5) Which of the following is not considered to be a 'qualified' plan? - A- IRA B- 403b Tax Sheltered Annuity C- Split Dollar D- Keogh 6) Traditional IRAs have a premature distribution penalty for distributions taken prior to age: - A- 55 B- 70 1/2 C- 59 1/2 D- 65 7) Tim Watson wants to obtain a Life insurance policy on his employee, Mike Carson, and to name Mike's wife, Deborah Carson, as the beneficiary. Signatures of which of the following would be legally required on the application? I. Tim Watson II. Mike Carson III. Deborah Carson - A- I and II B- II and III C- I, II, and III D- I only 8) An insurable interest must exist when: - A- Cash values are borrowed B- Death proceeds become payable C- A life insurance policy is issued D- A policy is surrendered for cash 9) A client with a participating Life insurance policy receives both interest and dividends. What are the tax implications? - A- Neither are taxable B- The interest is taxable, but the dividends are not C- Both are taxable as ordinary income D- The dividends are taxable, but the interest isn't 10) A Life insurance policy of which the cash value is over-funded according to IRS rules is known as: - A- A Universal Life Contract B- A Variable Life Contract C- A Modified Endowment Contract D- A Variable/Universal Life Contract 11) The owner of a business is insured under a $100,000 Key Employee Life policy that contains a Double Indemnity clause and a Suicide clause. The business has paid the annual premium of $2,000. Six months after the inception date of the policy, the insured commits suicide. The insurance company's liability for payment is: - A- $100,000 B- $200,000 C- $ -0- D- $2,000 12) A parent who wishes to have complete control of their son's life insurance policy until the son reaches age 25 can do so through the use of which of the following? - A- Ownership provision B- Payor provision C- Insuring Clause D- Consideration Clause 13) Premature distributions from a Traditional IRA prior to age 59 1/2 are subject to: - A- A 50% IRS penalty B- Ordinary income tax plus a 10% penalty C- Capital gains tax plus a 6% penalty D- Ordinary income tax 14) When someone other than the insured is the owner of a Life insurance policy, the owner may do all of the following without the insured's consent, EXCEPT: - A- Make a policy loan B- Change the beneficiary C- Increase the amount of insurance D- Surrender the policy for its cash value 15) Albert Metz, who has $2,000 of Group Life insurance, has just terminated his employment.The maximum amount that Mr. Metz will be able to convert is which of the following? - A- $1,500 B- $1,000 C- $2,000 D- $500 16) Which of the following statements is true about a policy assignment? - A- It permits the beneficiary to designate the person or persons to receive the benefits B- It is valid during the insured's lifetime only, because the death benefit is payable to the named beneficiary C- It is the same as a beneficiary designation D- It transfers the owner's rights under the policy to the extent expressed in the assignment form HEALTH SECTION 1 - HEALTH SECTION 1 1) If a dentist was off work for 4 months due to disability, his dental assistant's salary would be covered by: - A- Partnership Disability insurance B- Key Employee Disability C- Business Overhead insurance D- Disability Income insurance 2) Jesse Vega is involved in a two-car accident in which he is disabled and Mr. Vega's passenger and the other driver are injured. Which of the following would most likely be covered by his Disability Income policy? - A- His lost income B- The disability of the other driver C- His medical expenses D- The dismemberment of an arm of the passenger 3) The right of an employee to exchange his Group insurance for an Individual policy within 31 days from termination of employment is provided by the: - A- Reinstatement provision B- Conversion provision C- Insurability provision D- Renewability provision 4) Which of the following is true about the Health Insurance Portability and Accountability Act (HIPAA): - A- Probationary periods relating to preexisting conditions are prohibited B- It applies to all types of Health insurance C- Pregnancy may not be considered to be a pre-existing condition D- It enables terminated employees to continue their group coverage 5) When comparing PPOs (Preferred Provider Organizations) to HMOs (Health Maintenance Organizations), the main difference between them is: - A- HMOs stress preventative care B- HMOs provide broader choice of doctors C- PPOs have federal subsidies D- HMOs have higher deductibles 6) Which of the following does not follow the principle of indemnity and, if you were diagnosed with cancer, would pay in addition to any other medical expense coverage you have? - A- Medicaid B- Critical illness plan C- Medicare D- POS plan 7) Which of the following would be covered by Accidental Death and Dismemberment (AD&D) insurance: - A- Accidental loss of hearing B- Paralysis due to accident C- Accidental loss of eyesight D- Death due to heart attack 8) The most an insured can collect on a Disability Income policy is most closely tied to: - A- The average income in their state B- 200% of his income C- Their income D- A percentage of the federal poverty guidelines 9) A 69-year old Medicare beneficiary, who has been hospitalized twice in the past year, should consider buying which of the following to cover future excess medical bills: - A- Major Medical B- Medicare Supplement C- Medicaid D- Long Term Care 10) When selling a Medicare Supplement policy, a producer must disclose all of the following, EXCEPT: - A- What Medicare covers and what the Supplement covers B- Limitations and exclusions C- The 10 day free look provision D- Premium 11) Jim has a Major Medical policy with a $500 deductible and 80/20 co-insurance. If he has a $5,000 claim, how much of the claim will Jim have to pay: - A- $500 B- $3,600 C- $1,400 D- $900 12) Which of the following A&H policies would provide reimbursement for expenses incurred as the result of a broken leg? - A- Dental insurance policy B- Accidental Death and Dismemberment policy C- Disability Income policy D- Medical Expense policy 13) Under a Major Medical policy, the cost of which of the following would usually be considered a covered medical expense? I. Heart surgery II. An emergency appendectomy III. Plastic surgery for burns received in an auto accident - A- I and II B- I only C- III only D- I, II, and III 14) All of the following are true about Long Term Care insurance, EXCEPT: - A- It may be cancelled, if the insured's health changes B- It may be cancelled for non-payment of premium C- Coverage is subject to a daily maximum limit D- It must have a 30-day free look provision 15) HMOs offer all of the following features, EXCEPT: - A- Co-payments B- Closed networks C- Reimbursement D- Preventative care 16) Which of the following statements about Group insurance is true? - A- Group insurance is essentially reduced-cost mass protection B- A small group is rated on the basis of its own experience C- Group insurance is issued after each prospect has had a medical examination D- Each person insured in a group is issued a policy 17) When benefits are paid to a policy owner covered under a Hospital Expense policy, the policy is considered to be which of the following? - A- Reimbursement B- Special Risk C- Limited Accident D- Service 18) Which of the following statements about Accidental Death and Dismemberment coverage are true? I. Death benefits are paid only if death occurs within 24 hours of an accident II. Dismemberment benefits are paid for certain disabilities that are presumed to be total and permanent III. Accidental Death benefits are paid only if death results from an accidental bodily injury as defined in the policy - A- I and III B- II and III C- I, II, and III D- I and II 19) If you purchased a Major Medical policy with a $500 deductible and 80/20 co-insurance, what would be the effect of adding a $500 Supplemental Accident rider to your policy: - A- It would limit coverage to $500 in the event of accidental injury B- It would waive the deductible and co-insurance up to $500 for accidental injury C- You would be required to pay a $500 additional premium if you were injured in an accident D- The deductible and co-insurance would be waived up to $500 for injury or sickness 20) Regarding Long Term Care insurance, which of the following is not considered to be an Activity of Daily Living (ADL): - A- Talking B- Bathing C- Transferring D- Eating 21) Leland Farrell was hospitalized for two weeks and received a bill for $2,100. He has a Major Medical policy with a $100 deductible. His co-insurance is 80/20, figured after reducing the bill by the deductible amount. Mr. Farrell is expected to pay a total of: - A- $520 B- $500 C- $400 D- $1,500 22) Group A&H insurance normally specifies that what percentage of those eligible must be enrolled under a noncontributory plan? - A- 100% B- 25% C- 75% D- 50% 23) Which of the following is not covered by a Basic Medical Expense policy: - A- Hospital room and board B- Long term care expenses C- In-hospital doctor visits D- Surgical expenses 24) Jill has a Major Medical insurance policy with a $1,000 deductible and 80/20 co-insurance. If she has a $10,000 claim, how much will her insurer pay: - A- $2,800 B- $7,200 C- $2,000 D- $1,000 25) Hospital Indemnity policies will pay: - A- Medical bills B- Surgical expenses C- Hospital room and board D- A daily amount if hospitalized 26) In an A&H policy, an Elimination Period provision refers to the period: - A- Between the first day of disability and the actual receipt of payment for the disability incurred B- During which any specific accident or illness is excluded from coverage C- Between the effective date of the policy and the date on which payments under the policy become due D- Between the first day of disability and the day to which the disability must continue before it can result in the insured receiving any benefits 27) Which of the following statements is USUALLY true about the benefits of a Group Short- Term Disability Income policy? - A- They are payable for accidents covered by Workers' Compensation B- They are not payable for accidents covered by Workers' Compensation C- They are not affected by Workers' Compensation D- They are payable when expenses exceed Workers' Compensation benefits 28) Which of the following is INCORRECT regarding a Disability Income policy? - A- On a group policy you have a taxable benefit B- On an individual policy you have a taxable benefit C- On a group policy you insure your gross income D- On an individual policy you insure your net income HEALTH SECTION 2 - HEALTH SECTION 2 1) If the insured is not entirely satisfied with the policy issued, she may return it to the insurance company for voiding and receive a refund of premium at which of the following times? - A- Within a specified period from the date the insurance company issues the policy B- Within a specified period from the date the insured receives the contract C- Within a specified period from the date the producer receives the contract D- Within a specified period after the first renewal premium falls due 2) The owner of a Medical Expense policy has all of the following rights, EXCEPT: - A- Sue the insurer, if there is a disagreement over a claim B- Return the policy to the insurer within the free look period C- Modify the policy without the consent of the insurer D- Assign the benefits to the provider of medical services 3) Which of the following describes a policy, where benefits cannot be reduced, premiums cannot be raised, and coverage cannot be canceled? - A- Conditionally Renewable B- Guaranteed Renewable C- Non-cancelable D- Optionally Renewable 4) Which of the following is true about the Health insurance policy provision regarding reinstatement of a lapsed policy? - A- Upon reinstatement, no new probationary period may apply B- The insurer must reinstate the policy if the overdue premium is paid C- The insurer must offer it D- It is an optional provision 5) Which of the following is NOT an optional provision on a Health insurance policy? - A- Illegal Occupation B- Change of Occupation C- Misstatement of Age D- Entire Contract 6) All of the following statements about the Cancellation provision in an A&H policy are true, EXCEPT that the insurance company: - A- Must refund the unearned premium on a pro rata basis if it cancels the policy B- Is obligated to refund the unearned premium on a short-rate table basis if the policy owner requests the cancellation C- Is not obligated to refund the unearned premium upon cancellation D- Must notify the insured of cancellation in writing within a specified period before the cancellation 7) A policy is applied for on September 14th, approved on September 30th, issued on October 12th and delivered to the insured on October 18th. When does the Free Look start? - A- October 18th B- September 30th C- September 14th D- October 12th 8) The section of a Health policy that states the insurance company's promise to provide benefits in accordance with the terms of the policy is called the: - A- Incontestability clause B- Consideration clause C- Insuring clause D- Probationary Period provision 9) A Disability Income policy is written with a 1 year benefit period for sickness and accident, a 30-day probationary period and a 30-day elimination period. If an insured becomes disabled due to sickness for 9 days, how much coverage is immediately available? - A- None B- 21 days C- 30 days D- 1 year 10) Which mandatory Health insurance policy provision keeps the producer and/or the insurer from modifying the policy after it has been issued? - A- Entire Contract clause B- Insuring agreement C- Incontestability D- Legal actions 11) Which of the following properly describes a policy, where the policyowner has no guarantee of renewal and the insurance company may refuse to renew the policy at the next premium due date? - A- Guaranteed Renewable B- Conditionally Renewable C- Optionally Renewable D- Non-cancelable 12) The Health insurance policy provision that prevents an insurer from altering its agreement with a policy owner by referring to documents not contained in the policy is the: - A- Entire Contract clause B- Legal Actions provision C- Incontestability clause D- Insuring clause 13) Pre-existing Conditions are referred to in which of the following required A&H policy provisions? - A- Claims Forms B- Time Limit on Certain Defenses C- Payment of Claims D- Legal Actions 14) Which of the following is true regarding coverage for war on an accident and health policy? - A- It is excluded via a rider B- It is never covered C- It is always covered D- It is excluded per the contract 15) Under a Guaranteed Renewable Health insurance policy, the insurer may: - A- Cancel the contract for too many claims B- Change rates by class C- Change policy provisions at any time D- Reduce the amount of insurance if the insured's health declines 16) An applicant for an Individual Health policy failed to complete the responses to the Medical History questions because she had forgotten some important past treatment dates. She did, however, sign the application. Before being able to complete the responses and pay the initial premium, she was confined to a hospital for a condition that would ordinarily be covered by the policy. In this situation, she was not insured because she had not met the conditions specified in which of the following? - A- Insuring clause B- Pre-existing Conditions clause C- Eligibility clause D- Consideration clause 17) The language in a Major Medical Expense policy that requires a claim to be shared between the insurer and the insured is called? - A- Coordination of Benefits B- Co-insurance C- Co-payment D- Deductible 18) The purpose of the Illegal Occupation provision is to: - A- Allow an insurance company to collect extra premiums to provide coverage for an insured's illegal acts B- Protect an insured from purchasing policies from an unlicensed producer C- Absolve an insurance company from liability for a loss incurred by an insured during his commission of a felony D- Prevent a producer from rebating on large policies 19) The owner of a Medical Expense policy has all of the following rights, EXCEPT to: - A- Sue the insurance company, if there is a disagreement over a claim B- Assign the benefits to the provider of the medical services C- Return the policy to the insurance company within the Free Look period D- Add coverage for a spouse without providing proof of insurability 20) Which clause or provision contains the insurer's promise to pay claims in accordance with the terms of the policy? - A- Consideration clause B- Payment of Claims provision C- Insuring agreement or clause D- Entire Contract clause 21) On Disability Income insurance, which of the following is true regarding the Change of Occupation provision? - A- It allows the insurer to adjust benefits B- It is a mandatory policy provision C- It is designed to protect the insured D- It allows the insurer to void coverage 22) A client with Disability Income insurance hurts his back and is off work for 3 months and then returns to work. If he hurts his back again, it may be covered as a: - A- Recurrent disability B- Temporary disability C- Residual disability D- Partial disability 23) If the insurer does not send the insured claim forms within the time specified, which of the following is correct? - A- The insurer has waived the requirement and must pay the claim B- The insured does not have to submit claim forms C- The insured may submit the claim on any form D- The insured is relieved of any further responsibility 24) Under the Uniform Provisions Law, which of the following provisions is optional for an A&H policy? - A- Physical Examination and Autopsy B- Time Limit on Certain Defenses C- Change of Occupation D- Entire Contract 25) A producer has just been told by a policy owner that she is 10 years younger than was listed on the application. The producer should: - A- Notify the insurance company for a possible review of the application B- Write a new policy at the correct age immediately so there will be no gap in coverage C- Notify the insurance company to adjust the existing policy to the correct age D- Determine whether there has been any change in health since the application for the policy 26) Marshall bought a disability income policy with a 30 day waiting period on March 1st. He became disabled on June 1st but went back to work on June 15th. He became disabled again on July 1st until October 1st. When do his benefits begin? - A- July 1st B- June 15th C- August 15th D- June 1st 27) if a Health insurance policy is delivered on August 1st and returned by the insured on August 9th, the insurer will: - A- Refund all premiums paid and void the policy B- Pay all claims turned in between August 1st and August 9th C- Require the insured to disclose the reason why D- Return part of the premiums paid 28) In Health insurance, the length of the Grace Period varies according to which of the following? I. The mode of premium payment II. The length of the benefit period - A- II only B- I only C- I and II D- Neither 29) The policy provision that prevents an insurance company from altering its agreement with a policy owner by referring to documents or other items not contained in the policy is called the: - A- Incontestable provision B- Entire Contract provision C- Benefits provision D- Legal Actions provision 30) A 40-year-old woman is insured under a $500-per-month Disability Income policy that contains a Change of Occupation provision. After her policy was issued, she changed her occupation from insurance producer to farmer without notifying the insurance company and she was recently injured. She would most likely receive which of the following from the insurance company? - A- $500 per month B- Less than $500 per month C- No benefits D- More than $500 per month 31) The Time of Payment of Claims provision requires that an insurance company pay Disability Income benefits no less frequently than: - A- Quarterly B- Semi-annually C- Annually D- Monthly 32) When does the Free Look start? - A- Date of application B- At policy delivery C- Policy issue D- Date of the Conditional Receipt 33) An insured's Individual Health Insurance policy was reinstated effective June 1st. On June 8th the insured became ill, was hospitalized, and returned to work on June 15th. The insured's policy would provide which of the following? - A- No benefits B- Benefits from June 11th through June 15th C- Partial benefits from June 8th through June 15th D- Full benefits 34) A policy owner has which of the following rights under an A&H policy? - A- Refusal of cancellation B- Selection of beneficiaries C- Return of earned premiums D- Extension of renewal period 35) The Legal Actions provision of an A&H policy requires that: - A- An arbitrator be used to settle disputes between the insurance company and the insured B- The insurance company must settle a claim within 60 days after receipt of Proof of Loss C- Claims be settled promptly D- An insured must wait at least 60 days after submission of Proof of Loss before initiating a law suit 36) An insured is required to submit Notice of Claim to the insurer within how many days after a loss? - A- 30 B- 20 C- 60 D- 90 37) To be eligible for benefits under the Waiver of Premium rider, the insured must: - A- Pay all premiums due B- Be under a physician's care C- Be confined to house/home D- Take a physical examination every three months 38) The right of an employee to exchange his Group Health insurance for an Individual policy within 31 days after termination of employment is provided by: - A- The grace period B- COBRA C- HIPAA D- The conversion provision 39) A 40-year-old insurance producer is insured under a $4,000-a-month Disability Income policy that contains a Change of Occupation provision. If he changes his occupation to construction worker without notifying the insurer and has a claim, the insurer will most likely: - A- Pay more than $4,000 a month B- Deny the claim C- Pay less than $4,000 a month D- Pay $4,000 a month 40) Which of the following statements about the Time Limit on Certain Defenses provision is true? - A- It is applicable to Group Health contracts only B- It limits the duration of an exclusion rider to a maximum of two years C- It usually expires after the first year of the policy D- It may prohibit an insurance company from denying a claim on the basis of misstatements in an application HEALTH SECTION 3 - HEALTH SECTION 3 1) All of the following are true about eligibility for Disability Income benefits under Social Security EXCEPT: - A- There is a 5 month waiting period B- They are available only to those who have attained fully insured status C- They are available only to those who are at least age 65 D- Claimants must prove that their disability prevents them from performing any gainful work and will last at least 1 year 2) To be eligible for Social Security Disability Income benefits, the claimant must satisfy a waiting period of: - A- 6 months B- 1 year C- 30 days D- 5 months 3) To be eligible for Social Security Disability Income benefits, the claimant must prove that their disability prevents them from performing any gainful work and be expected to last at least or result in death. - A- 1 month B- 5 months C- 6 months D- 12 months 4) Which of the following is a program established to help states expand their public assistance programs for individuals whose income and resources are insufficient? - A- POS plan B- Medicaid C- Critical illness plan D- Medicare 5) This program is made up of four parts, and the insured helps to pay for three of these parts. - A- POS plan B- Medicaid C- Medicare D- Critical illness plan 6) Part A of Medicare is generally available at no charge to those who are at least age: - A- 60 B- 62 C- 55 D- 65 HEALTH SECTION 4 - HEALTH SECTION 4 1) Which of the following statements is true about Residual Disability benefits? - A- They are reduced when an insured is not under a doctor's care B- An insured is entitled to a Principal Sum benefit for the partial loss of a limb C- Payment may be based on loss of time, income, or function D- Payment may be based on termination of employment 2) Which of the following benefits, if any, may be taxed like wages and salary by the Internal Revenue Service? - A- Workers' Compensation benefits B- Welfare benefits C- All answer options are incorrect D- Social Security Disability benefits 3) The coverage provided by a Disability Income policy that does NOT pay benefits for losses occurring as the result of the insured's employment is called: - A- Workers' Compensation B- Non-occupational coverage C- Unemployment coverage D- Occupational coverage 4) On Health insurance, all of the following are considered to be Rights of Ownership EXCEPT: - A- Applying to reinstate a lapsed policy B- Changing an irrevocable beneficiary on an AD&D policy C- Paying the premium D- Assigning benefits payable to a health care provider 5) What type of Health insurance requires the policy owner to designate a beneficiary? - A- Specified Disease B- AD&D C- Disability Income D- Medical Expense 6) What type of Disability Income insurance coverage will pay the insured a portion of the difference between what he earned before his disability and what he can earn now? - A- Temporary B- Partial C- Residual D- Total 7) All of the following are true regarding a Group Health insurance policy that includes coverage for dependents EXCEPT: - A- Dependent children may continue coverage as long as they live at home B- Upon termination of employment, dependents may continue their group coverage C- Upon termination of employment, dependents may convert to an individual policy without a physical exam D- Newborn children are covered from the moment of birth 8) If an insured, covered by both Disability Income insurance and Workers' Compensation, is injured at work, the claim will be: - A- Shared by the two policies equally B- Paid by Workers' Compensation C- Paid by the Disability Income policy D- Denied HEALTH SECTION 5 - HEALTH SECTION 5 1) Policy delivery refers to the delivery of the: - A- Insurance policy cost disclosure materials to the applicant B- Premium and receipt for the insurance policy to the agency office C- Completed application for the insurance policy to the agency office D- Completed insurance policy to the applicant 2) If, at the time of application, the applicant does not pay any initial premium, what should the producer do when delivering the policy? - A- Ask the applicant to fill out a new application B- Ask the applicant to take another physical exam C- Require the client to pay the entire first years premium to start coverage D- Collect the initial premium and ask the client to sign a Statement of Continued Good Health 3) The Fair Credit Reporting Act requires that: - A- The insurer or producer to furnish a copy of the consumer report to applicants who have been rejected B- The insurer may not use underwriting information received from producers as the basis for declining coverage C- The insurer furnish the Federal Trade Commission a list of all declined applicants D- The applicant be advised, in advance, that a consumer report may be ordered 4) Coverage becomes effective when the: - A- The producer delivers the policy to the insured B- First premium has been paid and the application is approved C- The medical exam has been completed and the premium has been paid D- First premium has been paid and received in the insurer's home office 5) All of the following must sign the application, EXCEPT: - A- The producer B- The proposed insured C- The beneficiary D- The policy owner, if other than the insured 6) An applicant for an A&H insurance policy has a heart condition of which he is unaware and therefore he answers "no" to the question pertaining to heart problems. His answer is considered to be a: - A- Representation B- Warranty C- Fraudulent answer D- Concealment 7) When completing an application for Medical insurance, a producer should do which of the following? - A- Review the applicant's health statement and bind the coverage B- Complete the Medical Information Bureau report C- Sign the applicant's name, if the applicant lives out-of-state D- Witness the applicant's signature 8) Which party to the insurance contract makes an enforceable promise? - A- The insurer B- The insured C- The producer D- The policy owner 9) On the delivery of an insurance policy that contains an impairment rider for a past health condition, a producer must do which of the following? I. Explain, to the best of their ability, the rider and the specific exclusions II. Obtain the insured's signature on the amendment form III. Change any statement on the application that they think may be incorrect - A- I and II B- II only C- I, II, and III D- I only 10) When a policy is issued with a premium surcharge or an impairment rider, what should the producer do? - A- Deliver the policy in person, explain the changes and advise the client that they can either accept the new policy or reject it B- Refund the client's premium, since their offer to buy has been rejected C- Deliver the policy as issued, advising the client to read it and call if they have any questions D- Mail the policy out with a note asking the client to call 11) If an applicant completes an application for insurance and gives the producer a check for the first premium, the producer should give the applicant a: - A- Copy of the Entire Contract B- Binder of coverage C- Copy of the policy D- Conditional Receipt 12) Dennis Wiggins makes application for an A&H policy and pays his producer the initial premium. The producer gives Mr. Wiggins a conditional receipt. His coverage will become effective when: - A- The producer delivers the policy B- Mr. Wiggins countersigns the conditional receipt C- The insurance company requests a medical examination D- The insurance company accepts the risk 13) in order to comply with Fair Credit Reporting Act, at which of the following times must a producer notify an applicant that a credit report may be requested? - A- When the policy is delivered B- When the applicant's credit is actually checked C- At the initial interview D- At the time of application 14) Which of the following statements about a Conditional Receipt is true? - A- It guarantees that the applicant is acceptable to the insurance company B- It is used to purchase temporary insurance that terminates in six months C- It becomes part of the policy D- It is an interim Insuring Agreement 15) Which law requires that the applicant be notified before a consumer report is ordered? - A- Health Insurance Portability and Accountability Act (HIPAA) B- Employees Retirement Income Security Act (ERISA) C- Fair Credit Reporting Act (FCRA) D- Consolidated Budget Reconciliation Act (COBRA) 16) Andrew Reed advised his insurance company of a loss covered by his Major Medical policy. If the insurance company does not provide Mr. Reed with the proper claim forms within 15 days, he has which of the following rights? - A- To submit a description of the loss, in his own words, as Proof of Loss B- To receive immediate payment of his claim C- To refuse to submit the required Proof of Loss D- To file a suit against the insurance company immediately 17) A client purchased a Major Medical policy from you last month and would now like to add AD&D coverage. As a producer, you should: - A- Mail out a new application, making coverage effective upon return B- Use information in your existing file to complete the new application C- Complete a new application by phone and sign the client's name D- Meet with the client in person and have them complete and sign the application 18) All of the following statements about sources of underwriting information are true, EXCEPT: - A- The contents of an inspection report cannot be disclosed to the applicant B- An attending physician's statement is a good source of information C- The application is typically the principal source of information D- A medical examination is typically used when benefits are large SECTION 1 - TEXAS COMMON LAW - SECTION 1 - TEXAS COMMON LAW 1) A person appointed by an insurer to solicit or sell insurance on their behalf in this state is known as a(n): - A- Adjuster B- Agent C- Broker D- Solicitor 2) Texas resident agents must complete hours of continuing education every two years. - A- 10 B- 40 C- 24 D- 20 3) Which of the following is NOT prohibited under the Unfair Practices section of insurance law: - A- Making false oral statements about the financial condition of a person which are calculated to injure that person B- Readjusting group premium rates based on loss or expense experience C- Misleading or false statements about dividends previously paid on an insurance policy D- Discriminating between insurance applicants on the basis of gender 4) An insurance company can have rates based on: - A- Gender B- Ethnic background C- Religion D- Nationality 5) Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as: - A- Defamation B- Rebating C- Misleading advertising D- Coercion 6) Shareholders own a insurer: - A- Stock B- Fraternal C- Reciprocal D- Mutual 7) An insurance company authorized to sell insurance in Texas, but with their home office in Illinois, is called a/an: - A- Alien company B- Domestic company C- Foreign company D- Surplus company 8) Regarding Claims Methods and Practices, all of the following are true EXCEPT: - A- Insurers cannot deny unsubstantiated claims B- Insurers must conduct a reasonable investigation prior to denial of a claim C- Insurers may settle a claim by attempt to reach a compromise D- Insurers cannot require insureds to pay the costs of a claims investigation 9) All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT: - A- It applies to credit reports ordered in connection with insurance, banking and employment B- Insurers are not required to give customers a copy of the report C- Reports may be sent to anyone who requests one D- The customer must be notified if adverse action is taken as a result of a report 10) No licensee whose license has been denied, refused or revoked can file another licensing application with the Commissioner for at least _ years: - A- 5 B- 4 C- 2 D- 3 11) All could be considered rebates EXCEPT: - A- Employment B- Dividends C- Securities D- Commissions 12) To become a Texas insurance agent, you must: - A- Pass an exam B- Have resided in Texas for at least one year C- Post a bond D- File your personal financial statement with the Commissioner 13) When the applicant passes the exam and qualifies in all other respects except for the fingerprint check by the FBI, the Department of Insurance will issue a license called: - A- Conditional B- Retroactive C- Temporary D- Reciprocal 14) A Texas resident agent seeking to sell insurance to customers in another state needs: - A- A non-resident license in that state B- A Foreign agents license in that state C- A Certificate of Authority in that state D- A resident license in that state 15) Which of the following statements regarding temporary licenses is FALSE: - A- They may be renewed B- They may be issued without exam C- They are valid up to 90 days D- They require 40 hours of license training 16) When the Commissioner finds, after a hearing, that a person has intentionally violated an insurance regulation, what is the maximum fine that may be levied: - A- $25,000 B- $250 C- $5,000 D- $2,500 17) If an agent is convicted of a felony in this or another state, who do they have to notify: - A- The National Association of Insurance Commissioners (NAIC) B- The Federal Department of Insurance C- The local Agent's Association D- The State Department of Insurance 18) Unfair claims practices will be assumed to be intentional if: - A- They are reported to an insurer by the policyholder B- They occur with such frequency as to indicate a general business practice C- The licensee fails to promptly submit a required report D- The licensee has been reported for a similar practice during the preceding three years 19) Circulating deceptive sales material to the public is what type of Unfair Trade Practice: - A- Defamation B- Misleading advertising C- Misrepresentation D- Coercion 20) Conditions for a corporate agency seeking a Texas insurance agent's license include: - A- It must sell all lines of insurance B- All active corporate officers must have individual agent's licenses C- It must be a domestic corporation D- All salaried employees must be licensed 21) Sharing commissions is legal if: - A- The other party also has an insurance license B- The other party is licensed for the same lines of insurance you are C- The other party has permission of your client D- The other party represents a life company and you represent a P&C company 22) What is the maximum period of time the Commissioner may revoke your agent's license: - A- Two years B- There is no maximum time period C- 12 months D- Six months 23) Your license will expire every years. - A- 3 B- 4 C- 2 D- 5 24) The maximum monetary penalty for an agent who violates an insurance law, rule or order is: - A- $5,000 B- $15,000 C- $25,000 D- $10,000 25) If a license is revoked, the licensee shall NOT be eligible for a new license: - A- Ever again B- Except by special permission of the governor C- For at least 5 years D- For six months 26) Defamation is: - A- Concealment B- False advertising C- Misrepresentation D- Misstating financial condition 27) insurable interest must exist on property insurance: - A- At time of loss B- At time of application C- At time of policy delivery D- It need not exist 28) Which of the following indicates free competition is occurring: - A- All insurers are charging the same rates B- All policy forms contain exac