WEBCE INSURANCE PRACTICE TEST EXAM QUESTIONS AND
ANSWERS (VERIFIED ANSWERS ALREADY GRADED A+) LATEST
UPDATE
1. Which of the following exempted insurance companies from federal antitrust
legislation? - CORRECT ANSWER the McCarran-Ferguson Act
2. Which of the following has primary responsibility for regulating the insurance
industry?
a. the states - CORRECT ANSWER
Which statement about the NAIC is correct? - CORRECT ANSWER The NAIC
prepares model laws, regulations, and guidelines for adoption by the states.
4. The NAIC issued a model law on long-term care insurance. Which statement
about the model law's effectiveness is correct? - CORRECT ANSWER The
model law becomes effective in a state if approved by the state legislature.
Which statement about life insurance illustrations is correct? - CORRECT
ANSWER Illustrations must include the company's name, the date the illustration
was prepared, initial death benefit, and the name, age, and gender of the proposed
insured.
2. Which of the following provides general information about life insurance
policies to potential buyers? - CORRECT ANSWER the Buyer's Guide
,3. Which of the following is the Gramm-Leach-Bliley Act primarily aimed at
regulating? - CORRECT ANSWER the disclosure of personal financial
information to third parties
4. What is the purpose of the Producer Database? - CORRECT ANSWER
streamline producer licensing procedures
5. For how long must an organization maintain a record of a person's request to be
placed on a do-not-call list? - CORRECT ANSWER 5 years
1. Which of the following must be considered in making a suitable fixed annuity
recommendation to a customer? - CORRECT ANSWER a. the customer's
financial status
b. the customer's tax status
c. the customer's investment objectives
d. all of the above
Which of the following is not a prohibited practice? - CORRECT ANSWER
giving a gift of nominal value to an insurance applicant
Which of the following terms refers to the unethical and illegal practice of making
a misleading statement about an insurance policy to induce a person to buy a
policy with another insurer? - CORRECT ANSWER twisting
When meeting with a prospect to discuss disability income insurance, Agent Tyler
makes disparaging comments about the financial stability and reputation of a
competitor to dissuade the prospect from purchasing its policies. Which unfair
trade practice has Agent Tyler committed? - CORRECT ANSWER defamation
,What type of authority exists when a reasonable consumer would infer from the
circumstances that the agent has authority to act on behalf of the principal? -
CORRECT ANSWER implied authority
Which of the following is the most severe step a state insurance department can
take in disciplining an insurer? - CORRECT ANSWER liquidation
Which of the following is not an example of an unfair claims practice? -
CORRECT ANSWER setting a time limit for submitting proof of loss
Sam was involved in a car accident. The other driver told Sam that the two of them
should agree on a settlement now because the longer Sam waited, the more it was
going to cost him. What should Sam do? - CORRECT ANSWER decline because
of his policy's cooperation provisions
Norman is involved in filing a claim for a loss that is large and very complex. He
feels that if he handles it himself, there is a good chance he will end up with
considerably less than the loss warrants. Which of the following should Norman
hire to help him with the claim? - CORRECT ANSWER public adjuster
Jamie has a liability policy with ABC insurance. He is being sued for damages by
Margie, who is also an ABC policyholder. Which statement best describes ABC's
duties? - CORRECT ANSWER It has a higher duty to Jamie.
A minitrial is similar to arbitration in that the findings of the third party are always
binding. - CORRECT ANSWER False
Which of the following statements regarding class actions is not true? -
CORRECT ANSWER An injured party cannot become a member of the class
without making a formal request to the court.
, Which statement is true about arbitration? - CORRECT ANSWER The
submission agreement is a binding contract.
How will a court interpret an ambiguous provision in an insurance policy? -
CORRECT ANSWER A court will always interpret ambiguous provisions in
favor of the insured.
In addition to a damage award of $50,000, the court also awarded Fran an
additional $300,000 because of the insurer's unreasonable behavior in refusing to
settle the claim. What type of additional damages did the court most likely award?
- CORRECT ANSWER punitive damages
1. Which of the following is applied to all expenses in a health insurance policy
during a specified period? - CORRECT ANSWER b. all-cause deductible
2. Under third-party indemnity insurance, insurers pay providers directly. -
CORRECT ANSWER a. True
3. Which of the following is true of the Blues? - CORRECT ANSWER c. . They
provide benefits on a service basis.
4. Connie was in the hospital for four days undergoing surgery on her hip. Her
insurance company paid her $75 a day for each day, totaling $300. What type of
policy does Connie probably have? - CORRECT ANSWER b. a hospital
indemnity policy
5. Under the ACA, all of the following are required components of an essential
benefits package, EXCEPT: - CORRECT ANSWER a. a comprehensive set of
services
ANSWERS (VERIFIED ANSWERS ALREADY GRADED A+) LATEST
UPDATE
1. Which of the following exempted insurance companies from federal antitrust
legislation? - CORRECT ANSWER the McCarran-Ferguson Act
2. Which of the following has primary responsibility for regulating the insurance
industry?
a. the states - CORRECT ANSWER
Which statement about the NAIC is correct? - CORRECT ANSWER The NAIC
prepares model laws, regulations, and guidelines for adoption by the states.
4. The NAIC issued a model law on long-term care insurance. Which statement
about the model law's effectiveness is correct? - CORRECT ANSWER The
model law becomes effective in a state if approved by the state legislature.
Which statement about life insurance illustrations is correct? - CORRECT
ANSWER Illustrations must include the company's name, the date the illustration
was prepared, initial death benefit, and the name, age, and gender of the proposed
insured.
2. Which of the following provides general information about life insurance
policies to potential buyers? - CORRECT ANSWER the Buyer's Guide
,3. Which of the following is the Gramm-Leach-Bliley Act primarily aimed at
regulating? - CORRECT ANSWER the disclosure of personal financial
information to third parties
4. What is the purpose of the Producer Database? - CORRECT ANSWER
streamline producer licensing procedures
5. For how long must an organization maintain a record of a person's request to be
placed on a do-not-call list? - CORRECT ANSWER 5 years
1. Which of the following must be considered in making a suitable fixed annuity
recommendation to a customer? - CORRECT ANSWER a. the customer's
financial status
b. the customer's tax status
c. the customer's investment objectives
d. all of the above
Which of the following is not a prohibited practice? - CORRECT ANSWER
giving a gift of nominal value to an insurance applicant
Which of the following terms refers to the unethical and illegal practice of making
a misleading statement about an insurance policy to induce a person to buy a
policy with another insurer? - CORRECT ANSWER twisting
When meeting with a prospect to discuss disability income insurance, Agent Tyler
makes disparaging comments about the financial stability and reputation of a
competitor to dissuade the prospect from purchasing its policies. Which unfair
trade practice has Agent Tyler committed? - CORRECT ANSWER defamation
,What type of authority exists when a reasonable consumer would infer from the
circumstances that the agent has authority to act on behalf of the principal? -
CORRECT ANSWER implied authority
Which of the following is the most severe step a state insurance department can
take in disciplining an insurer? - CORRECT ANSWER liquidation
Which of the following is not an example of an unfair claims practice? -
CORRECT ANSWER setting a time limit for submitting proof of loss
Sam was involved in a car accident. The other driver told Sam that the two of them
should agree on a settlement now because the longer Sam waited, the more it was
going to cost him. What should Sam do? - CORRECT ANSWER decline because
of his policy's cooperation provisions
Norman is involved in filing a claim for a loss that is large and very complex. He
feels that if he handles it himself, there is a good chance he will end up with
considerably less than the loss warrants. Which of the following should Norman
hire to help him with the claim? - CORRECT ANSWER public adjuster
Jamie has a liability policy with ABC insurance. He is being sued for damages by
Margie, who is also an ABC policyholder. Which statement best describes ABC's
duties? - CORRECT ANSWER It has a higher duty to Jamie.
A minitrial is similar to arbitration in that the findings of the third party are always
binding. - CORRECT ANSWER False
Which of the following statements regarding class actions is not true? -
CORRECT ANSWER An injured party cannot become a member of the class
without making a formal request to the court.
, Which statement is true about arbitration? - CORRECT ANSWER The
submission agreement is a binding contract.
How will a court interpret an ambiguous provision in an insurance policy? -
CORRECT ANSWER A court will always interpret ambiguous provisions in
favor of the insured.
In addition to a damage award of $50,000, the court also awarded Fran an
additional $300,000 because of the insurer's unreasonable behavior in refusing to
settle the claim. What type of additional damages did the court most likely award?
- CORRECT ANSWER punitive damages
1. Which of the following is applied to all expenses in a health insurance policy
during a specified period? - CORRECT ANSWER b. all-cause deductible
2. Under third-party indemnity insurance, insurers pay providers directly. -
CORRECT ANSWER a. True
3. Which of the following is true of the Blues? - CORRECT ANSWER c. . They
provide benefits on a service basis.
4. Connie was in the hospital for four days undergoing surgery on her hip. Her
insurance company paid her $75 a day for each day, totaling $300. What type of
policy does Connie probably have? - CORRECT ANSWER b. a hospital
indemnity policy
5. Under the ACA, all of the following are required components of an essential
benefits package, EXCEPT: - CORRECT ANSWER a. a comprehensive set of
services
