Unit Seventeen - Florida Statutes and
Rules Exam Questions with Correct
Answers
The claim that the insuring entity and the health plan are not subject to insurance
regulation is known as: ____ - ANSWER-"Pre-emption"
The Savings and Deemer Clauses - ANSWER-Congress never intended that ERISA
would relieve any person from any law of any state that regulates insurance. This is
stated within the ERISA law. This paragraph is referred to the "savings clause".
Another clause within the law is known as the "deemer clause". This means that a
legitimate ERISA plan providing health benefits cannot be "deemed" to be an
insurance company or to be engaged in the business of insurance. Also ERISA
plans may not take profits or be marketed to others. This is the business of
insurance companies - not ERISA plans.
What types of employers use ERISA?
1. Large companies with sufficient assets to handle the costs if contributions to the
plan are insufficient to cover expenses of the plan
2. Corporations with many employees among which to spread the risk
3. Companies with the financial expertise to handle the risk planning ERISA Pre-
emption and State Regulation
What limits the scope ERISA Section 514(a)? - ANSWER-The Savings Clause
Congress never intended that ERISA would relieve any person from any law of any
state that regulates insurance. This is stated within the ERISA law. This paragraph is
referred to the "savings clause".
The MEWA Issue - ANSWER-MEWA is an abbreviation for Multiple-Employer
Welfare Arrangement. These are risk-bearing entities defined as employee welfare
benefits plans that are established to provide one or more insurance benefits
(including health insurance) to employees of two or more employers. In other words,
a MEWA cannot be a single-employer plan to exempt it from state insurance
regulation.
MEWAs are not exempt from state insurance regulation. ERISA recognizes MEWAs
so there is a coexisting state and federal regulatory authority over most MEWA
employee welfare benefit plans.
Special Rules of Pre-emption apply to MEWAs that meet the ERISA definition and
that are also employee welfare benefit plans:
,If fully insured the MEWA is subject to state insurance laws
If not fully insured, the MEWA is subject to all state insurance laws not inconsistent
with ERISA - unless exempt because of other U.S. Department of Labor regulations.
If MEWA is exempted, it is subject to state insurance regulations in the same manner
as a fully insured MEWA.
If MEWA is not an employee benefit plan, there is no pre-emption and it is subject to
full state insurance regulation.
MEWA is an abbreviation for ____-____ ____ ____. - ANSWER-Multiple-Employer
Welfare Arrangement
MEWA provides one or more insurance benefits to employees of ____ or more
employers. - ANSWER-two
Particular Situations - ANSWER-There are three exceptions to the MEWA definition.
They are:
1. Union Plans
2. Association Plans
3. Professional Employer Organization (PEO)
Union Plans
Most Union Plans are subject to insurance law. The only exception are the plans the
U.S. Department of Labor has approved after reviewing the bargaining agreements
between the union and their employers.
Union Plans:
can be an exception to MEWA
must have an "express finding" made by the U.S. Department of Labor
without an express finding are subject to state regulations
What are the three exceptions to the MEWA definition? - ANSWER-Union Plans,
Association Plans, Professional Employer Organization (PEO)
Name one consequence for aiding and abetting an unauthorized insurer - ANSWER-
Any of these 3 answers are correct: Conviction of a 3rd degree felony; liability for
unpaid claims; suspension or revocation of insurance licenses
Association Plans - ANSWER-Association Plans are not exempt from state
regulations for two reasons:
There is no employer-employee relationship
They must be fully insured
Professional Employer Organization (PEO) are not exempt from state regulations
because there is not an employer/employee relationship and the original employer
controls the common law incidents of employment, such as:
hiring and firing
, employee performance evaluations
employee discipline
compensation
hours, location, nature and method of the work performed
Possible Consequences for Aiding and Abetting an Unauthorized Insurer and for
Acting as an Insurer without Proper License
Conviction of a 3rd degree felony
Liability for all unpaid claims
Suspension or revocation of all insurance licenses
17.2 Agent Pre-Licensing Training: Ethics - ANSWER-Ethics and the Insurance
Industry
In many businesses, the code of ethics is focused on corporate compliance - let's not
break the law. Ethical behavior is more than striving to not do wrong. Instead it is
determining to do right.
Business ethics aims at creating a culture in which the company's employees
conduct business responsibly. Sometimes agreement on what is meant by
"conducting business responsibly" does not translate well and it's difficult to establish
a common understanding. Some organizations choose to use terms like integrity,
honesty, or fairness. Ethics is closely related to altruism because it requires unselfish
behavior.
Recent business scandals, particularly related to government contracts brought
about a focus on corporate compliance. Many large companies have Corporate
Compliance Offices and programs. Some have been criticized for focusing more on
the letter of the law than the spirit of the law. The following area will attempt to define
ethical behavior.
Ethical behavior is so important to the insurance industry that agents are required to
complete five hours in ethics continuing education every two years.
Ethical behavior is more than trying not to do wrong. It is determining to do r____. -
ANSWER-right
Ethics - What is it? - ANSWER-The word "ethics" comes from the Greek word
"ethos" which means "custom". When used in Greek society, it generally referred to
"proper modes of conduct". Ethical behavior is more than just not breaking the law. It
is the product of ingrained attitudes, personal respect, and ideals of service to others
in an unselfish manner. Altruism is a term that is closely related to agent ethics.
Altruism is defined as "consciously seeking and serving the welfare of others". The
opposite of Altruistic would be "selfish" or putting your own interests above the
interests of others.
Which term is closely related to agent ethics? - ANSWER-altruism
Personal Ethics - ANSWER-Where do we get our values?
Parents
Friends
Rules Exam Questions with Correct
Answers
The claim that the insuring entity and the health plan are not subject to insurance
regulation is known as: ____ - ANSWER-"Pre-emption"
The Savings and Deemer Clauses - ANSWER-Congress never intended that ERISA
would relieve any person from any law of any state that regulates insurance. This is
stated within the ERISA law. This paragraph is referred to the "savings clause".
Another clause within the law is known as the "deemer clause". This means that a
legitimate ERISA plan providing health benefits cannot be "deemed" to be an
insurance company or to be engaged in the business of insurance. Also ERISA
plans may not take profits or be marketed to others. This is the business of
insurance companies - not ERISA plans.
What types of employers use ERISA?
1. Large companies with sufficient assets to handle the costs if contributions to the
plan are insufficient to cover expenses of the plan
2. Corporations with many employees among which to spread the risk
3. Companies with the financial expertise to handle the risk planning ERISA Pre-
emption and State Regulation
What limits the scope ERISA Section 514(a)? - ANSWER-The Savings Clause
Congress never intended that ERISA would relieve any person from any law of any
state that regulates insurance. This is stated within the ERISA law. This paragraph is
referred to the "savings clause".
The MEWA Issue - ANSWER-MEWA is an abbreviation for Multiple-Employer
Welfare Arrangement. These are risk-bearing entities defined as employee welfare
benefits plans that are established to provide one or more insurance benefits
(including health insurance) to employees of two or more employers. In other words,
a MEWA cannot be a single-employer plan to exempt it from state insurance
regulation.
MEWAs are not exempt from state insurance regulation. ERISA recognizes MEWAs
so there is a coexisting state and federal regulatory authority over most MEWA
employee welfare benefit plans.
Special Rules of Pre-emption apply to MEWAs that meet the ERISA definition and
that are also employee welfare benefit plans:
,If fully insured the MEWA is subject to state insurance laws
If not fully insured, the MEWA is subject to all state insurance laws not inconsistent
with ERISA - unless exempt because of other U.S. Department of Labor regulations.
If MEWA is exempted, it is subject to state insurance regulations in the same manner
as a fully insured MEWA.
If MEWA is not an employee benefit plan, there is no pre-emption and it is subject to
full state insurance regulation.
MEWA is an abbreviation for ____-____ ____ ____. - ANSWER-Multiple-Employer
Welfare Arrangement
MEWA provides one or more insurance benefits to employees of ____ or more
employers. - ANSWER-two
Particular Situations - ANSWER-There are three exceptions to the MEWA definition.
They are:
1. Union Plans
2. Association Plans
3. Professional Employer Organization (PEO)
Union Plans
Most Union Plans are subject to insurance law. The only exception are the plans the
U.S. Department of Labor has approved after reviewing the bargaining agreements
between the union and their employers.
Union Plans:
can be an exception to MEWA
must have an "express finding" made by the U.S. Department of Labor
without an express finding are subject to state regulations
What are the three exceptions to the MEWA definition? - ANSWER-Union Plans,
Association Plans, Professional Employer Organization (PEO)
Name one consequence for aiding and abetting an unauthorized insurer - ANSWER-
Any of these 3 answers are correct: Conviction of a 3rd degree felony; liability for
unpaid claims; suspension or revocation of insurance licenses
Association Plans - ANSWER-Association Plans are not exempt from state
regulations for two reasons:
There is no employer-employee relationship
They must be fully insured
Professional Employer Organization (PEO) are not exempt from state regulations
because there is not an employer/employee relationship and the original employer
controls the common law incidents of employment, such as:
hiring and firing
, employee performance evaluations
employee discipline
compensation
hours, location, nature and method of the work performed
Possible Consequences for Aiding and Abetting an Unauthorized Insurer and for
Acting as an Insurer without Proper License
Conviction of a 3rd degree felony
Liability for all unpaid claims
Suspension or revocation of all insurance licenses
17.2 Agent Pre-Licensing Training: Ethics - ANSWER-Ethics and the Insurance
Industry
In many businesses, the code of ethics is focused on corporate compliance - let's not
break the law. Ethical behavior is more than striving to not do wrong. Instead it is
determining to do right.
Business ethics aims at creating a culture in which the company's employees
conduct business responsibly. Sometimes agreement on what is meant by
"conducting business responsibly" does not translate well and it's difficult to establish
a common understanding. Some organizations choose to use terms like integrity,
honesty, or fairness. Ethics is closely related to altruism because it requires unselfish
behavior.
Recent business scandals, particularly related to government contracts brought
about a focus on corporate compliance. Many large companies have Corporate
Compliance Offices and programs. Some have been criticized for focusing more on
the letter of the law than the spirit of the law. The following area will attempt to define
ethical behavior.
Ethical behavior is so important to the insurance industry that agents are required to
complete five hours in ethics continuing education every two years.
Ethical behavior is more than trying not to do wrong. It is determining to do r____. -
ANSWER-right
Ethics - What is it? - ANSWER-The word "ethics" comes from the Greek word
"ethos" which means "custom". When used in Greek society, it generally referred to
"proper modes of conduct". Ethical behavior is more than just not breaking the law. It
is the product of ingrained attitudes, personal respect, and ideals of service to others
in an unselfish manner. Altruism is a term that is closely related to agent ethics.
Altruism is defined as "consciously seeking and serving the welfare of others". The
opposite of Altruistic would be "selfish" or putting your own interests above the
interests of others.
Which term is closely related to agent ethics? - ANSWER-altruism
Personal Ethics - ANSWER-Where do we get our values?
Parents
Friends
