Alabama Insurance EXAM Prep CH15
The Commissioner can extend the time you have to complete your continuing education
requirements for up to how long?
A
90 days
B
60 days
C
30 days
D
120 days - ANS-A.
The Commissioner may extend an agents C.E. requirements for up to 90 days if for a reason
deemed appropriate. If the Commissioner denies the request, the agent has 30 days to get
compliant.
If an insurance company accepts business from a person that is not currently appointed and
who is not licensed for that line of business, which of the following applies?
A
Insurer may be fined up to $10,000
B
Insurer may be fined up to 3 times the premium received
C
Insurer may be subject to a fine up to $10,000, imprisonment, or both
D
Insurer may be fined up to 3 times the commission earned - ANS-B.
An insurance company may be fined up to 3 times the premium received if accepting any
business from a person who is not appointed and licensed for that line of insurance. A $10,000
fine may only be applied when an agent has violated 1 or more of the grounds for suspension or
revocation.
To confer with or offer advice to a policy buyer about a policy's benefits, terms, or conditions. -
ANS-Negotiate.
(This definition applies only if the person doing the negotiating sells insurance.)
,When a producer/agent misleads a person when comparing policies in order to induce the client
to lapse, forfeit, surrender, exchange or convert an existing policy, the producer/agent is
engaging in an unfair trade practice known as:
A
Rebating
B
Twisting
C
Intimidation
D
Coercion - ANS-B.
Twisting is Policy Replacement. It usually includes some coercion tactics and pressure to
exchange a policy in order to purchase a new policy. It is usually not in the insureds best
interest. Replacement is not illegal, but it is not recommended and is highly scrutinized. If
replacement is done to the insureds detriment, the agent would be guilty of Twisting.
True or False:
The Commissioner may revoke a producer's or insurer's license for failing to pay the fine. -
ANS-True.
True or False:
A person is not allowed to advertise or give free insurance to induce the purchase of property.
Free insurance includes insurance for which the charge is less than the cost. - ANS-True.
Know the following Unfair Trade Practices, Prohibited Activities:
Twisting
Defamation
Rebating
Coercion - ANS-
-Must include all usual policy terms and any applicable endorsements
-May be oral or written
-Is valid for up to 90 days until the policy is issued and may, with the Commissioner's written
approval, be extended or renewed
-Is commonly known as a Temporary Insuring Agreement or a Temporary Insurance Policy
Does not guarantee that the policy will be issued and may be cancelled at anytime by the
insurance company if the insured is found to be an excessive risk - ANS-Binder
, Which statement concerning a binder is true?
A
A binder is valid for a maximum of 60 days
B
A binder provides only partial coverage of a risk
C
A binder is valid for a maximum of 90 days
D
A binder must be issued in writing to be valid - ANS-C.
A binder is valid for up to 90 days or until the policy is issued, whichever is shorter. The binder is
temporarily the policy until it is issued and the policy effective date is the same as the effective
date of the binder. It does not guarantee the issue of the policy and may be given orally or in
writing.
A person who, for compensation, investigates and negotiates claim settlements on the insurer's
behalf. This term does not include an insurer's salaried employee or an attorney licensed in
Alabama. - ANS-Adjuster.
To be licensed as an adjuster, an applicant must be _______ years old when making
application.
A
20
B
21
C
18
D
19 - ANS-D.
To be a licensed adjuster, you must be at least 19 years old when making application.
True or False:
To be qualified for an adjuster license, an individual must be:
- At least 19 years of age
The Commissioner can extend the time you have to complete your continuing education
requirements for up to how long?
A
90 days
B
60 days
C
30 days
D
120 days - ANS-A.
The Commissioner may extend an agents C.E. requirements for up to 90 days if for a reason
deemed appropriate. If the Commissioner denies the request, the agent has 30 days to get
compliant.
If an insurance company accepts business from a person that is not currently appointed and
who is not licensed for that line of business, which of the following applies?
A
Insurer may be fined up to $10,000
B
Insurer may be fined up to 3 times the premium received
C
Insurer may be subject to a fine up to $10,000, imprisonment, or both
D
Insurer may be fined up to 3 times the commission earned - ANS-B.
An insurance company may be fined up to 3 times the premium received if accepting any
business from a person who is not appointed and licensed for that line of insurance. A $10,000
fine may only be applied when an agent has violated 1 or more of the grounds for suspension or
revocation.
To confer with or offer advice to a policy buyer about a policy's benefits, terms, or conditions. -
ANS-Negotiate.
(This definition applies only if the person doing the negotiating sells insurance.)
,When a producer/agent misleads a person when comparing policies in order to induce the client
to lapse, forfeit, surrender, exchange or convert an existing policy, the producer/agent is
engaging in an unfair trade practice known as:
A
Rebating
B
Twisting
C
Intimidation
D
Coercion - ANS-B.
Twisting is Policy Replacement. It usually includes some coercion tactics and pressure to
exchange a policy in order to purchase a new policy. It is usually not in the insureds best
interest. Replacement is not illegal, but it is not recommended and is highly scrutinized. If
replacement is done to the insureds detriment, the agent would be guilty of Twisting.
True or False:
The Commissioner may revoke a producer's or insurer's license for failing to pay the fine. -
ANS-True.
True or False:
A person is not allowed to advertise or give free insurance to induce the purchase of property.
Free insurance includes insurance for which the charge is less than the cost. - ANS-True.
Know the following Unfair Trade Practices, Prohibited Activities:
Twisting
Defamation
Rebating
Coercion - ANS-
-Must include all usual policy terms and any applicable endorsements
-May be oral or written
-Is valid for up to 90 days until the policy is issued and may, with the Commissioner's written
approval, be extended or renewed
-Is commonly known as a Temporary Insuring Agreement or a Temporary Insurance Policy
Does not guarantee that the policy will be issued and may be cancelled at anytime by the
insurance company if the insured is found to be an excessive risk - ANS-Binder
, Which statement concerning a binder is true?
A
A binder is valid for a maximum of 60 days
B
A binder provides only partial coverage of a risk
C
A binder is valid for a maximum of 90 days
D
A binder must be issued in writing to be valid - ANS-C.
A binder is valid for up to 90 days or until the policy is issued, whichever is shorter. The binder is
temporarily the policy until it is issued and the policy effective date is the same as the effective
date of the binder. It does not guarantee the issue of the policy and may be given orally or in
writing.
A person who, for compensation, investigates and negotiates claim settlements on the insurer's
behalf. This term does not include an insurer's salaried employee or an attorney licensed in
Alabama. - ANS-Adjuster.
To be licensed as an adjuster, an applicant must be _______ years old when making
application.
A
20
B
21
C
18
D
19 - ANS-D.
To be a licensed adjuster, you must be at least 19 years old when making application.
True or False:
To be qualified for an adjuster license, an individual must be:
- At least 19 years of age
