Health Ch. 8 Indiana Laws & Rules Pertinent to Insurance Questions and Answers Graded A

Health Ch. 8 Indiana Laws & Rules Pertinent to Insurance Questions and Answers Graded A In order to conduct business in Indiana, admitted Insurance Companies must have a Certificate of Insurance Certificate of Authority Business Entity license Domestic Insurer license Insurance Companies admitted to do business in Indiana must have a Certificate of Authority. Which of these statements regarding licensed Indiana Insurance Consultants is true? Must hold meetings with clients in an approved facility Can also be licensed as an Insurance Producer Commissions are split with licensed Producers Insurance advice is sold for a fee A licensed Indiana Insurance Consultant sells insurance advice for a fee. Which statement regarding Indiana Limited Lines licenses is true? Can be under the age of 18 Pre-license education is not a requirement Continuing education requirements are less than the continuing education requirements for a Resident Producer's license An exam is not required The correct answer is "Continuing education requirements are less than the continuing education requirements for a Resident Producer's license". Under Indiana's Unfair Claims Settlement laws, which of these activities by an Insurance Company is considered illegal? Leave the insured no choice but to sue the Insurance Company to settle a claim Promptly pay a claim Ask for additional information to settle a claim Pay a partial claim Forcing an insured to sue the Insurance Company in order to receive a claim settlement is considered illegal under the Indiana Unfair Claims Settlement laws. Which of these is considered to be a violation of the Unfair Competition Law? Charging the same rate for two people in the same risk classification Basing discrimination on a pre-existing health condition Unfair discrimination Basing discrimination on age Unfair discrimination would be considered a violation of the Unfair Competition Law. If a Producer offers something of value as an inducement to a potential customer to purchase a policy, this Producer may be found guilty of coercion rebating twisting misrepresentation Rebating is when a Producer offers something of value to a potential Policyowner outside of the promises contained in the policy to convince them to buy a policy. What kind of insurance license is recommended for those individuals who would like to sell pre-need Life Insurance for a funeral home? Producer Consultant Limited Lines Surplus Lines A Limited Lines license is appropriate for a person that wants to sell only pre-need Life Insurance for a funeral home. Which of these would be a valid reason for the Indiana Insurance Commissioner to issue a Temporary Producer License? A disabled Producer would like his spouse to maintain his insurance agency while disabled A new recruit would like to determine if selling insurance is a viable career choice To allow a retired Producer to receive renewal commissions To allow a Producer from another state to sell insurance in Indiana In this situation, a Temporary Producers License may be issued to the spouse of a disabled Producer to carry out the day-to-day operations of the insurance agency. Which of these is a requirement to become an Indiana Resident Producer? Hearing must be held by Indiana Insurance Commissioner to determine eligibility Appointed by a Domestic Insurer Fee must be paid for each license requested Must be at least 19 years old Paying a fee for each license requested is one of the requirements for a new applicant to be licensed as an Indiana Resident Producer. An applicant is found to have Autoimmune Deficiency Syndrome during the underwriting process of a Life Insurance policy. Which information may be revealed by the insurance company to the Medical Information Bureau (MIB)? Applicant has Autoimmune Deficiency Syndrome Applicant has abnormal results Applicant is at high risk for acquiring Autoimmune Deficiency Syndrome Presence of Human Immunodeficiency Virus If an applicant's HIV antibody test comes back as positive, the results reported to the MIB will indicate that the applicant had abnormal test results. When may an applicant return a Life insurance policy for a full refund under Indiana law? within 10 days of application being signed within 10 days of policy issue date within 10 days of policy delivery date within 10 days of initial premium collected Under Indiana law, the Free Look provision states that an applicant may return a Life insurance policy for a full refund within 10 days of the date of policy delivery. What is required for a Producer to be in compliance with Rule 13, Life Insurance Advertising? A potential Applicant must be told that that the Producer is currently licensed for any Life Insurance transaction A potential Applicant must be told that Life Insurance is the exclusive subject of the sale A Producer is required to notify potential Applicants that dividends are guaranteed A Producer is required to have all sales materials approved by the Commissioner To be in compliance with Rule 13, a Producer must inform a potential Applicant that the sole subject of the sale is Life Insurance. In order for a lapsed Whole Life policy to be reinstated, all of these must occur EXCEPT All back premiums paid with interest Reinstatement occurs within 3 years of policy lapse A new incontestable period starts at time of reinstatement Proof of good health required All of these are necessary conditions for a lapsed Whole life policy to be reinstated EXCEPT for "A new incontestable period starts at time of reinstatement". In a viatical settlement, who is considered to be the viator? Insured Insurer Broker Beneficiary The insured is considered the viator in a viatical settlement. Jill is covered under two Group Health policies, one through her employer and one through her husband's employer. If Jill suffers a loss, which policy provision dictates the primary coverage? Replacement Time Payment of Claims Notice of Claim Coordination of Benefits The Coordination of Benefits provision dictates which coverage will be considered primary and the other secondary. The purpose of this coordination is to prevent duplication and/or excessive payment of benefits. If a Producer is found to have violated the Insurance Code, what are the potential consequences? Fined up to $75,000 for each violation Commissions suspended for up to 1 month Community service Has the right to a Judicial Review of the Insurance Commissioner's decision In this situation, the Producer has the right to a Judicial Review of the Insurance Commissioner's decision. Which of these is NOT considered to be a violation of the Unfair Competition Law in Indiana? monopolize or restrain trade making unsubstantiated criticisms about an insurance company pay insurance commissions to an unlicensed individual paying a finder's fee to an individual who provides a sales lead Paying a finder's fee to someone who generates sales leads is not a violation of the Unfair Competition Law. According to Indiana law, controlled business is considered to be 25% of the Producer's commissions over a 12 month period the Producer's finder's fees paid over a 12 month period the number of policies written over a 12 month period the annual premium collected over a 12 month period by the Producer Under Indiana law, Controlled Business is limited to 25% of the Producer's commissions income in a twelve-month period. Unfair Claim Settlement complaints submitted to the Insurance Commissioner will result in a notification of the violation to the Insurance Company within ___ days. 10 15 20 30 If the Indiana Insurance Commissioner receives a complaint about an alleged Unfair Claim Settlement practice, the Commissioner is required to notify the Insurance Company involved within 10 days. In order for a Licensed Resident Producer to sell insurance advice, they must have a consultant present during the meeting make full disclosure in writing at the outset of the transaction about how they will be compensated also hold a Consultant's license have a CLU designation In order for a Licensed Resident Producer to sell insurance advice, they must make full disclosure in writing at the outset of the transaction about how they will be compensated. Which of these is NOT a type of Limited Lines Insurance licenses in Indiana? Travel Insurance Long Term Care Insurance Credit Life Insurance Crop Hail Insurance Long term care insurance is not considered a type of limited lines insurance in Indiana. Under Rule 13, which of these acts is prohibited in life insurance advertising? Using the term "investment plan" when referring to a life insurance policy Stating that a policy pays dividends A Producer presenting a sales presentation Stating that a term life policy may be converted to whole life Rule 13 states that life Insurance advertising prohibits life insurance policies from being referred to as investment plans. Rule 16.1 concerns the regulation of Life Insurance replacement. Which of these statements is true? No additional paperwork is needed at the time of application if replacement is involved Only the replacing insurance company needs to be notified of the replacement A Notice Regarding Replacement is only required to be signed by the applicant Rule 16.1 does not prohibit the replacement of a Life Insurance policy Rule 16.1 does not prohibit the replacement of Life Insurance policies. It does, however, regulate the activities of insurers and agents with respect to the replacement of all forms of existing life insurance. A Producer is in compliance with Rule 16.1 (Life Insurance Replacement) by convincing the policyowner to convert their existing coverage into a reduced paid-up policy convincing the policyowner to surrender the cash value in an existing policy having only the Producer sign the Notice Regarding Replacement using reasonable means when determining if a Replacement is taking place It is the Producer's duty to use reasonable means to determine if Replacement is involved. How must a life insurance policy's loan interest rate be set, according to Indiana law? Must be set according to the nation's prime interest rate Must be set at or above the state-mandated maximum Must be set at or below the state-mandated maximum Must be set according to T-bill rates Policy loan interest rates must be set at or below the state-determined maximum. All of these statements are true regarding a child qualifying for coverage under the Indiana Children's Health Insurance Program EXCEPT Must be a resident of Indiana to qualify Must be under 19 years of age to qualify Family's income level must be greater than 150% of Federal poverty level, but less than 200% Must have been born in the United States to qualify All of these statements qualify a child for coverage under the Indiana Children's Health Insurance Program EXCEPT for the child must be born in the United States. Indiana's Long Term Care Partnership Program requires a Producer to have 15 hours of additional education after they receive their license passed a separate exam devoted specifically to Long Term Care insurance a $30,000 bond 20 hours of additional education after they receive their license Producers are required to receive an additional 15 hours of education after they receive their license in order to sell policies under Indiana's Long Term Care Partnership Program.