Health Ch. 8 Indiana Laws & Rules
Pertinent to 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 - ANS-It is the
Producer's duty to use reasonable means to determine if Replacement is involved.
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 - ANS-Under Indiana
law, Controlled Business is limited to 25% of the Producer's commissions income in a
twelve-month period.
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 - ANS-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.
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 - ANS-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.
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 - ANS-Policy loan interest rates must be set at or below the
state-determined maximum.
, 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 - ANS-In this
situation, the Producer has the right to a Judicial Review of the Insurance Commissioner's
decision.
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 - ANS-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.
In a viatical settlement, who is considered to be the viator?
Insured
Insurer
Broker
Beneficiary - ANS-The insured is considered the viator in a viatical settlement.
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 - ANS-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 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 - ANS-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.
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 - ANS-Insurance Companies admitted to do business in Indiana must
have a Certificate of Authority.
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
Pertinent to 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 - ANS-It is the
Producer's duty to use reasonable means to determine if Replacement is involved.
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 - ANS-Under Indiana
law, Controlled Business is limited to 25% of the Producer's commissions income in a
twelve-month period.
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 - ANS-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.
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 - ANS-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.
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 - ANS-Policy loan interest rates must be set at or below the
state-determined maximum.
, 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 - ANS-In this
situation, the Producer has the right to a Judicial Review of the Insurance Commissioner's
decision.
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 - ANS-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.
In a viatical settlement, who is considered to be the viator?
Insured
Insurer
Broker
Beneficiary - ANS-The insured is considered the viator in a viatical settlement.
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 - ANS-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 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 - ANS-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.
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 - ANS-Insurance Companies admitted to do business in Indiana must
have a Certificate of Authority.
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
