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62 Cards in this Set

  • Front
  • Back
What are the two types of reinsurance treaties?
Falcultative and Automatic
What is another term for the direct writer in a reinsurer treaty?
Ceding Company
Before a company can sell insurance in any state, it must be licensed to sell insurance or, as it is called it must be ______________ to that state or authorized to do business in that state.
A health insurance company which is incorporated in Illinois is a ______________ company in Illinois.

A. Alien
B. Foreign
C. Domestic
C. Domestic
In all other states, other than the state where it is incorporated, where it is admitted, a corporation is considered __________________

A. a domestic company.
B. a alien company.
C. a foreign company.
C. a foreign company.
If a company is incorporated in a country other than the United States, it is considered and referred to as an _________________________.
alien company.
The Blue Cross part of Blue Cross/Blue Shield provides insurance coverage by:
A. paying member hospitals for surgical procedure expenses and billing the patient only for services not covered.
B. reimbursing member hospitals directly for the hospital costs covered by the policy and billing the insured for services not covered by the plan.
C. reimbursing insureds for the portion of the bill that is covered under the plan.
B. reimbursing member hospitals directly for the hospitals costs covered by the policy and billing the insured for services not covered by the plan.
Blue Shield Plans were originally organized by physicians through a medical society to provide coverage for medical and surgical expenses.

True or False
What are the two basic types of HMOs?
Group Practice and IPA.
The type of HMO characterized by medical services being provided in the offices of doctors who contract with the HMO is?
Individual Practice Association (IPA)
Which of the following is/are true?

I. Every employer must offer its employees the option of joining a conveniently located, qualified HMO if conventional health insurance is provided.
II. HMO sponsors include insurance companies, Blues, labor unions, and employers.
II only. I does not apply because it is only those employers with more than 25 employees that must do this all else being equal.
The following description is a description of what?
"A prepaid medical care plan which provides a broad range of medical services for subscribers in return for a fixed periodic fee. Group Practice and Individual Practice Associations are the two basic types of this type of health care management.
Health Maintenance Organization (HMO)
How does a Preferred Provider Organization (PPO) differ from an HMO?
1. Doctors are paid according to each service they provide, rather than on a straight salary.
2. Insured employees are not forced to use the PPO, though their medical costs may be reduced if they do choose to use it.
Which of the following is/are true?
I. With both PPO and POS plans, subscribers are not required to use network caregivers.
II. Managed care organizations include HMOs, PPOs, and POS plans.
I and II are both true. POS plans utilize a gatekeeper (primary care physician) to refer within the Point OF Service Network.
An arrangement where each subscriber is both an insured and an insurer is a ____________?
Medicare is Federally or State administered?
Medicaid is Federally or State administered?
Which of the following are not sources of income to the accident and health insurer?
A. Premiums
B. Interest earned on investments
C. Physical examinations
D. Agent's commissions
C and D (Physical examinations and Agent's commissions) are not income but rather expenses.
The premium that a company charges which takes all four factors in accident and health insurance premiums is called the ____________.
Gross Premium.
Claim costs, expenses, interest earned, and policy termination rate determine the _____________(net/gross)premium.
The service charge made by the insurer when premiums are paid more frequently than annually is for what two reason?
1. Extra expense incurred.
2. Investment interest lost.
An agent represents a ___________, while a broker represents the ____________.
company, customer.
An intentional material misrepresentation for purposes of gaining advantage from another party is the definition of ____________.
A death benefit in an A&H policy will pay a death benefit only when ___________.
the death was accidental.
What is meant by the term, "principle sum"
Principle sum is the amount of the accidental death benefit as specified in the policy. This principle is usually no more than 200 times the monthly income benefit of the policy.
Which of the following would be part of the accident and health insurance contract under the entire contract provision?
I. The printed policy form provided to the policy owner by the company.
II. The bylaws of the insurer corporation; they were only referred to in the policy.
I only. for II to be a true statement, the bylaws would have to be included or attached to the policy.
An agent can change a policy or waive any of its provisions. True or False?
False. In order for a change to be effective, it must have been approved by an executive officer of the insurance company and the approval must be endorsed on or attached to the policy. An agent cannot change any part of the policy or waive any of its provisions.
Who does have Authority to make a contract change?
An executive officer of the insurance company.
In regards to the grace period for premium payments, what is the grace period if premiums are to be paid weekly as outlined in the policy? Monthly? Bi-annually?
7, 10, and 31 days respectively.
Carrie Baxter submits a reinstatement application on April 1 and receives a conditional receipt for her premium on that date. Carrie's policy is reinstated if:
A. the application is approved before may 15.
B. she does not receive notice of disapproval before may 15.
Both A and B are true
Suppose an A&H policy lapses on August 2 and is reinstated on August 15. Which of the following would be covered?
A. An accident on August 9.
B. Sickness which begins August 26.
C. An accident on August 17.
D. Sickness which begins on August 18.
B & C are the correct answers because immediately upon reinstatement accidents are covered but sickness is not covered until 10 days after the reinstatement date.
An insurer fails to pay a premium due on October 1, and the policy lapses. Seventy-five days after October 1, the policy is reinstated. The policy is renewable subject to the consent of the insurer. The insurer can charge a back premium for 1. how many days 2. prior to what.
the 60 days prior to reinstatement.
An insurer (may/may not) charge the insured a premium for the period before reinstatement for which no premium has been paid.
In the case of a policy renewable subject to the consent of the insurer, the period for which unpaid premiums may be charged is limited to how many days.
60 days
All of the following are true of the notice of claim provision except:
A. the notice may be written or oral.
B. the notice must be within 20 days of the occurrence or commencement of loss, or as soon after as reasonably possible.
C. the notice may be given to the insurer or its agent.
D. the insurer may require notice of continued disability every six months, if the policy provides disability income benefits for at least two years.
A. is incorrect because the notice must be written.
Toby Richards gives a notice of claim to his A&H agent on July 1. He should receive claim forms from the insurer by what date under the sixth notice of claim provision.
July 16 is the date as the insurer has 15 days to provide the appropriate forms. If the insurer does not provide these forms in the allotted time, the insured may provide the detail in letter form and will have met the provisions under the notice of claim provisions.
Becky Hill loses a hand in a boating accident. The dismemberment benefit under her accident and health insurance policy is due when?
Immediately after the insurer receives the written proof of loss.
On may 31, an insured furnishes proof of loss for injuries he suffered in an automobile accident. He is prohibited from suing the company to receive the policy benefits before what date.
July 30th. The eleventh required provision establishes minimum and maximum time limits for suing the insurer because of the policy. Any court action based on the policy cannot occur sooner than 60 days after the required written proof of loss has been furnished. This waiting period allows the insurer time to evaluate the claim before being faced with a suit.
If the insured cannot change the beneficiary without the beneficiary's permission, then the beneficiary is classified as what?
Expense-incurred coverage pays the ___________ for the actual expenses he or she has incurred, up to a certain limit.
A. hospital
B. insured
B. insured. Provision-of-service coverage would pay the hospital rather than the insured.
How does the fourth optional provision differ from the fifth optional provision as it relates to A&H insurance?
The fourth deals with insurance on an expense-incurred or provision-of-service basis; the fifth on an other than expense-incurred basis.
The policy provision in which the insurer promises to insure against losses that result from accidental bodily injury or sickness is the:
A. entire contracts clause.
B. benefits provision.
C. insuring clause
D. consideration clause.
E. Santa Clause
C - insuring clause is the correct answer. In this clause, the insurer states that it will insure against certain types of losses which result from an accident or illness specified in the policy. This clause does not address specific losses for which the insurer provides insurance. This is found in another section of the policy.
The insurer clause is found in all policies. True or False.
Where in the policy would you look to determine if payments are provided for the particular type of loss?
A. Consideration Clause
B. Santa Clause
C. Insuring Clause
C. Entire Contract Clause
D. Benefit Clause
D. The benefit clause outlines the the benefits to be paid for qualifying losses.
In a packaged policy the insured pays for:
A. Only those benefits desired for coverage.
B. All benefits regardless of desired coverage.
Which of the following kinds of information will be found in the benefit provisions?
A. The type of losses( loss of income, medical expenses) for which the policy pays.
B. The amount of payments for the covered losses.
C. The circumstances when the benefits are payable.
D. All of the above.
The requirements for a legally enforceable contract to exist include agreement, consideration, and competent parties. True or False
Long-term care insurance is particularly valuable because it provides:
A. health benefits
B. benefits for custodial care (which is not covered by medicare)
C. hospital benefits
D. surgical benefits
B - benefits for custodial care (which is not covered by medicare)
The federal government provides accident and health coverage through:
A. Worker's compensation
B. Medicare
C. Medicaid
B is the correct answers. Worker's compensation and Medicaid is governed under states.
The insurer's gross premium is:
I. usually calculated on the assumption that premiums are payable annually.
II. determined by using claim costs, expenses, interest earned, and policy termination rates.
Both I and II are correct.
What benefits that a typical major medical policy does not cover ARE provided by a separate non integrated dental plan?
A. Dental care required because of an accidental injury.
B. Routine dental and preventive care.
B - routine dental and preventive care is the correct answer.
What is the difference between a non-noncancelable policy and a guaranteed renewable policy?
A noncancelable policy gives the insured the unqualified right to continue the policy in force for a substantial period of time by the payment of premiums of an amount guaranteed in the policy. The premium may be the same for the duration of the noncancelable period or it may increase in accordance to a schedule in contract. But, the insurer may not increase the premium beyond the amount set by the contract, nor may it change the coverage while the contract is in force.

A guaranteed renewable policy, on the other hand maintains all of the above features except that the premium is not guaranteed. The insurer has the right to change the premiums for classes of insureds, but it cannot change the premium for an individual insured and cannot change the premium for other insureds in that class.
This type of contract gives the insured the right to renew the contract from period to period until a stated date or until the insured reaches a certain age conditional upon reasons stated in the policy.This type of policy is known also by the term, "limited continuance" policy.
Conditionally Renewable Policy
How does a Renewable at Insurer's Option Policy differ from a Cancelable Policy?
A cancelable policy can only be terminated by the insurer on the anniversary date of the policy or at premium due dates, but a guaranteed renewable policy can be terminated at any time, not just at policy anniversary or premium due dates. This right is subject to requirements of notice.
Nonoccupational insurance is health insurance that only covers off-the-job sickness and accidents. It is insurance that does not cover disability resulting from sickness or accident that is covered by ______________________?
Worker's Compensation Insurance.
Hospital Insurance pays the insured a stated benefit while he or she is hospitalized. The payments made are made regardless of the amount of incurred expenses regardless of other existing insurance. True or False?
The NAIC (National Association of Insurance Commissioners) Long-Term Care Insurance Model Act promotes which of the following?
A. availability of long-term care coverage.
B. protects applicants from unfair or deceptive marketing practices.
C. facilitates public understanding of policies.
D. establishes standards of coverage.
ABC&D are all correct of the NAIC.
Long-Term care insurance is:
A. guaranteed renewable.
B. limited on the denial of coverage due to preexisting conditions.
C. required to outline provided coverage, including a statement of benefits, exclusions, reductions, limitations, and renewal provisions.
D. One which typically provides a free look period of 30 days.
ABC&D are all correct.
An insurer has an A&H policy and suffers an accident. How long does the insured have to notify the insurer of the claim according to the Notice of Claim Provision?
An insured must give written notice within 20 days or whatever is "reasonable" given the circumstances of the accident.
After submitting the notice of claim, an insurer has how many days to furnish proof of loss forms to the claimant before the claimant can write a letter indicating proof of loss which will suffice as the proof of loss forms.
15 days is the time that the insurer has to supply proof of loss forms from the time it receives the notice of claim document(s).
Coverage on a provision-of-service basis provides direct payment from the insurer to the _______________or_______________ for services rendered.
hospitals or doctors
Expense-incurred coverage pays the _________________ for actual expenses incurred, up to a certain limit.