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37 Cards in this Set
- Front
- Back
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A health insurance policy can exclude coverage for all of the following EXCEPT: * A) dental care.* B) cancer. * C) pregnancy. * D) preexisting conditions. |
As a general rule, a health insurance policy cannot limit or exclude coverage by type of illness, accident, treatment or medical condition, subject to certain exceptions. A policy that does not cover medical treatment for cancer would exclude coverage by type of illness. b |
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The first-year commission for Medicare supplement insurance policies cannot be more than: * A) 100% of the second-year commission.* B) 200% of the second-year commission. * C) 20% of the maximum amount of coverage. * D) 100% of the policy premium. |
b |
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Basic hospital expense coverage typically provides coverage for at least how many days for one period of hospital confinement for each covered person? * A) 20 days.* B) 10 days. * C) 31 days. * D) 60 days. |
c |
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Which of the following is a power of the New Jersey Commissioner of Banking and Insurance? * A) Conduct investigations relating to insurance matters through the state attorney general.* B) Conduct investigations through the Department of Banking and Insurance, but not subpoena witnesses. * C) Conduct investigations, subpoena and interrogate witnesses and licensees, and impose penalties for code violations. * D) Conduct investigations, subpoena and interrogate witnesses, but not impose penalties for code violations. |
c |
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Under what circumstances can a surplus lines agent sell a policy underwritten by an insurance company that is NOT licensed in New Jersey? * A) When the client is referred by a limited lines agent.* B) When the coverage cannot be obtained from an authorized insurer. * C) When it offers a higher sales commission than a similar policy from a domestic insurer. * D) When it offers a lower premium than a similar policy from a domestic insurer. |
b |
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Health insurance contracts issued in New Jersey must cover the treatment of alcoholism in which of the following circumstances? * A) If the individual is older than age 18.* B) In a licensed detoxification facility. * C) Through Alcoholics Anonymous. * D) In state-run hospitals only. |
b No health policy providing hospital and medical benefits shall be issued in New Jersey unless it provides benefits to covered persons in connection with the treatment of alcoholism. These policies shall include coverage for inpatient and outpatient care in a hospital, treatment at a licensed detoxification facility, or confinement at a certified treatment facility. |
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An insurance office in New Jersey other than a principal office where a resident licensee conducts insurance business is known as a: * A) supplementary office.* B) satellite office. * C) branch office. * D) secondary office. ***Licensee must notify department in writing of the closign of any branch office within ____ callander days and return the branch office certificate at that time |
A branch office must be registered with the commissioner to obtain a branch office certificate that permits the sale of insurance at that location only. The certificate expires at the same time as the producer's license. The licensee must notify the department in writing of the closing of any branch office within 20 calendar days and return the branch office certificate at that time. |
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Which of the following is subject to New Jersey's replacement regulations? * A) Individual credit life insurance.* B) Annuity. * C) Group life insurance. * D) Individual life insurance. |
d Several kinds of life insurance products are exempt from replacement regulations, including annuities, credit life insurance, many kinds of group life insurance, and variable life insurance. |
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A certification of license status must contain all of the following EXCEPT: * A) the licensee's previous employer.* B) whether formal disciplinary action was taken during the last 4 years. * C) the licensee's license reference number. * D) the kinds of insurance for which the person is authorized. |
a Upon request by any person, the Department shall issue a certification of the license status of any currently licensed producer or producer licensed within the preceding four years. Such certification shall contain the licensee's name, date of birth, license reference number, whether currently licensed or expired, kinds of insurance for which authorized (whether qualified by examination or the equivalent), and whether any formal disciplinary action was taken during the last four years. |
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All of the following health insurance policies must cover the treatment of alcoholism EXCEPT: * A) a Medicare supplement policy.* B) an employer group plan. * C) an individual health policy. * D) an individual policy that was converted from a terminated group plan that covered the treatment of alcoholism. |
a The treatment of alcoholism is not required under policies that provide limited hospital or medical expense coverage such as Medicare supplements, student accident policies, or surgical expense policies. |
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Where must an insurance producer keep premiums that are held more than five days before being remitted to the insurance company? * A) Document box.* B) Personal checking account. * C) Producer's office. * D) Trust account. |
d Premiums collected by a producer must be remitted to the insurer within five business days of receipt (seven business days for accident and health policies). An insurance producer must maintain a premium trust account. Premiums collected may be deposited there. A trust account is a fiduciary account established and maintained by the insurance producer to hold money in connection with transacting insurance business. The account's purpose is to hold funds related to the insurance business. It cannot be used to maintain personal assets. |
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A temporary certificate lasts how many days after it is issued? * A) 45 days.* B) 60 days. * C) 90 days. * D) 180 days. |
b The Commissioner may issue a temporary certificate evidencing that the applicant may begin work when the applicant has submitted a proper application for a license that does not disclose any information that would disqualify the individual. A temporary certificate expires no more than 60 days after issuance. |
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Medicare supplement policies must give applicants the right to return the policy within how many days of delivery for a premium refund? * A) 20 days.* B) 30 days. * C) 50 days. * D) 14 days. |
B An applicant for a Medicare supplement policy must be permitted to return the policy within 30 days of delivery if she is not satisfied with it. A 30-day free-look provision must be included and prominently displayed on the first page of the policy. |
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How many days does an insurance company have to notify the Commissioner when it cancels a contract of agency with a licensed New Jersey producer? * A) 45 days.* B) 30 days. * C) 90 days. * D) 15 days. |
D Upon the cancellation of an agency contract, the insurer shall within 15 days file written notice of cancellation with the Commissioner. The notice shall also include the reason for the cancellation. Agency appointment shall not terminate until the notice of cancellation has been filed with the Commissioner. |
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How long must an insurance producer maintain records of insurance transactions with its policyholders? * A) Six months.* B) Three years. * C) One year. * D) Five years. |
D A producer shall maintain a file for each customer or client for at least 5 years after termination of the coverage. The file must include a copy of the application, the name of any producer involved in the transaction, the insurance premium financing agreement, if any, and all correspondence related to the transaction. |
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In order to obtain a resident insurance producer license in New Jersey, one must complete an approved course of education how long before applying for a license? * A) 2 years.* B) 1 year. * C) 6 months. * D) 18 months. |
A |
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A surplus lines agent must fulfill which of the following requirements? * A) Be a college graduate.* B) File a $5,000 bond with the Commissioner. * C) Hold a license for both life and health authorities. * D) Hold a license for property and casualty authorities. |
D No license granting surplus lines authority shall be issued or renewed unless the applicant holds or will hold property and casualty authorities. No surplus lines producer shall charge any fee to an originating broker in connection with the negotiation or procurement of any contract of surplus lines insurance that shall exceed $50 plus the actual costs incurred for any services performed by a person that is not associated with the surplus lines producer, such as inspection services. These are the 2 statutory requirements for a surplus lines producer. |
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Within how many days of opening a branch office must an insurance producer notify the Department of Banking and Insurance? * A) 15 days.* B) 20 days. * C) 30 days. * D) 45 days. |
C A producer must file with the Department a branch office registration form within 30 days before business is first conducted there. If a branch office is closed down, the producer must provide 20 days notice to the Department and return the certificate for cancellation. Failure to notify the Department of the opening or closing of a branch location is subject to a $500 fine. |
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All of the following are considered unfair and deceptive acts in the marketing of insurance EXCEPT: * A) conservation.* B) intimidation. * C) false advertising. * D) boycotting. |
A Misrepresentation, defamation, boycott, unfair discrimination and rebating are all considered unfair acts and deceptive marketing practices. Conservation is the effort of agents and insurance companies to keep insurance in force through the prevention of lapses and the reinstatement of business that already has lapsed. |
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The service fee for any one policy CANNOT exceed: * A) $20.00* B) $5.00 * C) $10.00 * D) $50.00 |
A Only a producer acting as a broker or consultant may charge a fee to a policyholder for services rendered. If a producer is acting as a broker or consultant and is charging a fee, all parties must sign a written agreement including the fee to be charged, any additional commissions to be received, and the execution date of the agreement. The maximum service fee on a personal lines policy is $20 per year. |
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When the surviving spouse of a deceased licensee enters into a written agreement with a licensed producer to continue the deceased's insurance business, which of the following restrictions apply to this contract? * A) It cannot remain in effect for more than 6 months.* B) The parties involved must agree not to share commissions. * C) All clients of the deceased must be notified of the change in writing within 30 days. * D) All insurance contracts written during the time period are not binding. |
A When business is continued through an agreement with a licensed producer, commissions may be shared, the new producer must inform the Insurance Department in writing, and the temporary agreement cannot exceed 6 months in duration. |
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The principal purpose of the New Jersey Individual Health Coverage Program is to: * A) promote affordable health care coverage for all persons.* B) assist individuals who are unable to afford health insurance coverage. * C) monitor and ensure the solvency of authorized insurers in New Jersey. * D) help insurers offer individual health insurance to persons who might otherwise be unable to obtain coverage as substandard risks. |
D All qualified insurers must participate in the state's Individual Health Coverage Program, which helps insurers offer individual health insurance to persons who might otherwise be unable to obtain coverage as substandard risks. Although the program ultimately helps persons who cannot afford health insurance coverage, the program's main purpose is to make it possible for insurers to offer affordable health care coverage to these individuals. These insurers pay annual assessments to cover losses and administrative expenses shared by all insurers participating in the program. Assessments are based on the proportion of their respective market share. |
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How long is the standard term of an insurance producer's license in the state of New Jersey? * A) 3 years.* B) 4 years. * C) 2 years. * D) 1 year. |
C |
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A Medicare supplement policy cannot deny a claim for losses incurred more than how long from the effective date of coverage for a pre-existing condition? * A) Six months.* B) Two years. * C) Six years. * D) Three years. |
A A Medicare supplement cannot deny a claim for losses incurred more than six months from the effective date of coverage for a pre-existing condition. Furthermore, a policy cannot define a pre-existing condition more restrictively than a condition for which medical advice was given or treatment was recommended by, or received from, a physician within six months before the effective date of coverage. |
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All of the following are lines of insurance, or authorities, for which producers can receive a license to transact EXCEPT: * A) credit life.* B) title insurance. * C) life. * D) surplus lines. |
A In addition to life, surplus lines and title insurance, the producer license authorities also include health, property, and casualty insurance. Life authority covers all forms of life insurance and annuities, including variable contracts. Credit life insurance is not an authority a person may designate for a producer license. |
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An insurance producer's license will NOT be reinstated if the applicant for the license has had his license revoked within the preceding: * A) five years.* B) three years. * C) six months. * D) one year. |
A If a producer's license is revoked, the producer must wait 5 years before applying for reinstatement and 10 years before owning a share of an insurance organization. If a producer's license is suspended, he may apply for reinstatement immediately after the period of suspension. |
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What is the most common elimination period found in disability income contracts? * A) 30 days.* B) 60 days. * C) 90 days. * D) 10 days. |
A An elimination period is the period that must elapse before monthly benefits will begin under a disability income contract. The most common elimination or waiting period found in disability income contracts is 30 days. |
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What is the term used to describe any attempt by an existing insurer to continue existing life insurance in force after receiving notice from a replacing insurer? * A) Rebating.* B) Producer renewal. * C) Replacement. * D) Conservation. |
D Conservation is any attempt by a present insurer or its producer to continue an existing life insurance policy after receiving notice from a replacing insurer. Each agent who uses a sales proposal when conserving existing life insurance shall leave with the applicant the original or a copy of all sales proposals used in the conservation effort. The agent should also submit a copy of all sales proposals used in the conservation effort to the existing insurer. |
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The term of insurance protection provided by a credit insurance policy cannot extend for more than how long? * A) 15 days beyond the scheduled maturity date of the loan.* B) One year after the loan is made. * C) Two years. * D) Two years after the loan is paid off. |
A Coverage begins when the borrower becomes obligated to the creditor (the effective date of the policy). The term of the insurance shall not extend more than 15 days beyond the scheduled maturity date (pay-off date of the indebtedness). The maximum term is five years. |
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What is another name for a sanction imposed by the commissioner on an insurance producer or insurer in New Jersey? * A) Cease and desist order.* B) Limitations period. * C) Administrative penalty. * D) Notice of violation. |
C An administrative penalty is a sanction which the commissioner can impose on an insurance producer or insurance company. It may include the revocation or suspension of a license or the imposition of a fine. |
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The term of a temporary license is how many days? * A) 180 days.* B) 365 days. * C) 90 days. * D) 30 days. |
A The commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if the commissioner determines that the temporary license is necessary for the servicing of an insurance business in certain cases. |
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Licensed insurance producers must inform the New Jersey Department of Banking & Insurance about a change of address within how many days of the time the change occurs? * A) 10* B) 15 * C) 30 * D) 20 |
C Licensed insurance producers must provide the Department with written notification of any change of business mailing or location address and residence address within 30 days of the change. |
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If a licensee is found to have knowingly violated the law, what is the maximum fine that the Commissioner may impose for the first violation charged? * A) $1,000.00* B) $500.00 * C) $2,500.00 * D) $5,000.00 |
D A fine may be assessed against the offender as follows: $5,000 for the first offense, $10,000 for the second offense, and $15,000 for subsequent offenses. The Commissioner may, in addition to or as an alternative to these penalties, ask the Attorney General to charge the offender with a criminal offense. Furthermore, the Commissioner may refer the matter to the state licensing authorities, who may suspend or revoke the offender's license. |
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A Medicare supplement outline of coverage must include all of the following EXCEPT a: * A) listing of the producer's commission schedule.* B) description of the principal benefits. * C) statement of the renewal provisions. * D) statement that the outline of coverage is a summary of the contract. |
A A Medicare supplement outline of coverage must include a description of the contract's principal benefits and coverage, a statement of renewal provisions and a statement that the outline of coverage is a summary of the contract. |
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Accidental death and dismemberment benefits must be payable if the loss occurs within how long after the accident? * A) 90 days.* B) 2 years. * C) 10 days. * D) 24 hours. |
A To be covered, death must occur within 90 days of an accident. The basic purpose of this restriction is to make sure that the accident is the only cause of death. |
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Which of the following statements about Medicare supplement insurance is CORRECT? * A) It cannot be guaranteed renewable.* B) It must provide long-term care coverage. * C) It cannot terminate a person's coverage solely on the grounds of age. * D) It can terminate coverage on the basis of mental deterioration. |
C A Medicare supplement insurance policy cannot end coverage solely on the grounds of age or deterioration of physical or mental health. |
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Every insurer that sells limited line credit insurance must give to every person selling that insurance: * A) a course of instruction that has been approved by the commissioner.* B) an affidavit that the insurer is to receive any service of process on behalf of the person. * C) a certificate attesting that the person is in good standing. * D) a license to sell insurance. |
A Every insurer that sells, solicits, or negotiates any form of limited line credit insurance must provide an approved program of instruction to each individual who will be selling limited line credit insurance. |
