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PSI - NY LIFE, ACCIDENT AND HEALTH ACTUAL

EXAM QUESTIONS.

Which policy provision permits the policy owner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policy owner rejects the terms or costs? - Solution Free Look When will a policy pay on a UCR basis? - Solution When particular benefits are not listed on a payment schedule Which type of rider reimburses health and social service expenses incurred in a convalescent or nursing home facility? - Solution long term care rider Which of the following is exempted from the incontestability provision in insurance policies? - Solution Fraudulent misstatements What does first dollar coverage mean? - Solution As soon as covered medical expenses are incurred, the policy begins to pay What is the waiver of premium provision? - Solution In a long term care contract, the premium is waived after the insured has been confined for a specific period of time According to the Time Payment of Claims provision, the insurer must make the payment immediately after receiving proof of loss EXCEPT - Solution for claims involving periodic payments Which is a disadvantage to a flexible premium annuity? - Solution the actual amount of the annuity benefit cannot be determined in advance When a policy or certificate containing an accelerated benefit provision is applied for or delivered, the producer is responsible for providing that applicant a summary of coverage that includes all of the following EXCEPT

• Solution a detailed and comprehensive summary of the accelerated benefit

which one of the following represents an advantage of obtaining a policy loan versus a withdrawal? - Solution the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis How does a noncancelable policy differ from a guaranteed renewable policy? - Solution with the non cancelable policy the insurer may increase premiums only based on the terms of the policy What does it mean if a health policy is conditionally renewable? - Solution Insurer may elect NOT to renew only under the conditions specified in the policy When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during the policy's initial: - Solution 2 year period What does coinsurance mean? - Solution The insurer and the insured share expenses over the deductible. Which of the following must be given to the insurer within 20 days after occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible? - Solution Notice of claim The right to change the beneficiary or dispose of the policy or its benefits in any manner one chooses is reserved to the policy owner UNLESS which of the following is true? - Solution The policy owner has named an irrevocable beneficiary Which of the following refers to how often a premium is paid? - Solution Mode All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while - Solution Committing a misdemeanor At which point are contractual death benefit settlement options determined and by whom are they determined? - Solution At the time the policy is purchased by the owner of the policy All of the following are ownership rights EXCEPT - Solution Switching the policy from one insured to another

All of the following are TRUE regarding incomplete applications EXCEPT - Solution The incomplete application can be accepted with the missing information added later A consumer report used to determine eligibility for insurance may include all of the following EXCEPT - Solution Medical underwriting exam All of the following are required signatures on a life insurance application EXCEPT - Solution The minor in a juvenile policy Why are insurance policies considered conditional contracts? - Solution Certain conditions need to be met to make the contract legally enforceable. When does insurable interest come into play in a life insurance policy? - Solution when the applicant for the policy is not the insured Which of the following occurs immediately after the application is submitted and the initial premium paid? - Solution the underwriting process begins Obtaining consumer information reports under false pretenses is prosecutable by which of the following? - Solution Fair Credit Reporting Act What is the purpose of Stranger-originated life insurance (STOLI)? - Solution the policy is originated primarily or solely for the purpose of resale All of the following are classifications of risk EXCEPT - Solution non- nicotine What specific new procedures does the USA Patriot Act require of insurance companies? - Solution Establish an anti-money laundering program What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application? - Solution The applicant and possibly the agent initial any changes made.

What is a MIB report? - Solution medical information on an applicant for assessing life or health insurance risk How do warranties differ from representations? - Solution a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge. If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of the following EXCEPT - Solution the treatment procedures that are covered by the policy. Which of the following was specifically designed to address STOLI and IOLI practices? - Solution NCOIL Act Why is rehabilitation considered worthy of federal help under workers' compensation? - Solution it reduces insurance losses and helps regain the worker's dignity In a case where an individual's health is insured by both their own policy and their spouse's policy, which policy pays in the event of an illness? - Solution The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount. The group conversion option is allowed for all of the following EXCEPT - Solution during the annual benefits enrollment period. What type of insurance should a company purchase if it wants to insure the life of its CEO? - Solution key person insurance All of the following are tax qualified retirement plans EXCEPT - Solution Section 529 plan. Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? - Solution It is financially insufficient to cover end of life expenses. For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following? - Solution age

When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? - Solution when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year In noncontributory plans, which percentage of eligible members must participate? - Solution 100% Short term disability insurance generally only covers injuries due to which of the following? - Solution Non-occupational injuries Managed care plans increase efficiency by all of the following means EXCEPT - Solution transferring the management of costs to the insureds. Under which situation must insurable interest exist between the applicant and insured at the time of application? - Solution When a third-party applicant names themselves beneficiary Which of the following is characteristic of a nonqualified plan? - Solution plan does not meet federal guidelines for tax benefits In a home healthcare benefit, all of the following are eligible expenses EXCEPT - Solution blood transfusions All of the following are requirements to qualify for Social Security disability benefits EXCEPT when - Solution unable to work in occupation in which the worker was trained or educated How long after being entitled to disability benefits will an individual be eligible to receive Medicare benefits? - Solution 2 years Which of the following amends the Social Security Act to make Medicare secondary to group health plans? - Solution TEFRA Which of the following is TRUE of a point of service plan? - Solution A patient's care is coordinated by an in-network primary care physician. A group conversion option may be used in all the following instances EXCEPT - Solution a life-changing event, such as marriage, divorce, or childbirth

Which problem was universal life insurance designed to address? - Solution low interest rates during periods of high inflation Compared to basic hospital, medical and surgical policies, which type of insurance provides broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? - Solution major medical insurance Current assumption whole life policies are sensitive to which of the following? - Solution interest rates Which is the major reason why long term care insurance is becoming increasingly important? - Solution As life expectancy increases, the chances of needing long term care also increase Which of the following is defined as the dollar amount beyond which the insured no longer participates in payment of medical expenses? - Solution Stop Loss Limit Which is the primary purpose of Health Reimbursement Accounts (HRAs)?

• Solution To assist covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions. States generally define a true "group" for insurance as requiring a minimum of how many participants? - Solution 10 When should a buy-sell agreement include a provision for the buy-out of an owner's business interest in the event of a disability? - Solution When there is a buy-sell agreement funded with life insurance to buyout the interest of a deceased owner or partner. Which type of life policy can be continued year after year without a required medical examination but rates are dependent on the insured's current age?
• Solution renewable term Which of the following is true about a decreasing term life policy? - Solution The face amount reaches zero at policy expiration. Which of the following is TRUE of the limited pay whole life policy? - Solution Coverage continues after the policy is paid-up.

Which of the following is a characteristic of Preferred Provider Organizations (PPOs)? - Solution prearranged costs for services rendered All of the following are characteristics of variable whole life EXCEPT - Solution there is no guaranteed minimum death benefit. Which of the following policy types is considered double indemnity? - Solution accidental death Which of the following lists the three common types of permanent individual life insurance? - Solution Variable Life, Whole Life, Universal Life Which of the following is TRUE for a flexible premium annuity? - Solution The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount. Which type of annuity covers two or more annuitants and provides monthly income only until the first annuitant dies? - Solution Joint Life Annuity Which of the following coverage types pays a monthly cash benefit following the elimination period for total disability due to accident or sickness? - Solution Disability income insurance In which of the following does a covered employee agree to a reduction in compensation so the amount can be used to cover medical expenses? - Solution Flexible Spending Account (FSA) Which of the following is covered by a dread disease policy? - Solution illnesses that do not occur frequently but incur significant costs when they do occur Which insurance plans are commonly offered through the worksite (employer sponsored) EXCEPT? - Solution Medicare Process 2103 (d-i) - Solution 1. The Superintendent may issue a license to any person, firm or corporation who has complied with the requirements of the Insurance Code, authorizing the licensee to act as agent of any authorized insurer. Every individual applicant for a license under this section and every proposed sub-licensee must be 18 years of age or older

at the time of issuance of such license. The person must submit to and pass a written examination required by the Superintendent. Producer Definition (2101(k)) - Solution An insurance producer means an insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed under the insurance laws of this state to sell, solicit or negotiate insurance. Who Should be Licensed (2101(k)(1)) - Solution 1. The term "insurance producer" does not include: An officer, director or employee of a licensed insurer, fraternal benefit society or health maintenance organization or of a licensed insurance producer, provided that the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in this state and: (a) the officer, director or employee's activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance; (b) the officer, director or employee's function relates to underwriting, loss control, Inspection or the processing, adjusting, investigating or settling of a claim on a contract of Insurance; or (c) the officer, director or employee is acting in the capacity of a special agent or agency supervisor assisting licensed insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance. Home State (2101(l)) - Solution Home state means the District of Columbia or any state or territory of the United States in which an insurance producer maintains his, her or its principal place of residence or principal place of business and is licensed to act as an insurance producer. Negotiate (2101(m)) - Solution Negotiate or negotiation means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from licensed insurers, fraternal benefit societies or health maintenance organizations for purchasers. Sell (2101(n)) - Solution Sell or sale means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of a

licensed insurer, fraternal benefit society or health maintenance organization. Solicit (2101(o)) - - Solution Solicit or solicitation means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular licensed insurer, fraternal benefit society or health maintenance organization. Agent 2101(a) - Solution In this section, insurance agent means any authorized or acknowledged agent of an insurer, fraternal benefit society or health maintenance organization issued a certificate of authority pursuant to the public health law, and any sub-agent or other representative of such an agent, who acts as such in the solicitation of, negotiation for, or sale of, an insurance, health maintenance organization or annuity contract, other than as a licensed insurance broker. Agent 2101(k) - Solution insurance producer means an insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed under the insurance laws of this state to sell, solicit or negotiate insurance. The applicant must be at least 18 years of age at the time of license issuance. An examination is required for each applicant, except where noted for applicants with a change in residency moving to New York (see code 2103 below). Brokers 2101(c) - Solution a licensed insurance representative who does not represent a specific insurance company, but places business among various companies. Legally, the broker is usually regarded as a representative of the insured rather than the insuring company. Brokers 2101(h) - Solution any licensed attorney at law of this state. Consultants (2107) - Solution The Superintendent may issue an insurance consultant's license to any person, firm, association or corporation who or which has complied with the requirements of this chapter with respect to either: life insurance, meaning all of those kinds of insurance authorized. Any such license issued to a firm or association shall authorize only the members of such firm or association named in such license as sub- licensees to act individually as consultants there under, and any such

license issued to a corporation shall authorize only the officers and directors thereof named in such license as sub-licensees to act individually as consultants there under. Adjuster 2101(g) - Solution The Superintendent may, in his discretion require an applicant for a license under this section to present evidence, in such form as he prescribes, that such applicant has been employed, for a period which he deems reasonable, by an insurer, an independent adjuster or a public adjuster, in the performance of duties which in his opinion would provide the applicant with a satisfactory preliminary training for the duties and responsibilities which would evolve upon him as a licensee under this section. The term independent adjuster means any person, firm, association or corporation who for money, commission or any other thing of value, acts in this state on behalf of an insurer in the work of investigating and adjusting claims arising under insurance contracts issued by such insurer and who performs such duties required by such insurer as are incidental to such claims and also includes any person who for compensation or anything of value investigates and adjusts claims on behalf of any independent adjuster. Adjuster 2108 - Solution Adjusters will be licensed as either independent adjusters, or as public adjusters. The Superintendent may prescribe the types of independent adjusters' licenses according to the kind or kinds of insurance claims which the licensee is to be authorized to investigate and adjust. No adjuster may act on behalf of an insurer unless licensed as an independent adjuster, and no adjuster may act on behalf of an insured unless licensed as a public adjuster. A public adjuster works on behalf of the insured for a fee. Nonresident 2101(d) - Solution In this section, non-resident insurance agent means an individual who is a non-resident of this state and who is licensed or authorized to act as an insurance agent in the state in which he resides, or in which he or the firm or association of which he is a member or employee, or the corporation, of which he is an officer, director, or employee maintains an office as an insurance agent. Nonresident 2101(e) - Solution In this section, "non-resident insurance broker", means an individual who is a non-resident of this state and who is licensed or authorized to act as an insurance broker in the state in which he resides, or in which he, or the firm or association of which he is a member

or employee, or the corporation, of which he is an officer, director or employee maintains an office as an insurance broker. Nonresident 2103(g)(5) - Solution In the discretion of the Superintendent, no written insurance examination will be required of any individual seeking to be named as a licensee or sub-licensee who is a non-resident insurance agent. Nonresident 2103(g)(11) - Solution No written insurance examination will be required of any individual who applies for an insurance agent license in this state who was previously licensed for the same line or lines of authority in another state, provided, however, that the applicant's home state grants non-resident licenses to residents of this state on the same basis. Such individual shall also not be required to complete any prelicensing education. This exemption is only available if the person is currently licensed in that state or if the application is received within 90 days of the date of cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's producer database records, maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries indicate that the producer is or was licensed in good standing for the line of authority requested. An individual or entity licensed in another state that moves to this state must make an application within 90 days of establishing legal residence to become a resident licensee. No prelicensing education or examination will be required of that person to obtain any line of authority previously held in the prior state except where the Superintendent determines otherwise by regulation. Nonresident 2136 - Reciprocity - Solution The Superintendent shall waive any requirements for a nonresident license applicant otherwise applicable under this chapter if: (a) the applicant has a current and valid license in his or her home state and is in good standing in his or her home state; (b) the applicant has submitted a completed application in the form prescribed by the Superintendent or submitted the application for licensure submitted to his or her home state; (c) the applicant has paid the fees required by this chapter; and (d) the applicant's home state awards nonresident insurance producer licenses to residents of this state on the same basis as provided in this subsection.

Business Entities 2101(p) - Solution A business entity means a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity. Business Entities 2103(e) - Solution Before any original insurance agent's license is issued to a business entity, there must be on file in the office of the Superintendent an application by the prospective licensee in such form or forms and supplements, and containing information the Superintendent prescribes and for each business entity, the sub-licensee or sub-licensees named in the application must be designated responsible for the business entity's compliance with the insurance laws, rules and regulations of this state. Temporary License (2109; Regs. 9, 18, 29, Part 20.1) - Solution A temporary license may be issued in the case of death, service in armed forces or disability. The Superintendent may issue a temporary insurance agent's or insurance broker's license, or both, without requiring the applicant to pass a written insurance examination or to satisfy certain requirements except as to age in the following cases: (1) In the event of the death of a person who at the time of his death was a licensed accident and health insurance agent; (a) to the executor or administrator of the estate of such deceased agent or broker; (b) to a surviving next of kin of such deceased agent or broker, where no administrator of his estate has been appointed and no executor has qualified under his duly probated will; (c) to the surviving member or members of a firm or association, which at the time of the death of a member was such a licensed insurance agent or licensed insurance broker; or (d) to an officer or director of a corporation upon the death of the only officer or director who was qualified as a sub-licensee or to the executor or administrator of the estate of such deceased officer or director; (2) to any person who may be designated by a person licensed pursuant to this chapter as an insurance agent, or an insurance broker, or both, and who is absent because of service in any branch of the armed forces of the United States.

(3) to the next of kin of a person who has become totally disabled and prevented from pursuing any of the duties of his or her occupation, and who at the commencement of his or her disability the license or licenses may be issued for a term not exceeding 90 days from the death of such additional term or terms of 90 days each, not exceeding in the aggregate 15 months. The Superintendent may issue renewal licenses for an additional term or terms of 90 days each exceeding the a Renewal (2103(j); Reg. 5, Part 21.2) - Solution All individual insurance agent licenses must be renewed every two years. Individual licenses are issued with an expiration date determined by the date of birth: The license of an agent born in an even numbered year will expire on the agent's birthday in an even numbered year. The license of an agent born in an odd numbered year will expire on the agent's birthday in an odd numbered year Adjuster licenses are not determined on a birth date renewal. Adjuster licenses expire on December 31st of even-numbered years. Resident Licensees - Solution All licensed agents, brokers, consultants and public adjusters must complete continuing education (CE) requirements as a condition of renewing these licenses. Licensees must complete 15 credits of approved continuing education during each biennial licensing period. After your license has been renewed the first time, continuing education (CE) will always be required upon subsequent renewal or relicensing applications. Credits must be accumulated during the renewal period, which begins with the effective date of the license and ends with the expiration date. CE must be completed before processing the renewal or relicensing application. Assumed Names (2102(f)) - Solution Licensees must notify the Superintendent upon changing his, her or its legal name. Except for an individual licensee's own legal name, no licensee may use any name, in

conducting a business regulated by this article that has not been previously approved by the Superintendent. Change of Address (All Addresses, including Email) - (2134; Reg. 5, Part 21.4; Reg. 6, Part 22.3; Reg. 7, Part 23.4) - Solution Licensees must inform the Superintendent by a means acceptable to the Superintendent of a change of business or residence address within 30 days of the change. This also includes e-mail addresses. Reporting of Actions (2110(i) - Solution Licensees must report to the Superintendent any administrative action taken against the licensee in another jurisdiction or by another governmental agency in this state within 30 days of the final disposition of the matter. This report must include a copy of the order, consent to order or other relevant legal documents. Cease and Desist Order (2405) - Solution Whenever the Superintendent has reason to believe that a person has committed or is committing a defined violation or has been engaged in or is engaging in any method of competition, or any act or practice, which could become a determined violation and that a proceeding thereon would be in the interest of the public, he shall serve upon that person a statement of the charges and notice of a hearing to be held at a time not less than 10 days after the date of service of the notice and at the place fixed in the notice. The person will be given an opportunity at the hearing to be heard personally or by counsel. Anyone violating a cease and desist order may be subjected to a fine of up to $5,000 for each violation. Hearings - Notice and Process (2405, Financial Services 305) - Solution A statement of the charges and notice of a hearing to be held at a time not less than 10 days after the date of service of the notice and at the place fixed in the notice. Suspension, Revocation, and Nonrenewal (2110) - Solution The Superintendent may refuse to renew, revoke, or may suspend, for a period the Superintendent determines, the license of any insurance producer, insurance consultant or adjuster, if, after notice and hearing, the Superintendent determines that the licensee or any sub-licensee has:

1. violated any insurance laws, regulation, subpoena or order of the Superintendent of Insurance or of another state's Insurance Commissioner, or has violated any law in the course of his dealings in such capacity;
2. provided materially incorrect, materially misleading, materially incomplete or materially untrue information in the license application;
3. obtained or attempted to obtain a license through misrepresentation or fraud;
4. has used fraudulent, coercive or dishonest practices, demonstrated incompetence, demonstrated untrustworthiness, or demonstrated financial irresponsibility in the conduct of business in this state or elsewhere;
5. improperly withheld, misappropriated or converted any monies or properties received in the course of business in this state or elsewhere;
6. intentionally misrepresented the terms of an actual or proposed insurance contract or application for insurance;
7. has been convicted of a felony;
8. admitted or been found to have committed any insurance unfair trade practice or fraud;
9. had an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory;
10. forged another's name to an application for insurance or to any document related to an insurance transaction;
11. improperly used notes or any other reference material to complete an examination for an insurance license;
12. knowingly accepted insurance business from an individual who is not licensed;
13. failed to comply with an administrative or court order imposing a child Penalties (2127): - Solution The Superintendent, in lieu of revoking or suspending the license of a licensee, may in any one proceeding by order, require the licensee to pay a penalty in a sum not exceeding $500 for each offense, and a penalty in a sum not exceeding $2,500 in the aggregate for all offenses. Upon the failure of such a licensee to pay such penalty ordered within 20 days after the mailing of such order, postage prepaid, registered, and addressed to the last known place of business of such licensee, unless such order is stayed by an order of a court of competent jurisdiction, the Superintendent may revoke the license of such licensee or suspend the same for such period as he determines.

Superintendent's General Duties and Powers (2404, Financial Services 201, 202, 301) - Solution The Superintendent is empowered to: Examine and investigate into the affairs of any person in order to determine whether the person has violated or is violating the insurance and regulations of this state. Responses to requests for information by the Superintendent should be made not less than 15 business days. The Superintendent is authorized, after notice and hearing, to levy a civil penalty against such person in an amount not to exceed $500 per day for each day beyond the date specified by the Superintendent for response, but in no event will such penalty exceed $10,000. In the event the Superintendent levies five separate civil penalties against any one person within five years for failure to comply with this section, the Superintendent is authorized, after notice and hearing, to levy an additional civil penalty against not to exceed $50,000. The Superintendent is also authorized to levy additional civil penalties not to exceed $50,000, after notice and hearing, against such person for every five subsequent violations of this section within a five year period. Any licensee may surrender his or her license in lieu of payment of any civil penalty imposed by the Superintendent. Certificate of Authority (1102) - Solution The certificate of authority is an insurer's license to transact insurance in this state as an authorized insurer. Solvency (307) - Solution It is required that each insurer file annual financial statements for review by the Superintendent to determine the continued solvency of the insurer. Unfair Claim Settlement Practices (2601; Reg. 64, Part 216.3-216.6) - Solution Unfair settlement practices include: Knowingly misrepresenting to a claimant pertinent facts or policy provisions related to the coverages at issue. Failing to acknowledge within reasonable time, communications with respect to claims arising out of its policies. Failing to adopt and implement reasonable standards of prompt investigation of claims arising out of an insurer's policies. Claims must be promptly investigated to determine liability. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims submitted in which liability has become reasonable clear.

Compelling policyholders to institute suit to recover amounts due under its policies by offering less than the amounts ultimately recovered in suit brought by them Appointment of Agent - Solution The appointment must be made 15 days from the date an agency contract is executed, or the first application is submitted Termination of Agent Appointment (2112(d); Regs. 9, 18, 29, Part 20.2) - Solution Every insurer, fraternal benefit society or health maintenance organization or insurance producer or the authorized representative of the insurer, fraternal benefit society, health maintenance organization or insurance producer doing business in this state must, upon termination of a certificate of appointment, file with the Superintendent within 30 days a statement, in such form as the Superintendent may prescribe, the facts relative to such termination for cause. Misrepresentation (2123; Reg. 64, Part 216.3) - Solution It is a violation for an agent to make false or misleading statements or unfair coverage comparisons. False Advertising (2603) - Solution It is a violation to make false or misleading statements regarding the advertising of insurance products. A producing agent may not issue any illustration or statement used to advertise his/her business unless the agent is authorized to transact those lines of authority. Defamation of Insurer (2604) - Solution It is any false or malicious communication, written or oral, that injures another's reputation, fame or character. Individuals and companies both can be defamed. Unethical agents practice defamation by spreading rumors or falsehoods about the character of a competing agent or the financial condition of another insurance company. Both of these actions are considered illegal. Unfair Discrimination (2606-2608, 2612) - Solution Neither agents nor insurance companies are permitted to discriminate against perspective insureds. This means that a person cannot be given a different rate for coverage than another person in identical circumstances. They may not discriminate against a person solely because of an applicants' race, religion, occupation, where they live or their financial status.

Rebating (2324, 4224) - Solution Rebating occurs if the buyer of an insurance policy receives any part of the agent's commission or anything of significant value as an inducement to purchase a policy. State regulations are very strict in this respect and are designed to prohibit discrimination in favor of, or against, policyowners. In this state, the practice of rebating is illegal and the following are defined as illegal inducements: Offering, paying or allowing any rebate or other inducement not specified in the policy or any special favor or advantage concerning the dividends or other benefits that will accrue, in order to place, negotiate or renew the policy. Offering, selling or purchasing anything of value not specified in the policy. Offering, paying or allowing any rebate of any premium on any insurance policy or annuity contract. Controlled Business (2103(i)) - Solution The Superintendent may refuse to issue, suspend, or revoke a license if an applicant receives more than 10% of the aggregate net commissions during a 12- month period from insurance sold to a licensee's spouse or other family members or business associates or their immediate family. Sharing Commissions (2121, 2128) - Solution The sharing of commissions with an unlicensed person or entity is prohibited. Fiduciary Responsibility - Solution When someone has a fiduciary duty to someone else, the person with the duty must act in a way that will benefit someone else, usually financially. The person who has a fiduciary duty is called the fiduciary, and the person to whom the duty is owed is called the principal or the beneficiary. License display - Solution an insurance agent or broker must prominently display the license or licenses of the supervising person or persons responsible for that office. While the Insurance Law and regulations promulgated thereunder do not require other insurance agents or brokers in an office to display their licenses, the Department is of the view that it is a good practice for each licensee to do so. Commissions and compensation - Solution A sales commission is a sum of money paid to an employee upon completion of a task, usually selling a certain amount of goods or services. Employers sometimes use sales

commissions as incentives to increase worker productivity. A commission may be paid in addition to a salary or instead of a salary. Termination responsibilities of producer - Solution https://www.nysenate.gov/legislation/laws/ISC/ Aiding Unauthorized Insurer (2117) - Solution Acting for or aiding unlicensed or unauthorized insurers or health maintenance organizations. (a) No person, firm, association or corporation shall in this state act as agent for any insurer or health maintenance organization which is not licensed or authorized to do an insurance or health maintenance organization business in this state, in the doing of any insurance or health maintenance organization business in this state or in soliciting, negotiating or effectuating any insurance, health maintenance organization or annuity contract or shall in this state act as insurance broker in soliciting, negotiating or in any way effectuating any insurance, health maintenance organization or annuity contract of, or in placing risks with, any such insurer or health maintenance organization, or shall in this state in any way or manner aid any such insurer or health maintenance organization in effecting any insurance, health maintenance organization or annuity contract. Producer Compensation Transparency - Solution "Producer Compensation Transparency," requires all New York-licensed producers to offer unrequested information about their compensation to their clients. If a client asks for more information, the producer must make a second highly detailed disclosure. Cyber Security Requirements for Financial Services Companies (Reg 23 ) - Solution Is designed to promote the protection of customer information as well as the information technology systems of regulated entities. This regulation requires each company to assess its specific risk profile and design a program that addresses its risks in a robust fashion. Senior management must take this issue seriously and be responsible for the organization's cybersecurity program and file an annual certification confirming compliance with these regulations. A regulated entity's cybersecurity program must ensure the safety and soundness of the institution and protect its customers.

Fair Credit Reporting Act (FCRA) - Solution federal law that regulates the collection of consumers' credit information and access to their credit reports. It was passed in 1970 to address the fairness, accuracy, and privacy of the personal information contained in the files of the credit reporting agencies. Workers Compensation - Solution Eligibility - All work injuries that occur during the course of work are covered under New York workers' compensation law. New York, like most states, also covers occupational diseases, which are illnesses that arise during the course of employment. Typical occupational diseases include asbestosis and hearing loss. Industrial (work-related) injuries can include bone fractures, sprains, burns, cuts, amputations, and other injuries that cause immediate harm. If your injury requires more than simple first aid, and it occurred in the course of your employment, you likely have a workers' compensation claim. Activities that happen outside the scope of your employment, such as commuting to and from work, are not covered. In other words, injuries or diseases arises from these activities do not give rise to a workers' compensation claim. Benefits - If you have an allowed workers' compensation claim, you will begin receiving workers' compensation benefits immediately. Your employer's workers compensation insurance carrier will pay medical bills for treatment related to your industrial injury. If you are unable to work due to your work-related injury or occupational disease for more than seven days, your employer's workers' compensation insurance carrier will begin payment of cash benefits to compensate for your lost wages. These temporary disability benefits equal two-thirds of your average weekly wage, multiplied by the percentage of your disability. Cash benefits are subject to a weekly maximum established by the state each year. As of July 1, 2017, the maximum benefit is $870.61 per week. These payments are usually paid every other week. The insurance carrier will continue to make these payments to you until your workers' compensation claim is closed or you are able to return to work, whichever occurs first. If your doctor f Death Benefit (face amount/face value/coverage) - Solution The amount paid to beneficiaries when a policyholder dies.

Beneficiary - Solution The person(s) who receive the death benefit. They are selected by the policyholder. Premium - Solution The regular payment made toward the insurance policy. These are typically monthly. Cash value - Solution A tax-deferred savings account that are included in permanent life insurance policies. The cash value is basically an investment account inside of your straight life insurance policy. This account will grow according to a guaranteed rate over the course of the policy length. The rate of return will typically be large enough that when you turn 100 the cash value account will equal the value of the death benefit. At any point, you can use the cash value account for a variety of reasons, including: Universal life insurance - Solution has a cash value, just like a whole life insurance policy. Your premiums go toward both the cash value and the death benefit. But there's a twist: the policyholders of universal life policies can change the premium and death benefit amounts without getting a new policy. Basically, although you have a minimum premium to keep the policy in force, you can use the cash value to pay the premium. That means if you have enough money in the cash value, you can use that to skip premium payments entirely, letting the accrued interest do the work. the cash value of a universal life insurance policy has an interest rate that's sensitive to current market interest rates. If the interest rate being credited to your policy decreases to the minimum rate, your premium would have to increase to offset the reduced cash value. You can also adjust the death benefit within limits outlined in your policy. Increasing it may subject you to further underwriting, while there may be fees to decrease it. If your financial situation changes, the ability to change the death benefit amount within your policy is appealing. While this can be done with term life insurance policies, this feature is one of the main selling points of a universal policy. Variable Life Insurance - Solution similar to whole life insurance in that they both have a cash value, but the functions of the cash values are quite different.

With a whole life insurance policy, the cash value component is a savings account. That's why, although the growth might be small compared to other investment options, there is a guaranteed minimum rate. It also includes dividend payments from the life insurance company. A variable life insurance cash value, though, is more akin to investing. The money paid into it goes into a series of mutual fund-like sub-accounts where you can get some decent growth, but you can also lose money depending on the market. The cash value is more or less placed in the stock market. While this makes variable life insurance policies a better investment option than whole life insurance policies - the potential for higher, tax-deferred growth makes it a "super-IRA" - you can only invest in the sub-accounts available through your policy. That means you don't get to choose from the wide variety of mutual funds that are available on the open market. As an investment vehicle, variable life insurance policies provide tax-free money to beneficiaries during the time that the policyholder is alive. Once that person dies, however, that money is retained by the insurance company. Like other types of life insurance, a variable policy can help cover funeral and end-of-life expenses. Variable universal life insurance - Solution If you think variable universal life insurance is just some aspects of universal and variable life insurance policies mashed together...well, you're mostly right. A variable universal life insurance policy takes the best (or worst, depending on how you look at it) of the other two policies: you can adjust the premium and death benefit amount while investing the cash value in the policy's cash value. But variable universal life insurance also comes with many of the same elements as the other two. Again, this policy is more complicated than most people need, and it isn't your best investment or insurance option. Simplified issue life insurance - Solution Typically when you apply for life insurance, you go through a paramedical exam as part of the underwriting process so the insurer can find out how risky you are to insure. Ultimately, it helps them set your premium rate. With simplified issue life insurance, though, you can skip the medical exam. That's the "simplified" part of this policy type. Known as a "no exam policy," a simplified issue policy gets you life insurance without the health exam. You're not out of the woods completely, though. You don't need to go through the medical exam, but you do need to fill out a health

questionnaire, answering questions like if you smoke, have been diagnosed with serious illnesses, and so on. People in poor health may have to take the exam if they have too many health issues, and they could flat-out be denied by insurers. For those healthier people in a hurry, though, it might be a good option to skip scheduling the paramedical exam, which adds some time to the underwriting process. But with this benefit comes a major financial drawback. With a term life insurance policy, your premium rates are directly tied to your chances of outliving your policy. If you're young and/or healthy, you'll pay lower rates than someone who is older and/or in poor health. That's why the medical exam is important. Since there is no medical exam with simplified issue life insurance, the policies tend to be more expensive than term policies. Guaranteed issue life insurance - Solution Guaranteed issue life insurance takes the concept of simplified issue life insurance - forgoing the health exam - and takes it a step further in that you don't have to answer any questions about your health, either. As long as you can pay the premium, the insurer will cover you, needing only your age, sex, and state of residence. That makes it appealing for older people, whose declining health makes it prohibitively expensive to get coverage with another insurance types. Guaranteed issue life insurance is useful for elderly applicants, but others can likely get more life insurance coverage at a lower cost with a different policy type. Just like with simplified issue life insurance, the lack of insight into your health conditions that a medical exam and interview would provide means that you're going to be paying more for coverage. Final expense insurance - Solution Final expense insurance is a unique type of policy. It covers the cost of anything associated with your death, whether its medical costs, a funeral, or cremation - whatever your literal final expenses are. It's usually only issued to people of a certain age and the policy is valid up to a certain age. Like other permanent life insurance policies, there's a cash value that can grow over time. Final expense insurance is a simplified issue policy in most cases, but if you don't pass the health questionnaire you'll be placed in a guaranteed issue policy instead.

Final expense insurance is usually attractive to older people who don't have other life insurance coverage (maybe they outgrew their term life policy) and don't have enough savings to pay for their own funeral, which can cost upwards of $8,000.Coverage is usually for small amounts, from $5,000 to $25,000, to cover those expenses. It's good if you don't have another way to pay for your funeral and don't want to burden your family with the costs. However, it has the same drawbacks as guaranteed issue life insurance: higher life insurance premiums for relatively low coverage amount. If you or your family are able to pay for a funeral through other means, that's your best bet. Term Life Insurance - Solution Term life insurance lasts for a set number of years before it expires. If you die before the term is up, a set amount of money, known as the death benefit, is paid to your designated beneficiary. Term life is considered the simplest, most accessible insurance policy. When you make your payments (known as your premium), you're simply paying for the death benefit that goes to your beneficiaries in the event of your death. The death benefit can be paid out as a lump sum, a monthly payment, or an annuity. Most people elect to receive their death benefit as a lump sum. Term life insurance policies are more affordable than other types of life insurance policies, usually costing between $30-40 a month for a 30-year, $500,000 policy for healthy people in their 20s and 30s. They expire at the end of the term, which can last up to 30 years. Level Term Life Insurance - Solution A term life policy guaranteed to have the premium remain the same for the duration of the contract. This is what most people refer to as term life. Purchased for a set number of years (5, 10, 30 years, for example), the premium and the death benefit remains the same (level) until the end of the term. Many of these policies can be converted to a permanent policy at the end of the term, or can be canceled at any time. Annual renewable term life insurance - Solution Annual renewable life insurance works just like term life policies that have 10-, 20-, and 30-year terms. If you die while the term is active, your beneficiaries get a death benefit from the carrier. However, the term in an annual renewable term policy only lasts one year, after which it's renewed for another year, for a set number of years.

Traditional term life insurance policies typically have a guaranteed level premium, meaning that your premium rates at the time of purchase are the same throughout the term of the policy. (Guaranteed level premium policies average out the cost over the life of the policy.) Your premiums will only go up if you let your policy lapse and try to purchase the same policy again. Convertible term - Solution A convertible life insurance policy is simply a term life insurance policy that can convert to a permanent life insurance policy. Here's how it works: Let's say a 35-year-old man buys a 30-year convertible term life insurance policy. At age 45, he decides to convert that policy to a permanent life insurance policy. He will pay a substantially larger premium as a result but have coverage for the rest of his life. Most convertible policies have a time limit to convert, usually 10 years. Often, when the conversion option is close to expiring, life insurance companies let policyholders know that time is running out to execute this option. level-premium term insurance - Solution Level-Premium Insurance is a type of life insurance in which premiums stay the same price throughout the term, while the amount of coverage offered increases. Premium payments often start at a higher level than policies with similar coverage but are ultimately worth more than competitors as policyholders experience increased coverage over time at no additional expense. Terms are usually 10, 15, 20 and 30 years, based on what the policyholder requires. Whole Life Insurance - Solution considered a permanent life insurance policy because if does not expire. It has a death benefit but also a cash value, which is a tax-deferred savings account that is included in the policy. The cash value accrues interest at a predetermined fixed rate. Each month, a certain portion of your premium will go into the cash value of the policy, which offers a guaranteed rate of return (The exact amount that goes into savings is determined by your individual policy). The policy's cash value grows over time. Due to the fees and the extra feature, a whole life insurance policy can cost five to 15 times as much as a term life policy (for the same death benefit amount).