Insurance Laws in Wisconsin and Insurance Regulation Exam Questions And Answers, Exams of Insurance law

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Insurance Regulation Exam Questions

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Is an insurance contract is valid even if sold or serviced by an unlicensed intermediary? - correct answer ✅Yes Intermediary - correct answer ✅A person who assists in placing insurance, advise, negotiate, and solicit. (PANS) What are the requirements to get your life insurance license? - correct answer ✅18 years old, pass licensing exam, complete application, pay fees, and be of good character. Does Wisconsin mandate sponsorship by an insurance company to get licensed? - correct answer ✅No Insurance Agent - correct answer ✅Intermediary who acts on behalf of the insurer he/she represents. Re-insurance Broker - correct answer ✅Person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance on behalf of an insurance company.

Insurance Regulation Exam Questions

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Insurance Broker - correct answer ✅Intermediary who acts in the procuring of insurance on behalf of an applicant for insurance or an insured. Intermediary Corp./Partnership - correct answer ✅At least one executive must have an insurance license for a Corp. to get a license. Re-insurance Manager - correct answer ✅Any person who has the authority to bind, or manages all or part of the assumed re-insurance business of a re-insurer and acts as an agent for the re-insurer. Surplus Lines Agent/Broker - correct answer ✅Licensee is able to place insurance with unauthorized insurers. Up to $100,000 bond and collects 3% tax paid by policyholders while not commingling funds. Managing General Agents - correct answer ✅Manages all insurance business, acts as an agent, Produces and underwrites, and adjusts or pays claims in excess of 3%.

Insurance Regulation Exam Questions

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Life Settlement Broker (Viatical Settlement Broker) - correct answer ✅A person who receives a fee or commission to attempt to negotiate settlements between a life insurance policyholder/certificate holder and one or more life settlement providers. Must maintain professional liability insurance. Temporary Licenses - correct answer ✅Given to the personal representative of the deceased, mentally/physically disabled, or active duty member. To give time for the sale of the goodwill of a business, for recovery of the business, and to provide training/licensing of new personnel. How long are temporary licenses good for? - correct answer ✅Up to 12 months. How does the Commissioner assess trustworthiness? - correct answer ✅Criminal background checks How does the Commissioner assess competence? - correct answer ✅Licensing exams How long are exam scores valid for? - correct answer ✅30 days

Insurance Regulation Exam Questions

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Within 1 year of taking the examination, how many preliminary educational hours must be completed? - correct answer ✅20 hours What are the various lines of insurance that can be licensed? - correct answer ✅Life insurance, accident/health insurance, property insurance, casualty insurance, and personal lines insurance. How long must an intermediary keep records? - correct answer ✅3 years. How soon must the intermediary notify the commissioner of a change of address, business or residence? - correct answer ✅Within 30 days. Disposal of Records - correct answer ✅"Dumpster Diving Law": all records containing personal information must be shredded, erased, modified, or any other way to get rid of the possible access by unauthorized people.

Insurance Regulation Exam Questions

And Answers

What is the fine for financial institutions who violate the disposal of records rule? - correct answer ✅Fined up to $ What if an unauthorized person obtain and intends to used disposed records? - correct answer ✅Fined up to $1000, imprisonment for up to 90 days, or both. How much and when does an agent have to pay in order to stay licensed? - correct answer ✅$35 for resident ($70 for nonresident) and biennial (every 2 years). What significant changes must you report to the commissioner within 30 days? - correct answer ✅Changes in members of partnership, management powers, status/relationships, and from resident to nonresident or vice versa. Do you have to notify the commissioner about felony or misdemeanor convictions? - correct answer ✅Within 30 days

Insurance Regulation Exam Questions

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How many CE credits must intermediaries carrying major line licenses attend? - correct answer ✅24 hours, 3 hours being in ethics When must the CE be completed? - correct answer ✅Last day of the month of the agent's birth How many days prior to the reporting date does an agent need to be notified that they (agent) failed to meet CE requirements? - correct answer ✅60 days What line of insurance license is exempt from CE? - correct answer ✅Limited-lines license How long does an intermediary have to reinstate their licenses without having to complete the pre-licensing education and exam again? - correct answer ✅1 year What reasons would cause the intermediary not able to reinstate their licenses for 5 years? - correct answer ✅Repeatedly violating insurance statutes, fails to pay child support, delinquent taxes, and etc.

Insurance Regulation Exam Questions

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Disciplinary Period - correct answer ✅Revocation or surrendered license begins on the date of termination of license of the intermediary and ends on the date on which new license is issued. Disciplined Person - correct answer ✅An agent who license was revoked or surrendered under stipulation. (affiliates, any estate, owns 10% in stock, and employees of the disciplined) Civil Penalty - correct answer ✅Non-criminal restitution for wrongdoing usually resulting in a fine. What happens when a person violates an effective order? - correct answer ✅Required to pay double the amount of any profit gained from violation. What happens if a person violates an insurance statue? - correct answer ✅Must pay the State up to $1000 per each violation. What happens if a person violates an order specifically to them? - correct answer ✅Requires them to pay the State up to $1000 per each violation.

Insurance Regulation Exam Questions

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Firm - correct answer ✅Person that markets insurance but does not include an insurer. How much can a person be fined in Wisconsin for violating an insurance statute or State law? - correct answer ✅Up to $5,000, 3 years in prison, or both. How much would a corporation have to pay if the violate a insurance statue or State law? - correct answer ✅Up to $10,000. Commissioners Powers - correct answer ✅Administer, interpret, and enforce the insurance laws of Wisconsin. Ted Nickel is the commissioner of Wisconsin. Who makes the insurance laws? - correct answer ✅The Wisconsin legislature. Commissioner Duties - correct answer ✅Adopt standards set by the National Association of Insurance Commissions (NAIC), issue orders, require all business

Insurance Regulation Exam Questions

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information (not personal), prescribe reports/forms, prescribe minimum standards, and issue declaratory orders. How often is the commissioner required to examine domestic insurers?

correct answer ✅Every 3 years or more often if necessary. Who pays for the cost of examinations by the commissioner? - correct answer ✅The examinees, annual billing (March 1st), can't exceed 1% of net premiums earned, or billed later. How soon after the examinee has been billed for the exam must they pay it back? - correct answer ✅10 days If a hearing is issued WITHOUT a hearing, any aggrieved by the order can demand a hearing within how many days? - correct answer ✅ 30 If a person does not comply with an order issued withing 2 weeks after the commissioner has given the notice, the commissioner can fine how much? - correct answer ✅Up to $5,

Insurance Regulation Exam Questions

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After the original hearing and final order is issued, an aggrieved person may request a re-hearing how many days later? - correct answer ✅20 days Insurance Security Fund - correct answer ✅Created to protect policy-owners, insureds, beneficiaries, and anyone entitled to payment under an insurance policy from excessive delay or liquidation of the insurer. What is the maximum obligation on a single risk, loss, or life that the Fund can pay? - correct answer ✅$300, Is the insurer liable for the acts of its agents? - correct answer ✅Yes. What they do is a reflection of the insurance company. What does prompt or promptly means from a receipt of a communication concerning a claim? - correct answer ✅10 days

Insurance Regulation Exam Questions

And Answers

Can agents share commissions? - correct answer ✅Yes, only if they have the same licenses. Controlled Business - correct answer ✅Any coverage written on a producer's own life, health, or property. (immediate family and business associates) Proper Exchange of Business - correct answer ✅Forwarding of insurance business from one agent to another when the forwarding agent is not able to place business with any of the companies for which the agent is listed due to capacity problems. How many insurance risks with a single insurer would make the agent exceed the occasional exchange of business? - correct answer ✅More than 5 per calendar year How many insurance risks with all insurers would make the agent exceed the occasional exchange of business? - correct answer ✅More than 25 per calendar year Fiduciary Capacity - correct answer ✅Funds received must be promptly accounted for and paid to the insured, insurer, or producer as entitled.

Insurance Regulation Exam Questions

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Misrepresentations - correct answer ✅Untrue, misleading because of incompleteness, and using other businesses Indicia. False Advertising - correct answer ✅Advertisements that include untrue, deceptive, or misleading statements that apply to the business of insurance or anyone who conducts it. Rebating - correct answer ✅Any inducement offered to the insured in the sale of insurance products that is not specified in the policy (illegal). Churning - correct answer ✅Replacing insurance policies for the sole purpose of making commissions. Twisting - correct answer ✅Misrepresentation or incomplete or fraudulent comparison of insurance policies that persuades an insured/owner, to their detriment, to cancel, lapse, switch, or take out a policy. (Illegal)

Insurance Regulation Exam Questions

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Inducement - correct answer ✅Special favors, stocks/bonds, and anything in value. Discrimination - correct answer ✅Illegal act on individuals within the same class or within the same life expectancy, except on the basis of classification to the degree of risk involved. Examples: sex, race, marital status, origin, geographic location, etc. Coercion - correct answer ✅To require, as a condition to a loan, that the applicant purchase insurance from a specific insurer. Is everyone free to choose their own insurer? - correct answer ✅Yes Can you charge extra for gas, working late-fees, and other charges for protection? - correct answer ✅No Influencing employers in insurance - correct answer ✅This act is illegal, no intermediary/employee may encourage, persuade, or attempt to influence any employer to refuse

Insurance Regulation Exam Questions

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employment or terminate employment of any person in connection with an insurance contract. Are you allowed to use an official position such as government or civil service to have a person purchase an insurance policy from a specific insurer? - correct answer ✅No Indicia - correct answer ✅Any marks, tokens, materials from an insurance company they used to work at that they are pretending to represent in order to sell insurance. Full Disclosures when Soliciting - correct answer ✅agent's name, name of company, insurance being sold, name of insurer, and types of insurance. Home Solicitation Selling - correct answer ✅Personal solicitation of insurance by an agent at the residence or place of business of the buyer (away from agent's place of business).

Insurance Regulation Exam Questions

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Collusion - correct answer ✅When an agent and a policyholder or insured act together to deceive or defraud the insurer. Warranty - correct answer ✅Statement made in an insurance application that is the absolute truth. (validity of the contract depends on it) Affirmative Warranty - correct answer ✅Express or implied positive representation that affirms an existence of a fact at the time the policy was entered into. Promissory Warranty - correct answer ✅A warranty in which certain things will be done or not done after the policy takes effect. Binders - correct answer ✅Temporary proof of policy contract and are good for 30 days, as well as oral contracts. How many days must the insurer notice the insured about rescinding their policy due to fact constituting this decision? - correct answer ✅Within 60 days of acquiring knowledge or within 120 days if they need additional medical information.

Insurance Regulation Exam Questions

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When must a copy of the application be given to the insured? - correct answer ✅15 working days after receipt of the request. Incorporation by Reference - correct answer ✅Making one document apart of another. Certificate of Insurance - correct answer ✅Outlines the contract provisions and benefits. What are some reasons for midterm cancellation? - correct answer ✅Failure to pay, material misrepresentation, substantial change in risk, sustained breaches of contract, and attainment of age specified in contract that wouldn't be covered. When does the notice of midterm cancellation have to be given to the policyholder? - correct answer ✅10 days prior When does the notice of anniversary cancellation have to be given policyholder? - correct answer ✅60 days prior

Insurance Regulation Exam Questions

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When does the notice of non-renewal need to be given to the policyholder? - correct answer ✅60 day prior When does a notice of proof of loss claim have to be provided to an insurer? - correct answer ✅Within 1 year. How many days does an insurer have to pay a claim? - correct answer ✅30 days before coming overdue. What happens to overdue payments? - correct answer ✅All overdue payments are charged simple interest at the rate of 12% per year. Gramm-Leach-Bliley Act (GLB Act) - correct answer ✅Protects personal information. Fair Credit Reporting Act - correct answer ✅Procedures that consumer-agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used. (protects consumers)

Insurance Regulation Exam Questions

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Consumer Reports - correct answer ✅Include written/oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources. Investigative Consumer Reports - correct answer ✅Talk to people about you and ask about your character, reputation, and habits. (Associates, friends, and neighbors provide the data) What happens to a person who willfully violates the FCRA? - correct answer ✅Penalty up to $2, Does a consumer have the right to know what is on that report? - correct answer ✅Yes Prohibited Information to request from the Consumer Reports - correct answer ✅bankruptcies more than 10 years old, civil suits, records of arrest or convictions of crimes, or any other negative information that is more than 7 years old. What happens to people who knowingly make false material statements? -

Insurance Regulation Exam Questions

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correct answer ✅Up to 10 years of prison. If activity jeopardizes the security of the insurer, then up to 15 years. 1033 Waiver - correct answer ✅Used to get back into the insurance industry after previous violation. Needs to be granted by the Commissioner. Every Producer must maintain a place of business in this state.. A. And maintain an approval rating of 60% B. That is approved by the Department. C. Accessible to the public. D. With the exception of resident licensees - correct answer ✅C Under what circumstance may an insurer cancel or refuse to renew an insurance policy based upon the past criminal record of the insured? A. Only upon conviction of an offense directly related to the risk insured B. Only upon conviction of an offense for which the insured had been previously convicted in the past 5 years C. By giving the insured 45 days prior written notice of the refusal or cancellation along with the specific reason

Insurance Regulation Exam Questions

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D. Only with the written consent of the Commissioner - correct answer ✅A. According to the rule of readability of insurance policies in this state, what is a required minimum score on the Flesch reading ease test for Medicare supplement policies? A. 30 B. 40 C. 50 D. 60 - correct answer ✅C Which of the following would be considered an illegal inducement to purchase insurance? A. Mailing an agency brochure to a prospective client B. Listing the insurance companies the agency represents in a letter C. Inviting prospective clients to the grand opening of the producer's new office D Confirming future dividends in a life insurance proposal - correct answer ✅D

Insurance Regulation Exam Questions

And Answers

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? A. 7 days B. 10 days C. 3 days D. 5 days - correct answer ✅5 days If an insurer requires that an applicant or insured undergo a physical examination in order to obtain or continue coverage, who must pay the cost of such examination? A. Applicant B. Insurance Producer C. Insurer D. Insured - correct answer ✅C