Texas Life & Health Insurance Regulations, Exams of Personal Health

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TEXAS LIFE & HEALTH INSURANCE.

"SECTION 1- TEXAS COMMON LAW"

) A person appointed by an insurer to solicit or sell insurance on their behalf in this state is known as a(n): A- Adjuster B- Agent C- Broker D- Solicitor - ✔✔B- Agent ) Texas resident agents must complete _____ hours of continuing education every two years. A- 0 B- 40 C- 24 D- 20 - ✔✔C- 24 ) Which of the following is NOT prohibited under the Unfair Practices section of insurance law: A- Making false oral statements about the financial condition of a person which are calculated to injure that person B- Readjusting group premium rates based on loss or expense experience

C- Misleading or false statements about dividends previously paid on an insurance policy D- Discriminating between insurance applicants on the basis of gender - ✔✔B- Readjusting group premium rates based on loss or expense experience ) An insurance company can have rates based on: A- Gender B- Ethnic background C- Religion D- Nationality - ✔✔A- Gender ) Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as: A- Defamation B- Rebating C- Misleading advertising D- Coercion - ✔✔D- Coercion ) Shareholders own a ___________ insurer: A- Stock B- Fraternal C- Reciprocal

D- Mutual - ✔✔A- Stock ) An insurance company authorized to sell insurance in Texas, but with their home office in Illinois, is called a/an: A- Alien company B- Domestic company C- Foreign company D- Surplus company - ✔✔C- Foreign company ) Regarding Claims Methods and Practices, all of the following are true EXCEPT: A- Insurers cannot deny unsubstantiated claims B- Insurers must conduct a reasonable investigation prior to denial of a claim C- Insurers may settle a claim by attempt to reach a compromise D- Insurers cannot require insureds to pay the costs of a claims investigation - ✔✔A- Insurers cannot deny unsubstantiated claims ) All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT: A- It applies to credit reports ordered in connection with insurance, banking and employment B- Insurers are not required to give customers a copy of the report C- Reports may be sent to anyone who requests one

D- The customer must be notified if adverse action is taken as a result of a report - ✔✔C- Reports may be sent to anyone who requests one ) No licensee whose license has been denied, refused or revoked can file another licensing application with the Commissioner for at least ____ years: A- 5 B- 4 C- 2 D- 3 - ✔✔A- 5 ) All could be considered rebates EXCEPT: A- Employment B- Dividends C- Securities D- Commissions - ✔✔B- Dividends ) To become a Texas insurance agent, you must: A- Pass an exam B- Have resided in Texas for at least one year C- Post a bond D- File your personal financial statement with the Commissioner - ✔✔A- Pass an exam

) When the applicant passes the exam and qualifies in all other respects except for the fingerprint check by the FBI, the Department of Insurance will issue a license called: A- Conditional B- Retroactive C- Temporary D- Reciprocal - ✔✔A- Conditional ) A Texas resident agent seeking to sell insurance to customers in another state needs: A- A non-resident license in that state B- A Foreign agents license in that state C- A Certificate of Authority in that state D- A resident license in that state - ✔✔A- A non-resident license in that state ) Which of the following statements regarding temporary licenses is FALSE: A- They may be renewed B- They may be issued without exam C- They are valid up to 90 days D- They require 40 hours of license training - ✔✔A- They may be renewed

) When the Commissioner finds, after a hearing, that a person has intentionally violated an insurance regulation, what is the maximum fine that may be levied: A- $25, B- $ C- $5, D- $2,500 - ✔✔A- $25, ) If an agent is convicted of a felony in this or another state, who do they have to notify: A- The National Association of Insurance Commissioners (NAIC) B- The Federal Department of Insurance C- The local Agent's Association D- The State Department of Insurance - ✔✔D- The State Department of Insurance ) Unfair claims practices will be assumed to be intentional if: A- They are reported to an insurer by the policyholder B- They occur with such frequency as to indicate a general business practice C- The licensee fails to promptly submit a required report

D- The licensee has been reported for a similar practice during the preceding three years - ✔✔B- They occur with such frequency as to indicate a general business practice ) Circulating deceptive sales material to the public is what type of Unfair Trade Practice: A- Defamation B- Misleading advertising C- Misrepresentation D- Coercion - ✔✔B- Misleading advertising ) Conditions for a corporate agency seeking a Texas insurance agent's license include: A- It must sell all lines of insurance B- All active corporate officers must have individual agent's licenses C- It must be a domestic corporation D- All salaried employees must be licensed - ✔✔B- All active corporate officers must have individual agent's licenses ) Sharing commissions is legal if: A- The other party also has an insurance license B- The other party is licensed for the same lines of insurance you are C- The other party has permission of your client

D- The other party represents a life company and you represent a P&C company - ✔✔B- The other party is licensed for the same lines of insurance you are ) What is the maximum period of time the Commissioner may revoke your agent's license: A- Two years B- There is no maximum time period C- 2 months D- Six months - ✔✔B- There is no maximum time period ) Your license will expire every ____ years. A- 3 B- 4 C- 2 D- 5 - ✔✔C- 2 ) The maximum monetary penalty for an agent who violates an insurance law, rule or order is: A- $5, B- $5, C- $25, D- $0,000 - ✔✔C- $25,

) If a license is revoked, the licensee shall NOT be eligible for a new license: A- Ever again B- Except by special permission of the governor C- For at least 5 years D- For six months - ✔✔C- For at least 5 years ) Defamation is: A- Concealment B- False advertising C- Misrepresentation D- Misstating financial condition - ✔✔D- Misstating financial condition ) insurable interest must exist on property insurance: A- At time of loss B- At time of application C- At time of policy delivery D- It need not exist - ✔✔A- At time of loss ) Which of the following indicates free competition is occurring: A- All insurers are charging the same rates

B- All policy forms contain exactly the same coverage C- There are substantial differences between rate levels of various insurers D- Commissions are fixed at the same level by all insurers - ✔✔C- There are substantial differences between rate levels of various insurers ) All are true about insurance licensing EXCEPT: A- All accounts of a terminated agent must be non-renewed by the insurer B- You must be at least l8 in order get a license C- A temporary license is available up to three months in certain circumstances D- Agents represent the insurance company - ✔✔A- All accounts of a terminated agent must be non-renewed by the insurer ) The Insurance Commissioner shall examine each established, authorized insurer in Texas no less than: A- Once every five years B- Every year C- Once every two years D- Once every three years - ✔✔A- Once every five years ) How long does an agent whose license has been revoked have to wait before they can reapply for a new license:

A- 2 years B- 3 years C- year D- 5 years - ✔✔D- 5 years ) What is the maximum time a Texas insurance agent's license may be issued for: A- Six months B- One year C- Two years D- Four years - ✔✔C- Two years ) An agent who procures a license for the principal purpose of obtaining insurance for themselves, for family members or employees, violates the regulations prohibiting: A- Fraud B- Controlled business C- Captive business D- Exclusive business - ✔✔B- Controlled business ) Which of the following is NOT considered an unfair practice: A- Requiring any person to buy insurance through a specific insurer as a condition to lending money for the purchase of property

B- Paying dividends to policyholders out of a surplus accumulated from participating policies C- Charging a higher premium than the one filed D- Using misleading advertising - ✔✔B- Paying dividends to policyholders out of a surplus accumulated from participating policies ) Temporary licenses issued in Texas generally: A- Are renewable for a like period B- Expire in 90 days C- None of the above is true D- Expire in one year - ✔✔B- Expire in 90 days ) Under the Unfair Claims Settlement Practices Act, which of the following is NOT unfair: A- Attempting to settle based upon an application that has been altered B- The denial of an unsubstantiated claim C- Failure to respond promptly on claims communications D- Refusing to pay claims without conducting a reasonable investigation

• ✔✔B- The denial of an unsubstantiated claim ) The type of government primarily concerned with the regulation of insurance and insurance companies is: A- County government

B- Federal government C- City government D- State government - ✔✔D- State government ) Making false or malicious statements about the financial condition of an insurer or agent is what type of Unfair Trade Practice: A- Defamation B- Intimidation C- Coercion D- Deceptive advertising - ✔✔A- Defamation ) An insurer must acknowledge receipt of a Notice of Claim within _____ days: A- 20 B- 0 C- 5 D- 30 - ✔✔B- 0 ) Who might receive dividends from a mutual insurer: A- Policyholders B- Stockholders C- Subscribers

D- Shareholders - ✔✔A- Policyholders ) Insurers applying for authority to do business in Texas are required to do all of the following, EXCEPT: A- Show evidence of sufficient legal reserves to handle claims B- File rates C- File forms D- Maintain their home office in Texas - ✔✔D- Maintain their home office in Texas ) A mortgage company may do all of the following EXCEPT: A- Buy coverage for you if you fail to do so as required by agreement B- Recommend an insurance company C- Require you to buy insurance from an authorized company D- Require you to buy insurance from them - ✔✔D- Require you to buy insurance from them ) An independent auto insurance agent's contract is terminated by the insurer he represents. How are his clients affected: A- They may stay with the terminated agent and receive customary services B- They must transfer to another agent of the company C- They must apply for coverage through the Assigned Risk Pool

D- They must insure elsewhere - ✔✔A- They may stay with the terminated agent and receive customary services ) To obtain a Texas license, you must do all EXCEPT: A- Be 8 years of age B- Complete pre-license training C- Be fingerprinted D- Pass an exam - ✔✔B- Complete pre-license training ) If an agent's license is suspended or revoked, what happens to their accounts: A- They are automatically non-renewed B- They continue in force C- They are cancelled immediately D- They are assigned to another insurer - ✔✔B- They continue in force