West Virginia Insurance Laws and Exam Questions: Life Insurance Policies and Regulations, Exams of Insurance law

Download West Virginia Insurance Laws and Exam Questions: Life Insurance Policies and Regulations and more Exams Insurance law in PDF only on Docsity! WV Life Insurance Laws and Rules 100% correct solutions 2 combined exams West Virginia Laws and Rules Pertinent to Insurance Examination of Records - ANS; The Commissioner can examine anyone in the business of insurance in the state at anytime. A company shall be examined every 5 years. Notice and Hearing - ANS; the Commissioner may call and hold hearings for any purpose deemed necessary. Insurance Commissioner - ANS; the commissioner may conduct investigations or examinations whenever deemed necessary, subpoena the witnesses to testify. cease and desist order - ANS; the commissioner may issue this order to any person committed of an unfair or deceptive act. Insurance Transaction - ANS; solicitation or inducement to purchase insurance, negotiations towards the sale of insurance, executing a contract of insurance, advising on coverages and claims. Producer - ANS; an applicant for a West Virginia insurer must be: 18 years of age, not committed any act that is grounds for suspension etc., completed a pre licensing course, passed the state exam, submit the app with fees, not intended to use the license primarily for controlled business, deemed trustworthy and competent. Continuing Education - ANS; must complete 24 hrs of continuing education every 2 years to keep their license. 3 of these hours are to be in ethics. Fingerprinting - ANS; The Commissioner requires all applicants be fingerprinted and background checked before obtaining their ins. license. Free Look Period - ANS; In WV, insurers must provide a minimum of 10 days for a free look period upon policy delivery. Commingling - ANS; a producer who has combined premiums collected with personal funds has done this act, and it is illegal Domestic Insurance Company - ANS; A company that resides and is incorporated under the laws of the state in which its home office is located. Foreign Insurance Company - ANS; a company whose home office is in ANOTHER state. Alien Insurance Company - ANS; An insurance company incorporated outside the country Authorized Insurer - ANS; a qualified insurance company Unauthorized Insurer - ANS; An insurance company that has not applied, or has applied and been denied a Certificate of Authority. Stock Insurance Company - ANS; an insurance company that is owned and controlled by stockholders. Mutual Life Insurance Companies - ANS; an insurance company owned and controlled by its policyowners. Misrepresentation - ANS; it is illegal to misrepresent any fact about an insurance policy, such as policy terms, benefits, value and cost. WV Life and Health Guaranty Assoc. - ANS; provides claim payments of admitted, insolvent (financially incapacitated) insurers. long-term care insurance - ANS; Insurance coverage that provides a daily monetary benefit to people who are chronically ill and who require living assistance either at home or in a residential facility, 30 day free look period is required for this policy. Notice to buyer - ANS; must be on the first page of the long term care policy. Outline of Coverage - ANS; Required for Long Term Care insurance. Considered a summary of coverage. Shopper's Guide - ANS; each prospective client is entitled to receive this guide. Limits and Exclusions - ANS; these are NOT permitted on the basis of Alzheimer's and Dementia. Model Health Plan - ANS; For "uninsurable" people of WV. Which of the following permits an insurance company to transact business in WV? - ANS; Certificate of authority The Boarding of Insurance Agent Education: - ANS; develops the continuation education program and submits the proposal to the insurance commissioner for approval Producer Appointments - ANS; if cancelled, notify the Commissioner within 15 days Commingling - ANS; A producer who has combined premiums collected with personal funds has engaged in commingling, which is a prohibited act. The West Virginia Insurance Commissioner attains office in which of the following ways? - ANS; Gubernatorial appointment (Governor of WV) An offer of life insurance by an insurance company in West Virginia to individuals who are personally invited to apply on the basis of the offer is known as what type of solicitation? - ANS; Direct response When a producer is soliciting a client to effect a contract of insurance, the producer is engaged in - ANS; transacting insurance Courses are approvedfor continuing education credit by the - ANS; Insurance Commissioner and the Board of Insurance Agent Education If a producer tells an applicant that an insurance policy is like a share of stock, the producer may be guilty of - ANS; misrepresentation The West Virginia Insurance Commissioner may refuse to renew a producer's license for all of the following reasons EXCEPT - violation of an insurance law - incompetence - filing for bankruptcy - untrustworthiness - ANS; filing for bankruptcy If a producer has been engaged in an administrative action by any government agency, within how many days following the final disposition must the producer report the action to the Insurance Commissioner? - ANS; 30 Which of the following terms defines the authority given to a producer to transact business on behalf of the insurer? - ANS; appointment An insurance company must do which of the following to terminate an producer's appointment? - ANS; Send notice of termination to the Commissioner A certificate of authority does which of the following? - ANS; Permits an insurance company to transact business in West Virginia Which of the following statements is CORRECT about the replacement of one insurance policy with another? - ANS; It is strictly regulated and requires full disclosure by both the producer and the replacing insurance company If the Insurance Department discovers that applicants for an insurance license intend to produce insurance principally on themselves, their family, and their property, which of the following will happen? - ANS; The applicants will not be issued a license Which of the following parties must provide an insured with proper disclosure concerning the replacement of an insurance company? - ANS; The producer who sells the new insurance policy The West Virginia Life and Health Guaranty Association guarantees life insurance death benefits up to - ANS; $300,000 In West Virginia, the Insurance Commissioner has the power to penalize a producer for a violation in which of the following ways? - ANS; A fine, only after a hearing Which activity may result in suspension or revocation of a producer's license? - Writing primarily controlled business - Using the human life value approach - Issuing a conditional receipt - Changing one's business address - ANS; Writing primarily controlled business The conversion period for a terminated employee to convert group life coverage to an individual plan is - ANS; 31 days Which of the following statements is CORRECT about the authority of the Insurance Commissioner to review Accident & Sickness policy forms for use in West Virginia? - ANS; The Commissioner has authority to review these forms if they will be issued for delivery in West Virginia If the West Virginia Insurance Commissioner calls a hearing on a producer's license, the affected producer must be given at LEAST how many days advance written notice? - ANS; 15 days Under West Virginia insurance law, an insured or insurer must ask for a rehearing based on a decision by the Insurance Commissioner within how many days? - ANS; 30 The life insurance and annuity replacement regulation defines replacement as - ANS; exchanging an existing policy for a new policy When an existing life insurance policy is being reissued with a reduction in cash value, the producer must sign the - ANS; Notice Regarding Replacement of Life Insurance or Annuity The Replacement of Life Insurance and Annuities regulation is designed to protect the interest of the - ANS; policyowner At the very least, a company shall be examined once every ___ years by the Commissioner - ANS; 5 When the Commissioner calls a hearing, it will be held within ___ days - ANS; 45 When the Commissioner calls a hearing, at least __ days written notice will be given to all persons affected by the hearing - ANS; 15 An insured or insurer must ask for a rehearing based on a decision by the Insurance Commissioner within ___ days - ANS; 30 Penalty if the Commissioner finds unknowingly guilty - ANS; $1,000 per violation, maximum $10,000 for all violations Penalty if the Commissioner finds knowingly guilty - ANS; $5,000 per violation, maximum $100,000 for all violations Insurance transactions include any of these: - ANS; - solicitation or inducement to purchase insurance - negotiations toward the sale of insurance - executing a contract of insurance - advising on coverages and claims A licensee may not transact insurance business in West Virginia until: - ANS; the licensee is appointed by an insurer Producer - ANS; An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation The licensing of insurance producers is needed to: - ANS; protect the public In West Virginia, an individual producer is considered to: - ANS; represent the insurance company An applicant for a resident producer license in West Virginia must: - ANS; -Be at least 18 years of age - Not have committed any act that is grounds for denial, suspension, or revocation - Completed a prelicensing course - Have passed the state exam for the lines of authority in which licensure is sought - Submit application with fees - Not intend to use the license primarily to write controlled business - Be deemed trustworthy and competent An producer that sells an insurance policy for an unauthorized insurer: - ANS; runs the risk of being responsible for unpaid claims Stock Insurance Company - ANS; - owned and controlled by stockholders - nonparticipating - objective is to produce profit for its owners, the stockholders Mutual Life Insurance Companies - ANS; - owned and controlled by its policyowners - policyholders elect a board of trustees or governing body to manage the firm - profits are returned to policyholders in the form of dividends or retained as surplus to meet future obligations - participating - objective is to provide insurance to its owners, the policyowners, at the lowest net cost Types of Unfair Trade Practices - ANS; - misrepresentation - false advertising - defamation - boycott, coercion, and intimidation - false financial statements - unfair discrimination - rebating Misrepresentation - ANS; It is an illegal practice to misrepresent any fact about an insurance policy, such as policy terms, benefits, value, cost, effective date, or existence of a contract of insurance False advertising - ANS; It is an illegal practice to falsely advertise insurance products or publish misleading information about its insurance coverage. This includes making false statements about the financial condition of an insurer Defamation - ANS; It is an illegal practice to make any public statement or advertisement that contains false information or unsubstantial criticisms about an insurance company intended to harm or malign Boycott, coersian, and intimidation - ANS; It is an illegal practice to commit or coordinatie any act or boycott, coercion, or intimidation in order it restrain or monopolize the business of insurance False financial statements - ANS; It is illegal to publish any false financial statement regarding a person or entity Unfair discrimination - ANS; It is an illegal practice to unfairly discriminate against a person in any way on an insurance-related matter. An example would be charging a different rate for someone in the same actuarial class. Fair discrimination is necessary for the insurance of life insurance policies, which is based on mortality Rebating - ANS; It is illegal to offer a prospective client something of value that is not specified in a contract to induce the purchase on an insurance policy West Virginia Life and Health Guaranty Association - ANS; provides claim payments of admitted insolvent (financially incapacitated) insurers For any one person, the Guaranty Association will provide: - ANS; - $300,000 in life insurance death benefits - $300,000 for disability income insurance; long-term care insurance - $100,000 in cash values - $500,000 for basic hospital - $250,000 in present value annuity benefits The Life and Health Guaranty Association is funded by: - ANS; insurance companies through assessments Mass marketed life or health insurance - ANS; Sold through a blanket, group, or franchise party, and is sold by direct response solicitation, under which the insured person pays all the insurance costs Proceeds from a life insurance policy are protected from any claims by a creditor of the insured as long as: - ANS; there is a named beneficiary When are proceeds not exempt from a creditor's claims? - ANS; When they are payable to the insured's estate What is the maximum fixed interest rate charged by insurers in West Virginia? - ANS; 8% How long does an insurance policy have the right to defer granting a policy loan? - ANS; A maximum of 6 months after receiving a request for the loan Treatment of replacement - ANS; Replacement is strictly regulated and requires full disclosure by both the producer and the replacing insurance company Replacement regulations apply to - ANS; Ordinary life insurance Who is exempt from replacement - ANS; group life In replacement, the old insurance has been or will be: - ANS; - lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated - converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values - modified to cause a reduction in benefits or length of policy term - subjected to loans exceeding 25% of the cash value - reissued with a reduction in cash value - used in a financed purchase Duties of the replacing producer - ANS; - Present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the producer. A copy must be left with the applicant - Obtain a list of all existing life insurance and/or annuity policies to be replaced including policy numbers and the names of all companies being replaced - Leave the applicant with the original or a copy or written or printed communications used for presentation to the applicant - Submit to the replaced insurance company a copy of the Replacement Notice with the application Duties of the replacing insurance company - ANS; - Require from the producer a list of the applicant's life insurance or annuity contracts to be replaced and a copy of the applicant - Send each existing insurance company a written communication advising of the proposed replacement within a specified period of time of the date that the application is received in the replacing insurance company's home or regional office. A policy summary or ledger statement containing policy data on the proposed life insurance or annuity must be included Conversion period from group life to individual - ANS; 31 days Which of the following statements is CORRECT if an insured converts his Life policy to Paid-Up Insurance and buys new insurance? - ANS; The transaction is considered replacement In group life insurance policies, assignment of benefits is permitted in West Virginia if the assignment is made to all of the following EXCEPT: - the insured's creditors - the insured's spouse - the insured's adult children - the insured's employer - ANS; The insured's employer In West Virginia, if an insurance producer charges a fee for placing an insurance policy, which of the following statements is CORRECT? - ANS; The producer must report the placement to his primary insurance company Individual life insurance proceeds are exempt from creditor's claims when they are payable to any of the following entities EXCEPT the insured's: - children - spouse - estate - business partner - ANS; estate