8 – Florida Laws and Rules Pertinent to Insurance (Test only has 40 Questions)

Which of the following is NOT required in the Outline of Coverage for a health insurance policy?

Projection of the policy’s future costs ( "Projection of the policy’s future costs". A table indicating the policy’s projected future costs is not required in an Outline of Coverage.

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

Twenty (Correct.) Written notice of a claim must be given to the insurer within 20 days.

How many hours of continuing education must a newly licensed agent complete every two years?

24 ( "24". A newly licensed agent must complete 24 hours of continuing education every 2 years.

A life policy loan in Florida cannot charge a fixed rate of interest higher than

10% (Correct.) The maximum fixed interest rate permitted on a life policy loan is 10%.

What is the purpose of the Life and Health Insurance Guaranty Association?

Protects policyowners against insolvent insurance companies ( "Protects policyowners against insolvent insurance companies". The Life and Health Insurance Guaranty Association is an association that protects policyowners against insolvent insurance companies.

Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called

Fraternal life insurance organizations (Correct.) A fraternal life insurance organization is a nonprofit provider of life insurance that is covered by a special section of the Florida insurance code.

What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law?

0% ( "0%". Most noncontributory group health plans require 100% participation by eligible members. Under Florida law, there is no specific minimum percentage participation for employees covered by employee group health insurance.

In Florida, most life insurance policies have a contestability period of

2 years (Correct.) The maximum contestability period for most life insurance policies is 2 years.

A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent’s license will terminate if a certain period of time elapses without being appointed. How long is this period of time?

48 months (Correct.) An agent’s license will terminate if the agent allows 48 months to elapse without being appointed for the class or classes of insurance listed on the license.

Which of the following is a standard provision of the conversion privileges in a Group Life policy?

Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis (Correct.) Conversion at regular rates on an attained-age basis without a medical exam is a standard provision for conversion privileges in Group Life policies.

According to Florida’s life insurance replacement laws, a policyowner must be provided with a written Comparison and Summary Statement when it’s requested by

the policyowner (Correct.) The replacement of existing life insurance policies with new contracts of life insurance requires a written Comparison and Summary Statement at the policyowner’s request.

All of the following are Nonforfeiture Options EXCEPT

Automatic Premium Loan Option (Correct.) An automatic premium loan is not considered a Nonforfeiture Option.

During the application process, the agent’s primary responsibility is to

the insurance company ( "the insurance company". The agent’s primary responsibility in the application process is to the insurer.

Association Plans that are designed to provide health benefits to their members are regulated by the state because

they are insured by an authorized insurer ( "they are insured by an authorized insurer". Association Plans must be fully insured by an authorized insurer. The insurer is subject to state regulation.

In Florida, a health policy that is paid on a quarterly basis requires a grace period of

31 days (Correct.) Florida law requires that the minimum grace period on a health insurance policy paid on a quarterly basis is 31 days.

Which of the following is NOT a consequence for placing business with an unauthorized insurer?

First degree misdemeanor (Correct.) All of these are possible consequences for placing business with an unauthorized insurer EXCEPT the conviction of a first degree misdemeanor.

An applicant who pays the initial premium at the time of application is typically given a(n)

conditional receipt (Correct.) A conditional receipt is normally given to an applicant who pays the initial premium at the time of application.

T is an employee covered under a Group Life policy. If T’s employment is terminated, the conversion privilege gives T the right to convert

to an individual policy upon employment termination (Correct.) When an employee covered on a Group Life policy leaves the group, the conversion privilege gives the employee the right to convert to an individual policy upon termination of employment.

A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy’s face value.

viatical settlement provider ( "viatical settlement provider". To receive a percentage of the policy face value, an owner of a life policy may sell the policy to a viatical settlement provider.

A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan’s termination?

31 days (Correct.) If a group plan is terminated, covered persons are guaranteed coverage for 31 days after termination.

If an agent would like to sell Variable annuities, which state examination must the agent pass?

Life and Variable contracts ( "Life and Variable contracts". An agent who wants to sell Variable annuities must be licensed by the state which includes examinations in Life and Variable contracts.

Who is a mutual insurance company owned by?

Its policyholders (Correct.) A mutual insurance company is owned by its policyholders.

The Florida Employee Health Care Access Act was established to make

group health insurance available to employers with up to 50 employees (Correct.) The purpose of the Florida Employee Health Care Access Act is to make group health insurance available to employers with 50 or fewer employees.

Employers with less than __ employees are affected by Florida’s Health Insurance Coverage Continuation Act (Mini COBRA).

20 (Correct.) Florida’s Mini COBRA regulation entitles individuals to continuation of coverage for groups with less than 20 full-time employees.

Florida’s 14-day free-look period for life insurance policies begins at the

date of delivery (Correct.) In Florida, the free-look period for life insurance contracts is 14 days from policy delivery.

Florida requires that coverage for newborns begins "from the moment of birth" and continues for

18 months (Correct.) Florida requires that newborn coverage begins "from the moment of birth" and continues for eighteen (18) months.

Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.

5 (Correct.) Florida requires that an insurance agent must complete 5 hours of continuing education on the subject of law and ethics every two years.

An example of sliding would be

charging for an additional product without the applicant’s consent (Correct.) Sliding involves selling additional coverage to an insurance applicant who doesn’t want or need it. An agent will often "slide" this additional coverage in without the customer’s knowledge or consent.

Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client.

$25 (Correct.) An agent is allowed to give advertising gifts to a prospective customer, provided they do not exceed $25.

In Florida, agents are allowed to engage in rebating if

offered to all insureds in the same actuarial class ( "offered to all insureds in the same actuarial class". Rebating is allowed in Florida if the agent rebates insureds in the same actuarial class.

The Financial Services Commission may hold hearings

for any reason deemed necessary (Correct.) The Financial Services Commission may hold hearings for any purpose within the scope of the insurance code deemed necessary.

Which Unfair Trade Practice involves an agent telling a prospective client that a policy’s dividends are guaranteed?

Misrepresentation (Correct.) An agent who tells a client that dividends are guaranteed may be guilty of misrepresentation.

J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisting ( "Twisting". Twisting is the unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation.

Which type of insurance company allows their policyowners to elect a governing body?

Mutual (Correct.) Policyholders elect the governing bodies of mutual insurance companies.

A stock insurance company

is owned exclusively by its shareholders ( "is owned exclusively by its shareholders". A stock insurance company is best defined as an incorporated company that has its capital divided into shares and is owned exclusively by its shareholders.

An example of rebating would be

offering a client something of value not stated in the contract in exchange for their business (Correct.) Rebating can be defined as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract.

Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent

only if the child is incapable of employment and chiefly dependent on the policyowner (Correct.) Coverage may be extended if the handicapped child is incapable of employment and chiefly dependent on the policyowner.

Which of the following factors is NOT considered when the Department of Financial Services determines if an agent’s home is an insurance agency?

The amount of premium collected at this location ( "The amount of premium collected at this location". The Department of Financial Services does not take into consideration the amount of premium collected at an agent’s home when determining whether or not the home is an insurance agency.

Defamation occurs when an agent makes a false statement intended to

malign another insurer (Correct.) Defamation is an unfair trade practice involving false, maliciously critical, or derogatory statements intended to injure a person or company engaged in the insurance business.

The Life and Health Insurance Guaranty Association is

funded by admitted insurance companies through assessments ( "funded by admitted insurance companies through assessments". The Life and Health Insurance Guaranty Association is funded by insurance companies through assessments and will pay claims if an insurance company becomes insolvent.