Testeacher Practice Test Flashcards
An insurance policy must specify all of the following except:
A. The parties between whom the contract is made
B. The property or life insured
C. The interest of the insured in property insured
D. Financial Rating of the insurer
Answer: D
Explanation: Under the California Insurance Code (CIC) an insurance policy must specify the following:
(a) The parties between whom the contract is made.
(b) The property or life insured.
(c) The interest of the insured in property insured, if he is not the absolute owner thereof.
(d) The risks insured against.
(e) The period during which the insurance is to continue.
(f) Either:
(1) A statement of the premium, or
(2) If the insurance is of a character where the exact premium is only determinable upon the termination
of the contract, a statement of the basis and rates upon which the final premium is to be determined and paid.
The financial rating of the insurer need NOT be specified.
Travel Accident Insurance would be sold by all of the following except:
A. Vending Machines
B. Credit card companies
C. Professional Insurance Agents
D. Insurer representatives
Answer: C
Explanation: Travel Accident insurance is generally sold using vending machines in airport lobbies, however it can also be purchased from credit card companies, or insurer representatives. It is NOT sold by professional insurance agents.
When will the first benefit check be issued for a disability income policy with a 90 day elimination A. 90thday of continued disability B. 91st day of continued disability C. 120th day of continued disability D. 121' Day of continue disability
Answer: D
Explanation: Since the policy has a 90 day waiting or elimination period there will be no benefits paid for the first 90 days of disability. After the insured satisfies the waiting/elimination period, benefits must be paid at least monthly and will be paid on the first day of the month for the previous month.
All of the following would be considered a violation of federal law except:
A. Providing false information on an insurance application
B. Transacting insurance in the state as a restricted person without prior authorization of the
insurance commissioner
C. Falsifying financial reports
D. Embezzling customer moneys
Answer: A
Explanation: Although providing false information on an insurance application would be a violation of state law, it is not a violation of Section 1033 of the United States Code which addresses crimes committed by persons engaged in the business of insurance whose activities affect interstate commerce.
A person convicted of the federal law regulating issues that effect the insurance industry and interstate commerce can be sentenced to how many years in prison:
A. 3
B. 5
C. 7
D. 10 or 15
Answer: D
Explanation: Depending on which violations occurred Section 1033 of the United States code states the maximum imprisonment can be either 10 or 15 years.
The minimum participation percentage for large group insurance under the California code is:
A. 25%
B. 40%
C. 75%
D. 50%
Answer: C
Explanation: The California Insurance Code requires a 75% minimum participation percentage for large group Life insurance.
A person found guilty of a violation of the federal law regulating issues that effect the insurance industry and interstate commerce can be subject to a civil penalty of up to:
A. $10,000
B. $20,000
C. $30,000
D. $50,000
Answer: D
Explanation: The Attorney General may bring a civil action in the appropriate United States district court against any person who engages in conduct constituting an offense under section 1033 of Title 18 of the United State Code and, upon proof of such conduct such person shall be subject to a civil penalty of not more than $50,000 for each violation.
Which of the following classes of insurance is exempt from the California Insurance Guarantee Association (CIGA):
A. Life and annuity
B. Plate glass
C. Workers Compensation
D. Fire
Answer: A
Explanation: Life and annuity policies are specifically excluded from coverage under the California Insurance Guarantee Association, however, life and annuity policies are covered by the California Life and Health Insurance Guarantee Association which is a separate Act altogether.
The federal law COBRA applies to employers with a minimum of
Answer: B
Explanation: COBRA requires that group health plans sponsored by employers with
employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
All of the following are qualifying events under COBRA except: A. Reduction in the hours of employment B. Death of an employee C. Termination due to gross misconduct D. Loss of job
Answer: C Explanation:
Reduction in the hours of employment Death of an employee
Qualifying Events for Employees:
- Voluntary or involuntary termination of employment for reasons other than gross misconduct
- Reduction in the number of hours of employment
Qualifying Events for Spouses:
• Voluntary or involuntary termination of the covered employee’s employment for any reason
than gross misconduct
• Reduction in the hours worked by the covered employee
• Covered employee’s becoming entitled to Medicare
• Divorce or legal separation of the covered employee
• Death of the covered employee
12.
Answer: A
Explanation: Under the Family and Medical Leave Act (FMLA) Covered employers must grant an eligible employee up to a total of 12 workweeks of unpaid leave during any 12-month period for one or more of the following reasons:
• for the birth and care of the newborn child of the employee;
• for placement with the employee of a son or daughter for adoption or foster care;
• to care for an immediate family member (spouse, child, or parent) with a serious health condition; or
• to take medical leave when the employee is unable to work because of a serious health condition.
Under the Americans with Disabilities Act (ADA) which of the following is not considered a disability:
A. Obese
B. Hearing
C. Sight
D. Diabetes
Answer: A
Explanation: To be protected under the ADA, a person must have a record of, or be regarded as having a substantial, as opposed to a minor, impairment. A substantial impairment is one that significantly limits or restricts a major life activity such as hearing, seeing, speaking, walking, breathing, performing manual tasks, caring for oneself, learning or working. Diabetes can be considered to meet the definition of disability under the act, whereas being obese does not.
Under the Americans with Disabilities Act (ADA) which of the following is not considered a disability:
A. Wearing eye glasses
B. Aids
C. Alzheimer’s
D. Diabetes
Answer: A
Explanation: Wearing eyeglasses is not considered to be a disability under the Americans with Disabilities Act (ADA), although Alzheimer’s, diabetes and HIV/AIDs are.
Under the Family and Medical Leave Act how many weeks of leave must be provided per year for the birth of a child?
A. 4
B. 8
C. 12
D. 16
Answer: C
Explanation: Under the Family and Medical Leave Act (FMLA) Covered employers must grant an eligible employee up to a total of 12 workweeks of unpaid leave during any 12-month period for one or more of the following reasons:
• for the birth and care of the newborn child of the employee;
• for placement with the employee of a son or daughter for adoption or foster care;
• to care for an immediate family member (spouse, child, or parent) with a serious health condition; or
• to take medical leave when the employee is unable to work because of a serious health condition.
Under the Women’s Health and Cancer Rights Act all health insurance plans which cover mastectomies must also cover which of the following:
A. Reconstructive surgery
B. Prescription drug coverage
C. Rehabilitation
D. Home health care
Answer: A
Explanation: Under WHCRA, group health plans, insurance companies and health maintenance organizations (HMOs) offering mastectomy coverage also must provide coverage for certain services relating to the mastectomy in a manner determined in consultation with a attending physician. This required coverage includes all stages of reconstruction of the breast on which the mastectomy was performed, surgery and reconstruction of the other breast to produce a symmetrical appearance, and prostheses and treatment of physical complications of the mastectomy.
