Property Chapter 4: Trade Practices

Question 1

Prohibited Practices: It is considered to be misrepresentation to

Answer 1

misstate the future dividends to be received or the past dividends that were previously paid on a participating policy.

Question 2

Prohibited Practices: It is prohibited to make any misrepresentation for the purpose of

Answer 2

inducing a policy holder to lapse, forfeit, or surrender their policy, which is also known as twisting.

Question 3

Prohibited Practices: It is prohibited to engage

Answer 3

coercion

Question 3

Prohibited Practices: It is prohibited to engage in

Answer 3

defamation

Question 3

Prohibited Practices: defamation (2) and How?

Answer 3

consists of making any
oral or written statement which is false,
maliciously critical of or derogatory
as to the financial condition of any insurer, which is calculated to injure any person engaged in insurance.

Question 4

Prohibited Practices: Coercion

Answer 4

consists of entering into any act that tends to result in unreasonable restraint of, or monopoly in, the business of insurance.

Question 5

Prohibited Practices: It is prohibited to

Answer 5

issue or deliver stock or securities of any kind as an inducement to insurance.

Question 6

PROHIBITATIONS sum

Answer 6

Defamation
Coercion

issue, Deliver stocks or securities

Question 7

Prohibited Practices: It is unfair to discriminate between (6)

Answer 7

individuals of the same

class and equal expectation of life,
in the rates charged for any

insurance contract
in the dividends
other benefits payable,
in any other of the terms and conditions of the contract.

Question 8

Prohibited Practices: It is unfair to discriminate on the basis (5)

Answer 8

of race,
creed,
color,
national origin
ancestry.

Question 9

Prohibited Practices: It is unfair to discriminate against any person on the basis of

Answer 9

DNA or genetic screening.

Question 10

Prohibited Practices: No producer may pay in connection with (3) 3.AKA

Answer 10

placing any policy,
any valuable consideration or inducement,
any special favor in dividends not specified in the policy, AKA REBATING

Question 11

Prohibited Practices: The payment of dividends by a mutual insurer is not considered

Answer 11

to be rebating since it is stated in the policy that dividends might be paid, although dividends are not guaranteed.

Question 12

Prohibited Practices: A violation of the insurance code.

Answer 12

Committing unfair claims settlement practices with such frequency as to indicate a general business practice constitutes

Question 13

Prohibited Practices: No insurer may fail to

Answer 13

fully disclose to first party claimants all pertinent benefits, coverages or other provisions of a policy under which a claim is presented.

Question 14

Prohibited Practices: No producer may

Answer 14

pay or return to any client all or any portion of the commission received in connection with the sale of insurance.

Question 15

Prohibited Practices: No commission may be paid

Answer 15

to an unlicensed individual for services rendered as a producer except for services rendered while they were properly licensed.

Question 16

Licensee Responsibilities:
Business Names:
Producers who solicit insurance are required to

Answer 16

disclose their name as it appears on their license and the name of the insurer they represent prior to their solicitation.

Question 17

Licensee Responsibilities:
Business Names:
No producer may file a business name containing

Answer 17

the words insurance company, or similar words unless the words agency or brokerage are used to distinguish the business from an insurer.

Question 18

Licensee Responsibilities:
Business Names:
Trade or fictitious business names may not

Answer 18

be similar to the business name of another licensed producer and may not imply affiliation with any government entity.

Question 19

Licensee Responsibilities:
Business Names:
No producer may file a business name containing the words

Answer 19

insurance company, or similar words unless the words agency or brokerage are used to distinguish the business from an insurer.

Question 20

Licensee Responsibilities:
Business Names:
After the applicant has received approval to use a fictitious business name, they have

Answer 20

90 days to register the name with their county of domicile and file a change of name with the Commissioner.

Question 20

Licensee Responsibilities:
Business Names:
No producer may conduct insurance business under a name other than? UNLESS

Answer 20

Their own legal name

unless such name has been filed with and approved by the Commissioner.

Question 21

Branch Offices: A branch office

Answer 21

an office in this state other than a principal office where the licensee conducts insurance business.

Question 22

Branch Offices: Licensees must file with

Answer 22

the Commissioner a branch office registration form within 30 days before business is first conducted there.

Question 23

Branch Offices: No branch office may engage in insurance related conduct unless

Answer 23

at least one licensed individual producer is present.

Question 24

Branch Offices: A branch office must be

Answer 24

open to the public during such hours and days of the week as to provide the public with reasonable access.

Question 25

Standards of Conduct: Licensees must inform the Commissioner of a change of business or residence address within

Answer 25

30 days

Question 26

Standards of Conduct: Producers may employ other? What must be in writing?

Answer 26

producers and are responsible for the conduct of any producers they employ. Employment contracts with other producers must be in writing.

Question 27

Standards of Conduct: Producers must notify the Commissioner within blank days of any crime or charges against them?

Answer 27

30 days

Question 28

Standards of Conduct: Producers must notify the Commissioner within blank days of the final disposition of a disciplinary proceeding initiated against them by FINRA or of any other administrative action or criminal prosecutions.

Answer 28

30 days

Question 29

Standards of Conduct: Payment of renewal commissions to any individual who ceases to hold a license may be

Answer 29

permitted only for business produced by that individual while they were licensed.

Question 30

Standards of Conduct: A producer may pay or assign commissions to

Answer 30

an insurance agency of which they are a partner.

Question 31

Standards of Conduct: When handling premiums, producers act in

Answer 31

a fiduciary capacity

Question 32

Standards of Conduct: Premiums paid by insureds made payable to a producer that are held for more than blank days before they are remitted to an insurer must be deposited in (3) What is not permitted?

Answer 32

5 business days deposited in a trust account, separate from the producer's business and personal accounts. Comingling is not permitted.

Question 33

Standards of Conduct: With the insurer's written authorization

Answer 33

trust accounts may be interest bearing, and the producer may retain any interest earned in the account.

Question 34

Standards of Conduct: Producers must maintain records of all trust account transactions for blank years after termination of coverage.

Answer 34

a period of 5 years

Question 35

Standards of Conduct: Agents may not receive commissions unless

Answer 35

they are properly licensed by the state.

Question 35

Standards of Conduct: Agents may also be authorized to collect

Answer 35

premiums and countersign insurance policies on behalf of the insurer they represent.

Question 36

Fraud: The purpose of the New Jersey Insurance Fraud Prevention Act (4)

Answer 36

facilitate the detection of insurance fraud, develop fraud prevention programs, require restitution of fraudulently obtained benefits and reduce the amount of premium dollars used to pay fraudulent claims.

Question 37

Fraud: Whenever the Commissioner determines that a person has violated the Fraud Prevention Act,

Answer 37

he may order restitution and levy a civil penalty of not more than $5,000 for the first violation, $10,000 for the second violation and $15,000 for each subsequent violation.

Question 38

Information Privacy: Under the New Jersey Insurance Information Privacy Act, an insurance institution or agent must provide a notice of of information practices to all applicants no later than the time of policy delivery when information

Answer 38

is collected only from the applicant or from public records.

Question 39

Information Privacy: Under the New Jersey Insurance Information Privacy Act, a notice must also be given at renewal, except that no notice is required if (3 options)

Answer 39

personal information is collected only from the policy holder or from public records, or a notice has been given in the last 24 months.

Question 40

Information Privacy: The federal HIPAA Privacy Rule regulates the use and disclosure of protected health insurance (PHI) held by covered entities, such as (3)

Answer 40

health insurers, medical service providers and employer sponsored health insurance plans.

Question 41

Information Privacy: The federal HITECH Act extends

Answer 41

HIPAA's privacy and security provisions by addressing the concerns associated with the transmission of electronic health records (EHRs) by covered entities and their business associates.

Question 42

Information Privacy: Insurance institutions, agents or insurance-support organizations must respond to an individual's request for access to their recorded personal information within

Answer 42

30 business days

Question 43

Guaranty Associations: The purpose of the New Jersey Life and Health Guaranty Association is to

Answer 43

protect state residents who are policy holders and beneficiaries of policies issued by insolvent insurers.

Question 44

All authorized Life and Health insurers are required, as a condition of doing business in the state

Answer 44

to be members of the Guaranty Association.

Question 45

If a member becomes insolvent

Answer 45

money to continue coverage and pay claims is obtained through assessment of the Association's other members.

Question 46

The maximum amount of coverage provided by the Association, with respect to any one insured individual (2)

Answer 46

500,000 limit for life ins. death benefits 100,000 life insurance or annuity cash values, although health insurance claims are covered without limit.

Question 47

The Life and Health Guaranty Association does not cover

Answer 47

the non-guaranteed portion of variable annuities or variable life insurance contracts.

Question 48

Producers and insurers are prohibited from referring to the Life and Health Guaranty Association in any

Answer 48

advertising or using its existence as an inducement to the purchase of insurance.

Question 48

The purpose of the New Jersey Property and Liability (Casualty) Guaranty Association is to

Answer 48

pay the covered claims which arise out of, and is within the coverage and limits of, a policy issued by an insolvent insurer to a New Jersey resident or covering a property permanently located in New Jersey.

Question 49

The Property and Casualty Guaranty Association does not cover (4)

Answer 49

Workers Compensation insurance, title insurance, surety bonds or ocean marine insurance.

Question 49

All authorized Property and Casualty insurers are required, as a condition of doing business in the state,

Answer 49

to be members of the Guaranty Association.

Question 50

Producers and insurers are prohibited from referring to the Property and Casualty Guaranty Association in any

Answer 50

advertising or using its existence as an inducement to the purchase of insurance.