Section 19 - Michigan laws and rules pertinent to insurance

Question 1

And insured dies from what appears to be accidental causes. When confirming the cause of death, which of these actions by the insurer takes precedence?
A. Autopsy
B. Eyewitness account
C. Police report
D. Physician notes

Answer 1

Autopsy

Question 2

A (N)_______ company is owned exclusively by shareholders.
A. Mutual
B. Mixed
C. Stock
D. Interactive

Answer 2

Stock

Question 3

In determining whether a pre-existing condition applies, the enrollee CANNOT have more than how many days gap in health insurance?
A. 60
B. 63
C. 65
D. 70

Answer 3

63

Question 4

A life insurance policy sold in Michigan may be contested by the insurer ONLY during the first ___ year(s) of the contract.
A. 1
B. 2
C. 3
D. 4

Answer 4

Two

Question 5

An example of endodontic treatment is a
A. Bridge
B. Crown
C. Filling
D. Root canal

Answer 5

Root canal

Question 6

A life insurance application may be backdated to
A. Save on premiums
B. Increase the producers commission.
C. Ease the underwriting requirements
D. Reduce the policy’s death

Answer 6

Save on premiums

Question 7

Upon receiving a producer complaint the Commissioner can immediately
A. Issue a cease and desist order
B. Revoke the license
C. Impose a fine
D. Issue a warrant for arrest

Answer 7

Issue a cease and desist order

Question 8

Which of the following is NOT a valid reason for an insurer to refuse renewal of a small employer group plan?
A. Coverage has been discontinued by the insurer
B. Number of participants does not meet minimum requirements
C. Willful misrepresentation
D. Claims are higher than expected

Answer 8

Claims were higher than expected

Question 9

Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?
A. Keep replacement records on file for at least 10 years
B. Notify the existing insurer of the proposed replacement
C. Submit to the replacing insurer a list of the policies to be replaced
D. Offer the insured a 60-day free-look period

Answer 9

Submit to the replacing insurer a list of the policies to be replaced

Question 10

A producer has allowed his/her license to lapse by failing to complete the required continuing education credits. The license may be reinstated by completing the requirement within ______ days of the renewal date.
A. 45
B. 60
C. 90
D. 120

Answer 10

90

Question 11

Tim purchases an insurance policy from a producer. The producer must present to Tim a notice detailing privacy policies and practices. After this initial notice, Tim must be provided another notice
A. Every six months
B. Annually
C. Every two years
D. Every three years

Answer 11

Annually

Question 12

If a producer diverts funds from an insurer, he/she may be found guilty
A. Malfeasance
B. Fraud
C. Subrogation
D. Misappropriation

Answer 12

Fraud

Question 13

A life insurance applicant in Michigan may backdate the application for up to _____ month(s)
A. 4
B. 5
C. 6
D. 7

Answer 13

6

Question 14

A producer is hired to sell insurance for an insurer. Upon submission of the agency contract application, the producer MUST be appointed by the insurer within _______ days.
A. 7
B. 15
C. 21
D. 30

Answer 14

15

Question 15

According to the Taft-Hartley Act, group insurance premium payments made by an employer MUST be paid to the
A. Trust
B. State
C. Insurance company
D. Administrator

Answer 15

Trust

Question 16

An example of an unfair claims settlement practice is
A. Making it mandatory that proof of loss be provided for each claim
B. Failing to promptly provide a reasonable explanation for the denial of claims
C. Paying a claim in a timely matter
D. Requiring a time limit for submitting a claim

Answer 16

Failing to promptly provide a reasonable explanation for the denial of claims

Question 17

A baby is born to a husband and wife covered under a family accident and health insurance policy. If the newborn is covered at birth, the first payment for the additional coverage would become due in ______days.
A. 15
B. 31
C. 45
D. 60

Answer 17

31

Question 18

Which of the following is included in the entire contract according to the entire contract provision?
A. Investigative report
B. Occupational rating
C. Clauses
D. Application

Answer 18

Application

Question 19

The ____ reserves the right to renew a small employer health plan.
A. Employees
B. Employer
C. Commissioner
D. NAIC

Answer 19

Employer

Question 20

The act of using misrepresentation to induce and insured person to terminate an existing policy and purchase a new policy is referred to as
A. Twisting
B. Subrogation
C. Defamation
D. Intimidation

Answer 20

Twisting

Question 21

Which of these is NOT the responsibility of a producer?
A. Represent the insurer
B. Forward applications to the insurer
C. Represent the insured
D. Collect initial premium

Answer 21

Represent the insured

Question 22

Which of the following is an example of a producer’s fiduciary duty?
A. Recording receipt and remittance of premiums is due to the insurance company
B. Determine the rate classification of the insured
C. Reviewing policy summary of benefits
D. Witnessing applicant signature

Answer 22

Recording receipt and remittance of premiums due to the insurance company

Question 23

A producer’s fiduciary duty requires that
A. Premiums are maintained in a personal bank account until remittance to insurer
B. Premiums be deposited in an interest-bearing account
C. Premiums are forwarded to the insurer on a timely basis
D. Premiums be commingled with personal funds

Answer 23

Premiums are forwarded to the insurer on a timely basis

Question 24

Michigan requires that a licensee complete_____ hours of continuing education on the subject of ethics every reporting period.
A. 1
B.2
C.3
D.4

Answer 24

3

Question 25

Newborn coverage under health insurance policies MUST include coverage for A. Private hospital room for mother B. Delivery costs C. Birth abnormalities D. Mother's lost income

Answer 25

Birth abnormalities

Question 26

Which of the following is an example of the illegal act of defamation? A. Offering a premium rebate, gift, or a special advantage of any kind to consumers as an inducement to purchase a contract of insurance B. Making a statement that is false or maliciously critical of the financial condition of an insurer C. Replacing an insurance policy from one insured to another based on misrepresentation D. Using threat or force to restrict fair trade in the transaction of insurance

Answer 26

Making a statement that is false, or maliciously critical of the financial condition of an insurer

Question 27

In Michigan a legal action may be taken against an insurer for up to _____ years for failing to pay a life insurance claim after proof of loss was submitted. A. 4 B. 5 C. 6 D. 7

Answer 27

6

Question 28

XYZ Insurance Company receives satisfactory proof of loss for a claim. If XYZ does NOT pay interest of ___ per annum. A. 6% B. 8% C. 10% D. 12%

Answer 28

12%

Question 29

In Michigan a person providing insurance advice to a person or business for a fee is required to hold which license? A. Adjuster B. Producer C. Counselor D. Limited lines

Answer 29

Counselor

Question 30

In Michigan, legal action can be taken for up to _____ years against an insurer for failure to pay health insurance claims after proof of loss was submitted. A. 1 B. 2 C. 3 D. 4

Answer 30

3

Question 31

And insurer would be committing Unfair Discrimination if coverage was denied based upon A. Sex B. Heart disease C. Diabetes D. Occupational risk

Answer 31

Sex

Question 32

Gina the producer caused financial harm to an insured. Which of these actions may the Commissioner take? A. Incarcerate Regina after a hearing B. Revoke Gina’s license immediately without a hearing C. Revoked Gina's license after a hearing concludes a violation has occurred D. Increase the band requirement for Gina’s license

Answer 32

Revoke Gina’s license after a hearing concludes a violation has occurred

Question 33

The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within _______ days. A. 10 B. 20 C. 30 D. 40

Answer 33

30

Question 34

In the Michigan insurance code, chapter 45, insurance fraud defines financial loss as all of the following EXCEPT A. Loss of earnings B. Additional premiums C. Out-of-pocket expenses D. Repair and replacement costs

Answer 34

Additional premiums

Question 35

A Universal Life policyowner must receive a notice of cash surrender value at LEAST every A. 6 months B. Year C. 2 years D. 5 years

Answer 35

Year

Question 36

A Medicare Supplement policy issued in the state of Michigan is required to provide each of the following EXCEPT A. IT must cover intermediate an outpatient care for substance abuse B. It must be guaranteed renewable C. It must include outpatient prescription drug coverage D. It must have a free look period of 30 days

Answer 36

It must include outpatient prescription drug coverage

Question 37

The act of ____ insurance does NOT require an individual to hold an insurance producer license. A. Underwriting B. Selling C. Negotiating D. Soliciting

Answer 37

Underwriting

Question 38

Under which circumstance me a deferred insurance commission be paid to an individual? A. Individual had an exemption issued by the DIFS B. Individual was a licensed producer at the time of the sale C. Individual is a licensed attorney D. Individual has completed a prelicensing course.

Answer 38

Individual was a licensed producer at the time of the sale

Question 39

Producers insurance license may ONLY be revoked by the A. Appointing insurance company B. Governor C. Department of insurance and Financial Services (DIFS) D National Association of Insurance Commissioners (NAIC)

Answer 39

Department of insurance and financial services (DIFS)

Question 40

A form of medical insurance covering the treatment and care of gum disease is called A. Medicaid B. Major Medical C. Franchise health policy D. Dental expenses insurance

Answer 40

Dental expenses insurance