Texas Life & Health Exam Questions Flashcards

Question

An applicant properly notifies her insurer of a straightforward claim, but the insurer waits an exceedingly long time to process it. Which of the below terms best describes the behavior of the insurer? A. Unfair claims settlement practice B. There is nothing wrong with this incident; there is not a specified deadline for insurers to process a claim. C. Misrepresentation D. Fraud

Answer 1

A. Unfair claims settlement practice If an insurer knowingly or frequently commits an act that neglects or deceives an insured, its behavior falls under the category of unfair claim settlement practice. In this instance, there is no reason why the insurer was warranted in waiting to process the claim.

Answer 2

A. Pay dividends to the policyowner A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned, and costs.

Answer 3

A. Defamation Defamation is making statements that are false as to the financial condition of any insurer and which are calculated to injure any person engaged in the business of insurance.

Answer 4

B. Admitted Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.

Answer 5

B. Authorized. Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.

Answer 6

B. Ownership Mutual companies are owned by policyholders, while stock companies are owned by stockholders.

Answer 7

C. The license holder's sister-in-law. A temporary license holder sale to a family member or an individual the temporary license holder has an employment or business relationship with will not pay commission.

Answer 8

A. Domestic A company is domestic when doing business within the state in which it is incorporated.

Answer 9

C. Defamation. A producer or broker who makes oral or written statements intended to injure another producer or insurer is guilty of the unfair trade practice of defamation.

Answer 10

D. 5 years. The Insurance Commissioner must examine each insured at least once every 5 years.

Answer 11

C. Obtaining an insurance license. An insurance transaction means the carrying on of business in insurance, which could include the solicitation of a policy, advising, negotiation, or inducement related to coverage or claims. Obtaining an insurance license is a prerequisite to transacting insurance.

Answer 12

C. $25 In this state, promotional materials, articles of merchandise, or gifts that have a redeemable value of $25 or less are not considered "valuable consideration," and therefore, are allowed.

Answer 13

C. Illegal It is illegal to participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly.

Answer 14

C. It is never legal to limit coverage based on marital status Availability of insurance benefits or coverage may not be denied based on sex or marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits.

Answer 15

C. Suggesting negotiations in settling the claim. When settling claims, negotiations can come into play.

Answer 16

C. Provide a financial statement. An applicant for a license must be at least 18 years old, pas the state exam (within the last 12 months), pay the appropriate fees and provide an application before a license can be issued. A financial statement of the individual is not a requirement to be licensed.

Answer 17

C. Stock Only stock insurance companies are owned and controlled by stockholders.

Answer 18

D. Authorized insurer. Insurers who meet the state's financial requirements and hold a Certificate of Authority to transact business in the state are considered authorized or admitted.

Answer 19

B. Applicant submitted his or her most recent tax return to the department. A license cannot be issued to an individual who has not passed the requiring licensing examination in the last 12 months, not paid the required fees to the department, or is under the age of 18. Tax information of the applicant is not a requirement for licensing.

Answer 20

A. Delay an acceptance or rejection decision Insurers can delay an acceptance or rejection decision for 30 days if arson is suspected.

Answer 21

A. Fraternal benefit society Fraternal insurers operate on the basis of a lodge of charitable organization, but they may also sell formal insurance plans for the benefit of their members. Reciprocal insurers are also associations that provide insurance for their members, but they are formed only for the purpose of providing insurance.

Answer 22

C. Discrimination. Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.

Answer 23

C. False advertising This is considered to be false, deceptive, or misleading advertising.

Answer 24

D. Have passed a licensing exam within the 12 months before applying. Applicants for an insurance producer license must pass a state exam, apply for a license and pay the required nonrefundable fees. Note that passing the exam does not constitute a license. Applicants cannot transact insurance until their license is issued.

Answer 25

B. The policy will not be affected. In insurance, fraud is the intentional misrepresentation of material information that is crucial when deciding whether or not to write a contract for an applicant. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first two years of the effective policy date. In this particular instance the applicant did not commit intentional fraud.

Answer 26

D. The applicant has been shown to be a proof personal credit risk. Being a poor personal credit risk is not a cause for suspension or revocation of a license.

Answer 27

D. 5 years. No one whose license has been revoked can receive another license in Texas for 5 years.

Answer 28

A. Giving a client a $25 pen with the insurer's logo during the insurance application process. In this state, promotional materials, articles of merchandise, or gifts that have a redeemable value of 25 or less are not considered "valuable consideration," and therefore, are allowed.

Answer 29

B. 15 Under state Claims Methods and Practices laws, every insurer, upon receiving a notification of a claim must acknowledge its receipt and begin an investigation within 15 working days.

Answer 30

B. Dividends from a mutual insurer. Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.

Answer 31

B. 2023 Producers must maintain records of completion of continuing education courses for 4 years from the date of the course completion.

Answer 32

A. There is no misconduct Although the agent misrepresented the insurance policy, in order to be charged with conducting a deceptive claim settlement, the agent would have had to misrepresent knowingly and/or chronically.

Answer 33

C. Coercion. This is an example of the illegal practice of coercion.

Answer 34

A. They may be renewed. Temporary licenses may be granted up to 90 days without examination to applicants who complete a 40 hour training course before applying for the license or within 14 days after applying for the license. A temporary license cannot be renewed.

Answer 35

A. Certificate of Authority A Certificate of Authority is required in order to transact insurance.

Answer 36

B. Unfair. Unfair settlement practices include refusing or delaying a settlement solely because there is other insurance available to partially or entirely satisfy the claim loss. The claimant who has a right to recover from more than one insurer has the right to choose the coverage from which to recover and the order in which payment is to be made.

Answer 37

A. All licensed agents must comply by January 1 of even-numbered years. Continuing education reporting period coincides with the license renewal date every 2 years.

Answer 38

A. Department of Insurance. All criminal convictions must be reported to the Texas Department of Insurance.

Answer 39

C. Illegal under any circumstances When a company criticizes the financial situation of another company with the intention of injuring that company, it has committed an illegal trade practice called defamation.

Answer 40

B. Issuing sales material with exaggerated statements about policy benefits Misrepresentation is issuing, publishing, or circulating any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This includes oral statements.

Answer 41

A. Alien insurer. Alien insurer is defined as an insurer formed under the laws of another country.

Answer 42

D. Foreign A foreign insurer is domiciled in one state and transacts insurance in another. A domestic insurer transacts insurance in the domicile state (in this case, Montana). An alien insurer is domiciled in one country and transacts insurance in another.

Answer 43

B. An agent misrepresents policy benefits to convince a policyowner to replace policies. Rebating occurs when an insured is offered something of value in order to induce the sale of an insurance product. Both the offer and acceptance of a rebate are illegal.

Answer 44

C. False advertising False advertising is the illegal practice of advertising or circulating materials that are untrue, deceptive, or misleading.

Answer 45

B. Discriminating in benefits and coverages based on the insured's habits and lifestyle Discriminating between individuals of the same class with equal life expectancies, or by reason of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also not allowed to cancel individual coverage due to a change in marital status. Discriminating in benefits based on the insured's habits and lifestyle (such as smoking or dangerous hobbies) is acceptable.

Answer 46

C. 30 days If a person suspects that a fraudulent insurance act has been or is about to be committed in this state, the person must report the information in writing to the Insurance Fraud Unit of the Department within 30 days.

Answer 47

B. Attempting to settle a claim in which liability is clear. Misrepresenting the nature of a policy, delaying a settlement solely because there is another policy that may pay part of the loss, and lacking standards for the investigation of an insured's claim are considered unfair or deceptive acts.

Answer 48

D. Rebating. Rebating is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy. Both the offer and acceptance of a rebate are illegal.

Answer 49

B. Denying an unsubstantiated claim Insurers do not have to pay unsubstantiated claims, which means that the claimant failed to submit the required proof of loss.

Answer 50

A. Rebating. When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating.

Answer 51

B. Discrimination Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.

Answer 52

B. 0 All CE hours must be completed during the reporting period; licenses are not allowed to carry over excess hours to the next reporting period.

Answer 53

C. 24 Agents must complete 24 hours of continuing education every renewal period. All CE hours must be completed during the reporting period; licenses are not allowed to carry over excess hours to the next reporting period.

Answer 54

D. A licensed life insurance agent To receive commissions, agents must be licensed in the line of insurance being sold.

Answer 55

B. To help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company All admitted insurers must be a member of the Insurance Guaranty Association as a condition of their license. The Insurance Guaranty Association is in existence to protect policyowners and beneficiaries against losses caused by the insolvency of an insurance company.

Answer 56

A. Telling a client that his first premium will be waived if he purchases the insurance policy today. Rebating is defined as offering any inducement in the sale of insurance products that is not specified in the policy, including money, reductions in commissions, promises, and personal services. Both the offer and acceptance of a rebate are illegal.

Answer 57

C. An agent who resides in another state, but is licensed to write insurance in Texas. A nonresident agent is one who resides in a state other than Texas, but who has met the licensing requirements and is authorized to write insurance in the state of Texas.

Answer 58

A. Intending to apply for another license. A statement with an application must contain information as to whether the individual has ever been refused a license, held a license, or has had a license revoked. The intent to apply for another license is not required.

Answer 59

B. Commissioner of Insurance only The Commissioner of Insurance can issue a temporary, 90-day life insurance agent's license.

Answer 60

D. Coercion. These are all considered to be Unfair Trade Practices, which are major violations that can lead to heavy penalties. Coercion, for example, is when the bank won't give you an auto loan unless you agree to buy auto insurance from them.

Answer 61

A. Rebates of premiums The Commissioner will suspend or revoke an existing license, or deny a new license for any of the following reasons: willful violations of state insurance laws, intentional material misstatements in the license application, and rebates of insurance premiums, among other offenses.

Answer 62

A. It can only be issued once in any 6-month period. Temporary licenses are not renewable and cannot be issued more than once in any 6-month period to the same applicant. A written examination is not required. Temporary licensees cannot sell insurance that replaces an existing individual life insurance policy or annuity contract that is in force.

Answer 63

A. 25% During any calendar year, at least 25% of a licensee's total volume of premiums must be from business other than controlled business.

Answer 64

B. Thank the customer. Unless the customer is also an insurance agent or was formerly an agent, it is illegal for the agent to pay of offer to pay for referrals.

Answer 65

C. 90 If an agent does not fulfill his or her continuing education requirements or pay the necessary fees then their license will expire within 90 days of the due date.

Answer 66

C. At least one officer or partner and any other person acting as an agent At least one officer of the corporation or one active partner of the partnership and all other persons performing any acts of an agent on behalf of the corporation or partnership in this state must be individually licensed separately from the corporation or partnership.

Answer 67

C. Consists of completing 24 hours of CE each biennium. An agent's license must be renewed every 2 years on their birthday in either even or odd numbered years depending on when the license was issued. Agents must complete 24 hours of continuing education every renewal period, unless otherwise exempt.

Answer 68

A. The Life and Health Insurance Guaranty Association The Life and Health Insurance Guaranty Association was created to protect policyholders against an insurance company's failure to perform its contractual obligations due to impairment or insolvency. All insurers that provide life, accident, and health insurance, annuities, or hospital service coverage in Texas must be members of this association.

Answer 69

B. A person who negotiates insurance contracts Persons who perform clerical tasks that are not related to soliciting or negotiating insurance contracts are not required to be licensed.

Answer 70

B. The written examination requirement will be waived. If a currently-licensed, foreign agent obtained an insurance license before written examinations were required, and if the agent seeks to transact insurance in Texas, the written examination requirement will be waived.

Answer 71

C. 4 years Producers must maintain records of completion of continuing education courses for 4 years from the date of the course completion.

Answer 72

B. The business must be able to pay up to $50,000 in the event that is proven to negligent. All of the above criteria are true, with the exception of the amount of money a business can afford to lose, in the event that is proven to be negligent. A business only needs to be able to pay $25,000.

Answer 73

D. Twisting Twisting is an illegal act, in which an agent misrepresents the terms of an insurance or annuities contract or draws incomplete comparisons, in a way that would compel the insured to surrender the contract for the new one.

Answer 74

B. Counselor A life insurance counselor is someone, for a fee or commission, offers to examine a life insurance, an annuity, or pure endowment policy and gives advice, recommendations or information regarding the policy's terms, conditions, benefits, coverage, or premium.

Answer 75

A. Submits an unsigned insurance policy application. Any type of fraud or misrepresentation is a violation that may cause a license to be denied, suspended, or revoked.

Answer 76

D. A salaried employee who advertises and solicits insurance. A person does not require an insurance producer license if he or she only advertises without intent to solicit insurance. However, once there is solicitation, a license is required.

Answer 77

C. Any change in business name. Agents must notify the Department on a monthly basis of any change of the license holder's mailing address, any felony conviction, or any administrative action take against the license holder by a financial or insurance regulator of Texas, another state, or the United States.

Answer 78

C. The agent has 30 days to notify the Department of Insurance of the new address. If an agent licensed in Texas moves to another state, the agent has 30 days to file new address with the insurance department.

Answer 79

A. Expire in 90 days. Temporary licenses expire in 90 days, and cannot be renewed.

Answer 80

A. Controlled business. When producers sell policies on themselves, their family, or their coworkers, this is called "controlled business." In this state, at least 25% of a licensee's total volume of premiums in a calendar year must be from business other than controlled business.

Answer 81

C. The insurance company Any person who solicits insurance on behalf of any insurance company, takes or transmits (other than for himself or herself) an insurance application or policy, examines any risk or loss or receives, or collects or transmits any premium, is considered to be the agent of the company for which the act is done.

Answer 82

B. 50% At least 50% of all required continuing education hours must be completed in a classroom setting or a classroom equivalent setting approved by the department.

Answer 83

C. 31 days Group policies also have many of the same policy provisions included in individual insurance such as a 2-year incontestability period and a 31-day grace period.

Answer 84

D. Yes; advertisements must not mislead the public in terms of financial standing. Advertisements must not mislead the public or attempt to induce a person to purchase insurance because of false advertisement.

Answer 85

B. Insurer. The insurer whose policies are advertised is responsible for all its advertisements, regardless of who wrote, created, presented, or distributed them.

Answer 86

C. Paid endorsement The ad must disclose whether the person making the testimonial has a financial interest in the insurer. If the person is compensated, the testimonial must include "Paid Endorsement" or similar language.

Answer 87

A. Availability of stranger-originated life insurance (STOLI). STOLIs are initiated for the purpose of obtaining a policy that would benefit a person who has no insurable interest in the life of the insured at the time of policy origination and are usually prohibited by state law. All the other answer choices are required disclosures.

Answer 88

B. Credit life. Credit life is most often sold by lenders and is term insurance written with a face amount and term that is matched to the amount and length of the loan period. Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor.

Answer 89

D. Creditor The creditor is the owner and the beneficiary of the policy.

Answer 90

C. Reduction of premium Reduction of premiums is not a nonforfeiture option (it's a dividend option). The other answer choices are the required nonforfeiture options in life insurance policies issued in this state.

Answer 91

B. Obtain a list of all life insurance policies that will be replaced. The replacing insurance company must require from the producer a list of the applicant's life insurance policies to be replaced and a copy of the replacement notice provided to the applicant, and send each existing insurance company a written communication advising of the proposed replacement.

Answer 92

B. Decreasing term Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. It is usually written as decreasing term insurance.

Answer 93

A. Footnotes and caveats Insurers will, as often as possible, eliminate the use of footnotes and caveats and define terms used in the illustrations in language that would be understood by a typical person within the segment of the public to which the illustration is directed.

Answer 94

D. Within 2 months Upon receipt of a written proof of death and the right of the claimant to the proceeds, the insurer must pay death claims within 2 months.

Answer 95

A. Vanishing premium information Illustrations used to sell life insurance cannot use the term "vanishing premium" - or any similar term - that implies the policy becomes paid up.

Answer 96

C. Notice Regarding Replacement During policy replacement, the replacing producer must present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the producer.

Answer 97

D. Creditor requiring that a debtor buys insurance from a certain insurer In credit life insurance, a creditor may require that the debtor have life insurance, but they cannot require the debtor to purchase insurance through a specific insurer.

Answer 98

D. Identity of the actual insurer The identity of the actual insurer must be stated in all advertisements.

Answer 99

A. 15 days The viator has a right to rescind a viatical settlement within 15 days of receiving the viatical settlement proceeds.

Answer 100

C. Federal government No combination of words, symbols, etc. similar to those of state or federal government agencies may be used that might mislead prospective insureds into believing the solicitation is connected with a government agency.

Answer 101

D. Cost comparison methods Cost comparison methods are used to compare the cost of one life insurance policy against another in order to guide prospective purchasers to policies that are competitively priced.

Answer 102

D. The creditor can only insure the debtor for the amount owed. Credit life insurance cannot pay out more than the balance of the debt, so that there is no financial incentive for the death of the insured.

Answer 103

D. Creditor is the policyowner. In credit life insurance, the creditor is the policyowner and the beneficiary; the debtor is the insured.

Answer 104

B. The amount to be repaid under the contract. The initial amount of credit life insurance may not exceed the total amount repayable under the contract of indebtedness.

Answer 105

D. All of the above An advertisement shall not contain untrue or misleading statements regarding the insurer's assets, corporate structure, financial standing, age, or position in the insurance business.

Answer 106

C. To help customers make educated decisions in buying life insurance The purpose of the regulation on individual and group life insurance policy illustrations is to provide standards that will protect and educate consumers.

Answer 107

C. The name of the primary and secondary beneficiaries Other required items include the name and business address of producer or insurer's authorized representative; the name, age, and sex of proposed insured; underwriting or rating classification upon which the illustration is based and the initial death benefit.

Answer 108

D. 31 Terminated employees and their dependents have 31 days to convert to an individual policy issued without evidence of insurability. The new policy can be any type of insurance EXCEPT term. The premium will be based on the current age of the insured.

Answer 109

D. 15-year level term. Individuals and dependents on a group life policy may convert to an individual policy issued by the same insurer. They can convert to any individual policy except term.

Answer 110

A. Benefits are paid to the borrower's beneficiary. In credit life insurance, the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan.

Answer 111

D. Replacement rule Anytime a new policy is issued that replaces or modifies existing insurance, a replacement form must be submitted to the ceding company.

Answer 112

B. Adjust the premium. In group insurance, if the insured participant misstated his or her age, the premium and/or the benefit will be adjusted to the correct age.

Answer 113

C. A cash surrender value A life insurance policy must ensure that upon surrender of the policy no later than 60 days after the due date of a premium payment, the company will pay a cash surrender value (instead of a paid-up nonforfeiture benefit) if the premiums have been paid for at least 3 full years for ordinary life insurance policies, or 5 years for industrial life insurance.

Answer 114

B. It insures the life of a debtor. Credit life insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor.

Answer 115

A. Policy backdating. Policy backdating is not a mandatory provision; in fact, backdating a policy more than 6 months is prohibited.

Answer 116

A. Grace period The grace period is a mandatory provision found in all life and health insurance policies that provides coverage for a period of time after the premium becomes past due.

Answer 117

B. 2 years Life insurance policies (individual and group) are incontestable after the policy has been in force for a period of 2 years.

Answer 118

A. The producer must provide the applicant with a Notice Regarding Replacement. In a replacement transaction, a producer must present to the applicant a Notice Regarding Replacement, signed by both the applicant and the producer.

Answer 119

A. Basic information about supplementary policies The outline of coverage must follow the standard format included in the insurance regulations. It must provide information about the insurance company, the policy number, important features of the policy, and explain the right to return the policy for a refund.

Answer 120

C. Guaranteed renewable. All long-term care policies or certificates issued in this state must be guaranteed renewable or noncellable.

Answer 121

B. On the first page. A renewal provision must be captioned and appear on the first page of the policy.

Answer 122

C. Between 100% and 400% Legal residents and citizens who have incomes between 100% and 400% of the Federal Poverty Level (FPL) are eligible for the tax credits.

Answer 123

B. They must be at least guaranteed renewable. Each Medicare supplement policy must be at least guaranteed renewable.

Answer 124

A. A permanent resident lawfully present in the U.S. To be eligible for health coverage on the Marketplace, the individual must be a U.S. citizen or national or be lawfully present in the United States, must live in the United States, and cannot be currently incarcerated. Medicare recipients are not eligible for coverage in the Marketplace.

Answer 125

A. Cervical cancer exams for all women starting at age 40. Cervical cancer exams as a preventive service will only be available for women at higher risk. All the other services are required preventive care services.

Answer 126

C. Guaranteed renewable. When a policy is guaranteed renewable, the insured has the right to keep the long-term care insurance in force by making timely payments of premium, and the insurer may not make any change to the policy or decline to renew it.

Answer 127

C. Small employer "Small Employer" means any person, firm, corporation, partnership, or association that during the preceding calendar quarter, employed not less than 2 nor more than 50 eligible employees.

Answer 128

B. A An insurance company must make available to each applicant a policy form offering the basic core benefits (Plan A) if it will offer any Medicare Supplement policies. An insurance company does not have to issue all or any of the plans B through N.

Answer 129

C. It cannot exclude new born children from coverage. All individual and group health insurance policies and contracts that provide coverage for a child of the insured must provide coverage for newborn children, from the moment of birth.

Answer 130

D. The applicant's health condition When health insurers set their premium rates, they are only permitted to base those rates on 4 standards: geographic rating area, family composition, age, and tobacco use.

Answer 131

B. At least 2 and not more than 50 Classification rules established by the Insurance Code state that "Small Employer" means any person or firm that during the preceding year employed at least 2 and not more than 50 persons.

Answer 132

D. 26 The law extends coverage for children to age 26 if the child is not eligible for other group coverage.

Answer 133

A. 31 days Texas insurance law specifies the insurer be notified within 31 days of the birth of a dependent child.

Answer 134

B. Continuation Provision The Renewal Provision, also known as a "Continuation Provision", must be included on the first page of Medicare supplement policies. This provision explains the right of the insurer to alter premium amounts.

Answer 135

D. Attained Age Attained age policies allow the insurer to increase premiums as the insured ages.

Answer 136

B. 10 There are 10 essential benefit categories under the ACA.

Answer 137

C. From the moment of birth, and the insurer must be notified within 31 days. A newborn covered without notification to the insurer from the moment of birth. The insured must notify the insurer within 31 days of birth.

Answer 138

D. Increased benefits The premiums of issue age policies can only increase in response to an increase in benefits.

Answer 139

A. Another insurer. Insurers are required to keep the HIV-related test result confidential, and may only disclose the results of the test upon the written request or authorization of the proposed insured to the following: the proposed insured or a person legally authorized to consent to the test, a licensed physician of the insured, an insurance medical information exchange, a reinsurer who is involved in the underwriting process, outside legal counsel who needs the information to effectively represent the insurer, and the state Department of Health.

Answer 140

C. A list of proposed subscribers A certificate of authority is necessary to operate an HMO. It is not likely that an organization would have predetermined subscribers.

Answer 141

C. Evidence of coverage. Texas HMOs must provide each enrollee evidence of coverage that includes information about the HMO, plan benefits, and cancellation provisions.

Answer 142

C. Misstatement of age on the application. Misstatement of age is not a reason an HMO policy may be cancelled. The rest are grounds for cancellation or nonrenewal.

Answer 143

D. The HMO In order to establish or operate a health maintenance organization, a certificate of authority from the Commissioner is required.

Answer 144

D. Gatekeeper. A subscriber in a HMO plan selects, or is given, a primary care physician. All of that subscribers health care is directed through that physician in terms of what treatment is given, and whether or not the subscriber is to be referred to a specialist for treatment of certain medically necessary procedures.

Answer 145

B. A group enrollment system either at their place of employment or as a member of an association Most HMOs operate almost exclusively through a group enrollment system, in which each member pays a fixed monthly premium, whether or not they have used the services of the HMO that month.

Answer 146

B. Records of previous insurers. Also included are a list of the names, addresses and official positions of those responsible for the applicant's affairs; a description of the quality assurance program, including peer review; a copy of the forms of evidence of coverage to be issued to enrollees; a description of complaint procedures to be used; and any information required by the Commissioner.

Answer 147

B. The insurance agent's name and license number. The insurance agent's name and license number are not required; all the other information must be provided.

Answer 148

D. Copayment A copayment is a specific dollar amount or a percentage of the cost of care that must be paid by the member. For example, the member may be required to pay $5 or $10 for each office visit.

Answer 149

C. Capitation basis HMOs generally pay the provider a fixed amount per subscriber in exchange for the medical services agreed upon, called a capitation basis.

Answer 150

C. Copayment A copayment is a specific dollar amount or a percentage of the cost of care that must be paid by the member. For example, the member may be required to pay $5 or $10 for each office visit.

Answer 151

B. On the face page The HMO's name, address and phone number, including a toll-free number, must appear on the face page of the policy: the first page containing any written text.

Answer 152

C. 30 days When a policy is cancelled for nonpayment of premium, the insurer is required to provide a 30-day written notice to the insured.

Answer 153

A. Immediately If there is misconduct that is detrimental to safe plan operations or the delivery of services, coverage may be cancelled immediately.

Answer 154

C. Indemnity Indemnity health insurance plans, otherwise known as first-dollar insurance, do not require insureds to satisfy a deductible before providing benefits.

Answer 155

A. Immediately HMO coverage can be cancelled for failure to meet eligibility requirements immediately.

Answer 156

D. There is no maximum time period. There is a difference between suspension and revocation. The maximum suspension is usually 1 2months, but license can be revoked permanently. Neither action may be taken by the Commissioner without first granting the licensee an opportunity for a hearing.

Answer 157

B. Persons receiving Medicaid are not eligible. Under PPACA, states can extend Medicaid to people under 138% of the poverty level. People on public coverage programs such as Medicaid are not eligible for the health care tax credit.

Answer 158

D. Testimonials used in advertisements may or may not apply to the policy advertised. The advertisement may not contain false statements regarding claims payment, imply that claim settlements will be liberal or generous, or special treatment will be provided beyond policy terms. Required information must not be minimized, made obscure, or otherwise presented so as to be misleading or deceiving to prospective purchasers.

Answer 159

B. 6 Texas HMOs cannot charge for the immunization of children from birth through age 6.

Answer 160

B. Premium rates Medicare supplement policies must include a renewal or continuation provision that is appropriately captioned and on the first page of the policy. It must include any reservation by the insurance company of the right to change premiums and any automatic renewal premium increases based on the policyholder's age (attained age policies).

Answer 161

A. Individual tax deduction for premiums paid. The Act does not offer tax deductions for health insurance premiums. The Act does offer a tax credit, which is different from a tax deduction. All the other provisions are included in this act.

Answer 162

C. 5 years. The Commissioner of Insurance must evaluate an insurer's financial condition and its ability to comply with state laws at least once every 5 years.

Answer 163

C. At the time of policy solicitation In individual or group LTC policies, outlines of coverage must be delivered to the applicant at the time of initial policy solicitation or prior to the presentation of the application by the agent.

Answer 164

D. "The illustration is not part of the insurance contract." An illustration must clearly state that is not a part of the insurance contract. All illustrations must be complete and approved prior to use. Illustrations must distinguish between guaranteed and projected amounts and identify nonguaranteed values.

Answer 165

A. 2 Two of the continuing education hours must cover ethics for agent to maintain his or her license.

Answer 166

C. 60 days If an insurer, after receiving the required statements, forms, and items from the insured, delays payments of a claim later than 60 days, the insurer must pay the claim with an additional annual interest of 18%. The insurer is also responsible for any attorney's fees arising from the delayed claim.

Texas Life & Health Exam Questions Flashcards

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