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59 Cards in this Set
- Front
- Back
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The Commissioner of Insurance is..
a) elected b) appointed by the governor c) appointed by the state legislature d) appointed by the pope |
elected
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A company incorporated or organized under the laws of North Carolina.
a)Domestic Company b)Foreign Company c)Alien Company d)In-State Company |
Domestic Company
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If a company has had false statements made on its behalf, the entity is subject to:
a)Ongoing review of its practices. b)Fine of not less than $2000 or more than $10,000. c)Fine of not less than $100 or more than $1000. d)No action, since the entity did not make the false statements. |
Fine of not less than $2000 or more than $10,000
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Record retention is required and the person must keep all of the following information except:
a)Number of policies b)Date issued c)Social Security numbers d)Amount issued |
Social Security numbers
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Twisting is
a)Lying about your age on an application. b)Not revealing all the facts concerning your health on your application. c)Offering to refund the premium if a person takes out a policy. d)Inducing a policyholder to lapse, forfeit or surrender a policy. |
Inducing a policyholder to lapse, forfeit or surrender a policy.
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Statements in an insurance application or in the policy are:
a)Warranties b)Sworn statements of Affirmation c)Representations d)Attestations |
Representations
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If an Agent signs a blank policy of insurance, he or she is:
a)Guilty of a felony b)Guilty of a Class 3 misdemeanor and punished by a fine of not less than $1,000 and no more than $5,000. c)Guilty of a Class 1 Misdemeanor and punished by a fine of not less than $100 and no more than $1000. d)Not guilty of any crime. |
Guilty of a Class 3 misdemeanor and punished by a fine of not less than $1,000 and no more than $5,000.
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An agent that acts without a license is
a) Guilty of a felony and punished with a fine of not less than $1000 and no more than $10,000. b)Guilty of a Class 3 misdemeanor and punished by a fine of not less than $1,000 and no more than $5,000. c)Guilty of a Class 1 Misdemeanor and punished by a fine of not less than $100 and no more than $1000. d)Not guilty of any crime. |
Guilty of a Class 1 Misdemeanor and punished by a fine of not less than $100 and no more than $1000
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An agent that misstates information is
a. Guilty of a felony and punished with a fine of not less than $1000 and no more than $10,000. b)Guilty of a Class 3 misdemeanor and punished by a fine of Less than $1,000 and no more than $5,000. c)Guilty of a Class 1 Misdemeanor and punished by a fine of not less than $100 and no more than $1000. d)Guilty of a felony and punished and punished with a fine Not Less than $2,000 or more than $10,000. |
Guilty of a felony and punished and punished with a fine Not Less than $2,000 or more than $10,000.
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A person who, for compensation, investigates or reports to their principle relative to claims arising under insurance contracts is
a)An agent b)An insurance provider c)An adjuster d)A broker |
An adjuster
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In what period is a licensed person required to notify the Commissioner’s office after the commencement of any bankruptcy, insolvency or receivership or upon making an assignment for the benefit of creditors of the person licensed?
a)Within 7 business days b)No notification is required c)Within 3 business days d)Within 10 business days |
Within 3 business days
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An insurance agent will provide all applicants and policyholders with a clear and prominent notice disclosing the agent and insurer’s disclosure practices within what time frame?
a)Prior to discussing the product or at the time of delivery of the insurance policy or certificate. b)Prior to the initial disclosure of personal information or at the time of delivery of the insurance policy or certificate. c)Prior to discussing the product or prior to the initial disclosure of personal information. d)Prior to the agent sharing the information with the agent’s principal who provides all notices required or prior to the initial disclosure of personal information. |
Prior to the initial disclosure of personal information or at the time of delivery of the insurance policy or certificate
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If a client misstates their age or gender, upon discovery
a)The policy is no longer in force b)Equitable adjustments of premiums, benefits or both can be made. c)The person is prosecuted for fraud. d)The person is prosecuted as a felon. |
Equitable adjustments of premiums, benefits or both can be made.
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Which of the following is not a requirement for reinstatement of the policy?
a)Proof of insurability to the insurer’s satisfaction. b)Payment of all overdue premiums. c)Payment of all other indebtedness to the insurer. d)All back payments excluding interest. |
All back payments excluding interest.
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The insurer has to pay death benefits within what period of time after receipt of proof of loss and if not, the insurer must:
a)45 days, pay interest b)15 days, pay interest c)30 days, pay interest d)None of the above |
30 days, pay interest
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Under what circumstances may an employee be eligible for continuation of health insurance if they were formerly under a group health plan?
a)If they work for the employer for at least a year. b)If they have worked for the employer for the last three months. c)If they are not eligible to be covered under another group coverage within 31 days. d)Both A and B. |
Both A and B.
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Susan was under group health insurance with her former company. Her insurance with them was terminated on June 30. She started a new job on June 1 and has enrolled in their group plan. What is the mandatory time frame that her new insurer is liable for health insurance claims?
a)Immediately upon enrollment. b)The first day after termination of her preceding insurer. c)The tenth day after termination of her preceding insurer. d)The fifteenth day after termination of her preceding insurer. |
The fifteenth day after termination of her preceding insurer
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What is the maximum rate an employer may charge a separated employee electing to continue coverage?
a)100% of the group rate on the due date of each payment. b)105% of the group rate on the due date of each payment. c)107% of the group rate on the due date of each payment. d)102% of the group rate on the due date of each payment. |
102% of the group rate on the due date of each payment
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Physical hazards
a)Are reckless behaviors that may lead to accidents. b)Are misstatements on an application for insurance. c)Physical sources that cause or increase the chance of loss. d)None of the above. |
Physical sources that cause or increase the chance of loss
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Robert is aging and the company is afraid his body of knowledge will be lost if something catastrophic happens to him. They want you to tell them how they can protect themselves from this potential loss. What kind of insurance would you suggest they purchase?
a)Long Term Care policy b)Key person Disability income policy c)Buy-Sell policy d)Accidental death and dismemberment policy |
Key person Disability income policy
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All of the following describe an FSA (Flexible Spending Account) except:
a)All withdrawals are tax free b)Employees save on federal employment and income taxes c)Allows reimbursement for certain medical expenses d)Most often, contributions are paid by means of a payroll salary reduction. |
All withdrawals are tax free
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An unforeseen and unintended injury resulting from an accident
a)Accidental means b)Accidental bodily injury c)Accidental sickness d)Accidental injury |
Accidental bodily injury
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The loss of income as a result of an accident and/or sickness that causes the insured to lose his or her ability to work and earn income is covered under
a)Worker’s compensation b)Disability Income policies c)Unemployment compensation d)Long Term Care insurance |
Disability Income policies
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The amount you may be required to pay for services after you pay any plan deductibles is called
a)Insurance b)Reinsurance c)Coinsurance d)Medicare insurance |
Coinsurance
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Which of the following is usually covered by Medicare without a deductible?
a)Semi-private room b)Hospice care c)Home health care d)SNF |
Hospice care
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This clause is the insurer’s contractual promise to pay benefits for specific kinds of losses resulting from sickness or accidents as stated in the policy:
a)Renewability Clause b)Insuring Clause c)Consideration Clause d)Guaranteed Issue Clause |
Insuring Clause
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What is the normal free look period for a health insurance policy?
a)Five days b)Thirty days c)Seven days d)Ten days |
Ten days
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In dental insurance what percentage of the covered procedure’s fees does an insurance company usually pay?
a)45%-60% b)20%-50% c)30%-70% d)50%-80% |
50%-80%
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This period is the time immediately following the start of a disability when benefits are not payable.
a)Grace period b)Benefit period c)Elimination period d)Waiver Period |
Elimination period
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If a disability policy is drawn up using the own occupation provision to define total disability it means
a)The insurer pays a benefit if the insured is incapable of performing the duties required for his current occupation. b)The insurer pays a benefit if the insured cannot perform any occupation for which he or she is reasonably qualified by education, training or experience. c)The insurer will pay a benefit if the insured is disabled on the job. d)None of the above. |
The insurer pays a benefit if the insured is incapable of performing the duties required for his current occupation
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This benefit is provided when the insured is totally disabled to assist the insured to learn a different vocation and eventually return to work in that occupation.
a)Rehabilitation benefit b)Medical Reimbursement benefit c)Residual benefit d)Partial Disability benefit |
Rehabilitation benefit
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Which rating structure is based on the actual loss experience of a particular group as a whole?
a)Neighborhood rating b)Community rating c)Experience rating d)Group rating |
Experience rating
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Susan has a face value on her policy of $100,000. If she commits suicide prior to two years of coverage, her beneficiary receives only premiums paid. This is known as
a)Elimination b)Reduction c)Limitation d)Exception |
Reduction
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Francine is about to do some spring cleaning in her home office. She wants to shred advertisements she used in the October 2007 campaign. To be legal, when can she shred these advertisements?
a)After October 2010 b)After October 2014 c)After October 2012 d)After October 2009 |
After October 2010
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A mechanism that evaluates the appropriateness, necessity, and quality of health care is:
a)Prospective review b)Concurrent review c)Utilization review d)Cost-savings review |
Utilization review
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The insurer gives each surgical procedure a fixed value according to the Surgical schedule. This is know as:
a)Relative value scale b)Nonscheduled plan c)Absolute value surgical schedule d)Usual, reasonable and customary charge |
Absolute value surgical schedule
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The Coordination of Benefits Provision is designed to:
a)Give insureds as much coverage as possible while eliminating over insurance. b)Prevent over insurance c)Give insured as much coverage as possible d)Save insurers as much money as possible |
Give insureds as much coverage as possible while eliminating over insurance
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When an insured holds more than one occupation, the insurer will generally classify the insured according to the occupation
a)In which the insured has been employed for the longest period of time. b)That produces the lowest premium. c)At which the insured spends the majority of hours each week. d)That is the most hazardous. |
That is the most hazardous
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Select the correct statement regarding long-term care policies.
a)ADL’s are not generally a consideration under these policies. b)Most LTC policies are guaranteed renewable up to age 70, after which they revert to optionally renewable policies. by the insured. d)Virtually all LTC policies require prior hospitalization before benefits will be paid. c)Current policies are more likely to pay benefits regardless of the level of care required |
Current policies are more likely to pay benefits regardless of the level of care required
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Sam is injured in an auto accident and is now receiving benefits from his individual disability income policy. Sam’s benefits:
a)Are received tax-free and generally limited to a percentage of monthly income. b)Are taxed upon receipt and generally unlimited. c)Are received tax-free and generally unlimited. d)Are taxed upon receipt and generally limited to a percentage of monthly income. |
Are received tax-free and generally limited to a percentage of monthly income
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For a contributory plan with some insurance companies, if the employee does not apply within the eligibility period he or she:
a)Loses the opportunity to purchase group insurance. b)Must pay a penalty for applying late. c)May be required to take a medical exam, even for a non-medical policy. d)Must wait a full year before again being eligible to apply. |
May be required to take a medical exam, even for a non-medical policy
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Employer paid premiums for employee group health insurance are generally:
a)Neither deductible to the employee or the employer. b)Nontaxable to the employee. c)Tax deductible to the employer. d)Tax deductible to the employer and nontaxable to the employee. |
Tax deductible to the employer and nontaxable to the employee
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When may a producer change a policy or waive its provisions?
a)Never b)With the approval and signature of the insured. c)With the approval and signature of an executive officer of the insurance company. d)With the approval and signatures of the insured and of an executive officer of the insurance company. |
Never
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Dental policies that limit benefits to specified maximums per procedure with first dollar coverage are:
a)Comprehensive b)Scheduled c)Non-comprehensive d)Non-scheduled |
Scheduled
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The Health Maintenance Organization concept that service providers are paid a fixed monthly fee for each member is called:
a)The gatekeeper system b)Designated service c)Capitation d)Closed panel |
Capitation
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Which of the following most accurately and completely describes an application when submitted with an initial premium?
a)A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in the application. b)A request from the producer to an insurer to issue an insurance policy. c)A form furnished by the insurer to issue an insurance policy. d)None of the above. |
A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in the application
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The type of health care provider that provides both the health care services and the health care coverage is a:
a)Traditional health insurance company b)Preferred provider organization c)Health Maintenance Organization d)None of the above |
Health Maintenance Organization
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Some major medical policies begin with the basic first dollar coverage that pays up to its limits. Then, the insured must pay a certain dollar amount of expenses before the major medical portion steps in. What term applies to the dollar amount the insured must pay between the basic policy and the major medical coverage?
a)Stop-loss limit b)Corridor deductible c)Intermittent d)Coinsurance percentage |
Corridor deductible
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If a company wishes to share information about a customer’s health with a third party:
a)The customer may not stop the company under most circumstances. b)The customer must actively opt-in to allow the disclosure. c)The customer must be given the opportunity to opt-out of such disclosures. d)The company may not share that information under any circumstances. |
The customer must actively opt-in to allow the disclosure
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When specific amounts for surgery are not scheduled and the insurer agrees to pay the prevailing rate in a certain area, this rate is called:
a)Usual, customary and replicable. b)Usual, customary and retail. c)Usual, customary and required. d)Usual, customary and reasonable. |
Usual, customary and reasonable
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Which of the following statements is not true concerning a coordination of benefits situation?
a)The group insurer for the spouse of the person with the claim is secondary. b)Where children are involved, the primary group insurer is the insurer for the parent whose birthday comes first in the year. c)The group insurer for the person with the claim is primary. d)To prevent over insurance, the secondary insurer does not pay benefits. |
Which of the following statements is not true concerning a coordination of benefits situation?
The group insurer for the spouse of the person with the claim is secondary. Where children are involved, the primary group insurer is the insurer for the parent whose birthday comes first in the year. The group insurer for the person with the claim is primary. To prevent over insurance, the secondary insurer does not pay benefits. |
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Health Maintenance Organizations are required to provide for all of the following except:
a)Emergency services b)Physicians services c)Prescription drugs d)Preventive services. |
Prescription drugs
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Which of the following is not true concerning the notice of claim and claim forms?
a)Notice provided to any authorized agent of the insurance company is considered to be proper notification to the insurer. b)The insured must file the notice of claim within 10 days or as soon as is reasonably possible. c)If the insurer fails to send the insured claim forms within 15 days after the insured gives notice of claim, the insured may submit written proof of loss. d)Notice to the insurer may be given by a beneficiary of the insured on the insured’s behalf. |
The insured must file the notice of claim within 10 days or as soon as is reasonably possible
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Luis and Margarita Rodriguez have a family health policy that includes two riders. One rider excludes coverage for Margarita’s diabetes. The other rider indicates that the couple may purchase additional disability income coverage at specified dates in the future without proving insurability. What two riders are attached to this policy?
a)Impairment and COLA riders b)Waiver of premium and multiple indemnity riders c)Waiver of premium and guaranteed insurability riders d)Impairment and guaranteed insurability riders |
Impairment and guaranteed insurability riders
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According to the required provision that addresses reinstatement of a lapsed policy, when an insured applies for reinstatement and receives a conditional receipt, how long does the insurer have to approve or deny reinstatement before the policy will be automatically reinstated?
a)180 days from the date the unpaid premium was due b)There is no such automatic reinstatement c)30 days from the date the insurer receives the application for reinstatement d)45 days from the date of the conditional receipt |
45 days from the date of the conditional receipt
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How old must you be to be licensed as an agent in North Carolina?
a)At least 16 years of age b)At least 18 years of age c)At least 21 years of age d)There is no age requirement |
At least 18 years of age
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Once you are licensed, if you change your legal address, how long do you have to notify the Commissioner?
a)10 days b)14 days c)30 days d)You don’t need to notify the Commissioner |
10 days
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Cal owns a Comprehensive Major Medical Policy with a $1000 Base Plan, a $1000 annual deductible and an 80/20 Coinsurance Clause. If Cal suffers a covered loss and his total submitted claim is $9000, how much will the Insurance Company have to pay?
a)$1000 b)$2400 c)$2600 d)$6600 |
$6600
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Today, the most accurate description of how a PPO compensates physicians is
a)Capitation b)Fee for service c)Reimbursement d)Negotiated fee for service |
Negotiated fee for service
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