Question 11 of 15
8: Which of the following would NOT be considered rebating?
A Giving a client a $20 pen with the insurer's logo during the insurance application process
B Sending a gift certificate to the insured's employee after the insurance has been effected as a thank you for the referral
C Sharing commission with the insured
D Collecting a lower premium than what is specified in a policy as a token of client appreciation
Rebates include money, sharing of commissions, promises, inducements and personal services. Articles of merchandise with conspicuously stamped or printed advertisement of the insurer, agent or broker that do not exceed $25 in value are not considered rebates.
11: Any New York agent that is found guilty of a violation of insurance licensing laws will be subject to which of the following penalties?
A $500 fine for each violation
B Imprisonment for up to one year
C Automatic license revocation
D $5,000 fine for each violation
If the licensee is found in violation of insurance licensing laws, the Superintendent may issue a penalty in lieu of revoking or suspending the person's license: up to $500 for each offense, not to exceed $2,500 aggregate for all offenses.
14: Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
A Defamation
B Coercion
C Misrepresentation
D False advertising
This is considered to be false, deceptive or misleading advertising.
3: The Superintendent may refuse to issue a license in all of the following situations EXCEPT if the proposed licensee
A Is from another state.
B Has not completed the prelicensing education.
C Is not trustworthy.
D Is not competent.
The Superintendent may refuse to issue any insurance agent's license if the proposed licensee is found to be not trustworthy and competent, or has not complied with any prerequisites.
8: In order for a nonresident licensee to become a resident producer in New York, the licensee must
A Wait 6 months and close out all existing business.
B Fulfill New York's prelicensing requirements.
C Pass a written exam.
D Apply within 90 days of becoming a resident.
If a licensed individual becomes a resident of New York, he or she must apply for a license within 90 days of becoming a legal resident, but does not have to fulfill prelicensing or examination requirements for lines of authority held in the previous state, unless the Superintendent determines otherwise.
13: If licensees have administrative action taken against them, they must file this with the Superintendent within
A 50 days.
B 20 days.
C 30 days.
D 45 days.
Licensees have 30 days after the final disposition on a matter to report administrative action taken against them.
2: Every insurance company in the state of New York must file annually with the office of the Superintendent to show that it is
A Solvent.
B Admitted.
C Certified.
D Authorized.
Every insurance company in the state of New York must file annually with the office of the Superintendent to show that it is solvent.
5: In addition to examinations that are specifically authorized by the Insurance Code, the Superintendent may examine each domestic life insurer as often as it is deemed necessary for the protection of the consumers. The Code requires examination of domestic life insurers every
A 5 years.
B 2 years.
C 3 years.
D 4 years.
Every authorized domestic life insurer and every rate service organization that makes or files rates will be examined at least once in every 5 years.
6: In order to qualify for a certificate of authority, every person, firm, association, corporation or joint-stock company must meet all of the following requirements EXCEPT
A If a stock company, the amount of capital and surplus required by law must be paid in cash or investments.
B If a mutual company, provide statements of at least 3 incorporators, proof of the required initial surplus in cash or investments, and the required number and amount of actual applications for insurance.
C The entity must be part of the New York Labor Union.
D The entity must fully comply with all applicable provisions of New York's insurance laws.
In order to qualify for a certificate of authority, every person, firm, association, corporation or joint-stock company must meet all the above requirements except for membership in the state Labor Union.
8: How long does a licensee have to deliver information requested by the Superintendent of Financial Services?
A 10 days
B 15 days
C 25 days
D 30 days
A licensee must submit requested information to the Superintendent within 15 days.
9: If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's
A Habits.
B Prior insurance.
C Ancestry.
D Credit history.
The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.
15: Who represents the insured in the investigating of a claim?
A Agent
B Public adjuster
C Broker
D Independent adjuster
A public adjuster is any person, firm, association or corporation, who for a commission, acts on behalf of the insured in negotiating a settlement of a claim for loss or damage to property.
12: If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
A 10 days
B 3 days
C 5 days
D 7 days
Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.13: If a hearing is scheduled for a producer who has violated regulations regarding unfair trade practices, the Superintendent must send a prior notice within how many days of the hearing?
A 10 days
B 14 days
C 20 days
D 30 days
The required notice of hearing is at least 10 days.Question 11 of 15
All of the following are true about the Insurance Frauds Prevention Act EXCEPT
AEvery insurer must file a fraud prevention plan within 150 days.
BThe Act is intended to permit the Superintendent and department to utilize their expertise to investigate and discover insurance fraud.
CThe Superintendent has the power to designate one or more units for the purpose of preventing fraud.
DThe Superintendent has the power to conduct investigations outside of the state.
Correct! Every insurer must file a fraud prevention plan within 120 days.
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
A3 years.
B5 years.
C10 years.
D12 years.
A Ancestry.
B Credit history.
C Habits.
D Prior insurance.
The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.
13: Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
A Are entitled to obtain a copy of the report from the party who ordered it.
B Must be advised that a copy of the report is available to anyone who requests it.
C May sue the reporting agency in order to get inaccurate data corrected.
D Must be informed of the source of the report.
Under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of information contained in a consumer report, the consumer must be advised and provided with the name and address of the reporting agency.
15: In this state a temporary license may be issued for all of the following reasons EXCEPT
A An agent's retirement.
B The death of an agent.
C An agent's disability.
D An agent's time in the military service
A 5% of the agent's annual commission is from policies sold to the agent's business associates.
B 40% of the agent's commission in the last month comes from business sold to friends and family members.
C 15% of the agent's annual commission is from business sold to the agent's family.
D 25% of the agent's commissions come from policies sold to one client.
Controlled business is when an agent receives more than 10% of the aggregate commissions during a 12-month period from insurance business sold to family, or business associates and their family members.
6: Which of the following individuals must pass a written examination to be licensed as a life insurance agent?
A An applicant who has a Chartered Life Underwriter (CLU) designation
B A resident of New York wishing to transact business in New York
C A nonresident licensee currently licensed in another state
D An individual seeking to be a representative of a fraternal benefit society as its agent
None of the above listed individuals must take and pass a written examination in New York to be licensed as an agent, except a New York resident wishing to act as an agent.
10: What is the maximum fine for violating a cease and desist order?
A $5,000
B $10,000
C $1,000
D $2,500
In New York, the maximum penalty for violating a cease and desist order handed down by the Superintendent is $5,000.
12: For the protection of public interest, the Superintendent may examine the books and records of any of the following EXCEPT
A Producers.
B Policyowners.
C Domestic insurers.
D Fraternal benefit societies.
The Superintendent may examine the books and records of any insurer, any pension fund, retirement system or organization authorized in the state of New York, as often as deemed necessary, for the protection of public interest.
13: If an agent fails to promptly remit the premiums collected from the insured to the insurer, the agent may be found guilty of which of the following?
A Embezzlement
B Controlled business
C Rebating
D Fraud
Embezzlement is the criminal act of taking money belonging to someone else. In addition to revocation of license, criminal penalties will be imposed.
15: In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
A They provide additional information from an outside source about a particular risk.
B They provide information about a customer's character and reputation.
C The customer has no knowledge of this action.
D The customer's associates, friends, and neighbors provide the report's data.
A$5,000
B$10,000
C$1,000
D$2,500
Incorrect! In New York, the maximum penalty for violating a cease and desist order handed down by the Superintendent is $5,000.In order for a nonresident licensee to become a resident producer in New York, the licensee must
AApply within 90 days of becoming a resident.
BWait 6 months and close out all existing business.
CFulfill New York's prelicensing requirements.
DPass a written exam.
Correct! If a licensed individual becomes a resident of New York, he or she must apply for a license within 90 days of becoming a legal resident, but does not have to fulfill prelicensing or examination requirements for lines of authority held in the previous state, unless the Superintendent determines otherwise.If licensees have administrative action taken against them, they must file this with the Superintendent within
A45 days.
B50 days.
C20 days.
D30 days.
Correct! Licensees have 30 days after the final disposition on a matter to report administrative action taken against them.11: Which of the following is an approved written document that identifies procedures in place to keep the insurer’s Information System safe?
A Privacy Disclosure
B Consumer Report
C Cybersecurity Policy
D Certificate of Coverage
The Cybersecurity Policy is an approved written document that identifies the policies and procedures in place to keep the Information System safeTreatment of nonpublic personal financial information about individuals requires the insurer to do which of the following?
AProvide notice to individuals about its privacy policies and practices, no later than at the time an insurance policy is delivered, and annually thereafter.
BDescribe the conditions under which a licensee may disclose nonpublic personal financial information about individuals to affiliates and nonaffiliated third parties.
CProvide methods for individuals to prevent a licensee from disclosing that information. An opt out notice must be provided to allow the consumer a choice to limit disclosure of personal information.
DAll of the above.
Correct! Under the Insurance Frauds Prevention act, the insurer must do each of the above.
4: An agent has recently changed his email address. What must the agent do to comply with the regulation for change of address?
A Nothing, email addresses are not subject to regulations
B Report the address change to the NAIC
C Inform the Department within 30 days
D Inform all his customers within 30 days
The Department of Financial Services must be notified within 30 days of any change of address: residence, business or email.
5: If an individual's license has been revoked, how soon can he or she obtain a new license?
A Never; once revoked, the license cannot be reinstated
B After 1 year of the revocation
C Within 12 months, based on the original violation
D After 60 days of the revocation
No individual, corporation, firm or association whose license has been revoked will be entitled to obtain any license for a period of one year after such revocation, or, if such revocation be judicially reviewed, for one year after the final judgment.
6: For which of the following reasons can a temporary license be issued?
A To negotiate new insurance contracts
B To provide temporary help to a licensed producer
C To service the existing business
D To solicit new business
A temporary license may only be used to service existing business, not to solicit, negotiate or procure new business.
7: Which of the following would NOT be a violation of state insurance regulations?
A Agent C uses her license to write only business other than controlled.
B Agent D collects premiums due on policies and deposits the funds in his own personal account.
C Agent A uses her license to write only insurance for herself and her immediate family.
D Agent B charges his clients a consulting fee, in addition to the premium for placing a policy.
The purpose of a license is to primarily write business other than controlled business.
8: Which of the following would NOT be considered an insurance producer?
A An insurance broker
B A reinsurance intermediary
C An insurance agent
D An insurer’s officer
Insurance producer means any person required to be licensed to sell, solicit or negotiate insurance, including agents, brokers and intermediaries. Officers are not required to be licensed.
12: The Superintendent may refuse to renew a license if a licensee is receiving more than 10% of the aggregate commissions from controlled business in how many months?
A 12
B 15
C 18
D 24
An insurance license is not intended to be used to earn commissions on personal insurance needs, or those of family members, business associates, etc. The Insurance Code limits the amount of controlled business that may be written.
13: The Superintendent can examine an authorized fraternal benefit society and property/casualty insurance company once every
A 12 months.
B 18 months.
C 3 years.
D 5 years.
The Superintendent will make an examination of every authorized fraternal benefit society and property/casualty insurance company at least once every 3 years. Every domestic life insurer must be examined at least once every 5 years.
14: An insurance broker's license may be issued to
A Persons age 17 or older.
B Only an individual or a corporation with officers named as sub-licensees.
C A person, firm or corporation.
D Anyone who can pass the written examination.
An insurance broker is any person, firm, association or corporation who solicits, negotiates or obtains insurance for an insured (other than him or herself) in exchange for a commission.
A A producer previously licensed in New Jersey who is applying for a New York license 120 days after becoming a resident of this state
B A nonresident licensee currently licensed in another state
C A ticket-selling airline representative for one-time issuance of baggage or accident insurance
D An applicant who has passed the written examination for an insurance agent's license in the past if he applies within 2 years following the date of license termination
Each of the above do not need to take the written examination, except for a previously licensed agent in New Jersey who has allowed more than 90 days to lapse since becoming a resident of New York.
4: What are the continuing education requirements for licensed insurance agents in the state of New York?
A 20 hours for life and heath agents and 25 hours for property and casualty brokers every 2 years
B 15 hours of approved instruction every 2 years
C 25 hours of instruction annually
D 30 hours of any insurance-related courses every 4 years
To renew a license, any resident or nonresident agent must complete 15 hours of instruction by an approved provider of continuing education biennially (every 2 years).
10: When must agents submit license renewal applications to the Superintendent?
A At least 30 days before the anniversary of the day they received their licenses
B Within 10 business days of their birthdays
C At least 60 days before the license expires
D By the last day of February of every year
Agents must file applications for renewal of their licenses with the Superintendent at least 60 days before the expiration of the license.
13: A client's policy lapsed in 2012 without being renewed. In what year can the insurance company destroy the file on this policy?
A 2012
B 2015
C 2018
D 2022
According to New York law, insurers must keep policy records for 6 years after the date the policy is no longer in effect, or until the filing of a review of the record, whichever is longer.
15: A candidate for a life and health agent license would need to complete how many hours of prelicensing education?
A 20
B 40
C 50
D 90
A 3 years
B 4 years
C 5 years
D 6 years
Insurers must keep records for at least 6 years or until the filing of a review of the record, whichever is longer.
4: An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
A Fraud
B Defamation
C Unfair discrimination
D Errors and omissions
According to Title 18, Sections 1033 & 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud. This includes statements made on an application for insurance, renewal of a policy, claims for payment or benefits, premiums paid, and financial condition of an insurer.
10: Which of the following will NOT be considered unfair discrimination by insurers?
A Cancelling individual coverage based on the insured’s marital status
B Assigning different risk classifications to applicants based on gender identity
C Discriminating in benefits and coverages based on the insured’s habits and lifestyle
D Charging applicants with similar health histories different premiums based on their ethnicity
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.
11: Which of the following individuals must pass a written examination to be licensed as a life insurance agent?
A An applicant who has a Chartered Life Underwriter (CLU) designation
B A resident of New York wishing to transact business in New York
C A nonresident licensee currently licensed in another state
D An individual seeking to be a representative of a fraternal benefit society as its agent
None of the above listed individuals must take and pass a written examination in New York to be licensed as an agent, except a New York resident wishing to act as an agent.
12: How long does a licensee have to notify the Superintendent of a change of address?
A 90 days
B Immediately
C 30 days
D 60 days
The Superintendent must be notified within 30 days upon any change of primary residence or business address.
13: When must agents submit license renewal applications to the Superintendent?
A At least 30 days before the anniversary of the day they received their licenses
B Within 10 business days of their birthdays
C At least 60 days before the license expires
D By the last day of February of every year
Agents must file applications for renewal of their licenses with the Superintendent at least 60 days before the expiration of the license.
14: Who does the agent represent?
A The public
B Managing general agents (MGAs)
C The insured
D The insurer
The agent represents the insurer not the insured.
15: Which of the following may NOT be included in an insurance company's advertisement?
A The policies' limitations or exclusions
B The name of a specific agent
C An identification of a limited policy as a limited policy
D That its policies are covered by a state Guaranty Association
It is illegal for insurers to state that their policies are guaranteed by the existence of a Guaranty Association.
5: An insurance agent was born in 1983. He obtained his New York insurance license in 2014. When will the agent's license expire?
A January 1st every even-numbered year
B Every year on the license issue date
C Every 2 years on the license issue date
D On the agent's birthday every odd-numbered year
Agent licenses last for 2 years. The licenses of all insurance agents born in odd-numbered years will expire on their birthdays in odd-numbered years. The licenses of all insurance agents born in even-numbered years will expire on their birthdays in even-numbered years.
6: If a person has been found liable for a civil penalty in a hearing, that ruling can be entered as a judgment and enforced after
A 45 days.
B 60 days.
C 90 days.
D 120 days.
Once it has been determined that a person is liable for a civil penalty, that determination may be entered 120 days later as a judgment and enforced, without court proceedings.
7: Who represents the insured in the investigating of a claim?
A Public adjuster
B Broker
C Independent adjuster
D Agent
A public adjuster is any person, firm, association or corporation, who for a commission, acts on behalf of the insured in negotiating a settlement of a claim for loss or damage to property.
8: An independent adjuster may include which of the following?
A A firm who acts on behalf of the insurer
B Officer, director or regular salaried employee of an insurer
C Adjustment bureau or association owned by the insurers
D Attorney at law
An independent adjuster is any person, firm, association or corporation, who, for a commission, acts on behalf of an insurer in the work of investigating and adjusting claims.
9: The New York Superintendent has the responsibility to make sure each entity transacting insurance in this state remains solvent. Insurers are required to file a statement with the Superintendent
A Every 2 years by the renewal date.
B Annually on or before March 1st.
C Biannually on or before April 1st.
D Semiannually on or before January and June 1st.
Each entity must file a statement with the Superintendent annually on or before March 1st.
12: A candidate for a life and health agent license would need to complete how many hours of prelicensing education?
A 20
B 40
C 50
D 90
Single lines of authority require a minimum of 20 hours of prelicensing education; combination licenses require a minimum of 40 hours.
13: Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce
A Without receiving written consent from a Federal Judge.
B Without receiving written consent from an insurance regulatory authority.
C Under any circumstances.
D Unless they have served an appropriate prison sentence.
Title 18, US Code, sections 1033-1034 makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce without receiving written consent from an insurance regulatory authority.
14: An agent in another state wants to become an agent in New York. The other state gives the same privileges to New York agents wanting to be licensed in that state as it does its own agents. New York, therefore, extends the privileges of its agents to the prospective agent of the other state. What is this called?
A Fair exchange
B Equanimity
C Reciprocity
D Equality
Reciprocity occurs when the state in which the person resides accords the same privilege to residents of New York.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
AAn unfair trade practice.
BA misrepresentation.
CA required disclosure.
DA legal representation of the Association.
Correct! It is an unfair trade practice to make any statement that an insurer’s policies are guaranteed by the existence of the Insurance Guaranty Association. Though it is illegal to advertise, the statement is still true and would not be considered a misrepresentation.