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Code and Ethics Quiz

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Licensure Insurance (Quizzes) Quiz on Code and Ethics Quiz, created by Heather Donaldson on 21/07/2016.
Heather Donaldson
Quiz by Heather Donaldson, updated more than 1 year ago
Heather Donaldson
Created by Heather Donaldson over 8 years ago
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Resource summary

Question 1

Question
According to the CA Department of Insurance which term means "mandatory"?
Answer
  • Oath
  • May
  • Warranty
  • Shall

Question 2

Question
According to the CA Department of Insurance, which term means "permissive"?
Answer
  • Oath
  • Shall
  • May
  • Twisting

Question 3

Question
When advertising on the internet in CA, an agent or broker must provide all the following except:
Answer
  • Name of the licensee
  • Office address
  • Expiration Date of the license
  • License number

Question 4

Question
Why is having a large number of similar exposure units important to insurers?
Answer
  • Te greater the number insured, the more premium is collected to offset fixed costs.
  • The insurer increases its market share with every insured.
  • The greater the number insured, the greater the amount of premiums collected to help cover losses.
  • The greater the number of insured's, the more accurately the insurer can predict losses and set appropriate premiums.

Question 5

Question
When a mutual insurance company changes to a stock insurance company, it is referred to as:
Answer
  • Mutualization
  • Stock split
  • Stock buy out
  • Demutualization (or conversion)

Question 6

Question
Which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurance of all outstanding risks?
Answer
  • Guaranteed
  • Insolvent
  • Solvent
  • Non-participating

Question 7

Question
According to the California Insurance Code, and insurance policy must specify all of the following EXCEPT:
Answer
  • The perils insured against
  • The financial rating of the insurer
  • The property or life being insured
  • The policy period

Question 8

Question
According to the CA Department of Insurance fraudulent is consider:
Answer
  • Misdemeanor
  • A forgiveness
  • Infraction
  • Felony

Question 9

Question
According to the CA Insurance Code, what must appear on a notice of claim form given to an insured?
Answer
  • Telephone number of the Department of Insurance
  • Information regarding the Arson Bureau
  • Information regarding an insurance claims analyst bureau
  • A notice stating that any person who knowingly presents a false, or fraudulent claim, is guilty of a crime, and may be subject to fines and confinement in state prison.

Question 10

Question
According to Proposition 103, the commissioner of insurance became an elected official. The commissioner may serve:
Answer
  • As many terms for which he is elected
  • One term only
  • Two consecutive terms (8 years)
  • No mention is made in the insurance code as to term limits

Question 11

Question
All of the following are valid reasons for the insurance commissioner to deny the application for an insurance license EXCEPT:
Answer
  • Applicant does not have a good business reputation
  • Applicant is not properly qualified to perform
  • Applicant does not have a CA business address
  • Applicant lack integrity

Question 12

Question
With whom are policy forms filed?
Answer
  • Insurance Services Office (ISO)
  • Department of Insurance (DOI)
  • National Council on Compensation Insurance (NCCI)
  • Internal Revenue Service (IRS)

Question 13

Question
Records of an agent or broker must be available to the commissioner:
Answer
  • At all times
  • Only after written notice from the commissioner
  • 15 days after the license is issued
  • Never

Question 14

Question
How long must an agent maintain records sold in CA?
Answer
  • 10 years
  • 6 years
  • 5 years
  • 2 years

Question 15

Question
An applicant for an insurance license had another professional license revoked. What would the commissioner most likely do?
Answer
  • Nothing, it did not involve insurance
  • Deny the application without a hearing
  • Take it under advisement
  • Deny after a hearing

Question 16

Question
When may an agent transact for an insurance company?
Answer
  • When the agent receives the action notice
  • When the commissioner receives the application
  • When the appointing company signs the action notice of appointment
  • At the beginning of the fiscal year

Question 17

Question
In the CA Insurance Code there is a definition that reads, in short, "...a person who offers to advise for a fee, any insured having interest in life or disability insurance contracts..." This is a:
Answer
  • An insurance broker paid on a fee for service
  • A solictor
  • A life and disability analyst
  • A Claims adjuster

Question 18

Question
If a licensee wants to terminate and surrender his license, what must he do?
Answer
  • Destroy the original license
  • Destroy the original and notify the commissioner
  • Deliver the license to the commissioner
  • Nothing

Question 19

Question
What must an insurer do, who accepts an application from an agent who is not appointed by that insurer, if they subsequently will issue a policy based on that application?
Answer
  • The agent must become an employee of that insurer within 30 days or re-submit the application
  • Add the agent's name on the company's list of approved agents
  • Send the agent an employment approval notice within 30 days of policy issuance
  • Forward to the insurance commissioner a notice of appointment within 14 days of receipt of the application

Question 20

Question
Who is allowed to work with non-admitted carriers when the insurance cannot be found in the ordinary market?
Answer
  • Non-ordinary companies
  • Health only agents
  • Surplus lines brokers
  • Gap insurances

Question 21

Question
Why is having a large number of similar exposure units important to insurers?
Answer
  • The greater the number insured, the more premium is collected to offset fixed costs.
  • The insurer increases its market share with every insured.
  • The greater the number insured, the greater the amount of premiums collected to help cover losses.
  • The greater the number of insured's, the more accurately the insurer can predict losses and set appropriate premiums.

Question 22

Question
When an agent accepts premium from the insured and uses the money for personal gain, it is considered:
Answer
  • Theft
  • Fraud
  • Concealment
  • Misrepresentation

Question 23

Question
An act which requires a reporting agency to take action if a consumer complains about inaccurate information is:
Answer
  • EPO
  • Medical Information Act
  • Fair Credit Act
  • COBRA

Question 24

Question
In insurance terms, a representation can be considered:
Answer
  • An absolute fact
  • An implied warranty
  • An express warranty
  • None of the above

Question 25

Question
When may a representation be withdrawn?
Answer
  • At any time as long as all parties agree
  • It cannot be withdrawn
  • Only before the insurance is in effect
  • Only after the policy is in effect

Question 26

Question
CA insurance code requires television commercial selling term life insurance to an individual 55 or older must inform the consumer that:
Answer
  • Passin a physical exam is a requirement for benefits
  • Anyone who purchases term life insurance who's 55 or older will receive a senior discount
  • Benefits and limitations should be considered prior to purchase
  • All answers are correct

Question 27

Question
Any person who meets with a senor at the seniors home, is required to deliver a notice in writing to the seniors home. They must receive this notice prior to the intitial meeting within how many days of the meeting?
Answer
  • 12 hours prior to the meeting
  • 6 hours prior to the meeting
  • No notice is required
  • No less than 24 hours

Question 28

Question
An employee tripped over her shoelace at work and suffered an injury. This injury would be covered by:
Answer
  • Commercial general liability
  • Disability insurance
  • Workers compensation
  • Premises and operations coverage form

Question 29

Question
Under workers compensation medical payments, which is correct?
Answer
  • There is at time limit for medical payments but no dollar limit
  • There is a dollar limit but no time limit
  • There is both a time limit and a dollar limit
  • There is no time or dollar limit on medical payments

Question 30

Question
Workers compensation Part 1 covers:
Answer
  • Retirement benefits
  • All sums the insurer is legally obligated to pay under common law
  • All sums the insurer is required to pay by state law
  • All costs of the employee required by state fund

Question 31

Question
To what does 24-hour coverage refer?
Answer
  • It is medical coverage which provides around the clock protection.
  • It is the joint issuance of a worker's compensation policy with a disability insurance policy or other medical coverage for non-occupational injuries and illnesses.
  • It refers to the fact that a person needs 24 hour nursing care
  • It means that there is a waiting period of 24 hours before coverage begins.

Question 32

Question
The insurance commissioner:
Answer
  • Is appointed by the governer
  • Is elected by the state legislature
  • Is appointed by the state attorney general
  • Is elected by the public

Question 33

Question
All of the following might make an agent act unethically EXCEPT:
Answer
  • Being mostly concerned about earnings
  • Associating with unethical agents
  • Being pressured as production is not up to quota
  • Placing clients' interests first

Question 34

Question
The insurance code definition of an "insurance broker" is:
Answer
  • Someone paid to transact insurance on behalf of another person but not on behalf of the insurer.
  • Someone appointed by a fire and casualty broker-agent (employer) receiving commissions from the employer, transacting insurance with the insurers the employer represents an acting on behalf of the clients.
  • Any agent that writes more difficult to place business with specialty insurers who have appointed him
  • Someone appointed to transact insurance with admitted insurers and receives commissions from them, but acts on behalf of the clients.

Question 35

Question
An agent held one appointment with an insurance company. The appointment was terminated. What is correct?
Answer
  • The license is active until the end of the term.
  • The license is inactive.
  • The agent must be re-appointed by the same company.
  • The agent is required to have another action notice of appointment filed within 30 days.

Question 36

Question
What must an insurer do who accepts an application from an agent who is not specifically appointed by that insurer and subsequently issues a policy based on that application?
Answer
  • The agent must become an employee of that insurer within 30 days or re-submit the application
  • Add the agent's name on the company's list of approved agents
  • Send the agent an employment approval notice within 30 days of policy issuance
  • Forward to the insurance commissioner a notice of appointment within 14 days of receipt of the application.

Question 37

Question
Lou Jones, who has earned the CPCU designation, holds individual licenses as insurance agent and broker. He employs two solicitors in his agency. Which of the following is a true statement about names?
Answer
  • He can use Lou Jones Insurance Company
  • He can use Lou Jones and Company
  • He can use Lou Jones, CPCU, AAI, on his insurance stationary and other forms
  • All answers are correct

Question 38

Question
Under worker's compensation, a disability that is a permanent physical impairment leaving the individual incapable of performing the previous regular occupation, but capable of performing some other type of work, is a:
Answer
  • Permanent total disability
  • Permanent partial disability
  • Temporary total disability
  • Temporary partial disability

Question 39

Question
Benefits under workers compensation would include:
Answer
  • Rehabilitation
  • Medical costs
  • Loss of time
  • All answers are correct

Question 40

Question
Worker's compensation laws require the employer to pay benefits to a worker who is injured in the course of his employment. The employee is covered:
Answer
  • Only if they injury is the result of the employer's fault or negligence.
  • If the injury is the fault or negligence of the employer or any other employee.
  • If the injury is the fault or result of negligence of the employer or any other person
  • Without regard to fault or negligence of the employer or any other person

Question 41

Question
Which of the following is not a federal government program?
Answer
  • Flood insurance
  • Federal Deposit Insurance Corporation
  • Federal Crop Insurance
  • Workers Compensation

Question 42

Question
The purpose of the CA Life and Health guarantee Association is:
Answer
  • It helps small insurers with less capital to compete with larger insurers.
  • To protect life policy holders and/or insured's when any member insurer becomes insolvent.
  • To guarantee that any promises made by any insurer's sales or marketing units are fulfilled.
  • (Subject to certain limitations) to protect life and health policy holders and/or insured's when member insurers become insolvent.

Question 43

Question
Under Tort Law, a person can face a claim for legal liability on the basis of all of the following EXCEPT:
Answer
  • Absolute liability
  • Intentional tort
  • Negligence
  • Breach of Contract

Question 44

Question
A wrongful act other than a crime or breach of contract is a:
Answer
  • Tort
  • Proximate cause
  • Liability
  • Hazard

Question 45

Question
What can an insurer do when a fraudulent and intentional omission is committed on the part of the insured proving a warranty false?
Answer
  • Have the insured imprisoned for up to 6 months
  • Rescind the contract
  • Force the insured to pay a fine
  • Force the commissioner to fine and imprison the insured

Question 46

Question
Under which circumstances does a party involved in a contract of insurance need to communicate information based solely on his judgment?
Answer
  • Never
  • Only when asked
  • Only when relevant to the matter in question
  • Always

Question 47

Question
Neglecting to communicate that which a party knows, and ought to communicate, so that the other party may make a sound decision is known as:
Answer
  • Concealment
  • Material Information
  • Boycottingg
  • None of the above

Question 48

Question
An act which requires a reporting agency to take action if a consumer complains about inaccurate information is:
Answer
  • EPO
  • Medical Information Act
  • Fair Credit Act
  • COBRA

Question 49

Question
A person who acts in a capacity that requires an active license without having a valid license is guilty of a:
Answer
  • Fraud
  • Misdemeanor
  • Felony
  • Misrepresentation

Question 50

Question
The mathematical rule that states that as the number of individual but similar exposure units increase, the easier it is to predict the losses is which of the following:
Answer
  • Insurance interest standard
  • Contract law
  • The law of large numbers
  • Materiality
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