CHAPTER 10: TEXAS STATUTES AND RULES COMMON TO

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CHAPTER 10: TEXAS STATUTES AND RULES COMMON TO

LIFE AND HEALTH INSURANCE EXAM QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -26 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: An agent explains the details of a life insurance policy to a client. The agent does not realize, however, that the state has recently rewritten two of the provisions. As a result, the agent inadvertently misrepresents the policy, making it more attractive than it really is. What best describes this situation?

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There is no misconduct Question 2: When a producer was reviewing a potential customer's insurance coverage that is written by another company, the producer made several oral statements that were maliciously critical of that other insurer. The producer could be found guilty of

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Defamantion Question 3: After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until hears what the other company will pay. The insurer's action will be classified as

Answer:

Unfair

Question 4: A banker is ready to close on a customers loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

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Coericon Question 5: The Commissioner has full power and authority to do all of the following except

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Draft insurance laws Question 6: To legally transact insurance in this state, an insurer must obtain which of the following?

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Certificate of Authority

Question 7: In Texas, how is the Commissioner of Insurance placed in office?

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Appointed by the governor for a term of two years Question 8: Which of the following individuals could legally receive commissions from the sale of a life insurance policy?

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A licensed life insurance agent Question 9: Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

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False advertising Question 10: An agent discovers his newest client was the result of a referral. To show his thanks to the referring customer, the agent could

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Thank the customer.

Question 11: All of the following must be true of an individual before a license can be issued except that the

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Applicant submitted his or her most recent tax return to the department

Question 12: To become a Texas insurance agent, an individual must

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Have passed a licensing exam within the 12 months before applying Question 13: The Commissioner of Insurance issues a Cease and Desist to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?

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30 days Question 14: What is the major difference between stock company and mutual company?

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Ownership

Question 15: Who might receive dividends from a mutual insurer?

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Policyholders Question 16: Which members of a corporation or partnership are required to obtain an individual insurance agent license in order for the association to be licensed?

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At least one officer or partner and any other person acting as an agent Question 17: When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

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Discrimination

Question 18: Which of the following occupations would not directly help to qualify someone for the office of Commissioner of Insurance?

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Insurance agent

Question 19: What is a foreign insurer?

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An insurer with a home office in another state Question 20: An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

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Foreign Question 21: Which of the following entities is not an insurer but an organization formed to provided insurance benefits for members of an affiliated lodge or religious organization?

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Fraternal benefit society

Question 22: Anyone who violates the Insurance Code of Texas may be fined up to

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$25,000

Question 23: If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

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Authorized Question 24: If a licensed agent in Texas receives a criminal conviction, that information must be reported to

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Department of Insurance