Insurance MCQ

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) Ancestry. B) Credit history. C) Habits. D) Prior insurance Answer: Ancestry

What is the maximum civil penalty for individual producers for violating the Insurance Code A) $500 B) $1,000 C) $5,000 D) $10,000 Answer: $1,000

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 A) 3 years. B) 5 years. C) 10 years. D) 12 years Answer: 10 years

A producer became subject to an administrative action by a governmental agency (not the state Department of Insurance). Which of the following would be considered an appropriate action A) The director must suspend the producer's license. B) The producer must notify the Director within 30 days of the final disposition of the matter. C) The producer doesn't have to do anything since the administrative action is initiated by an entity other than the Department of Insurance. D) The producer must surrender his or her license within 90 days Answer: The producer must notify the Director within 30 days of the final disposition of the matter

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act A) Illegal until endorsed by the Guaranty Association B) Legal, provided that the other insurers are paid royalties for the usage of their names C) Illegal under any circumstances D) Legal, provided that the information can be verified Answer: Illegal under any circumstances

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report A) Must be advised that a copy of the report is available to anyone who requests it. B) May sue the reporting agency in order to get inaccurate data corrected. C) Must be informed of the source of the report. D) Are entitled to obtain a copy of the report from the party who ordered it Answer: Must be informed of the source of the report

Which of the following best describes the unfair trade practice of defamation A) Issuing false advertising material B) Refusing to deal with other insurers C) Making derogatory oral statements about another insurer's financial condition D) Assuming the name and identity of another person Answer: Making derogatory oral statements about another insurer's financial condition

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance A) Undercutting B) Twisting C) Slandering D) Defamation Answer: Defamation

All of the following are true regarding rebates EXCEPT A) Rebates are only allowed if specifically stated in the policy. B) Rebating can be anything of economic value, given as an inducement to buy. C) Dividends are not considered to be rebates. D) Rebates are allowed if it's in the best interest of the client Answer: Rebates are allowed if it's in the best interest of the client

How often must a producer renew his or her insurance license A) Every 3 years B) Every 10 years C) Annually D) Every 2 years Answer: Every 2 years

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained A) 3 days B) 5 days C) 10 days D) 14 days Answer: 3 days

If a nonresident producer for this state changes his or her home address, what must the producer do to comply with the Oregon rules A) Notify the Oregon Department of Insurance within 30 days B) Notify the NAIC within 30 days C) Nothing D) Notify the Oregon Department of Insurance within 10 days Answer: Nothing

Bob was issued a temporary insurance producer's license 90 days ago. The license will expire in how many days A) 0 B) 10 C) 60 D) 90 Answer: 90

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of A) Concealment. B) Unfair claim practice. C) Rebating. D) Misrepresentation Answer: Misrepresentation

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A) An offer of employment. B) Stocks, securities, or bonds. C) An offer to share in commissions generated by the sale. D) Dividends from a mutual insurer Answer: Dividends from a mutual insurer

Within what time period can a producer reinstate a lapsed license without having to pass a written examination A) 6 months B) 3 years C) 12 months D) 90 days Answer: 12 months

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of A) Nothing, unless the remarks were in writing B) Defamation. C) Misrepresentation. D) Discrimination Answer: Defamation

To comply with Oregon rules and regulations, producers are required to communicate all of the following changes to the Department of Insurance EXCEPT A) If a nonresident producer changes her residence address. B) If a resident producer changes her business address. C) If a producer decides to close his business. D) If a resident producer changes his business telephone number Answer: If a nonresident producer changes her residence address

Which of the following is true about license reinstatement A) Lapsed licenses cannot be reinstated. B) To reinstate a license, a producer must pass a written examination. C) Reinstatement fees may be double the unpaid renewal fee. D) A license can only be reinstated within 6 months from the renewal date Answer: Reinstatement fees may be double the unpaid renewal fee

In order to get a nonresident license in this state, producers must A) Surrender their license in their state of residence. B) Apply and pay a fee to a nonresident state that reciprocates. C) Pass the nonresident state exam and satisfy their continuing education requirements. D) Represent an agency located in this state Answer: Apply and pay a fee to a nonresident state that reciprocates