Practice Test Geeks(ACE) ACORD Certified Expert Practice Test
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Regulatory Compliance & Law Flashcards

7 cards from real ACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Under the McCarran-Ferguson Act, who has primary authority to regulate the insurance industry?

    Answer: State governments

    McCarran-Ferguson Act of 1945 affirmed that states, not the federal government, have primary authority to regulate insurance.

  2. Which ACORD standard data element is used to uniquely identify an insurance company in electronic transactions?

    Answer: NAIC company code

    The NAIC company code is the standard identifier used to uniquely identify insurers in ACORD electronic data transactions.

  3. What is 'rebating' in the context of insurance regulatory compliance?

    Answer: Refunding a portion of the premium as an inducement to purchase

    Rebating is the illegal practice of offering a portion of the commission or premium as an inducement to purchase insurance.

  4. A certificate of insurance issued via ACORD 25 is best described as:

    Answer: Evidence of insurance coverage at a point in time

    ACORD 25 is evidence of insurance only and does not confer rights, amend coverage, or guarantee future coverage.

  5. Which federal law requires financial institutions, including insurers, to implement customer information security programs?

    Answer: Gramm-Leach-Bliley Act

    The Gramm-Leach-Bliley Act (GLBA) mandates that financial institutions protect the security and confidentiality of customer nonpublic personal information.

  6. Under most state insurance codes, 'unfair discrimination' in underwriting refers to:

    Answer: Charging different rates for the same risk class without actuarial justification

    Unfair discrimination means charging different rates or offering different terms to individuals in the same risk class without a valid actuarial basis.

  7. Which entity must an insurance producer typically notify when they change their principal place of business to another state?

    Answer: Their home state insurance department

    Producers must notify their home state insurance department of address changes, which may affect license status and reciprocal licensing in other states.