Regulation and Ethics Flashcards
7 cards from real EXAMFX practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulation and Ethics flashcards as text
An insurance producer who knowingly submits a false claim on behalf of a client is guilty of:
Answer: Insurance fraud
Submitting a false claim is insurance fraud, a criminal offense that can result in license revocation and prosecution.
Which of the following best describes the concept of 'twisting' in insurance?
Answer: Selling a policy to replace a competitor's policy using misrepresentation
Twisting is inducing a policyholder to replace existing coverage through misrepresentation or incomplete comparisons.
A producer's license can be suspended without a prior hearing in cases involving:
Answer: Immediate public harm or a court order
Regulators may suspend a license summarily without a hearing when there is an immediate threat to public safety or a court order requires it.
Which regulatory body sets minimum standards for insurance policy provisions at the national level by drafting model laws?
Answer: National Association of Insurance Commissioners (NAIC)
The NAIC drafts model laws and regulations that states may adopt to create uniformity across the insurance industry.
An applicant gives a producer a cash premium payment. The producer is required to:
Answer: Issue a written receipt and remit funds to the insurer promptly
Producers must provide a receipt for cash premiums and remit them to the insurer in a timely manner as required by fiduciary duty.
Which of the following situations constitutes a conflict of interest for an insurance producer?
Answer: Recommending a policy that pays a higher commission over one that better fits the client's needs
Placing personal financial gain above a client's best interest is a conflict of interest and an ethical violation.
Under most state insurance laws, how long does an insurer typically have to investigate and respond to a claim after receiving proof of loss?
Answer: 30 days
Most states require insurers to acknowledge, investigate, and respond to claims within 30 days of receiving proof of loss, though specifics vary.