EXAMFX Regulation and Ethics 2

Question 1

An insurance producer who knowingly submits a false claim on behalf of a client is guilty of:

Accepted Answer

Insurance fraud

Answer

Submitting a false claim is insurance fraud, a criminal offense that can result in license revocation and prosecution.

Question 2

Which of the following best describes the concept of 'twisting' in insurance?

Accepted Answer

Selling a policy to replace a competitor's policy using misrepresentation

Answer

Twisting is inducing a policyholder to replace existing coverage through misrepresentation or incomplete comparisons.

Question 3

A producer's license can be suspended without a prior hearing in cases involving:

Accepted Answer

Immediate public harm or a court order

Answer

Regulators may suspend a license summarily without a hearing when there is an immediate threat to public safety or a court order requires it.

Question 4

Which regulatory body sets minimum standards for insurance policy provisions at the national level by drafting model laws?

Accepted Answer

National Association of Insurance Commissioners (NAIC)

Answer

The NAIC drafts model laws and regulations that states may adopt to create uniformity across the insurance industry.

Question 5

An applicant gives a producer a cash premium payment. The producer is required to:

Accepted Answer

Issue a written receipt and remit funds to the insurer promptly

Answer

Producers must provide a receipt for cash premiums and remit them to the insurer in a timely manner as required by fiduciary duty.

(EXAMFX) Exam FX Insurance Practice Test