EXAMFX Regulation and Ethics 3

Question 1

A producer who replaces an existing life insurance policy must provide the policyowner with a:

Accepted Answer

Disclosure notice and comparison statement

Answer

Replacement regulations require producers to give the policyowner a written comparison and disclosure so they can make an informed decision.

Question 2

Which of the following is NOT considered an unfair trade practice under state insurance laws?

Accepted Answer

Offering a volume discount on group plans

Answer

Legitimate group pricing and volume arrangements are legal business practices, unlike misrepresentation, rebating, and coercion.

Question 3

When must an insurance producer disclose their license status to a prospective client?

Accepted Answer

At the first point of contact or solicitation

Answer

Producers are required to disclose their license status and the lines they are authorized to sell at the initial point of contact.

Question 4

An insurer that engages in 'redlining' is guilty of:

Accepted Answer

Refusing to offer coverage in certain geographic areas based on discriminatory criteria

Answer

Redlining is the illegal practice of denying or limiting coverage based on location as a proxy for race or other protected characteristics.

Question 5

A producer's continuing education requirement exists primarily to:

Accepted Answer

Ensure producers maintain current knowledge of laws and products

Answer

CE requirements ensure that producers stay current on regulatory changes, new products, and ethical standards to better serve consumers.

(EXAMFX) Exam FX Insurance Practice Test