CU Legal & Regulatory Compliance 1

Question 1

Why is legal compliance important in insurance underwriting?

Accepted Answer

It protects against legal penalties and maintains trust

Answer

It reduces marketing efforts.

Answer

It increases sales quotas.

Answer

It focuses solely on profitability.

Question 2

Which law prohibits discrimination based on race, gender, or religion in insurance?

Accepted Answer

Civil Rights Act

Answer

Patriot Act.

Answer

Sarbanes-Oxley Act.

Answer

Affordable Care Act.

Question 3

What is the role of state insurance departments?

Accepted Answer

Regulate insurers and protect consumers

Answer

Set global insurance prices.

Answer

Approve private investments.

Answer

Manage real estate markets.

Question 4

What does 'regulatory compliance' involve?

Accepted Answer

Following laws, regulations, and guidelines

Answer

Ignoring industry rules.

Answer

Creating independent policies.

Answer

Reducing compliance teams.

Question 5

What is an example of unethical underwriting behavior?

Accepted Answer

Denying coverage based on zip code without risk assessment

Answer

Providing clear application instructions.

Answer

Following published underwriting guidelines.

Answer

Requiring risk disclosures.

Question 6

Which entity oversees insurance market conduct?

Accepted Answer

State Insurance Departments

Answer

Federal Reserve.

Answer

Local Chambers of Commerce.

Answer

Private insurance boards.

Question 7

What is 'market conduct examination'?

Accepted Answer

An evaluation of insurer practices and regulatory compliance

Answer

A financial audit.

Answer

A customer satisfaction survey.

Answer

Annual shareholder meeting.

Question 8

What can result from non-compliance with insurance regulations?

Accepted Answer

Penalties, license revocation, and reputational damage

Answer

Increased bonuses.

Answer

Higher market share.

Answer

Automatic federal protection.

Question 9

What is the purpose of consumer protection laws in insurance?

Accepted Answer

To promote fair and transparent dealings for policyholders

Answer

To favor insurers over consumers.

Answer

To remove regulations on pricing.

Answer

To guarantee insurer profits.