Professional Standards & Competencies Flashcards
7 cards from real Insurance practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Standards & Competencies flashcards as text
In insurance, which term refers to the legal concept that prevents a party from asserting a position inconsistent with one previously taken if the other party relied on the earlier position?
Answer: Estoppel
Estoppel prevents an insurer from denying coverage based on a position it previously abandoned if the insured relied on that position to their detriment.
An insurance agent's license can be suspended for failing to notify the state insurance department of which of the following within the required timeframe?
Answer: A felony criminal conviction
Most states require agents to report felony convictions to the insurance department within a specified period, and failure to do so can result in license suspension.
Which professional competency involves an agent's ability to analyze a client's existing coverage and identify protection gaps?
Answer: Needs analysis
Needs analysis is the process of reviewing a client's current coverage, financial situation, and life circumstances to identify gaps and recommend appropriate solutions.
What is the ethical obligation of an agent when a client makes a statement on an application that the agent knows is false?
Answer: Correct the application and inform the client of the importance of accuracy
An agent must ensure the application is accurate and counsel the client that false statements can void coverage or result in claim denial.
Which of the following actions by an insurer constitutes unfair claims settlement practices?
Answer: Denying a claim without a reasonable investigation
Denying a claim without conducting a reasonable investigation is a prohibited unfair claims settlement practice under most state insurance codes.
A client's right to privacy under insurance regulations primarily protects against:
Answer: Unauthorized disclosure of nonpublic personal information
Privacy regulations, such as those stemming from the Gramm-Leach-Bliley Act, restrict insurers and agents from sharing nonpublic personal information without client consent.
When an agent tells a prospect that a competitor's policy 'is about to go insolvent' without factual basis, this is an example of:
Answer: Defamation/disparagement
Making false statements about a competitor's financial stability to gain business is defamation or trade disparagement, an unfair trade practice.