California Health and Life Insurance Regulations Flashcards
6 cards from real Life and Health California Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 California Health and Life Insurance Regulations flashcards as text
Under California law, 'twisting' in life insurance refers to:
Answer: Inducing a policyowner to lapse an existing policy by misrepresenting facts to purchase a new policy
Twisting is an illegal practice in which an agent misrepresents the facts about an existing policy to induce a policyowner to replace it with a new policy, to the insured's detriment.
California prohibits 'rebating' in insurance, which means an agent may NOT:
Answer: Return part of the commission or give anything of value not specified in the policy as an inducement to buy
Rebating occurs when an agent offers or gives the buyer anything of value—such as a portion of the commission, gifts, or special services—as an inducement to purchase a policy, which is illegal in California.
When a California insurance agent submits an application on behalf of a client, the agent is acting in what capacity?
Answer: As an agent of the insurer, not the applicant
When placing insurance, a licensed agent typically acts as an agent of the insurer—the agent's knowledge is imputed to the insurer, and the agent binds the insurer through their actions.
Under California Insurance Code, which of the following acts constitutes 'churning'?
Answer: Replacing a client's existing life policy with a new one to generate additional commissions without benefit to the client
Churning is the practice of replacing an existing policy with a new one on the same insurer's products primarily to generate additional commissions, to the policyowner's detriment.
A California insurance agent who receives premiums from a client on behalf of an insurer must:
Answer: Promptly forward the premiums to the insurer and maintain separate trust accounting
California law requires agents acting in a fiduciary capacity to promptly remit premiums to the insurer and to maintain those funds separately from personal funds until forwarded.
Under California law, which of the following must be given to an individual purchasing a Medicare supplement (Medigap) policy?
Answer: An outline of coverage, a buyer's guide, and a summary of benefits comparison
California requires that Medigap buyers receive an outline of coverage, a Medicare Supplement Buyer's Guide, and a summary comparing available benefits before or at the time of application.