Life & Health Insurance Insurance Regulation and Ethics Flashcards
7 cards from real Life & Health Insurance Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life & Health Insurance Insurance Regulation and Ethics flashcards as text
A cease and desist order issued by a state insurance commissioner requires a producer to:
Answer: Stop engaging in a specified prohibited activity
A cease and desist order is an administrative directive requiring the recipient to stop a particular practice that violates insurance law.
The concept of 'indemnity' in insurance means:
Answer: The insured is restored to the same financial position as before the loss
Indemnity is the principle that insurance should restore the insured to their pre-loss financial position, not result in a gain.
Which of the following would most likely constitute an unfair trade practice under state insurance law?
Answer: Making false statements about a competitor's financial condition
Making false or misleading statements about a competitor's financial condition is a form of defamation and an unfair trade practice.
Under the concept of utmost good faith (uberrimae fidei), both the insurer and insured are required to:
Answer: Disclose all material facts relevant to the insurance contract
The doctrine of utmost good faith requires both parties to disclose all material information that could affect the insurance agreement.
A producer's license may be suspended for failing to:
Answer: Meet continuing education requirements
Most states require licensed producers to complete continuing education credits periodically, and failure to comply can result in license suspension.
Which law governs the privacy of individual health information held by insurers and requires safeguards for protected health information?
Answer: HIPAA
HIPAA (Health Insurance Portability and Accountability Act) establishes federal standards for protecting individually identifiable health information.
An agent who gives a portion of their earned commission back to a policyholder as an inducement to purchase insurance is engaging in:
Answer: Rebating
Rebating is the illegal practice of returning part of the agent's commission or offering other valuable consideration as an inducement to purchase insurance.