#1. An employee that becomes ineligible for group coverage because of termination of employment or change in status, must exercise extension of benefits under COBRA
a) WITHIN 60 DAYS.
The terminated employee must
exercise extension of benefits under COBRA within 60 days of separation from
#9. The benefits from a business overhead expense insurance policy
c) ARE LIMITED TO COVERED EXPENSES AND ARE TAXABLE TO THE BUSINESS.
The benefits from a BOE policy are usually limited to covered expenses incurred or the maximum monthly benefit stated in the policy, and are taxable to the business as received.
#11. When may HIV-related test results be provided to the MIB?
b) ONLY IF THE INDIVIDUAL IS NOT IDENTIFIED
Insurance companies must maintain strict confidentiality regarding HIV-related test
results or diagnoses. Test results may not be provided to the MIB if the individual is identified.
#12. Under HIPAA portability, which of
the following are NOT protected under required benefits?
a) Pregnant women
b) Mentally ill
c) GROUPS OF ONE OR MORE
Legislation that took effect in July 1997, ensures "portability" of group insurance coverage, and
includes various required benefits that affect small employers, the self-employed, pregnant women, and the mentally ill. HIPAA applies to groups
of two or more.
#13. What does the application of
"Contract of Adhesion" mean?
a) SINCE THE INSURED DOES NOT PARTICIPATE IN PREPARING THE CONTRACT, ANY AMBIGUITIES WOULD BE RESOLVED IN FAVOR OF THE INSURED.
b) The holder of the contract has the ultimate power of promise.
c) The insurer may go to another for representation.
d) It makes sure that the insured does not get more than the value of the loss.
The insurer prepares the policy and submits it to the insured on a 'take it or leave it basis'. Because the insured does not have input in drafting the policy, but simply adheres to the terms of the policy, the policy is classified as a contract of adhesion. Any uncertain terms in the policy will be interpreted in favor of the insured.
#21. Under the mandatory uniform provision
"Notice of Claim", written notice of a claim must be
submitted to the insurer within what time parameters?
b) WITHIN 20 DAYS
This mandatory provision requires the insured to give the insurer, or its agent, written notice of a claim within 20 days of the loss or as soon as reasonably possible. If the nature of disability is such that the insured is legally incapacitated, this
requirement is waived.
#26. In addition to participation requirements, how does an insurer guard against adverse selection when
underwriting group health?
c) BY REQUIRING THAT THE INSURANCE BE INCIDENTAL TO THE GROUP
The group must form for a reason other than buying group insurance.
#28. If an applicant submits the
initial premium with an application, which action constitutes acceptance?
d) THE UNDERWRITERS APPROVE THE APPLICATION.
If the applicant has paid the initial premium, acceptance occurs when the underwriters approve the application. If the applicant waits to submit the initial premium, acceptance occurs when the applicant receives the policy and pays the premium.
#29. An insured wants to cancel her health insurance policy. Which portion of the contract would explain
c) RENEWAL PROVISION
Renewability provisions are included in each health insurance contract and outlines both the insurer’s and insured’s right to cancel or renew coverage. This is considered to be a very important provision required by HIPAA, the federal Health Insurance Portability and Accountability Act of 1996.
#35. Which of the following is NOT true
regarding an optionally renewable policy?
d) INSURER CAN ONLYCANCEL THE POLICY FOR REASONS STIPULATED IN THE CONTRACT.
Optionally renewable policies are similar to conditionally renewable, except that the insurer may cancel the policy for any reason whatsoever. The rest of the features are true.
#36. Which of the following is NOT true
regarding a noncancelable policy?
c) INSURER CAN INCREASE THE PREMIUM ABOVE WHAT IS STATED IN THE POLICY IF CLAIMS EXPERIENCE IS GREATER THAN EXPECTED.
The insurance company cannot cancel a noncancelable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the unilateral right to renew the
policy for the life of the contract, but, in effect, may cancel the policy at any time by discontinuing premium payments.
#42. The benefits in Medical Expense
TAX FREE BY THE INDIVIDUAL.
The benefits in Medical Expense Insurance are received income tax free by the individual.
#45. What happens to an insurance
application after the policy is issued?
IT BECOMES PARTOF THE CONTRACT.
If a policy is issued, the application becomes a part of the contract.
#47. Bill is approaching retirement age
and is concerned about having proper coverage should he have to be placed in a Long Term Care facility. Bill's agent told him that LTC policies would provide necessary coverage at all of the following levels, EXCEPT
Acute care is provided by Medical Insurance.
#48. Which of the following is provided
by medical personnel to those who need 24-hour supervision and help with daily activities?
b) INTERMEDIATE CARE
Intermediate care is nursing and rehabilitative care provided by medical personnel to those who need 24-hour supervision and help with daily activities.
#52. Under the mandatory uniform provision Legal Actions, an insured is prevented from bringing a suit against the insurer to recover on a health policy prior to
60 DAYS AFTER WRITTEN PROOF OF LOSS HAS BEEN SUBMITTED.
The insured must wait 60 days, but no later than 3 years (in most states) after proof of loss, before legal action can be brought against the company.
#54. An insured has submitted a claim
for $5,000 on his Major Medical policy. The insurance company will pay a portion of this claim; the rest must be covered by the insured himself. Considering that the policy deductible is $1,000, a coinsurance cost sharing is 80/20, and the stop loss limit is $10,000, what is the total amount that the insured will have to pay?
The insured first has to pay the specified deductible (in this case $1,000), and then the 20% of the remaining claim as coinsurance (20% of $4,000 = $800). The total for the deductible and
20% coinsurance is $1,800.
#58. What is the purpose of the gatekeeper in an HMO?
d) CONTROLLING COSTS
Initially the member chooses a primary care physician or gatekeeper. If the member needs the attention of a specialist, the primary care physician must refer the member. This helps keep the member away from the higher priced specialists unless it is truly necessary.
#59. Which of the following is NOT
mandatory under the Uniform Provisions Law as applied to accident and health policies?
a) CHANGE OF OCCUPATION
Change of Occupation is an optional provision.
#64 If necessary, an Insurance Commissioner can verify a producer’s licensing status through a producer database, maintained by
d) THE NAIC.
A producer database is maintained by the NAIC.
#66. A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lender may be guilty of
While a lender may require that the debtor have insurance, to condition a loan on purchasing insurance from a particular source is an unfair trade practice of coercion.
#67. Company C is developing its own
advertising script to be used in their radio advertising campaign for their LTC policies. Which of the following words or phrases would be allowed?
d) 'BENEFITS PAID DIRECTLY TO YOU'
'Benefits paid directly to you' would be allowed if stated in the policy.
#71. What is the lower and upper limit
for willful violations of the Insurance Code?
d) $25,000 AND $250,000 RESPECTIVELY
If a violation is committed flagrantly and with conscious disregard for the law (including violations of cease and desist orders), the Commissioner may levy a fine not to exceed
$250,000 for all violations. Individual intentional violations are subject to a fine of no less than $25,000.
#73. When is the producer required to
disclose information about producer compensation to the insured?
b) BEFORE THE INSURANCE TRANSACTION GOES IN EFFECT
The insured may be notified at any time during the sale, solicitation or negotiations of the insurance sale, as long as the insured receives that information prior to the effective date of
#75. Which of the following policies is
required to provide coverage for new cancer therapies?
b) A GROUP MEDICAL EXPENSE POLICY
b) A GROUP MEDICAL EXPENSE POLICY
Every individual or group hospital or medical expense insurance policy must provide
coverage for new cancer therapies still under investigation as outlined in the Insurance Code. Medicare supplement policies, disability income, specified disease other than cancer and other limited benefit policies are exempt from this
#77. An insurer that issues contracts for health care coverage that include a provision for the coordination of benefits must comply with any written requests for reimbursement within
c) 45 DAYS.
An insurer that issues contracts for health care coverage that include a provision for the coordination of benefits must comply with any written requests for reimbursement within 45
#79. Which of the following types of
insurance companies is an incorporated insurer without capital stock or shares?
Mutual insurers are incorporated insurers without capital stock or shares.
#94. A Medicare supplement plan must
have at least which of the following renewal provisions?