SOLICITING
Soliciting is any effort to influence a person to purchase an insurance product from you.
NEGOTIATING
Negotiating is communicating with a prospective client with regard to need for or efficacy of different
types of insurance related products.
EFFECTUATING
Effectuating is actually putting insurance related products into effect.
INSURANCE ACTIVITIES
Insurance activities are performed by Agents, Brokers and/or Consultants and must be licensed by the
Department of Insurance.
MANAGING GENERAL AGENT
A Managing General Agent has the authority to hire new agents and manage agents on behalf of an
insurer.
THE AGENT
The Agent represents the insurer (insurance company) in the insurance transaction, and has been
contracted by the company to solicit insurance products on its behalf.
CAPTIVE AGENTS VS. INDEPENDENT AGENTS
Captive Agents represent one specific company while Independent Agents can represent many different
companies.
THE BROKER
The Broker is a licensed producer who places insurance through a company without an agency contract.
Brokers represent the Insured (customers) in the insurance transaction.
INSURANCE CONSULTANT
An Insurance Consultant is a licensed producer who gives insurance advice for a fee, and can represent
anyone in any insurance transaction, both insurer & insured, (as long as disclosure is given).
CERTIFICATE OF AUTHORITY
A Certificate of Authority is the term for the document an insurer receives after being approved by a state
to do insurance business. When an insurer receives a Certificate of Authority is then known as an
Authorized or an Admitted Insurer.
MISREPRESENTATION
Misrepresentation involves making false statements to anyone about anything or anyone in the business
of insurance. This includes making false statements about an existing policy in order to induce the person
to cancel an existing policy.
FALSE INFORMATION AND ADVERTISING
This states that one cannot use false advertisements or publish false information about insurer, or any
person, in the business of insurance.
DEFAMATION
Defamation is making False and Maliciously Critical or Derogatory statements about any person in the
business of insurance.
FALSE FINANCIAL STATEMENTS
This occurs when an individual or group is making false statements as to the financial condition of a
competitor.
MISREPRESENTATION
Misrepresentation involves making false statements to anyone about anything or anyone in the business
of insurance. This includes making false statements about an existing policy in order to induce the person
to cancel an existing policy.
TWISTING
This is similar to Misrepresentation but one step further. Twisting is making false statements to a person
in order to encourage them to cancel an existing policy (just like Misrepresentation) and then purchase a
new policy in its place.
UNFAIR DISCRIMINATION
It is unlawful to refuse to take an application from anyone based on race, color, creed, gender, marital
status, physical impairments, or any reason contrary to federal or state law. Refusals must be based on
legally permissible written underwriting guide
REBATING
Rebating is offering a client something other than what is stated in the policy in return for purchasing a
policy (for example offering $50 in return for a prospect's agreement to purchase the contract). This is the
equivalent of paying a commission to an
BOYCOTT
An unfair trade practice in which one person refuses to do business with another until he or she agrees to
certain conditions.
The provisions of the National Do Not Call List apply to each of the following except:
Electronic communications
Auto dialing systems
Prerecorded messages
Established business relationships
Established business relationships
The administrative powers of the Insurance Commissioner are derived from:
Statutes which create the office
Court action
Regulations he/she adopts
Political positioning
Statutes which create the office
The Administrative Procedures Act dictates the duties and responsibilities of the Commissioner of Insurance in this state.
Public Law 15, also known as the McCarran-Ferguson Act, established the regulation of the insurance business by:
Allowing state regulation of insurance transactions
Prohibiting state regulation of insurance transactions
Abolishing the provisions of the Sh
Allowing state regulation of insurance transactions
Mc Carran/Ferguson (Public Law 15) allows states to regulate the insurance business, under the "watchful eye" of the Federal Government.
The inducement of an insured to lapse, forfeit, or surrender an insurance policy by misrepresentation or misleading comparisons, in order to write a new policy, is known as:
Churning
Twisting
Commingling
Rebating
Twisting
In the Paul Vs. Virginia case of 1868, it was determined that:
Insurance is commerce subject to federal regulation.
State insurance codes have to be ratified by the National Association of Insurance Commissioners (NAIC) .
Insurance is not a transaction of
Insurance is not a transaction of commerce.
In many states, it is illegal for an agent to offer anything other than the policy, as an inducement to buy insurance. This practice is known as:
twisting
defamation
rebating
coercion
Rebating
The purpose of an insurance guaranty association is to protect:
the privacy rights of insurance buyers
resident agents from competition by nonresident agents
claimants and policyowners when an insurer becomes insolvent
the general public from unfair trade
claimants and policyowners when an insurer becomes insolvent
A guaranty association is a mechanism used to pay covered claims, when an insurer becomes insolvent. It also protects policy owners and claimants by assisting in the detection and prevention of
Which one is not considered unfair discrimination?
Medical Conditions
Creed
Ancestry
Genetic Information
Medical conditions
When credit life or health is written, evidence of coverage (a policy or certificate of insurance) must be delivered to the debtor when the debt is incurred or within how many days?
20 days
60 days
10 days
30 days
30 days
The Commissioner may refuse to issue, or renew, or may to revoke or suspend a license upon finding that the producer did all of the following, EXCEPT:
Committed a fraudulent act
Depositing commissions into his own checking account
Obtained or attempted of
Depositing commissions into his own checking account
A nonresident licensee in New Jersey has a:
Resident & business address in a state other than New Jersey
Resident address in New Jersey & a business address in another state
Bona fide New Jersey branch office with both resident & business address in a sta
Resident & business address in a state other than New Jersey
When replacement of individual Life Insurance is involved, an agent must furnish a Notice Regarding Replacement of Life Insurance to which of the following?
The replacing insurer only
The existing insurer only
The applicant and replacing insurer
The appli
The applicant only
Which of the following would be considered the fine for a first offense of any insurance law?
Up to $1,000
Up to $10,000
Up to $250
Up to $5,000
Up to 5,000
During the solicitation of a Life policy, when must an insurer must furnish a prospective buyer with a Buyer's Guide and a Policy Summary?
Seven days before the initial premium is accepted
At the time the initial premium is accepted
Within 10 days after t
Seven days before the initial premium is accepted
This only applies if the policy does not contain "Free Look" Provision as required by law. Since all Life Insurance Policies contain a Free Look Provision by law, this is a mute point. This was a regulatio
When a nonresident insurance producer is issued a license it is deemed that ________ will be appointed as agent to receive service of original legal process in this state in any cause of action or legal proceeding arising within this state, out of transac
The New Jersey Commissioner of Insurance
The NJ Commissioner is the Non-Resident Producer's ""Agent"" designated to receive suit papers in the event a N/R Producer is sued for actions regarding insurance business generated in NJ.
A producer was found guilty of violating the rebating law on three occasions. What is the maximum fine the commissioner may impose?
25,000
A license may terminate a current producer by doing which of the following?
Achieving a CPCU designation
None of the choices listed
Losing their company appointment
Returning the license to the Department for cancellation any time before the expiration da
Returning the license to the Department for cancellation any time before the expiration date
Life Insurance solicitation requirements in New Jersey apply to all of the following EXCEPT:
Single Premium contracts
Annuities
Term Policies
Endowment policies
Annuities
A producer is suspected of violating insurance rules. A 10 day notice of hearing is issued and after the hearing is conducted, the producer is found guilty. The commissioner may do which of the following, in addition to imposing monetary penalties?
Revoke
Revoke the license of the licensee
When the replacement of Life Insurance is involved, the replacing insurer must delay issuing its policy for how many days?
20 days
60 days
10 days
30 days
30 days
Insurers are required to keep copies of Policy Summaries and Buyer's Guides on file for at least:
Five years after the documents are used
Seven years after the documents are used
Two years after the documents are used
Three years after the documents are u
Three years after the documents are used
A person whose producer license is revoked shall not be entitled to apply for another insurance license for at least:
Ten years
Two years
One year
Five years
Five years
A notice of hearing by the Commissioner will include all of the following EXCEPT:
Information about the nature of the hearing
A list of the persons to attend the meeting
The place where the hearing to be held
The time & date of the hearing
A list of the persons to attend the meeting
A Producers License may be revoked if The Commissioner finds that commissions earned on ""controlled business"" during any 12 month period exceed what percentage of the producer's aggregate commissions on all business written?
50%
25 %
10%
60%
50%
Publishing or circulating information, which is false and maliciously critical to an insurer and is intended to cause injury, is a prohibited practice known as which of the following?
Unfair discrimination
Defamation
Boycott
Coercion
Defamation
If credit life insurance is terminated before the scheduled maturity date of the debt, any unearned premium held by the insurer will be?
Debited to an account for "bad debts"
Refunded only if the amount is greater than $10.00
Added to the insurer's surplu
refunded to the debtor, unless less than $10.00
In Life Insurance, replacing companies must keep records of all replacement materials on file for how long?
5 years
3 years
5 years or until next regular examination by the Commissioner.
3 years or next regular examination
5 years or until next regular examination by the Commissioner
The licensee shall advise the Department of Banking and Insurance of the closing of a branch office within how many days?
20 days
20 days in writing
30 days
30 days in writing
30 days in writing
The death benefit of Credit Life and Health Insurance is paid to which of the following?
The Creditor
The account of the debtor
The policyholders beneficiary
The Creditor's Beneficiary
The creditor
Participation of the NJ Guaranty Associations is?
Mandatory for any Authorized Insurer
Required by Law for the policyholder to participate
Optional to the Insured if they elect to pay the premium
Required and the policyholder contributes to the fund annua
Mandatory for any Authorized Insurer
Users of The National Do Not call list must review and update their list every?
90 days
31 days
180 days
120 days
31 days
Accounts receivable, for insurance accounting purposes, may not include premiums owed to the licensee for more than what period of time after the last day of the month in which the insurance was effective:
120 days
60 days
90 days
180 days
120 days
How may a Producer's license by renewed?
By retesting every two years
By submitting an online renewal application
By calling the DOBI requesting renewal
By writing a letter to the DOBI requesting renewal
By submitting an online renewal application
Once a hearing determination dissolves a practice as not violating any rules, any Intervener in the proceedings may institute an action in the Superior Court to restrain the practice within ____ days after the determination is made.
30
10
5
60
30
The standard term for a New Jersey insurance producer license is:
4 years
1 year
2 years
3 years
2 years
When all qualifications have been satisfied, the Commissioner may issue a temporary certificate which will permit an applicant to begin working as a producer, pending receipt of the license. A temporary certificate may be effective for a period of up to:
60
Which of the following sells reinsurance?
The surplus lines insurer
The ceding insurer
The assumptive insurer
The assuming insurer
The assuming insurer
In the advertising of Individual Life Insurance policies, an "introductory" or "special enrollment" may not be made available until any previous enrollment period for the same policy has been closed for at least how long?
Two months
Three months
Five mont
Three Months
Each of the following is False EXCEPT?
The Association's liability is generally limited to that of the impaired insurance company.
The Life & Health Guaranty Association is comprised of representatives from the DOIs of every state.
It is illegal for an in
It is illegal for an insurer to advertise that policies are covered by the Life & Health Guaranty Association.
Any company selling life and/or Health insurance must belong to the Guarantee Association. It is illegal for insurers to advertise that their po
After passing the state examination, the Producer is issued a Temporary Certificate. How many days is the Temporary license issued for?
60 days
10 days
6 months
30 days
60
A policy summary includes all of the following, EXCEPT:
The name and address of the insurance agent
The cash dividends payable at the end of each year up to the 20th year (followed by a statement that the Dividends are not guaranteed.
The full name and ho
The annual percentage rate of the agents compensation
An insurer is required to maintain records of all complaints received:
since it was last examined by the Department
for at least five years
for at least two years
for at least one year
since it was last examined by the Department
All other records must be kept for 5 years. There is no 5 year requirement for Records of Complaints. Complaint records must be kept until the next examination by the Commissioner.
Since Insurers are examined b
Each of the following about Branch offices is true, EXCEPT:
At least one license producer is permanently assigned to that office
The office is accessible to the general public during reasonable business hours
The office must be open 9-5, 5 days a week
The
The office must be open 9-5, 5 days a week
As of January 1, 2007, a producer's license expires?
January 1, every two years
Every two years on the last day of the producer's birth month
Producer's license never expires
Every two years on its anniversary
Every two years on the last day of the producer's birth month
It is the responsibility of the producer at the time of application to establish if replacement is involved in the transaction. If it is a replacement transaction, the producer is required to: do which of the following?
Read the Notice Regarding Replaceme
Read the Notice Regarding Replacement out loud to the applicant (unless the applicant rejects that right in writing) and leave a copy with the client.
An advertisement made by a paid celebrity for Life Insurance must?
Be their current opinion
Represent their honest and true opinion
State that the celebrity is a paid spokesperson
All of the choices
All of the choices
All of the following would be listed on a producer status, EXCEPT:
Names and reference number of licensed organizations for which the producer serves as a licensed officer or partner
Petitions or discharges in bankruptcy
Date of birth
License authority an
Petitions or discharges in bankruptcy
The insurer must give the Department of Insurance how many days notice of the termination of an agent appointment:
20
60
15
30
15
How old must an individual be to obtain a producer's license?
21
15
18
20
18
A written statement describing the elements of a policy referred to as which of the following?
Buyer's Guide
Policy Summary
Insured's right to renew
All of the choices
Policy Summary
A document providing basic information about Life Insurance policies which contains and is limited to language approved by the Commissioner is known as a?
Policy Summary
Buyers Guide
Notice of Coverage Form
Comparison Form
Buyers Guide
If an Insurer decides to waive its right to certain information, which of the following prevents the insurer from reasserting its right at a later time?
The Doctrine of Reasonable Recourse
The Monroe Doctrine
A Doctrine of Adhesion
The Doctrine of Estoppe
The Doctrine of Estoppel
Once a right to information is waived, the law states that the party who waived that right is "estopped" or prevented from later reasserting the right.
A Certificate of Authority is issued to which of the following?
The insurer
The agent
The producer
The insured
The insurer
A Certificate of Authority is the document a company receives after receiving approval to do business in NJ. A certificate of authority means an Insurer is now an Authorized or an Admitted Insurer. The Producer get a License.
After passing the state test, a candidate must apply for a license within:
2 years
6 months
60 days
1 year
1 year
Who pays the expenses of the NJ Guaranty Association?
The participating insured
The participating reinsurers
The Member Insurers of the Association
The Commissioner of Insurance
The Member Insurers of the Association
A Producer takes an application for Accident and Health Insurance and realizes later that the box should have been checked "Yes" was checked "No". In this case the Producer should do which of the following?
Circle the box that was incorrect, check the cor
Circle the box that was incorrect, check the correct box, and get the client to initial it
The Penalty for failure to pay a claim in a timely manner is which of the following?
10%
60%
15%
50%
10%
After a hearing on rules & regulations, a proposed regulation or modification may not take effect until it has been on file with the Office of Secretary of State for at least how many days?
20 days
30 days
5 days
10 days
5 days
The Secretary of State's office is charged with the responsibility to oversee the creation of the regulation to determine it's legality.
When an insurance producer is convicted of any crime , the Producer must report the conviction to the Commissioner of Banking and Insurance within how many days after the conviction?
20 days
30 days
10 days
5 days
30 days
When and Insurer requires AIDS testing during the Underwriting process, which of the following is true?
If the applicant does not supply the insurer with the results within 30 days the company will cease it's underwriting and not issue coverage
The agent
All of the above
When the Commissioner suspects a producer is engaged in Unfair Methods of Competition or deceptive practices, a hearing may be held after giving the person advance notice of at least how many days?
10 days
30 days
20 days
60 days
10 days
Hearings are held 10 days after a notice of hearing notification.
When new Life Insurance is to be purchased, the solicitation will be considered a replacement transaction if, in conjunction with the sale, existing Life Insurance will be subject to borrowing for amounts exceeding which of the following?
10% of the polic
25% of the policy's loan value
If a client keeps an existing policy but borrows more than 25% of it's cash value in order to use that money for a new policy, Replace has occurred.
A licensed producer is required to file notice of any change of address in writing within:
30 days
10 days
60 days
20 days
30 days
After a hearing, if the Commissioner determines that a person has engaged in an Unfair Trade Practice, the Commissioner may impose a fine of which of the following?
$10,000 for each violation
$20,000 for each violation
$5,000 for each violation
$15,000 fo
$5,000 for each violation
The Commissioner of Banking and Insurance is appointed by which of the following?
The Legislature
The Senate
The Governor
The Secretary of State
The Governor
When the insurer enters into an agency contract with a licensed producer, it must file a Notice of Agency Contract with the Department within how many days?
15 days
30 days
10 days
20 days
15 days
The state must be notified of agency agreements and terminations. If the agency agreement is terminated the state must be notified within 15 days of termination as well. Fifteen days in.......Fifteen days out for Notice of Agency Contract.
An effort by an existing insurer to prevent replacement and continue existing Life Insurance in force is known as which of the following?
Reinstatement
Conversion
Conservation
Direct-response
Conservation
The Commissioner may revoke a producer's license if it is found that the commissions earned on "Controlled Business" during any 12 month period exceeded what percentage of the producer's aggregate commissions on all business written?
65%
30%
50%
25%
50%
Which of the following is not true regarding Branch Offices:
The office is accessible to the public during normal business hours.
At least one licensed insurance producer is assigned to that office.
The office must be open 9am - 5pm
At least one licensed
The office must be open 9am - 5pm
Which of the following is true concerning the proceeds of a Life Insurance policy if there is no assignment against the policy?
There is protection of proceeds against the beneficiary's creditors
There is protections of proceeds against the insured's cred
There is protection of proceeds against the insured's and the beneficiary's creditors
A producer who has a license revoked by the Commissioner of Insurance may:
Not receive commissions on the renewal of policies
Cancel all existing policies on a pro-rata basis
A) Receive commissions on renewal policies pursuant to the previous agency contr
Not receive commissions on the renewal of policies
Revocation severs all business relationships with anyone else in the insurance business. Once a Producer's license is revoked a company may not pay a renewal commission to that person.
Hearings conducted at the NJ Department of Insurance require that any person suspected of an unfair of deceptive act regarding the hearing be given _____ days notice that he/she is to appear for same
5
45
10
30
10
A ten day notice is required prior to a Hearing. conducted by the DOBI.
If a Producer requests a hearing the producer must give the DOBI a 20 day notice. Sometimes questions are not a clear as they need to be .If you get a question on Notice of Hearing
Each of the following is False EXCEPT?
It is illegal for an insurer to advertise that policies are covered by the Life & Health Guaranty Association.
The Association's liability is generally limited to that of the impaired insurance company.
State Life &
It is illegal for an insurer to advertise that policies are covered by the Life & Health Guaranty Association.
Any company selling life and/or Health insurance must belong to the Guarantee Association. It is illegal for insurers to advertise that their po
In advertisements of Life Insurance and Annuities, all of the following are true EXCEPT:
The advertisement must be actually true in fact
The company's name must be used in the ad
The advertisement cannot be misleading or deceptive
Advertisements include t
Advertisements include training materials provided to the producer
Upon the death or disability of a licensee, the surviving spouse, next of kin, administrator or executor of the estate, or legal guardian may apply to the Commissioner of Insurance for a Temporary License to continue the effected producers business for a
180 days
the Temporary License allows the person to renew, service and maintain existing business. the Temporary Licensee may not sell new business.
This rule also applies to a Producer who may have been called into active Military Duty and has appointed
Which of the following is the number of days required in a notice of hearing?
30 days
90 days
15 days
20 days
20
If you studied this correctly you should be looking for 10 days. Since 10 days is not offered, the next best answer is 20 days. If 10 and 20 days are offered in a similar question take 10!
All of the following are true regarding an organization licensed as a producer EXCEPT:
Anyone acting as a producer must be individually licensed
At least one partner or officer must be a licensed producer
All partners or officers who are licensed must sig
Each employee must be licensed
The Commissioner may demand that an insurance company pay a former agent commissions on renewal business written while under contract:
As long as the former agent has been replaced as the broker of record
At a lower commission rate
Only for business writt
In accordance with the previous agency contract
Who pays the expenses of the NJ Guaranty Association?
The participating insured
The Member Insurers of the Association
The Commissioner of Insurance
The participating reinsurers
he Member Insurers of the Association