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| Section | Objectives |
|---|
| State Law and Regulations | - Insurance producer regulations
- 1. Ethics and fiduciary duties
- 2. Licensing requirements
|
| Accident and Health Insurance | - Policy provisions
- 1. Exclusions and limitations
- 2. Coordination of benefits
- Health insurance types
- 1. Disability income insurance
- 2. Medical expense insurance
- 3. Long-term care insurance
|
| General Insurance Concepts | - Insurance principles and risk management
- 1. Risk types and management methods
- 2. Insurance contract fundamentals
|
| Life Insurance | - Policy provisions and riders
- 1. Beneficiaries and settlements
- 2. Policy loans and dividends
- Life insurance policies
- 1. Whole life insurance
- 2. Term life insurance
- 3. Universal life insurance
|
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Insurance Licensing Life and Accident and Health or Sickness Producer - Combo Series 20-30 Sample Questions (Q29-Q34):
NEW QUESTION # 29
Splitting the commission with the buyer on a sale of insurance is an unfair trade practice known as:
- A. Binding
- B. Twisting
- C. Rebating
- D. Soliciting
Answer: C
Explanation:
Rebating occurs when an insurance producer offers a portion of their commission, premium reductions, or other inducements to buyers that are not explicitly stated in the policy. It is prohibited under Maryland law to ensure fair competition and maintain ethical standards.
Rebating (D): Involves returning part of the commission or providing benefits not in the policy to incentivize a sale, violating Maryland Insurance Article §27-212.
Twisting (A): Refers to persuading a policyholder to lapse or replace a policy through misrepresentation, unrelated to commission-sharing.
Binding (B): Relates to confirming coverage but does not involve commissions.
Soliciting (C): Refers to seeking potential clients, not the unfair practice of rebating.
References: Maryland Unfair Trade Practices Act, COMAR 31.15.05, and Maryland Insurance Article §27-
209.
NEW QUESTION # 30
Who has the right to change the beneficiary of an accident and health policy with a revocable beneficiary designation?
- A. The insurer
- B. The beneficiary
- C. The producer
- D. The policyowner
Answer: D
Explanation:
With a revocable beneficiary (Insurance Article, § 16-201), the policyowner retains the right to change the beneficiary, not the beneficiary, insurer, or producer, who lack such authority.
References:Maryland Insurance Article, § 16-201; MIA policy ownership rules.
NEW QUESTION # 31
A transaction in which an existing annuity contract is terminated and a new one is issued is called:
- A. Reinstatement
- B. Continuation
- C. Replacement
- D. Conversion
Answer: C
Explanation:
Definition of annuity replacement.
Replacement occurs when an existing annuity is surrendered, lapsed, or terminated and replaced with a new annuity.
Why replacements are regulated.
Replacements may trigger:
Surrender charges
Loss of benefits
Restart of surrender periods
Maryland disclosure requirements.
Producers must disclose all consequences of annuity replacement to comply with good-faith and suitability rules.
Why the other options are incorrect.
Conversion: Applies to term-to-permanent policies.
Continuation: Keeping the same contract.
Reinstatement: Restoring a lapsed policy.
Conclusion.
Terminating one annuity and issuing another is a replacement.
NEW QUESTION # 32
All of the following would be considered an unfair trade practice EXCEPT:
- A. Statements misrepresenting the benefits of an insurance policy
- B. Sharing commissions with agents who have equivalent licenses
- C. Misrepresentation of any insurance policy as being shares of stock
- D. Publishing false statements derogatory to the financial condition of an insurer
Answer: B
Explanation:
Unfair trade practices under Maryland Insurance Law.
Maryland Insurance Article Title 27 and related regulations prohibit misrepresentation, false advertising, and defamation in insurance transactions.
Evaluate each option.
A). Misrepresenting policy benefits
This is expressly prohibited and considered an unfair trade practice.
B). Misrepresenting insurance as shares of stock
This is a classic example of illegal misrepresentation under Maryland law.
C). Publishing false derogatory statements about an insurer's financial condition This constitutes defamation and is an unfair trade practice.
D). Sharing commissions with agents who have equivalent licenses
This is permitted in Maryland, provided all parties are properly licensed for the same line of insurance.
Conclusion.
Commission sharing among equally licensed agents is lawful and therefore not an unfair trade practice.
NEW QUESTION # 33
Which expenses are covered by Medicare Part D?
- A. Medical
- B. Hospital
- C. Dental
- D. Prescription drug
Answer: D
Explanation:
Medicare Part D covers outpatient prescription drugs, not medical (Part B), hospital (Part A), or dental (excluded) expenses, per federal law applicable in Maryland. It fills a key gap for enrollees' medication costs.
References:Medicare guidelines; Maryland Insurance Article, § 15-901.
NEW QUESTION # 34
......
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