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How long must producers keep records of insurance transactions under their license?
A. 3 years
B. 5 years
C. 7 years
D. 1 year
Which of the following is the term used when a person, in a fiduciary position, has used funds in manner for which they were not intended such as the wrongful taking or use of money belonging to another?
A. Misappropriation of funds
D. Fiduciary capacity
In which of the following situations is it legal to limit coverage based on marital status?
A. It is never legal to limit coverage based on marital status
B. Excessive number of divorces, as defined by the Insurance Code
C. Legal separation during the application process
D. Divorce withing the last six months of applying for insurance
All of the following would be a reason that an insurance company's name could be disapproved for use in the State of Alabama EXCEPT
A. The name is to long to be printed on a single line of the policy in the required type size
B. The name tends to misrepresent to the insurance buying public as to the nature of the organization
C. The name tends to mislead the insurance buying public that company is agency of Medicare or other government agency
D. The name is the same or similar to a name already approved
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of
If an insurance producer is to charge to the client a fee that is in addition to the commission for the sale of an insurance policy, the producer must
A. Include this information in his sales pitch
B. Disclose the fee to the client, in writing, and be agreed upon prior to the issuance of the policy
C. have the fee be agreed upon by the insurer
D. Be license as an additional fee adovate
When a domestic insurance company, examined by the commissioner, disagrees with the findings of the examination, what recourse is available?
A. Hire their own examiner at the insurer's expense
B. Request a hearing withing 20 days of receiving the report
C. There is no recourse
D. Hire their own examiner at the Insurance Departments's expense
What instrument is available to the commissioner to prevent a licensee from performing specific acts or using certain methods conducting the business of insurance before any hearing is held to determine if a violation of laws or regulations has occurred?
A. Arrest warrant
B. Cease and desist order
C. License suspension
D. License revocation
Which of the following best describes an unfair trade of defamation?
A. Assuming the name and identity of another person
B. Issuing false advertising material
C. Refusing to deal with other insurers
D. making derogatory oral statements about another insurer's financial condition
Paul is a producer in Louisiana and wants to become a producer in Alabama. The Commissioner will waive certain examination requirements, provided that Louisiana would waive these same requirements if an Alabama producer sought licensure in Louisiana. What term is used to describe the phenomenon?
B. Fair exchange
A producer licensed in Alabama must notify the Insurance Department of any change of address in his or her residence or business address within how many days?
In Alabama, an insurance company certificate of authority is issued for what period of time?
B. 1 year
C. 3 years
D. 5 years
The license of Forgetful Frank has lapsed. How long, from the due date of the renewal fee, may Frank be reinstated without having to re-take a course or exam?
A. 3 months
B. 12 months
C. 1 month
D. 6 months
Which of the following would be considered an illegal inducement to purchase insurance?
A. Confirming future dividends in a life insurance proposal
B. Mailing an agency brochure to a prospective client
C. Listing the insurance companies the agency represents in a letter
D. Inviting prospective clients to the grand opening of the producer's new office
Which of the following is a requirement that must be satisfied before an applicant can receive an insurance producer license in Alabama?
A. Be at least 21 years old
B. Be a resident of Alabama
C. Complete prelicensing classroom instruction, unless otherwise exempt by the commissioner.
D. Agree to solicit insurance sale to members of her immediate family
A certificate of authority is not required fo ran insurance company that writes only
A. Surplus lines insurance
B. Accident and health insurance
D. Life insurance
An insurance entity or licensee cannot pay a commission or fee to a person if the person's license is classified as one of the following EXCEPT
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?
A. The change must be reported to the Commissioner
B. The change must be reported to the Federal Producer's Directory
C. The licensee must obtain a new license
D. It is illegal to transact insurance under any name other than the one listed on the license.
If another governmental agency takes legal action against a licensee, whose responsibility is it to report the action?
A. the person/entity requesting the action
B. The licensee
C. The Department of Insurance
D. The judge
All of the following may cause the Commissioner to suspend or revoke the license of an insurance producer, EXCEPT
A. Conviction of a felony
B. Failure of a producer to meet company imposed sales quotas for two consecutive periods
C. Misappropriating money belonging to an insurance company or insured
D. Failure to pay state tax when demanded by the state treasurer
A producer has become disabled. In order to keep his business going. what may his disignee do?
A. File for federal aid designed for his situation
B. Hire a temporary producer to run the business during the producer's absence
C. Obtain a temporary license
D. Suspend operations
Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is association with this?
A. Financial trust
C. Monetary gatekeeper
D. Fiduciary capacity
For a producer to meet the state continuing education requirements, how many CE hours must be completed on the topic of ethics?
D. 1 1/2
When a producer was reviewing a potential customer's insurance coverage that is written by another company, the producer made several oral statements that were maliciously critical of that other insurer. The producer could be found guilty of
B. False advertising
How often must the Commissioner or an examiner designated by the Commissioner examine domestic insurance companies?
A. Not more frequently than once every five years
B. As often as the Commissioner deems necessary, but not less frequently than once every five years
When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file bankruptcy. Which of the following terms best describes the advertisement?
D. False financial statement
A licensed life producer wrote a policy that covers the life of his brother. Since the insured was related, the producer refunded the commission earned on this to the insured. This is considered to be
A. A family business transaction
B. An acceptable business practice
C. A controlled business practice
D. An unfair trade practice
Which of the following would not be a violation of State insurance regulations?
A. Producer B charges his clients, in addition to the premium, a consulting fee
B. Producer C used her license to write uncontrolled business only
C. Producer D collects premiums due on policies and deposits the fund in his own personal account
D. Producer A used license to write only insurance for herself and her immediate family
An insurer devices an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes the practice?
A. A legal advertising strategy
B. Unfair Discrimination
Rebating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT
A. An agent offers the use of his lake house to person as an inducement to buy
B. An agent offers to share his commission with a policyholder
C. An agent offers tickets to a baseball game as an inducement to buy insurance
D. An agent used misrepresentation to convince a person to cancel an existing policy and take a new policy with him
A business entity acting as an insurance producer is required to do all of the following EXCEPT
A. Pay the fee established by the insurance code
B. Designate a licensed individual producer to be responsible for the business's compliance with the insurance laws of Alabama
C. Be a publically owned company
D. obtain an insurance producer license
How long does a temporary producer's license last?
A. 150 days
B. 6 months
C. 1 year
D. 90 days
Applicants for which type of insurance license are exempt from Alabama prelicensing education requirements?
A. Variable license
B. Insurance producer license
C. Life producer license used only for selling annuities
D. Limited License
In applying for an original certificate of authority, an insurer must submit an application with the appropriate fee and the following information, EXCEPT
A. Name of the company
B. A copy of its last financial statement
C. State or country of domicile
D. The amount of insurance it intends to write
A person convicted of willfully violating an insurance law of Alabama is subject to
A. A fine of up to $10,000, or a sentence of hard labor, determined by the violator
B. 100 hours of community service
C. A sentence of hard labor for a period of 2 years
D. A fine of up to $1,000, imprisonment, and a sentence to hard labor for a period of one year
An insurance producer who is late in filing an application for license renewal will be charged a fee of
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT
A. Promising returns and profits from the purchase of insurance
B. Offering benefit certificates or securities in return for purchasing insurance
C. Inviting prospective clients to the grand opening of the company's new office
D. Issuing or delivering insurance company stock in return for purchasing insurance
The illegal act of misrepresenting the true nature or facts of a policy or its benefit in order to induce a policyholder to surrender on policy and replace it with another is called
In the event that an insurer terminates the appointment of a producer, the insurer must notify the Commissioner within
A. 5 days
B. 10 days
C. 20 days
D. 30 days
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