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Quiz No. 04 is based on these topics. These are:
State Insurance Laws:
1. Understanding the insurance regulatory environment: state departments of insurance, insurance commissioners, etc.
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Question 1 of 30
1. Question
State insurance regulators use risk-based capital (RBC) requirements primarily to:
Correct
Risk-based capital requirements allow regulators to monitor the financial solvency of insurers by setting surplus benchmarks tied to risk.
Incorrect
Risk-based capital requirements allow regulators to monitor the financial solvency of insurers by setting surplus benchmarks tied to risk.
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Question 2 of 30
2. Question
During a market conduct exam of ABC Insurance, regulators discovered the company’s claims settlement practices were unfair and not compliant with state laws. Which regulatory action could the insurance department take?
Correct
The insurance department has the power to impose fines and penalities on insurers that violate market conduct regulations.
Incorrect
The insurance department has the power to impose fines and penalities on insurers that violate market conduct regulations.
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Question 3 of 30
3. Question
State insurance regulators participate in which of the following voluntary partnership that provides solvency analysis?
Correct
Regulators participate in the NAIC’s Financial Analysis and Examination program for solvency monitoring and coordinated oversight.
Incorrect
Regulators participate in the NAIC’s Financial Analysis and Examination program for solvency monitoring and coordinated oversight.
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Question 4 of 30
4. Question
Which regulatory body oversees the financial stability of insurers at the federal level?
Correct
The Federal Reserve supervises the financial stability and solvency of insurers considered systemically important financial institutions.
Incorrect
The Federal Reserve supervises the financial stability and solvency of insurers considered systemically important financial institutions.
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Question 5 of 30
5. Question
State insurance regulators rely on which organization’s data and analysis for oversight tasks?
Correct
The NAIC provides critical data, research, and analysis to support state insurance regulators in their oversight and protection roles.
Incorrect
The NAIC provides critical data, research, and analysis to support state insurance regulators in their oversight and protection roles.
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Question 6 of 30
6. Question
Under state regulations, insurance producers are required to meet which of the following requirements?
Correct
Insurance producers must pass state licensing exams to demonstrate their knowledge and qualifications to consumers.
Incorrect
Insurance producers must pass state licensing exams to demonstrate their knowledge and qualifications to consumers.
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Question 7 of 30
7. Question
State insurance regulators oversee solvency and market conduct primarily to:
Correct
The key mission of insurance regulators is to protect consumers by ensuring the solvency and proper market conduct of insurers.
Incorrect
The key mission of insurance regulators is to protect consumers by ensuring the solvency and proper market conduct of insurers.
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Question 8 of 30
8. Question
Which regulatory power allows insurance commissioners to hold public hearings about insurance issues or proposed regulations?
Correct
Insurance commissioners have certain legislative powers including holding public hearings to receive input on regulatory issues.
Incorrect
Insurance commissioners have certain legislative powers including holding public hearings to receive input on regulatory issues.
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Question 9 of 30
9. Question
Which regulatory body oversees the licensing and conduct of insurance producers in a state?
Correct
State departments of insurance handle the licensing, testing, continuing education and oversight of insurance producers in their jurisdictions.
Incorrect
State departments of insurance handle the licensing, testing, continuing education and oversight of insurance producers in their jurisdictions.
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Question 10 of 30
10. Question
What is a key purpose of requiring insurers to file their policy forms and contract provisions with state regulators before use?
Correct
Filing and approval of forms allows regulators to review terms for compliance with state laws and protect consumers from unfair provisions.
Incorrect
Filing and approval of forms allows regulators to review terms for compliance with state laws and protect consumers from unfair provisions.
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Question 11 of 30
11. Question
XYZ Life Insurance wants to merge with ABC Health Insurance. What regulatory review process must they undergo before merging?
Correct
Mergers and acquisitions of insurers must be reviewed and approved by state regulators to ensure solvency and market competition is maintained.
Incorrect
Mergers and acquisitions of insurers must be reviewed and approved by state regulators to ensure solvency and market competition is maintained.
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Question 12 of 30
12. Question
State insurance regulators coordinate their oversight through which organization?
Correct
The National Association of Insurance Commissioners allows coordination between state regulators.
Incorrect
The National Association of Insurance Commissioners allows coordination between state regulators.
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Question 13 of 30
13. Question
Cease and desist orders may be issued by state insurance regulators to:
Correct
Cease and desist orders tell insurers to temporarily stop certain practices in violation of state laws.
Incorrect
Cease and desist orders tell insurers to temporarily stop certain practices in violation of state laws.
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Question 14 of 30
14. Question
Under state regulations, which of the following is considered an unfair claims settlement practice?
Correct
Insurers must promptly pay the undisputed portions of claims and may take reasonable time to investigate claims.
Incorrect
Insurers must promptly pay the undisputed portions of claims and may take reasonable time to investigate claims.
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Question 15 of 30
15. Question
The primary tool used by insurance regulators to oversee life insurers’ financial solvency is:
Correct
Life insurers are subject to statutory reserve requirements to ensure funds are available to pay future claims.
Incorrect
Life insurers are subject to statutory reserve requirements to ensure funds are available to pay future claims.
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Question 16 of 30
16. Question
State insurance regulators coordinate their solvency monitoring through:
Correct
Solvency oversight and monitoring is coordinated via the NAIC’s Financial Analysis Working Group.
Incorrect
Solvency oversight and monitoring is coordinated via the NAIC’s Financial Analysis Working Group.
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Question 17 of 30
17. Question
Under state regulations, how often must insurance producers complete continuing education?
Correct
Insurance producers must complete a set number of continuing education hours annually to maintain up-to-date knowledge.
Incorrect
Insurance producers must complete a set number of continuing education hours annually to maintain up-to-date knowledge.
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Question 18 of 30
18. Question
State insurance regulators may place an insurer under administrative supervision when:
Correct
Failing to meet solvency standards can lead regulators to increase oversight through administrative supervision.
Incorrect
Failing to meet solvency standards can lead regulators to increase oversight through administrative supervision.
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Question 19 of 30
19. Question
What entity serves as the primary regulator for insurance issues at the federal level?
Correct
The Federal Insurance Office monitors insurance industry issues and developments at the federal level.
Incorrect
The Federal Insurance Office monitors insurance industry issues and developments at the federal level.
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Question 20 of 30
20. Question
State insurance regulators oversee insurers’ market conduct and claim settlement practices to:
Correct
Market conduct oversight aims to ensure insurers handle claims ethically, promptly, and in line with state laws.
Incorrect
Market conduct oversight aims to ensure insurers handle claims ethically, promptly, and in line with state laws.
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Question 21 of 30
21. Question
Which regulatory body oversees solvency and financial stability of insurers at the national level?
Correct
The Federal Reserve supervises financial stability and solvency of insurers deemed systemically important financial institutions.
Incorrect
The Federal Reserve supervises financial stability and solvency of insurers deemed systemically important financial institutions.
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Question 22 of 30
22. Question
State insurance regulators rely heavily on which organization for data collection and analysis?
Correct
The NAIC provides critical regulatory data, research, and analysis to support state insurance oversight.
Incorrect
The NAIC provides critical regulatory data, research, and analysis to support state insurance oversight.
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Question 23 of 30
23. Question
Which regulatory body licenses and oversees the conduct of insurance agents and brokers?
Correct
Licensing and oversight of insurance producers falls under state insurance regulators.
Incorrect
Licensing and oversight of insurance producers falls under state insurance regulators.
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Question 24 of 30
24. Question
Under state regulations, how frequently must insurers submit financial statements for solvency monitoring?
Correct
Insurers must file quarterly and annual financial statements with regulators for review.
Incorrect
Insurers must file quarterly and annual financial statements with regulators for review.
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Question 25 of 30
25. Question
State insurance regulators coordinate national oversight through:
Correct
The NAIC allows coordination between state regulators.
Incorrect
The NAIC allows coordination between state regulators.
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Question 26 of 30
26. Question
What term describes insurers being properly licensed and approved to operate in a jurisdiction?
Correct
Insurers must be authorized/admitted by state regulators before selling insurance in their jurisdiction.
Incorrect
Insurers must be authorized/admitted by state regulators before selling insurance in their jurisdiction.
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Question 27 of 30
27. Question
Under state regulations, insurers found to violate market conduct standards may face:
Correct
Regulators can impose fines, penalties and other disciplinary action for market conduct violations.
Incorrect
Regulators can impose fines, penalties and other disciplinary action for market conduct violations.
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Question 28 of 30
28. Question
What regulatory body oversees the financial stability of insurers at the federal level?
Correct
The Federal Reserve supervises financial stability and solvency of insurers deemed systemically important financial institutions.
Incorrect
The Federal Reserve supervises financial stability and solvency of insurers deemed systemically important financial institutions.
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Question 29 of 30
29. Question
Under state regulations, which of the following activities by an insurer would be prohibited as unfair discrimination?
Correct
Denying coverage based on personal characteristics like marital status is prohibited as unfair discrimination.
Incorrect
Denying coverage based on personal characteristics like marital status is prohibited as unfair discrimination.
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Question 30 of 30
30. Question
The purpose of requiring insurers to file their policies and forms with state regulators is to:
Correct
Form filing allows regulators to review policies for compliance before being issued.
Incorrect
Form filing allows regulators to review policies for compliance before being issued.