1. What is the MAXIMUM time period a life insurance application can be backdated?
A. Three months
B. Six months Correct
C. Nine months
D. Twelve months
Explanation
Life insurance applications can be backdated, typically up to a maximum of six months, to save the insured money on premiums by using a younger issue age. This is a common industry practice allowed within regulatory limits. Backdating for longer periods (like 9 or 12 months) is generally not permitted as it could be seen as misrepresentation.
2. In the two months before renewing their license, a producer earned an extra 15 hours of continuing education credits beyond what was needed to renew their license. Which of the following is TRUE?
A. All 15 hours can be carried forward
B. Only Long-Term Care and Ethics can be carried forward
C. No continuing education hours can be carried forward Correct
D. 12 hours of credits can be carried forward, excluding Long-Term Care (LTC) or Ethics credit hours
Explanation
In Indiana, continuing education (CE) credits cannot be carried forward from one licensing period to the next. Credits earned must apply to the current two-year licensing period. Excess credits do not roll over, regardless of the topic.
3. Which statement is TRUE about the Indiana Commissioner of Insurance?
A. The Commissioner of Insurance is elected to a four year term.
B. The Commissioner of Insurance is appointed by the NAIC.
C. The Commissioner of Insurance is appointed by and serves at the pleasure of the Governor. Correct
D. The Commissioner of Insurance is appointed by the legislature.
Explanation
The Indiana Commissioner of Insurance is appointed by the Governor and serves at the Governor's pleasure, not as an elected official or by the NAIC or legislature. This is a standard structure for insurance commissioners in many states.
4. Under an individual Medical Expense policy, a newborn child who is permanently and totally disabled will be covered:
A. through age 26
B. until they reach the limiting age
C. for as long as the policy is in force Correct
D. as long as the parents stay married
Explanation
Under the Affordable Care Act (ACA) and typical policy provisions, a dependent child who is permanently and totally disabled can remain covered under a parent's individual medical expense policy indefinitely, as long as the parent's policy remains in force, even beyond the usual age limit (typically 26).
5. Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the insurance laws of this state covering:
A. rebating
B. false advertising
C. discrimination
D. unfair methods of competition Correct
Explanation
Boycott, coercion, and intimidation are specific acts defined as 'unfair methods of competition' under state insurance laws (modeled after the NAIC Unfair Trade Practices Act). These practices are designed to stifle competition and are prohibited.