Mutual company is owned by its policyholders. Which of the following situations does NOT apply to the Florida Replacement Rule? Florida’s Replacement Rule applies to all of these situations EXCEPT “
An existing policyholder purchases an additional policy from the same insurer
“.
What is the Florida replacement rule?
The Florida Replacement Rule sets forth the requirements and procedures to be followed by insurance companies and insurance producers when a proposal is being made to a client who plans to replace existing life insurance contract(s) with the proposed new life insurance policy.
What is Florida definition of life insurance replacement?
What is Florida’s definition of Life insurance replacement?
A transaction in which coverage on an existing policy is increased
. A transaction in which group life coverage is converted to an individual policy.
What is Florida’s definition of life insurance replacement quizlet?
What is Florida’s definition of Life insurance replacement? A transaction in which a new policy is bought and an old policy is terminated. S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions.
Which of the following is not considered rebating quizlet?
Which of the following is not considered a rebate?
Various payment or budget plans
are not considered rebating. Rebating is an illegal activity.
Which of the following actions is required by an agent who is replacing an existing life insurance policy?
When replacing a life insurance policy, an agent must obtain a list of all life insurance to be replaced, give the applicant and the replacing insurer a copy of the “Notice of Replacement” signed by the applicant and the agent, leave a copy of all sales proposals used with the applicant, and send to the replacing …
What is a replacement policy?
Replacement Policy means
a policy offered or issued by Insurer on its own policy forms, to take effect upon the expiration or cancellation of a Removed Policy
.
Which of the following is not considered an unfair claim practice?
All of the following, if performed frequently enough to indicate a general business practice, are unfair claims settlement practices, EXCEPT:
Requiring submission of preliminary claim report or a formal proof of loss before paying a claim
is standard practice and not an unfair claim practice.
What is the replacement rule in insurance?
A replacement occurs when a new policy or contract is purchased and, in connection with the sale, you discontinue making premium payments on the existing policy or contract, or an existing policy or contract is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed …
What definition of replacement is the act of replacing an existing insurance policy with another replacement is?
Replacement is defined as
changes in existing coverage, usually with coverage from one insurer being “replaced” with coverage from another
. It is, however, a practice that can lead to ethical lapses.
Which of the following groups is not allowed to buy group insurance?
Which of the following is NOT an eligible group to obtain group life insurance? Group life insurance is limited to
employer groups, multiple employer trusts, labor unions, group credit life insurance, and association plans
.
What kind of policy does not typically require proof of insurability?
Some
group plans
may not require proof of insurability if the applicant applies during the open enrollment period. Also, providers of plans offering lower or limited benefits may not need evidence of a policyholder’s insurability. Also, convertible life insurance will not require additional evidence on conversion.
What is the reason for the establishment of rules governing life insurance and annuity replacements?
The purpose of this regulation is: (1)
To regulate the activities of insurers and producers with respect to the replacement of existing life insurance and annuities
. (b) Reduce the opportunity for misrepresentation and incomplete disclosure.
Which of the following employees may not be excluded?
Which of the following employees may NOT be excluded from a group life plan?
Full-time employees after the probationary period
. (All of these employees may be excluded from a group life plan except for “Full time employees after the probationary period”).
What is required in the Florida Employee Health Care Act?
For example, the Florida Health Care Access Act requires that
any employee signing up for insurance provide a full and accurate disclosure statement
.
What would not be considered rebating?
For example, all of the following would be considered an illegal rebate in most states:
Any gift designed to induce an insurance purchase, especially when the value of the gift is significant in relation to what the prospect will pay in premiums
. Any return of agent commissions to the buyer.
Which is not considered a rebate?
B; A rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy.
Insurance dividends
are not considered rebates as the IRS considers it as a return of overpaid premium.
Which of the following factors is not considered when the Department of financial Services determines if an agent’s home is an insurance agency?
The Department of Financial Services does not take into consideration the
amount of premium collected
at an agent’s home when determining whether or not the home is an insurance agency. (Correct.)
Which of the following are examples of third party ownership of a life insurance policy except?
All of the following are examples of a third-party ownership EXCEPT:
S applies for a policy on herself and names her husband as the beneficiary
. Third-party ownership exists when the insured and the owner of the policy are different persons. A business owner buys a life policy on his own life.
Which of the following actions is required by an insured who leaves the primary area?
If an insured leaves the primary area of medical coverage and seeks medical care, the insured first needs to:
contact the insurer to obtain prior approval for the medical service
.
Which of the following is not considered a life insurance replacement transaction?
Which of the following is not considered a life insurance replacement transaction?
Using a dividend option
is not considered replacing a life insurance policy. What is the purpose of life insurance replacement regulations?
What is an example of policy replacement?
Policy replacement is “…an action which eliminates the original policy or diminishes its benefits or values.” Examples of this are
policy loans, taking reduced paid-up insurance, or withdrawing dividends
.
What is replacement cost example?
In this situation,
it would cost the company $23,000 to purchase a similar asset to the one they current have in order to replace it
. Thus, $23,000 is the replacement cost of the $20,000 truck because this is how much it would cost to buy that same truck today.
What is the disadvantage of replacing a policy to a customer?
I/We acknowledge there may be disadvantages when replacing an existing policy such as:
It may cost more to retain your original benefits as you grow older
: If the policy being replaced was purchased for the life insured at a younger age, it may cost more to get the same or similar benefits in the new policy.
Which of the following will not be considered unfair discrimination by insurers?
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured’s habits and lifestyle
. Insurers are also not allowed to cancel individual coverage due to a change in marital status.
What is an unfair claims practice?
Unfair claims practice is
the improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim
. By engaging in unfair claims practices, an insurer tries to reduce its costs.
What are the unfair practice of insurance?
Unfair trade practices in insurance
Misrepresenting the benefits, advantages, conditions or terms of any policy
. Misrepresenting the dividends or share of the surplus to be received on any policy. Misleading or misrepresenting with regard to the financial condition of the insurer.
