NJ Health and Accident Producer Exam Questions with Correct
Answers
1. Which of these may NOT be used in a health insurance advertisement: An insurance
company's trademark instead of the company's actual name
2. XYZ Company is looking to replace their existing group health coverage with another plan The
replacing insurer is REQUIRED to: accept all individuals eligible under the previous plan
3. Q: What is the role of the Department of Banking and Insurance (DOBI): A: It regulates the
banking and insurance industries in New Jersey
4. Q: Who appoints the Commissioner of the Department of Banking and Insur- ance: A: The
Governor, with advice and consent of the Senate
5. Q: What is the role of the Commissioner of Insurance: A: The Commissioner has the power to investigate,
administer oaths, regulate insurers for insolvency, suspend/revoke licenses, and impose penalties for violations
6. Q: What is the maximum penalty for the first violation of insurance regula- tions: A:
$5,000
7. Q: What is the maximum penalty for each subsequent violation of insurance regulations:
A: $10,000
8. Q: How long before a hearing must the notice be delivered to the person/en- tity under
investigation: A: At least 10 days after the notice is delivered
9. Q: What happens if an insurance company becomes insolvent: A: The Commissioner will suspend its
Certificate of Authority
10. Q: What is an insurance producer: A: A person who produces business for the insurer, such as an agent,
,broker, or general agent
11. Q: What must an insurance consultant do before receiving fees from an
insurance prospect: A: Obtain a signed written memorandum stating the amount of compensation
12. Q: What is the requirement for a business entity acting as an insurance
producer: A: The business entity must be licensed in New Jersey
13. Q: How many hours of pre-licensing education are required for life insurance in New
Jersey: A: 20 hours
14. Q: How many hours of pre-licensing education are required for accident and health
insurance: A: 20 hours
15. Q: What are the continuing education requirements for resident producers-
: A: 24 hours every 2 years, with 3 hours in ethics
16. Q: How long is a temporary license valid in New Jersey: A: 180 days
17. Q: What are the reinstatement requirements for a lapsed license: A: Submission of a
reinstatement application, late renewal fee, and proof of continuing education completion
18. Q: What is a certificate of authority: A: A certificate allowing an insurer to transact business in New Jersey
19. Q: Define "Reinsurance": A: Reinsurance is when an insurer buys insurance for itself from another insurer
20. Q: What is a retrocession: A: When a reinsurer transfers part of its risk to another reinsurance company
21. Q: What is controlled business: A: Insurance policies written on individuals or companies that the producer
has direct influence over, such as family members or employers
22. Q: What is the maximum percentage of a producer's commission that can come
from controlled business: A: 50% in a 12-month period
23. Q: What is a domestic insurance company: A: A company incorporated under the laws of the state in
, which its home oflce is located
24. Q: What is an alien insurance company: A: A company chartered in a country other than the US
25. Q: What is the difference between a stock and a mutual insurance company-
: A: A stock company is owned by shareholders, while a mutual company is owned by policyholders
26. Q: What is twisting in insurance: A: Replacing an insurance policy based on misrepresentation
27. Q: What is the penalty for violating a cease and desist order: A: A penalty of up to
$5,000
28. Q: Define "unfair discrimination" in insurance: A: Discriminating against a person in any
insurance-related matter unfairly, such as charging different rates for people in the same actuarial class
29. Q: What is illegal rebating: A: Offering a premium rebate, gift, or special advantage not specified in the contract
to induce a person to purchase insurance
30. Q: What is the penalty for engaging in unfair claim settlement practices: A: The
Commissioner may issue cease and desist orders and impose fines
31. Q: What is the maximum penalty for making a false financial statement: A: A fine of
up to $1,000 for each violation or $5,000 if the violator knew the act was illegal
32. Q: What is required in a Buyer's Guide for life insurance: A: Basic information to help consumers
compare different life insurance policies
33. Q: What is required in a Policy Summary: A: Specific information on the provisions, benefits, and
coverage of the policy
34. Q: What is the maximum term of coverage for credit life insurance: A: The length of the
loan or five years, whichever is shorter
35. Q: What must be provided to an applicant regarding replacement of life
Answers
1. Which of these may NOT be used in a health insurance advertisement: An insurance
company's trademark instead of the company's actual name
2. XYZ Company is looking to replace their existing group health coverage with another plan The
replacing insurer is REQUIRED to: accept all individuals eligible under the previous plan
3. Q: What is the role of the Department of Banking and Insurance (DOBI): A: It regulates the
banking and insurance industries in New Jersey
4. Q: Who appoints the Commissioner of the Department of Banking and Insur- ance: A: The
Governor, with advice and consent of the Senate
5. Q: What is the role of the Commissioner of Insurance: A: The Commissioner has the power to investigate,
administer oaths, regulate insurers for insolvency, suspend/revoke licenses, and impose penalties for violations
6. Q: What is the maximum penalty for the first violation of insurance regula- tions: A:
$5,000
7. Q: What is the maximum penalty for each subsequent violation of insurance regulations:
A: $10,000
8. Q: How long before a hearing must the notice be delivered to the person/en- tity under
investigation: A: At least 10 days after the notice is delivered
9. Q: What happens if an insurance company becomes insolvent: A: The Commissioner will suspend its
Certificate of Authority
10. Q: What is an insurance producer: A: A person who produces business for the insurer, such as an agent,
,broker, or general agent
11. Q: What must an insurance consultant do before receiving fees from an
insurance prospect: A: Obtain a signed written memorandum stating the amount of compensation
12. Q: What is the requirement for a business entity acting as an insurance
producer: A: The business entity must be licensed in New Jersey
13. Q: How many hours of pre-licensing education are required for life insurance in New
Jersey: A: 20 hours
14. Q: How many hours of pre-licensing education are required for accident and health
insurance: A: 20 hours
15. Q: What are the continuing education requirements for resident producers-
: A: 24 hours every 2 years, with 3 hours in ethics
16. Q: How long is a temporary license valid in New Jersey: A: 180 days
17. Q: What are the reinstatement requirements for a lapsed license: A: Submission of a
reinstatement application, late renewal fee, and proof of continuing education completion
18. Q: What is a certificate of authority: A: A certificate allowing an insurer to transact business in New Jersey
19. Q: Define "Reinsurance": A: Reinsurance is when an insurer buys insurance for itself from another insurer
20. Q: What is a retrocession: A: When a reinsurer transfers part of its risk to another reinsurance company
21. Q: What is controlled business: A: Insurance policies written on individuals or companies that the producer
has direct influence over, such as family members or employers
22. Q: What is the maximum percentage of a producer's commission that can come
from controlled business: A: 50% in a 12-month period
23. Q: What is a domestic insurance company: A: A company incorporated under the laws of the state in
, which its home oflce is located
24. Q: What is an alien insurance company: A: A company chartered in a country other than the US
25. Q: What is the difference between a stock and a mutual insurance company-
: A: A stock company is owned by shareholders, while a mutual company is owned by policyholders
26. Q: What is twisting in insurance: A: Replacing an insurance policy based on misrepresentation
27. Q: What is the penalty for violating a cease and desist order: A: A penalty of up to
$5,000
28. Q: Define "unfair discrimination" in insurance: A: Discriminating against a person in any
insurance-related matter unfairly, such as charging different rates for people in the same actuarial class
29. Q: What is illegal rebating: A: Offering a premium rebate, gift, or special advantage not specified in the contract
to induce a person to purchase insurance
30. Q: What is the penalty for engaging in unfair claim settlement practices: A: The
Commissioner may issue cease and desist orders and impose fines
31. Q: What is the maximum penalty for making a false financial statement: A: A fine of
up to $1,000 for each violation or $5,000 if the violator knew the act was illegal
32. Q: What is required in a Buyer's Guide for life insurance: A: Basic information to help consumers
compare different life insurance policies
33. Q: What is required in a Policy Summary: A: Specific information on the provisions, benefits, and
coverage of the policy
34. Q: What is the maximum term of coverage for credit life insurance: A: The length of the
loan or five years, whichever is shorter
35. Q: What must be provided to an applicant regarding replacement of life
