MICHIGAN LIFE, ACCIDENT, AND HEALTH — COMPREHENSIVE EXAM
PREPARATION QUESTIONS AND ANSWERS
1. The Commissioner of Insurance is appointed by the Governor for a term of: 4
years
2. All of the following are examples of insurance transactions except:
A. soliciting applications for insurance
B. delivering policies
C. licensing of producers
D. collecting premiums: Correct answer: C - licensing of producers
3. A temporary license issued to close the affairs of a deceased producer may
be issued for up to days at the discretion of the Commissioner: 180 days
4. Continuing Education (CE)
hours of CE every two years
hours must be in Ethics
day grace period to complete CE: 24 total hours every two years
3 hours in ethics
90 day grace period
5. Michigan Life and Health Insurance Guaranty Association: Protects policy holders
against failure insolvent insurers
6. Controlled business: It is permitted provided it does not exceed 15% of the premiums written in a
12-month period
7. To motivate a buyer to sign an application for insurance, a producer promis-
es a gift equal to 50% of the commission. This is an example of .: Re-
bating
8. Defamation: A written statement that is false and derogatory that is designed to injure someone's reputation.
9. The maximum fine for knowingly violating a cease and desist order is
$ and .: $10,000 and possible license revocation
10. Insurance counselor: Provides advice concerning an insurance policy and charges a fee for that advice.
11. An applicant who has been denied an insurance license has days to
request a hearing to protest the denial.: 30 days
12. True / False
A producer may share commissions with another licensed producer: True
, MICHIGAN LIFE, ACCIDENT, AND HEALTH — COMPREHENSIVE EXAM
PREPARATION QUESTIONS AND ANSWERS
13. True / False
A producer may not share commissions with a licensed nonresident produc-
er: False
14. If, after a hearing, the Commissioner believes a producer knowingly violat-
ed insurance licensing laws, the Commissioner can:: Fine the producer a max of $2,500
per violation
15. A producer has a fiduciary responsibility to all of the following:: - Insured on
cancelled policies
- Insurer, for premiums due
- Prospective purchaser of insurance, when the application is rejected.
16. Why can't a producer barter or trade an insurance contract for goods and
services?: The insurance product is not the producer's to barter; it belongs to the insured.
17. How often must the Commissioner examine the books, records, and docu-
ments of domestic insurers?: At least once every 5 years
18. A producer has days to respond to charges of violating insurance
laws.: 30 days.
19. If a producer is convicted of routinely misrepresenting benefits in insurance
policies, he may be fined up to $ for all violations.: $25,000
20. Under what type of policy does an insured have to be notified if current
policy values are insufficient to maintain the policy, given guaranteed interest
and expense rates?: Universal Life Insurance
21. An advertisement for a life insurance policy must include all of the follow-
ing:: - information material to the insurance policy
- a description of the type of policy advertised
- the identity of the insurer
22. Implying that policy dividends are guaranteed as an inducement for an
insured to drop an existing policy and purchase a new policy is an example
of .: Twisting
23. The minimum number of lives that must be covered under a group life
insurance policy in Michigan is .: 2 lives.
24. The maximum life insurance policy loan interest that may be charged on a
fixed interest loan is %.: 8%
, MICHIGAN LIFE, ACCIDENT, AND HEALTH — COMPREHENSIVE EXAM
PREPARATION QUESTIONS AND ANSWERS
25. In life insurance, all advertisements must be kept by the insurer for at least
months.: 48 months
26. The maximum life insurance policy loan interest that may be charged on an
adjustable rate loan is %.: 18%
27. True/ False
A long-term care policy can exclude all of the following:
- Alcoholism
- Drug addiction
- Alzheimer's disease
- Self-inflicted injury: False
A long-term care policy can exclude all alcoholism, drug addiction, and self-inflicted injury. Alzheimer's disease cannot
be excluded.
28. True/False
A long-term care application must include questions that reveal when the
proposed coverage will replace other existing health or long-term care cov-
erage.: True
29. True/False
A Medicare supplement policy can indemnify against losses resulting from
accidents on a different basis than losses resulting from sickness.: False - Medicare
supplements must indemnify the same way for accidents and sickness.
30. True/False
A Medicare supplement policy must cover intermediate outpatient care for
substance abuse.: True - Intermediate care for substance abuse includes inpatient treatment for drug
addiction and alcohol abuse
31. In Michigan, the free-look or trial examination period for a LTC policy is
days.: 30
32. True/False
All LTC policy owners must be offered a cost-of-living benefit adjustment
option.: True
33. Health insurance is in force for newborns from birth and notification must
be given within days of birth for coverage to extend beyond that point.: 31
days
PREPARATION QUESTIONS AND ANSWERS
1. The Commissioner of Insurance is appointed by the Governor for a term of: 4
years
2. All of the following are examples of insurance transactions except:
A. soliciting applications for insurance
B. delivering policies
C. licensing of producers
D. collecting premiums: Correct answer: C - licensing of producers
3. A temporary license issued to close the affairs of a deceased producer may
be issued for up to days at the discretion of the Commissioner: 180 days
4. Continuing Education (CE)
hours of CE every two years
hours must be in Ethics
day grace period to complete CE: 24 total hours every two years
3 hours in ethics
90 day grace period
5. Michigan Life and Health Insurance Guaranty Association: Protects policy holders
against failure insolvent insurers
6. Controlled business: It is permitted provided it does not exceed 15% of the premiums written in a
12-month period
7. To motivate a buyer to sign an application for insurance, a producer promis-
es a gift equal to 50% of the commission. This is an example of .: Re-
bating
8. Defamation: A written statement that is false and derogatory that is designed to injure someone's reputation.
9. The maximum fine for knowingly violating a cease and desist order is
$ and .: $10,000 and possible license revocation
10. Insurance counselor: Provides advice concerning an insurance policy and charges a fee for that advice.
11. An applicant who has been denied an insurance license has days to
request a hearing to protest the denial.: 30 days
12. True / False
A producer may share commissions with another licensed producer: True
, MICHIGAN LIFE, ACCIDENT, AND HEALTH — COMPREHENSIVE EXAM
PREPARATION QUESTIONS AND ANSWERS
13. True / False
A producer may not share commissions with a licensed nonresident produc-
er: False
14. If, after a hearing, the Commissioner believes a producer knowingly violat-
ed insurance licensing laws, the Commissioner can:: Fine the producer a max of $2,500
per violation
15. A producer has a fiduciary responsibility to all of the following:: - Insured on
cancelled policies
- Insurer, for premiums due
- Prospective purchaser of insurance, when the application is rejected.
16. Why can't a producer barter or trade an insurance contract for goods and
services?: The insurance product is not the producer's to barter; it belongs to the insured.
17. How often must the Commissioner examine the books, records, and docu-
ments of domestic insurers?: At least once every 5 years
18. A producer has days to respond to charges of violating insurance
laws.: 30 days.
19. If a producer is convicted of routinely misrepresenting benefits in insurance
policies, he may be fined up to $ for all violations.: $25,000
20. Under what type of policy does an insured have to be notified if current
policy values are insufficient to maintain the policy, given guaranteed interest
and expense rates?: Universal Life Insurance
21. An advertisement for a life insurance policy must include all of the follow-
ing:: - information material to the insurance policy
- a description of the type of policy advertised
- the identity of the insurer
22. Implying that policy dividends are guaranteed as an inducement for an
insured to drop an existing policy and purchase a new policy is an example
of .: Twisting
23. The minimum number of lives that must be covered under a group life
insurance policy in Michigan is .: 2 lives.
24. The maximum life insurance policy loan interest that may be charged on a
fixed interest loan is %.: 8%
, MICHIGAN LIFE, ACCIDENT, AND HEALTH — COMPREHENSIVE EXAM
PREPARATION QUESTIONS AND ANSWERS
25. In life insurance, all advertisements must be kept by the insurer for at least
months.: 48 months
26. The maximum life insurance policy loan interest that may be charged on an
adjustable rate loan is %.: 18%
27. True/ False
A long-term care policy can exclude all of the following:
- Alcoholism
- Drug addiction
- Alzheimer's disease
- Self-inflicted injury: False
A long-term care policy can exclude all alcoholism, drug addiction, and self-inflicted injury. Alzheimer's disease cannot
be excluded.
28. True/False
A long-term care application must include questions that reveal when the
proposed coverage will replace other existing health or long-term care cov-
erage.: True
29. True/False
A Medicare supplement policy can indemnify against losses resulting from
accidents on a different basis than losses resulting from sickness.: False - Medicare
supplements must indemnify the same way for accidents and sickness.
30. True/False
A Medicare supplement policy must cover intermediate outpatient care for
substance abuse.: True - Intermediate care for substance abuse includes inpatient treatment for drug
addiction and alcohol abuse
31. In Michigan, the free-look or trial examination period for a LTC policy is
days.: 30
32. True/False
All LTC policy owners must be offered a cost-of-living benefit adjustment
option.: True
33. Health insurance is in force for newborns from birth and notification must
be given within days of birth for coverage to extend beyond that point.: 31
days
