Chapter 9: Arkansas Statutes, Rules,
and Regulations for Life and Health
Final Exam and Correct Answers 2025-
2026 Set.
Cease and desist - Answer To stop or discontinue
Coercion - Answer Forceful act or threat aimed to influence a person to act against his or her
will
Commission - Answer Payment to the agent by the insurance company for placing insurance,
usually a percentage of the policy premium
Commissioner - Answer The head of the State Department of Insurance
Exempt - Answer Not subject to an obligation
Home office - Answer Insurer's headquarters, principal place of business
Inducement - Answer An offer that attempts to influence the other party
Solvency - Answer Ability to meet financial obligations
Statute - Answer A formal written law enacted by legislature; insurance statutes can be
found in the state Insurance Code
Who is an insurance agent? - Answer A person authorized to sell, solicit and negotiate
insurance contracts
On its advertisement, a company claims that it has funds in its possession that are, in fact, not
available for the payment of losses or claims. What is the company guilty of? - Answer
Misrepresentation
, What is the purpose of insurance guaranty associations? - Answer To protect policyowners,
insureds and beneficiaries from financial losses caused by insolvent insurers
If the commissioner/Superintendent finds a licensee engaging in an unfair method of
competition or an unfair practice, what order will be issued? - Answer Cease and desist
order
An agent offers a client free tickets to a sporting event in exchange for the purchase of an
insurance policy. what is the agent guilty of? - Answer Rebating
Who must be notified of a producer's change of address? - Answer The Department of
Insurance (Commissioner/Director/Superintendent)
To whom may a certificate of authority by issued? - Answer To an insurer authorized to
transact business in this state
What type of licensee represents the insurance company? - Answer The agent
When is controlled business legal? - Answer When the commissions from controlled
business do not exceed the aggregate commissions on all the other business (specific limits may
vary from state to state)
If a producer makes maliciously critical statements about another insurer, what is this illegal
practice called? - Answer Defamation
Can insurers advertise the existence of the guaranty association during solicitation and sale of
insurance policies? - Answer No, advertising of the existence of the guaranty association for
the purposes of solicitation and sale of insurance policies by insurers is an illegal business
practice
For what reason can a temporary license be issued? - Answer For continuation of business in
case the licensed producer dies or becomes disabled
What are the most common penalties for violations of insurance statutes? - Answer A cease
and desist order, a fine, and license suspension or revocation
and Regulations for Life and Health
Final Exam and Correct Answers 2025-
2026 Set.
Cease and desist - Answer To stop or discontinue
Coercion - Answer Forceful act or threat aimed to influence a person to act against his or her
will
Commission - Answer Payment to the agent by the insurance company for placing insurance,
usually a percentage of the policy premium
Commissioner - Answer The head of the State Department of Insurance
Exempt - Answer Not subject to an obligation
Home office - Answer Insurer's headquarters, principal place of business
Inducement - Answer An offer that attempts to influence the other party
Solvency - Answer Ability to meet financial obligations
Statute - Answer A formal written law enacted by legislature; insurance statutes can be
found in the state Insurance Code
Who is an insurance agent? - Answer A person authorized to sell, solicit and negotiate
insurance contracts
On its advertisement, a company claims that it has funds in its possession that are, in fact, not
available for the payment of losses or claims. What is the company guilty of? - Answer
Misrepresentation
, What is the purpose of insurance guaranty associations? - Answer To protect policyowners,
insureds and beneficiaries from financial losses caused by insolvent insurers
If the commissioner/Superintendent finds a licensee engaging in an unfair method of
competition or an unfair practice, what order will be issued? - Answer Cease and desist
order
An agent offers a client free tickets to a sporting event in exchange for the purchase of an
insurance policy. what is the agent guilty of? - Answer Rebating
Who must be notified of a producer's change of address? - Answer The Department of
Insurance (Commissioner/Director/Superintendent)
To whom may a certificate of authority by issued? - Answer To an insurer authorized to
transact business in this state
What type of licensee represents the insurance company? - Answer The agent
When is controlled business legal? - Answer When the commissions from controlled
business do not exceed the aggregate commissions on all the other business (specific limits may
vary from state to state)
If a producer makes maliciously critical statements about another insurer, what is this illegal
practice called? - Answer Defamation
Can insurers advertise the existence of the guaranty association during solicitation and sale of
insurance policies? - Answer No, advertising of the existence of the guaranty association for
the purposes of solicitation and sale of insurance policies by insurers is an illegal business
practice
For what reason can a temporary license be issued? - Answer For continuation of business in
case the licensed producer dies or becomes disabled
What are the most common penalties for violations of insurance statutes? - Answer A cease
and desist order, a fine, and license suspension or revocation
