NJ Health and Accident Producer Exam
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Which of these may NOT be used in a health insurance advertisement - CORRECT
ANSWERS✅✅An insurance company's trademark instead of the company's actual name
XYZ Company is looking to replace their existing group health coverage with another plan
The replacing insurer is REQUIRED to - CORRECT ANSWERS✅✅accept all individuals
eligible under the previous plan
Q: What is the role of the Department of Banking and Insurance (DOBI) - CORRECT
ANSWERS✅✅A: It regulates the banking and insurance industries in New Jersey
Q: Who appoints the Commissioner of the Department of Banking and Insurance -
CORRECT ANSWERS✅✅A: The Governor, with advice and consent of the Senate
Q: What is the role of the Commissioner of Insurance - CORRECT ANSWERS✅✅A: The
Commissioner has the power to investigate, administer oaths, regulate insurers for
insolvency, suspend/revoke licenses, and impose penalties for violations
Q: What is the maximum penalty for the first violation of insurance regulations - CORRECT
ANSWERS✅✅A: $5,000
Q: What is the maximum penalty for each subsequent violation of insurance regulations -
CORRECT ANSWERS✅✅A: $10,000
Q: How long before a hearing must the notice be delivered to the person/entity under
investigation - CORRECT ANSWERS✅✅A: At least 10 days after the notice is delivered
Q: What happens if an insurance company becomes insolvent - CORRECT
ANSWERS✅✅A: The Commissioner will suspend its Certificate of Authority
,Q: What is an insurance producer - CORRECT ANSWERS✅✅A: A person who produces
business for the insurer, such as an agent, broker, or general agent
Q: What must an insurance consultant do before receiving fees from an insurance prospect -
CORRECT ANSWERS✅✅A: Obtain a signed written memorandum stating the amount of
compensation
Q: What is the requirement for a business entity acting as an insurance producer - CORRECT
ANSWERS✅✅A: The business entity must be licensed in New Jersey
Q: How many hours of pre-licensing education are required for life insurance in New Jersey -
CORRECT ANSWERS✅✅A: 20 hours
Q: How many hours of pre-licensing education are required for accident and health insurance
- CORRECT ANSWERS✅✅A: 20 hours
Q: What are the continuing education requirements for resident producers - CORRECT
ANSWERS✅✅A: 24 hours every 2 years, with 3 hours in ethics
Q: How long is a temporary license valid in New Jersey - CORRECT ANSWERS✅✅A: 180
days
Q: What are the reinstatement requirements for a lapsed license - CORRECT
ANSWERS✅✅A: Submission of a reinstatement application, late renewal fee, and proof of
continuing education completion
Q: What is a certificate of authority - CORRECT ANSWERS✅✅A: A certificate allowing
an insurer to transact business in New Jersey
Q: Define "Reinsurance" - CORRECT ANSWERS✅✅A: Reinsurance is when an insurer
buys insurance for itself from another insurer
Q: What is a retrocession - CORRECT ANSWERS✅✅A: When a reinsurer transfers part of
its risk to another reinsurance company
, Q: What is controlled business - CORRECT ANSWERS✅✅A: Insurance policies written on
individuals or companies that the producer has direct influence over, such as family members
or employers
Q: What is the maximum percentage of a producer's commission that can come from
controlled business - CORRECT ANSWERS✅✅A: 50% in a 12-month period
Q: What is a domestic insurance company - CORRECT ANSWERS✅✅A: A company
incorporated under the laws of the state in which its home office is located
Q: What is an alien insurance company - CORRECT ANSWERS✅✅A: A company
chartered in a country other than the US
Q: What is the difference between a stock and a mutual insurance company - CORRECT
ANSWERS✅✅A: A stock company is owned by shareholders, while a mutual company is
owned by policyholders
Q: What is twisting in insurance - CORRECT ANSWERS✅✅A: Replacing an insurance
policy based on misrepresentation
Q: What is the penalty for violating a cease and desist order - CORRECT ANSWERS✅✅A:
A penalty of up to $5,000
Q: Define "unfair discrimination" in insurance - CORRECT ANSWERS✅✅A:
Discriminating against a person in any insurance-related matter unfairly, such as charging
different rates for people in the same actuarial class
Q: What is illegal rebating - CORRECT ANSWERS✅✅A: Offering a premium rebate, gift,
or special advantage not specified in the contract to induce a person to purchase insurance
Q: What is the penalty for engaging in unfair claim settlement practices - CORRECT
ANSWERS✅✅A: The Commissioner may issue cease and desist orders and impose fines
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Which of these may NOT be used in a health insurance advertisement - CORRECT
ANSWERS✅✅An insurance company's trademark instead of the company's actual name
XYZ Company is looking to replace their existing group health coverage with another plan
The replacing insurer is REQUIRED to - CORRECT ANSWERS✅✅accept all individuals
eligible under the previous plan
Q: What is the role of the Department of Banking and Insurance (DOBI) - CORRECT
ANSWERS✅✅A: It regulates the banking and insurance industries in New Jersey
Q: Who appoints the Commissioner of the Department of Banking and Insurance -
CORRECT ANSWERS✅✅A: The Governor, with advice and consent of the Senate
Q: What is the role of the Commissioner of Insurance - CORRECT ANSWERS✅✅A: The
Commissioner has the power to investigate, administer oaths, regulate insurers for
insolvency, suspend/revoke licenses, and impose penalties for violations
Q: What is the maximum penalty for the first violation of insurance regulations - CORRECT
ANSWERS✅✅A: $5,000
Q: What is the maximum penalty for each subsequent violation of insurance regulations -
CORRECT ANSWERS✅✅A: $10,000
Q: How long before a hearing must the notice be delivered to the person/entity under
investigation - CORRECT ANSWERS✅✅A: At least 10 days after the notice is delivered
Q: What happens if an insurance company becomes insolvent - CORRECT
ANSWERS✅✅A: The Commissioner will suspend its Certificate of Authority
,Q: What is an insurance producer - CORRECT ANSWERS✅✅A: A person who produces
business for the insurer, such as an agent, broker, or general agent
Q: What must an insurance consultant do before receiving fees from an insurance prospect -
CORRECT ANSWERS✅✅A: Obtain a signed written memorandum stating the amount of
compensation
Q: What is the requirement for a business entity acting as an insurance producer - CORRECT
ANSWERS✅✅A: The business entity must be licensed in New Jersey
Q: How many hours of pre-licensing education are required for life insurance in New Jersey -
CORRECT ANSWERS✅✅A: 20 hours
Q: How many hours of pre-licensing education are required for accident and health insurance
- CORRECT ANSWERS✅✅A: 20 hours
Q: What are the continuing education requirements for resident producers - CORRECT
ANSWERS✅✅A: 24 hours every 2 years, with 3 hours in ethics
Q: How long is a temporary license valid in New Jersey - CORRECT ANSWERS✅✅A: 180
days
Q: What are the reinstatement requirements for a lapsed license - CORRECT
ANSWERS✅✅A: Submission of a reinstatement application, late renewal fee, and proof of
continuing education completion
Q: What is a certificate of authority - CORRECT ANSWERS✅✅A: A certificate allowing
an insurer to transact business in New Jersey
Q: Define "Reinsurance" - CORRECT ANSWERS✅✅A: Reinsurance is when an insurer
buys insurance for itself from another insurer
Q: What is a retrocession - CORRECT ANSWERS✅✅A: When a reinsurer transfers part of
its risk to another reinsurance company
, Q: What is controlled business - CORRECT ANSWERS✅✅A: Insurance policies written on
individuals or companies that the producer has direct influence over, such as family members
or employers
Q: What is the maximum percentage of a producer's commission that can come from
controlled business - CORRECT ANSWERS✅✅A: 50% in a 12-month period
Q: What is a domestic insurance company - CORRECT ANSWERS✅✅A: A company
incorporated under the laws of the state in which its home office is located
Q: What is an alien insurance company - CORRECT ANSWERS✅✅A: A company
chartered in a country other than the US
Q: What is the difference between a stock and a mutual insurance company - CORRECT
ANSWERS✅✅A: A stock company is owned by shareholders, while a mutual company is
owned by policyholders
Q: What is twisting in insurance - CORRECT ANSWERS✅✅A: Replacing an insurance
policy based on misrepresentation
Q: What is the penalty for violating a cease and desist order - CORRECT ANSWERS✅✅A:
A penalty of up to $5,000
Q: Define "unfair discrimination" in insurance - CORRECT ANSWERS✅✅A:
Discriminating against a person in any insurance-related matter unfairly, such as charging
different rates for people in the same actuarial class
Q: What is illegal rebating - CORRECT ANSWERS✅✅A: Offering a premium rebate, gift,
or special advantage not specified in the contract to induce a person to purchase insurance
Q: What is the penalty for engaging in unfair claim settlement practices - CORRECT
ANSWERS✅✅A: The Commissioner may issue cease and desist orders and impose fines
