Regulation and Ethics Flashcards
7 cards from real EXAMFX practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulation and Ethics flashcards as text
An insurance policy provision that is more favorable to the insured than state law requires is:
Answer: Permitted and enforceable
Insurers may offer policy provisions more favorable than the statutory minimum, and such provisions are generally valid and enforceable.
Which of the following actions would NOT violate anti-rebating laws?
Answer: Providing a complimentary pen with the company logo
Nominal promotional items of minimal value, such as a branded pen, are typically exempt from anti-rebating statutes.
Under the Fair Credit Reporting Act (FCRA), if an applicant is denied insurance based on a consumer report, the insurer must:
Answer: Notify the applicant and provide the reporting agency's contact information
The FCRA requires that applicants receive an adverse action notice identifying the consumer reporting agency so they can review and dispute the information.
A licensed producer moves to a new state and wants to get licensed there. The process that allows a home-state licensee to obtain a non-resident license more easily is called:
Answer: Reciprocity
Reciprocity allows producers licensed in their home state to obtain a non-resident license in another state without repeating all licensing steps, provided that state honors the home state's standards.
Which of the following describes the 'free look' period in insurance?
Answer: Period during which a policyowner may return a policy for a full refund
The free look period — typically 10–30 days — gives policyowners the right to review a new policy and return it for a full premium refund if dissatisfied.
An agent who holds a nonresident license must comply with the insurance laws of:
Answer: The state where the policy is being sold
When selling insurance in a given state, the producer must follow that state's laws and regulations regardless of where their home license was issued.
Which action by a producer demonstrates adherence to the ethical principle of 'suitability'?
Answer: Recommending a product based on the client's financial situation and needs
Suitability requires that recommendations be based on the client's actual needs, financial situation, and objectives, not the producer's compensation.