Colorado Life & Health Insurance License, Practice Exams

Which does section 10-20-104(2) exclude from the association's coverage?

1. A direct nongroup annuity contract issued by a member insurer
2. A self-funded employer plan or welfare arrangement ✓
3. A certificate under a direct group life insurance policy
4. A structured settlement annuity where the payee is a resident

Why: C.R.S. § 10-20-104(2)(b)(IV) excludes any portion of a plan or programme to the extent it is SELF-FUNDED OR UNINSURED, naming multiple employer welfare arrangements and minimum premium group insurance plans. The logic runs through the whole article: the association guarantees an insurer's promises, so where no insurer bore the risk there is nothing for it to stand behind.

A state insurance guaranty association exists to:

1. Pay covered claims of insurers that become insolvent, up to set limits ✓
2. Set the premium rates that all insurers in the state must charge
3. Guarantee that every applicant will be approved for coverage
4. Provide free legal representation to policyholders in disputes

Why: Guaranty associations protect policyholders by covering claims (within statutory limits) when a member insurer becomes insolvent; their existence may not be used in advertising or sales.

A policy has an accidental death benefit (double indemnity) rider. The insured dies of a heart attack. The beneficiary receives:

1. The face amount only, with no doubling ✓
2. Double the face amount
3. Triple the face amount
4. Only the policy's cash value

Why: Double indemnity pays an additional amount only for accidental death; death from illness pays the regular face amount.

Under the 'paid-up additions' dividend option, dividends are used to:

1. Buy small amounts of additional paid-up whole life coverage ✓
2. Reduce the premium due on the next policy anniversary date
3. Pay the policyowner the dividend directly in cash each year
4. Purchase one-year term insurance equal to the cash value

Why: Paid-up additions use dividends to buy single-premium whole life, increasing both death benefit and cash value with no new underwriting.

An insurance company or producer that has committed a fraudulent insurance act is subject to:

1. Available disciplinary action by the commissioner ✓
2. Automatic revocation of the licence concerned
3. A civil penalty fixed by statute at ten thousand dollars
4. Referral to the attorney general and no other sanction

Why: C.R.S. § 10-1-128(5)(e) subjects the company or producer to available disciplinary action by the commissioner. "Available" points outward to the sanctions elsewhere in title 10 rather than creating a new one — the section supplies the finding, and the licensing and certificate provisions supply the consequence.

A carrier applies minimum participation requirements to small employers. Under section 10-16-105(3) it must apply them:

1. Uniformly among small employers of the same size ✓
2. Uniformly among every small employer, whatever its size
3. As it sees fit, participation being a commercial matter
4. Uniformly among small employers in the same industry

Why: C.R.S. § 10-16-105(3)(b) requires uniformity among small employers with the SAME NUMBER of eligible employees applying for or receiving coverage. Paragraph (c) then permits the requirements to vary BY the size of the group and by product. The two read together: a carrier may treat a five-life group differently from a forty-life group, but not one five-life group differently from another.

An agency moves its principal address to another state. Within ten days it must notify the commissioner and:

1. Apply for a nonresident licence immediately
2. Return the producer licence for cancellation ✓
3. File a surety bond covering existing business
4. Transfer its registered producers to another agency

Why: C.R.S. § 10-2-406(6) requires notification and return of the licence for cancellation within ten days, with relicensing then subject to part 5 - the nonresident provisions. Compare subsection (5), which requires the same return within ten days when an agency ceases doing business in this state altogether. Moving out and closing down are handled identically.

The legislative declaration for the HIV testing section describes the aim as maintaining a balance between the industry's need for information and:

1. The cost of the testing borne by the applicant
2. The state's interest in communicable disease surveillance
3. The medical profession's duty of confidence to patients
4. The public's need for fairness in testing practices ✓

Why: C.R.S. § 10-3-1104.5(1) frames the whole section as a balance: the need for information by those conducting the business of insurance against the public's need for fairness in HIV testing practices, including minimising intrusion into privacy and limiting disclosure of results. Every operative requirement that follows can be read as one side or the other of that balance.

Which does a viatical settlement provider NOT have to obtain before entering into a viatical settlement contract under section 10-7-609(1)?

1. A physician's written statement that a viator who is the insured is of sound mind and free from undue influence
2. The issuing insurer's written consent to the settlement ✓
3. A document consenting to release of the insured's medical records
4. A witnessed document in which the viator consents and acknowledges understanding the contract

Why: C.R.S. § 10-7-609(1) requires the physician's statement of sound mind where the viator is the insured, the medical records release, and the witnessed viator consent acknowledging a full understanding of the contract and of the policy's benefits. The insurer's CONSENT is nowhere in the list - the insurer must verify coverage and process the transfer, but it has no veto over its policyholder's decision to sell.

The licence the commissioner issues to a qualified applicant is:

1. Valid for two years
2. Valid for three years
3. Perpetual, subject to continuation ✓
4. Valid until the producer changes appointment

Why: C.R.S. § 10-2-408(1) issues a PERPETUAL producer licence, and subsection (4) keeps it in effect unless revoked or suspended for as long as the continuation fee is paid. There is no expiry date to diarise - what has to be watched is the continuation, and the continuing education period in § 10-2-301(1), which runs twenty-four months from the renewal date.

A group plan's 'probationary period' (waiting period) is the time a new employee must:

1. Wait after being hired before becoming eligible to enroll ✓
2. Remain disabled before any disability benefit becomes payable
3. Hold the coverage before pre-existing conditions are covered
4. Wait after filing a claim before the insurer must pay it

Why: The probationary/waiting period is the length of employment required before a new hire becomes eligible to enroll in the group plan.

A single-premium whole life policy is funded with one lump sum and:

1. Is immediately paid up, though it is usually classified as a MEC ✓
2. Requires continued annual premiums for the next twenty years
3. Provides only temporary protection that expires after one year
4. Carries no cash value until the insured reaches retirement age

Why: A single-premium whole life policy is paid up at issue with a high cash value; because it is heavily funded, it is generally a Modified Endowment Contract.

An HMO holding a Colorado certificate of authority becomes insolvent. Under section 10-16-401(2), the state:

1. Accepts no responsibility for the organization's financial obligations ✓
2. Guarantees enrollee claims up to a statutory limit
3. Assumes the obligations through the guaranty association only for HMOs
4. Is liable to the extent of the fees it collected from the organization

Why: C.R.S. § 10-16-401(2) says it in terms, alongside the declaration that nothing in part 1 or part 4 shall be construed to ensure the success of any HMO. Licensing is not endorsement. The general assembly wrote that in so that a certificate could never be read as a state guarantee to enrollees.

The optional "Relation of earnings to insurance" provision of section 10-16-203(7) may not reduce total monthly loss-of-time benefits below:

1. Two hundred dollars in every case
2. Two hundred dollars, or the sum of the monthly benefits specified, whichever is lesser ✓
3. Five hundred dollars, or the sum of the monthly benefits specified, whichever is lesser
4. The insured's average monthly earnings over the preceding two years

Why: C.R.S. § 10-16-203(7)(a) sets a floor the averaging cannot cut through, and the floor is itself capped by the benefits actually bought - a policy promising one hundred and fifty dollars a month cannot be pushed up to two hundred. The clause also cannot reduce benefits other than those payable for loss of time.

An insurer wants to test the validity of a commissioner's order in court. Section 10-1-111 expressly:

1. Bars any challenge until administrative remedies are exhausted
2. Requires the challenge be brought in Denver district court
3. Permits a challenge only once the order has taken effect
4. Preserves the right to test validity in a proper court ✓

Why: C.R.S. § 10-1-111 is two-sided. It lets the commissioner, THROUGH THE ATTORNEY GENERAL, seek an injunction or other process to enforce an order; and it expressly preserves the affected company's or person's right to test that order's validity in any court of competent jurisdiction, by injunction, appeal or other proper proceeding. Note the routing — the commissioner cannot go to court alone.

Before issuing an HMO certificate of authority, section 10-16-402(2) requires the commissioner to be satisfied that those responsible for the applicant's affairs are:

1. Licensed as insurance producers in this state
2. Residents of Colorado
3. Qualified health-care providers
4. Competent, trustworthy, and of good reputation ✓

Why: C.R.S. § 10-16-402(2)(a) uses that three-part character test, which recurs throughout insurance licensing. The subsection then adds the substantive conditions: an acceptable plan of operation, effective provision of health-care services, financial responsibility, enrollee participation under § 10-16-404, nothing in the method of operation contrary to the public interest, and correction of any certified deficiencies.

A Medicare supplement insurer wishes to non-renew a policy because the insured has grown older and less healthy. Under section 10-18-103(2) the renewability standards:

1. Forbid cancellation or non-renewal solely on those grounds ✓
2. Permit non-renewal at any policy anniversary
3. Permit non-renewal after the policy has run five years
4. Permit non-renewal with ninety days' notice

Why: C.R.S. § 10-18-103(2)(a) requires terms of renewability under which the policy cannot be cancelled or non-renewed by the insurer SOLELY on the grounds of deterioration of health or of age. Article 19 does the same for long-term care at § 10-19-107(1)(a). Both protect the person the cover was bought for at exactly the point they start to need it.

An HMO wishes to construct a nursing care facility. Under section 10-16-403(2) it must file notice with the commissioner beforehand, and the commissioner shall disapprove if the exercise of the power would:

1. Substantially and adversely affect its financial soundness ✓
2. Duplicate facilities already available within the service area
3. Increase the HMO's schedule of charges to enrollees
4. Require the HMO to borrow against its legal reserves

Why: C.R.S. § 10-16-403(2)(a) gives one ground for disapproval - that the exercise would substantially and adversely affect financial soundness and endanger the HMO's ability to meet its obligations - and deems the exercise approved if not disapproved within thirty days. The commissioner may exempt de minimis activities from the filing requirement by rule under paragraph (b).

Returned premiums received or credited by insurers must be passed to the person entitled within:

1. 30 days after receipt or credit ✓
2. 45 days after receipt or credit
3. 60 days after receipt or credit
4. 90 days after receipt or credit

Why: Thirty days under C.R.S. § 10-2-704(1)(c). Note the asymmetry with paragraph (b): money owed to the INSURED moves faster than money owed to the insurer. Three periods run through this section and they are easily swapped - 45 days to remit premiums, 30 days to pass on returned premiums, 45 days for the insurer to remit unearned premiums under subsection (2).

The uniform 'time of payment of claims' provision requires the insurer to pay claims:

1. Immediately (or promptly) upon receipt of written proof of loss ✓
2. Only after a mandatory 90-day internal review of every claim
3. Within five years of the date the loss originally occurred
4. At the end of the calendar year in which the loss happened

Why: Claims must be paid immediately upon receipt of proof; disability income benefits are paid at least monthly.

Choosing the cash surrender nonforfeiture option means the owner:

1. Takes the net cash value and ends the coverage ✓
2. Keeps the full face amount as term insurance for a limited number of years
3. Uses the cash value to buy a smaller, fully paid-up permanent policy
4. Borrows against the cash value while leaving the policy in force

Why: Cash surrender pays the net cash value and terminates the policy.

In an equity-indexed annuity, the 'participation rate' determines:

1. How much of the index's gain is credited to the contract ✓
2. The minimum guaranteed interest rate paid in a year of market losses
3. The percentage surrender charge applied during the first contract year
4. The fixed monthly income the annuitant will receive after annuitizing

Why: The participation rate sets the share of the index increase credited; a cap may further limit it, and a floor (often 0%) prevents loss.

The Medicare Supplement (Medigap) open enrollment period:

1. Lasts six months, starting when the person is 65 and enrolled in Part B ✓
2. Is a one-time 30-day window that opens at the person's 70th birthday
3. Occurs every fall and lets enrollees switch among all Medigap plans
4. Is available only to people who also qualify for full Medicaid benefits

Why: During the 6-month Medigap open enrollment (beginning at 65 and enrolled in Part B), insurers must issue any plan regardless of health (guaranteed issue).

In insurance, a 'peril' is:

1. The cause of a loss, such as fire, accident, or illness ✓
2. A condition that increases the likelihood or severity of a loss
3. The carelessness of an insured who relies on having coverage
4. The dishonest intent of an applicant to profit from a loss

Why: A peril is the actual cause of loss; a hazard is a condition increasing the chance or severity of that loss.

A company wants key person cover on an employee. Under section 10-7-704(1) it must obtain the employee's written consent before purchase, and if the employee refuses the company:

1. May lawfully terminate their employment
2. May purchase the cover with the commissioner's approval
3. May not retaliate or take adverse action against them ✓
4. May purchase the cover for a reduced face amount

Why: C.R.S. § 10-7-704(1)(h) requires written consent before purchase and forbids the business entity, affiliate or subsidiary from retaliating or taking adverse action against a key employee or key person who withholds it. The same protection appears in paragraph (g) for plan participants. Consent is worth little if refusing it costs someone their job, so the statute protects the refusal as well as requiring the consent.

Accelerated death benefits paid to a terminally ill insured are generally:

1. Received income-tax-free ✓
2. Fully taxable to the insured as ordinary earned income for the year
3. Taxed as a long-term capital gain on the policy's accumulated cash value
4. Subject to a mandatory flat 20% federal income-tax withholding

Why: They are generally received income-tax-free, similar to a death benefit, when the insured is terminally ill.

State guaranty association protection may NOT be:

1. Used by producers as a selling point in advertising ✓
2. Available to policyholders of an insolvent insurer
3. Subject to statutory coverage limits
4. Funded by assessments on member insurers

Why: Using guaranty fund protection to induce a sale is prohibited; the fund exists to protect policyholders of insolvent insurers, within limits.

A Medicare supplement policyholder cancels after the first thirty days, giving the insurer thirty days' notice. Under section 10-18-107 the insurer must refund:

1. The whole premium paid for the current policy year in full
2. A prorated amount for the full months being cancelled ✓
3. Nothing, the free look period having expired
4. A prorated amount, less an administrative charge

Why: C.R.S. § 10-18-107 adds this second, easily missed right after the free look: cancel later, give at least thirty days' notice before cancellation, and prepaid premium is refunded pro rata based on the subsequent FULL MONTHS of coverage being cancelled. Two separate thirty-day periods in one section, doing different jobs.

An insurance agency qualifies as a Colorado resident if:

1. Its principal office is in this state ✓
2. A majority of its producers reside in this state
3. It is incorporated under Colorado law
4. It writes most of its premium in this state

Why: C.R.S. § 10-2-405(1)(b) uses the location of the principal office, not the state of incorporation and not where the business is written. The mirror provision at § 10-2-502(1)(b) qualifies an agency as a NONRESIDENT where its principal office is in another state - so one test, applied from either side, decides which licence an agency holds.

Which settlement option pays the beneficiary an income that cannot be outlived?

1. Fixed period
2. Fixed amount
3. Interest only
4. Life income ✓

Why: A life income settlement option pays for the beneficiary's lifetime, regardless of how long they live.

To be 'fully insured' for Social Security, a worker generally needs 40 quarters of coverage, whereas 'currently insured' status:

1. Requires fewer quarters and provides limited survivor benefits ✓
2. Requires 60 quarters and provides full benefits in most situations
3. Is available only to those over age 65
4. Provides no benefits to survivors at all

Why: Currently insured status (about 6 of the last 13 quarters) provides limited survivor benefits; fully insured (40 quarters) provides the full range.

A single policy has two owners resident in different states, one holding sixty percent. Under section 10-7-602(16) the transaction is governed by the law of:

1. The state where the policy was issued
2. The state where the insured resides
3. Either state, at the viatical settlement provider's election
4. The state where the sixty percent owner resides ✓

Why: C.R.S. § 10-7-602(16) points to the residence of the owner with the LARGEST PERCENTAGE ownership, and only where owners hold equally does it fall to a state agreed in writing by all of them. Note too that a viator is not confined to the owner of a policy on a terminally or chronically ill life except where the part says so - Colorado regulates life settlements generally, not only viatical ones in the narrow sense.

On learning that one of its policies is being replaced, the existing insurer must under Regulation 4-1-4-8 send the owner a letter about the right to receive policy value information within:

1. Ten business days of receiving notice of the replacement
2. Thirty days of receiving notice of the replacement
3. Five business days of receiving notice of the replacement ✓
4. Five business days of the owner asking for the information

Why: Regulation 4-1-4-8.B sets two separate five business day clocks and it is easy to collapse them. The first runs from the existing insurer's receipt of NOTICE OF THE REPLACEMENT, for the letter telling the owner what they may ask for. The second runs from the owner's REQUEST, for supplying the information itself.

Under the 'accumulate at interest' dividend option, dividends:

1. Are used to buy small amounts of paid-up additions
2. Are left on deposit to earn interest, which is taxable ✓
3. Are applied to reduce the amount of the next premium
4. Are mailed to the policyowner as a cash check yearly

Why: Dividends are retained to earn interest; the dividend itself is a return of premium, but the interest earned is taxable.

Under section 10-20-104(3), the association's limit for coverage or services under HEALTH BENEFIT PLANS is:

1. Three hundred thousand dollars
2. Five hundred thousand dollars ✓
3. Four hundred thousand dollars
4. Seven hundred fifty thousand dollars

Why: C.R.S. § 10-20-104(3)(b)(I)(B) sets five hundred thousand dollars for health benefit plans, the highest single-life figure in the article, and § 10-20-104(3)(b)(II)(A) carries it through to the aggregate cap as an express exception. Health claims can run far beyond a death benefit, which is why this one is larger.

An applicant discloses plans to travel abroad lawfully next year. A Colorado life insurer may not refuse or rate the risk:

1. Unless the destination is subject to a travel advisory
2. Solely for reasons associated with that lawful travel ✓
3. Unless the planned travel will exceed thirty days abroad
4. In any circumstances whatever connected with travel

Why: C.R.S. § 10-7-103(2) protects PAST OR FUTURE lawful foreign travel - so a stated intention is covered as much as a completed trip. The word doing the work is "solely": travel may still be one factor among several, and subsection (2) goes on to allow genuine differentiation where it can be evidenced.

Accelerated benefits may be provided for an insured diagnosed with a terminal illness, for health-care expenses or long-term care that is:

1. Certified or ordered by a physician ✓
2. Approved in advance by the insurer
3. Expected to last at least twelve months
4. Not covered by any other policy

Why: C.R.S. § 10-7-113(1)(a) permits acceleration for an insured diagnosed with a terminal case of AIDS, as defined in § 10-3-1104.5(2)(a), or any other terminal illness, for health-care expenses or long-term care certified or ordered by a physician. Paragraph (b) adds a second route with no medical gate at all: the occurrence of a qualifying event as defined by the policy.

An endowment policy is distinguished by the fact that it:

1. Pays the face amount at a set maturity date if the insured is still living ✓
2. Provides only temporary coverage that expires with no value
3. Invests the entire premium in the insurer's separate investment accounts chosen by the owner
4. Decreases its face amount steadily over the policy's term

Why: An endowment pays the face amount either at the insured's death or upon reaching the maturity date while living; modern tax rules limit their use.

An insurer replaces one of its own policies with another it issues. Regulation 4-1-4-7 requires it to allow credit for the time already elapsed under:

1. The replaced policy's incontestability period alone
2. The replaced policy's incontestability and suicide periods ✓
3. The replaced policy's contestable period and grace period
4. No period; the new contract starts both clocks afresh

Why: Regulation 4-1-4-7.B covers both clocks, up to the face amount of the existing policy, and applies where the replacing and existing insurers are the same or are affiliates under common ownership or control. It stops an insurer from using an internal replacement to restart the two-year contestable period of C.R.S. 10-7-102(1)(b) and the one-year suicide period of 10-7-109. On a financed purchase the credit may be limited to the amount by which the existing face amount was reduced.

Retained proceeds are payable to a beneficiary in installments, and a creditor of that beneficiary seeks to attach them. Where the policy so provides, the payments are:

1. Available to creditors once twelve months have elapsed
2. Available to creditors up to the amount of the debt owed
3. Not subject to the beneficiary's debts or judicial process ✓
4. Subject to attachment only under a court order made on notice

Why: C.R.S. § 10-7-106 provides, where the policy or supplemental agreement so states, that no payment of interest or principal is subject to that person's debts, contracts or engagements, nor to judicial process to levy on or attach them. This is the statutory spendthrift protection - and it depends entirely on the policy having said so.

An HMO fears adverse selection during open enrollment. Under section 10-16-408(1) it may impose underwriting restrictions if:

1. It notifies the commissioner before the enrollment period opens
2. It applies them uniformly to all applicants
3. Its actuary certifies the restrictions are necessary
4. The commissioner authorises them within thirty days ✓

Why: C.R.S. § 10-16-408(1) requires an application to the commissioner, who approves or denies within thirty days of receipt. The permitted grounds are narrow: to preserve financial stability, to prevent excessive adverse selection by prospective enrollees, or to avoid unreasonably high or unmarketable charges. Note this is one of the few thirty-day clocks in part 4 that is NOT a deemed approval.

Under the Fair Credit Reporting Act (FCRA), if an insurer takes adverse action based on a consumer report, it must:

1. Notify the applicant and identify the reporting agency that supplied the report ✓
2. Pay the applicant a statutory penalty for the inconvenience caused
3. Automatically reverse its underwriting decision and issue the policy exactly as it was applied for
4. Destroy the consumer report and delete all records within thirty days

Why: FCRA requires that an applicant subject to adverse action be notified and told the source so they can request and dispute the information.

A final expense (burial) policy is typically:

1. A small whole life policy meant to cover funeral and final costs ✓
2. A large term policy intended to replace decades of lost income
3. A variable policy whose death benefit fluctuates with the market
4. A group policy issued automatically to all employees at hire

Why: Final expense is a modest permanent (whole life) policy designed to cover burial and end-of-life expenses, often with simplified underwriting.

A carrier issuing a small employer health benefit plan wishes to cover only the healthier half of the group. Section 10-16-105(1):

1. Permits it if the excluded employees are offered individual plans
2. Forbids it; coverage must be offered to all eligible employees who apply ✓
3. Permits it where the employer consents in writing
4. Forbids it only where the employer offers dependent coverage

Why: C.R.S. § 10-16-105(1)(b)(II) says it twice for emphasis - the carrier SHALL offer coverage to all eligible employees and, where the employer offers dependent coverage, their dependents who apply when first eligible, and SHALL NOT offer coverage to only certain individuals or dependents in the small group or to only part of the group. Cherry-picking within a group is exactly what small group reform exists to stop.

Which person IS an "eligible employee" under section 10-16-102(18)?

1. An employee who works on a temporary or substitute basis
2. The sole owner of an unincorporated business, and their spouse
3. A partner in a partnership, and their spouse
4. A full-time manager in a bona fide employer-employee relationship ✓

Why: C.R.S. § 10-16-102(18)(a) requires a FULL-TIME employee in a bona fide employer-employee relationship with an employer not established for the purpose of obtaining a small group plan, then excludes temporary or substitute workers, an individual and spouse or civil union partner with respect to a business wholly owned by them, and a partner in a partnership and their spouse. The exclusions all describe people who are really the business rather than employed by it.

Which transaction is NOT exempted from Regulation 4-1-4-3?

1. An individually solicited replacement of a whole life policy ✓
2. Credit life insurance
3. Group life insurance used to fund a preneed funeral contract
4. A structured settlement

Why: Regulation 4-1-4-3.B exempts credit life insurance, group life or group annuities with no direct solicitation, group life and annuities funding preneed funeral contracts, certain same-insurer contractual changes and conversions, various qualified and employer-funded plans, employer or association paid coverage, short non-convertible term, immediate annuities bought with contract proceeds, and structured settlements. An ordinary individually solicited whole life replacement is the core case the regulation was written for.

An employee's spouse loses group coverage because the couple divorces. The maximum COBRA continuation period is:

1. 36 months ✓
2. 18 months
3. 12 months
4. 6 months

Why: Divorce is a qualifying event that allows the affected dependent up to 36 months of COBRA continuation.

A family maintenance policy combines whole life with level term to:

1. Pay an income for a set period beginning at the insured's death, then the face amount ✓
2. Decrease the death benefit gradually as the insured's children grow up
3. Invest part of each premium in the policyowner's chosen mutual funds
4. Provide temporary coverage only, expiring with no value at the term's end

Why: Family maintenance adds level term to whole life; if the insured dies during the term, it pays income for a stated period from the date of death, then the face amount.

An insurer must respond to a request for verification of coverage from a viatical settlement provider no later than:

1. Thirty business days after the request is postmarked
2. Fifteen calendar days after the request is received
3. Thirty calendar days after the request is postmarked ✓
4. Sixty calendar days after the request is postmarked

Why: C.R.S. § 10-7-609(1)(b) runs thirty CALENDAR days from the POSTMARK, on a form approved by the commissioner, and the insurer must either complete the verification or say in which respects it cannot. The clock starting at posting rather than receipt puts the risk of a slow post office on the insurer.

Which is NOT required in the written records an HMO keeps of its complaint system under section 10-16-409(1)?

1. A description of the procedures of the complaint system
2. The name and address of each complaining enrollee ✓
3. The total number of complaints handled and the causes underlying them
4. The number, amount and disposition of malpractice claims settled during the year

Why: C.R.S. § 10-16-409(1)(b) requires the procedures, the total number of complaints with a compilation of underlying causes, and the malpractice settlement data for the HMO and its providers. Enrollee identities are not called for, and subsection (3) limits the commissioner's examination of the system by reference to the medical records protections in § 10-16-416(3).

The required "Entire contract-changes" provision of section 10-16-202(2) states that a change in the policy is valid only when approved by:

1. Any officer of the insurer, or any agent authorised to accept it
2. The commissioner of insurance, on filing
3. An executive officer, endorsed on or attached to the policy ✓
4. The insurer's underwriting department, in writing

Why: C.R.S. § 10-16-202(2) requires both limbs - approval by an EXECUTIVE OFFICER and that approval endorsed on or attached to the policy - and closes with the sentence that does the real work in practice: no agent has authority to change the policy or to waive any of its provisions. What the agent said at the kitchen table is not part of the contract.

A Medicare supplement policy proposes a benefit limitation on a type of care Medicare also covers. Under section 10-18-103(2) that limitation may not be:

1. Applied during the first six months of coverage
2. Different from the limitation in the insurer's other policies
3. Expressed as a dollar cap rather than a percentage
4. More restrictive than Medicare's own limitation for that care ✓

Why: C.R.S. § 10-18-103(2)(e) requires that benefit limitations, exceptions and reductions be no more restrictive than those of Medicare for any type of care the policy covers. It is the mirror of the non-duplication rule in subsection (1): a supplement may not pay twice, and it may not be stingier than the programme it supplements.

A worker is injured on the job and cannot work. Under a nonoccupational disability policy, the claim is:

1. Not covered, because on-the-job injuries fall under workers' compensation ✓
2. Covered in full, the same as any off-the-job injury
3. Covered at half the normal monthly benefit amount
4. Covered only after workers' compensation is exhausted under the policy's terms

Why: Nonoccupational coverage excludes work-related injuries (handled by workers' compensation); occupational/24-hour coverage applies on or off the job.

Before notifying policyholders of a full withdrawal from a Colorado market, section 10-16-105.1(2) requires the carrier to notify the commissioner at least:

1. Ten business days beforehand
2. Three business days beforehand ✓
3. Thirty days beforehand
4. Ninety days beforehand

Why: C.R.S. § 10-16-105.1(2)(h)(I)(B) gives the commissioner three business days' head start before the news reaches policyholders. It is short because its purpose is preparation rather than approval - the Division cannot stop a carrier leaving, but it can be ready for the calls.

'Unfair discrimination' in insurance means:

1. Charging different rates to individuals of the same class and risk ✓
2. Declining an applicant who genuinely presents a substandard risk
3. Offering preferred rates to applicants who do not use tobacco
4. Setting premiums using actuarially sound mortality tables

Why: Unfair discrimination is applying different rates or terms to insureds of the same class and equal risk; risk-based distinctions are permitted.

Which is expressly NOT a "first-party claimant"?

1. A public entity that paid a claim due to an insurer's delay
2. A corporation asserting benefits owed under a policy
3. A nonparticipating provider performing services ✓
4. A partnership entitled to benefits on behalf of an insured

Why: C.R.S. § 10-3-1115(1)(b)(II) excludes two categories: a nonparticipating provider performing services, and a person asserting a claim against an insured under a liability policy. The definition in (1)(b)(I) is otherwise wide — individual, corporation, association, partnership or other legal entity, and expressly a public entity that has paid a claim because of the insurer's unreasonable delay or denial.

A long-term care applicant declines the nonforfeiture benefit they were offered. Under section 10-19-113.4(1) the insurer must then provide:

1. Nothing further, the offer having been declined
2. A reduced paid-up benefit after ten years
3. A refund of premiums on any later lapse
4. A contingent benefit upon lapse ✓

Why: C.R.S. § 10-19-113.4(1) makes the OFFER of a nonforfeiture benefit a condition of issuing the policy at all, and turns a refusal into a lesser protection rather than none - a contingent benefit upon lapse, available for a specified period. The commissioner sets that period by rule, along with the substantial premium rate increase that triggers the benefit.

An insurer seeks to rely on a statement in the application to resist a claim, but no copy of the application was attached to or endorsed on the policy. Under section 10-16-209(1) the insured is:

1. Bound, the statement having been signed
2. Not bound by the statement ✓
3. Bound only if the statement was material
4. Bound unless the insured requested a copy at issue

Why: C.R.S. § 10-16-209(1) makes attachment or endorsement of the application a precondition of relying on anything in it - the sickness and accident twin of § 10-7-102(1)(c) for life policies. The principle is the same in both: the insurer may not rely on a document the insured was never given back with the contract.

If a deceased insured held any incidents of ownership in their life policy at death, the death benefit is generally:

1. Excluded from the estate and paid entirely income-tax-free
2. Included in the insured's taxable estate for estate-tax purposes ✓
3. Taxed as ordinary income to the named policy beneficiary
4. Subject to an automatic 10% early-distribution penalty

Why: Incidents of ownership (e.g., right to change the beneficiary) cause the proceeds to be included in the insured's taxable estate.

The fee an individual remits when applying for the licensing examination is:

1. Refundable if the applicant fails
2. Refundable if the examination is cancelled
3. Credited against the first licence fee
4. Nonrefundable ✓

Why: C.R.S. § 10-2-402(3)(a) makes the examination fee nonrefundable, set by the commissioner under § 10-2-413. Subsection (2) requires examinations to be held at reasonable times and places designated by the commissioner and made public - so the state undertakes to make sitting the exam practical, but not to underwrite the applicant's outcome.

The board of directors of the protection association under section 10-20-107(1) consists of:

1. No fewer than five nor more than nine member insurers
2. Nine member insurers appointed by the commissioner
3. No fewer than seven nor more than eleven individuals, whether or not insurers
4. No fewer than seven nor more than eleven member insurers ✓

Why: C.R.S. § 10-20-107(1) puts the seats in the hands of MEMBER INSURERS rather than individuals, selected by the member insurers subject to the commissioner's approval. The commissioner appoints only if the board is not selected within sixty days of notice of the organizational meeting, and must ensure fair representation between insurers writing primarily life or annuity business and those writing primarily health benefit plans.

On life insurance death benefits, from thirty days after a complete request until settlement, the annual interest rate is:

1. The federal discount rate
2. Two percentage points above the federal discount rate ✓
3. Four percentage points above the federal discount rate
4. Eight percent, fixed by statute

Why: C.R.S. § 10-7-112(1) steps the rate up to two points above the federal discount rate once the insurer has had thirty days with a complete request. The section defines that rate as what a commercial bank pays the Federal Reserve Bank of Kansas City on a government bond or other eligible paper, rounded to the nearest full percent.

The coordination of benefits provision is designed to:

1. To increase the total benefits payable across all plans
2. To stop an insured collecting more than the expenses incurred ✓
3. To eliminate all policy deductibles when two plans apply
4. To extend the maximum benefit period under each plan

Why: COB establishes primary/secondary payer order so total reimbursement does not exceed the expenses incurred.

The fraud warning statement must appear on applications, policies or claim forms:

1. In conspicuous nature, permanently affixed ✓
2. In at least twelve-point bold type
3. On the signature page only
4. In a form the commissioner prescribes by rule

Why: C.R.S. § 10-1-128(6)(a) requires a statement in conspicuous nature, permanently affixed to the application, policy or claim form, whether printed or electronically transmitted, substantially the same as the wording the paragraph sets out. Contrast § 10-4-110.8(6)(a)(II)(A), which does prescribe bold twelve-point type — Colorado is specific about typography when it wants to be, and here it is not.

A 50-year-old withdraws $10,000 of gain from a nonqualified deferred annuity. Besides ordinary income tax, the IRS penalty is:

1. $1,000 ✓
2. $2,000
3. $500
4. $0

Why: A premature distribution before 59½ incurs a 10% penalty: 10% × $10,000 = $1,000, on top of ordinary income tax on the gain.

A 'bonus' annuity credits an extra percentage to the premium up front but usually comes with:

1. A longer surrender-charge period ✓
2. No surrender charges at all
3. A guaranteed doubling of the account
4. Immediate tax-free withdrawals

Why: Bonus annuities add an upfront credit but typically offset it with longer or higher surrender charges and sometimes lower base rates.

Under a presumptive disability provision, the insured is presumed totally disabled (and paid full benefits) upon:

1. Total loss of sight, hearing, speech, or two limbs ✓
2. Any short illness expected to resolve within a single week
3. Voluntary early retirement from a physically demanding job
4. Reaching the policy's stated benefit-period maximum age

Why: Presumptive disability pays full benefits for specified losses (sight, hearing, speech, or two limbs) even if the insured is able to work.

A worker's 'primary insurance amount' (PIA) is:

1. The benefit payable at full retirement age, the basis for other benefits ✓
2. The total of all Social Security taxes the worker paid under the policy's terms
3. A one-time lump sum paid at the worker's death
4. The maximum a worker may contribute each year

Why: The PIA is the monthly benefit at full retirement age; survivor and disability benefits are figured as percentages of it.

A 'dual eligible' individual is someone who qualifies for:

1. Both Medicare and Medicaid ✓
2. Two separate private major medical plans at once
3. Both an HSA and a flexible spending account together
4. Medicare Part A but not Part B coverage

Why: Dual eligibles qualify for both Medicare and Medicaid; Medicaid may help cover Medicare premiums and cost sharing for those with limited income.

Medicare Part B approves a $1,000 charge. After the annual deductible is satisfied, the beneficiary's 20% coinsurance is:

1. $200 ✓
2. $800
3. $1,000
4. $500

Why: After the deductible, Medicare pays 80% and the beneficiary pays 20% — here $200.

A small employer offers dependent coverage to its staff. Under section 10-16-105(1) the carrier must offer coverage to dependents who apply:

1. Only at the annual renewal of the group health plan
2. At any time the dependent chooses
3. Only where the dependent has no other coverage
4. When the employee first becomes eligible to enroll ✓

Why: C.R.S. § 10-16-105(1)(b)(II)(A) ties the dependents' opportunity to the employee's own first eligibility window. The duty is conditional on the employer offering dependent coverage at all - the statute does not compel that choice, it governs what follows once the employer has made it.

An insured dies during the grace period with the premium unpaid. The insurer:

1. May deny the claim outright, the premium being unpaid
2. May deduct the unpaid premium for the current policy year ✓
3. Must pay in full and may not recover the premium at all
4. Must pay the policy's cash surrender value and nothing more

Why: C.R.S. § 10-7-102(1)(i) keeps the insurance in force through the grace month and then settles the money fairly: if the insured dies within the month of grace, the unpaid premium for the current policy year may be deducted in any settlement under the policy. The beneficiary is paid; the insurer is not made to provide a year's cover for nothing.

Under section 10-16-105.1(1), a carrier providing coverage under a health benefit plan must renew or continue it:

1. At the option of the policyholder ✓
2. At the option of the carrier, acting reasonably
3. For a minimum of three consecutive plan years
4. Unless the commissioner approves non-renewal

Why: C.R.S. § 10-16-105.1(1) puts the choice in the policyholder's hands and subsection (2) then lists the ONLY reasons a carrier may refuse to renew or discontinue. It is a closed list, not an illustrative one - a reason not on it is not a reason at all.

A 'life with 10-year period certain' annuity:

1. Pays income for only ten years and then stops entirely
2. Pays for life but guarantees at least ten years of payments ✓
3. Pays nothing at all if the annuitant dies during payout
4. Is functionally identical to a straight life-only annuity

Why: It pays for the annuitant's life and guarantees a minimum number of years of payments to a beneficiary.

An applicant for an individual managed care plan neither lives nor resides in the carrier's established geographic service area. Under section 10-16-105(4) the carrier:

1. Must refer the applicant to another carrier in the area
2. Must offer the plan on an out-of-area basis
3. Must offer the plan at an out-of-area premium
4. Need not offer that plan or accept the application ✓

Why: C.R.S. § 10-16-105(4)(a) suspends the guaranteed issuance duty for managed care plans outside the carrier's established geographic service area. It is a network limitation rather than an underwriting one - a plan built on contracted local providers cannot deliver care to someone living hundreds of miles away, and the statute recognises that rather than pretending otherwise.

A policy sets out the first premium payment in the policy itself. Under section 10-7-102(1)(a):

1. The policy itself is the receipt ✓
2. A separate signed receipt is still required
3. The producer must countersign the policy
4. The premium must be paid at the home office

Why: C.R.S. § 10-7-102(1)(a) requires premiums payable in advance, at the home office or to an agent on delivery of a receipt signed by one or more duly authorized officers - UNLESS the first payment is set forth in the policy, in which case the policy is the receipt. It saves a piece of paper and, more usefully, makes the policy itself proof that the first premium was paid.

An insured has a terminal illness and medical aid-in-dying is available to them under article 48 of title 25. The insurer:

1. May exclude death occurring by that means
2. May reduce the benefits otherwise payable proportionately
3. Shall not deny or alter benefits on that basis ✓
4. May require the insured to purchase a rider

Why: C.R.S. § 10-7-103(3) forbids denying or altering benefits otherwise available to an individual with a terminal disease based on the AVAILABILITY of medical aid-in-dying under article 48 of title 25. Note the reach: it is the availability of the option that cannot be used against the insured, whether or not it is ever taken up.