Connecticut Life & Health Insurance License, Practice Exams

Telemedicine benefits in a health plan allow members to:

1. Receive only in-person care at a designated network hospital
2. Purchase prescription medications at a government-set price
3. Consult a provider remotely using phone or video technology ✓
4. Bypass all deductibles and copayments for every service

Why: Telemedicine lets members access care remotely via phone or video, often at lower cost and with greater convenience for routine issues.

A 'corridor deductible' appears in supplementary major medical plans and is the amount:

1. Refunded to the insured at the end of a claim-free year
2. Deducted from the death benefit before any claim is paid
3. Between where basic coverage ends and major medical begins ✓
4. Charged each time the insured visits an in-network specialist

Why: In a supplementary major medical plan, the corridor deductible is the gap the insured pays after basic benefits are exhausted and before major medical starts.

An accident-only policy provides benefits for:

1. Long-term custodial nursing-home care after an accident
2. Losses resulting from accidents, but not from sickness ✓
3. Routine preventive care and annual wellness checkups only
4. Both accidental injuries and any illness the insured develops

Why: Accident-only coverage is limited to losses caused by accidental injury; sickness is excluded, making it a limited (supplemental) policy.

An insurer discovers material fraud on an application after the contestable period has ended. For most fraudulent misstatements, the insurer:

1. Is barred from contesting once two years have elapsed
2. May reduce the death benefit by half as a penalty
3. Must pay the claim and then sue the beneficiary
4. May still contest the claim, because fraud is an exception ✓

Why: While most misstatements become incontestable after two years, material fraud generally remains contestable under the law.

A 'market conduct' examination by regulators reviews an insurer's:

1. Reinsurance treaties alone
2. Sales, underwriting, and claims practices ✓
3. Investment portfolio yields and reserve adequacy
4. Executive compensation and board minutes

Why: Market conduct exams assess how an insurer treats consumers — marketing, underwriting, policyholder service, and claims handling.

A 'life income with period certain' settlement option guarantees:

1. Payments that continue jointly for two named annuitants for life
2. The single largest possible payment, but nothing after the payee dies
3. A lump-sum distribution of the entire proceeds at the payee's request
4. Income for life, with a minimum number of years paid to a beneficiary ✓

Why: Life income with period certain pays for the payee's life but guarantees payments for at least a stated period; a beneficiary receives the remainder if the payee dies early.

A tax-qualified long-term care policy that meets federal standards generally offers:

1. Coverage only for care delivered in a skilled nursing facility
2. Tax-free benefits and premiums that may be deductible within limits ✓
3. A guaranteed cash refund of all premiums at the insured's death
4. Benefits that are always fully taxable as ordinary income

Why: Tax-qualified LTC policies (under HIPAA standards) pay benefits income-tax-free (within per-diem limits) and allow a limited premium deduction.

R.C.S.A. 38a-819-35 defines the two LIFE INSURANCE COST INDEXES. How does the Net Payment Cost Index differ from the Surrender Cost Index?

1. It is calculated in the same manner except that the annual premium is set at the maximum the insurer may charge.
2. It is calculated in the same manner except that dividends are accumulated at three per cent rather than five per cent.
3. It is calculated in the same manner except that it is shown for twenty years only, and never for ten years.
4. It is calculated in the same manner except that the cash surrender value and any terminal dividend are set at zero. ✓

Why: R.C.S.A. 38a-819-35(F)(2): the Life Insurance Net Payment Cost Index is calculated in the same manner as the comparable Life Insurance Cost Index except that the cash surrender value and any terminal dividend are set at zero.

What does R.C.S.A. 38a-819-25(D) require about the NAME or TITLE given to a life insurance policy in an advertisement?

1. The name or title must be the generic name of the policy, being a short title descriptive of the premium and benefit patterns of the policy or rider.
2. The name or title must include the words “life insurance”, unless it is accompanied by other language clearly indicating that it is life insurance. ✓
3. The name or title must be the one under which the policy form was approved by the commissioner, and no marketing name may be used in an advertisement.
4. The name or title must not include the words “plan”, “programme” or “fund”, which imply that the contract is an investment rather than insurance.

Why: R.C.S.A. 38a-819-25(D): an advertisement shall not use as the name or title of a life insurance policy any phrase which does not include the words 'life insurance' unless accompanied by other language clearly indicating it is life insurance. Subsection (E) separately requires the advertisement to describe the type of policy prominently.

In a variable annuity, the contract value is measured in accumulation units during the pay-in phase and in ___ during the payout phase.

1. Annuity units ✓
2. Guaranteed dollars
3. Surrender shares
4. Mortality credits

Why: During accumulation the value is tracked in accumulation units; at annuitization it converts to a fixed number of annuity units whose dollar value varies.

A plan has a $750 deductible and 80/20 coinsurance. On a $5,750 covered bill, the insured pays:

1. $1,750 ✓
2. $1,000
3. $1,150
4. $2,000

Why: Deductible $750 + 20% of the remaining $5,000 ($1,000) = $1,750.

A $1,000 covered expense is submitted to two health plans. The primary plan pays $800. Under coordination of benefits, the secondary plan typically pays:

1. $200 ✓
2. $800
3. $1,000
4. $0

Why: COB limits total payment to 100% of the expense; the secondary plan pays the remaining $200, not a duplicate benefit.

R.C.S.A. 38a-819-6(A)(1) forbids misleading omissions and wording in an accident and sickness advertisement. What does it say about offering inspection of the policy or a refund of premium?

1. Neither remedies a misleading statement. ✓
2. Either cures the advertisement for the future.
3. Both together remedy a misleading statement.
4. A refund offer alone remedies the statement.

Why: R.C.S.A. 38a-819-6(A)(1): the fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale, or that an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.

A nonresident producer moves to Connecticut, or a Connecticut resident producer moves away. What does 38a-702g(c) require, and what does it cost?

1. A change of address and certification from the new resident state not later than thirty days after the change, with no licensing fee or application for a producer moving here. ✓
2. A new resident application accompanied by the full fee specified in section 38a-11, filed not later than thirty days after the change of legal residence in either direction.
3. A change of address filed within ninety days of the move, together with the fee specified in section 38a-11 for the issue of a duplicate licence showing the new address.
4. Notice to each appointing insurer within thirty days of the move, the commissioner being notified only at the next renewal of the licence under section 38a-784.

Why: 38a-702g(c) provides that such a producer SHALL FILE A CHANGE OF ADDRESS AND PROVIDE CERTIFICATION FROM THE NEW RESIDENT STATE NOT LATER THAN THIRTY DAYS AFTER THE CHANGE OF LEGAL RESIDENCE, and that NO LICENSING FEE OR APPLICATION SHALL BE REQUIRED FROM A PRODUCER MOVING TO THIS STATE PURSUANT TO THIS SECTION. Note this thirty-day rule is about RESIDENCE; the thirty days in 38a-771(a) covers a change of business address, employer or name for an existing licensee.

How do 38a-702a(4), (11) and (12) define a producer's HOME STATE and LIMITED LINES INSURANCE?

1. Home state is the state in which the producer maintains the principal place of residence, whether or not the producer is licensed there, a producer whose business is conducted elsewhere being a nonresident of that other state; limited lines insurance is credit insurance, travel insurance and any line for which the commissioner issues a limited lines producer licence.
2. Home state is the state in which the producer was first licensed as an insurance producer, whatever the producer's later place of residence or business may be; limited lines insurance is credit insurance and travel insurance only, the commissioner having no power to recognise any further line as limited lines insurance, whatever the needs of reciprocity with other states.
3. Home state is any state or territory of the United States, including the District of Columbia, in which the producer maintains the principal place of residence or principal place of business and is licensed as a producer; limited lines insurance is credit insurance and travel insurance, or any other line the commissioner deems necessary to recognise for 38a-702g. ✓
4. Home state is any state or territory of the United States, including the District of Columbia, in which the producer maintains the principal place of residence or principal place of business, whether or not licensed there; limited lines insurance is credit insurance and travel insurance, or any other line the commissioner deems necessary to recognise for the purpose of section 38a-702g.

Why: 38a-702a(4) defines home state as any state or territory of the United States, including the District of Columbia, in which an insurance producer maintains the producer's principal place of residence or principal place of business AND is licensed to act as an insurance producer. The licensing limb is part of the definition, which is why the version saying 'whether or not licensed there' is wrong. 38a-702a(11) defines limited lines insurance as credit insurance and travel insurance, or any other line of insurance that the commissioner deems necessary to recognize for the purpose of complying with section 38a-702g, and 38a-702a(12) defines a limited lines producer as a person authorized by the commissioner to sell, solicit or negotiate limited lines insurance.

A key feature of convertible term insurance is that it can be changed to a permanent policy:

1. Only if the insured becomes totally disabled first
2. Only after a new medical exam confirms insurability
3. Only during the first policy year
4. Without providing evidence of insurability ✓

Why: Convertible term can be converted to permanent coverage without evidence of insurability.

A reciprocal insurer is:

1. An unincorporated group of members who insure each other through an attorney-in-fact ✓
2. A federal chartering agency that licenses insurers under the McCarran-Ferguson Act
3. A stock company whose shareholders elect the board and receive taxable dividends
4. A fraternal benefit society organized in lodges that sells only to its own members

Why: A reciprocal is an unincorporated association whose subscribers exchange insurance among themselves, managed by an attorney-in-fact.

A SIMPLE IRA retirement plan is intended for:

1. Government workers not covered by Social Security, who defer pay through a 457(b) plan instead
2. Small employers, with employee salary deferrals and an employer match ✓
3. Self-employed individuals who have no employees at all other than a spouse on the payroll
4. Large corporations with thousands of unionized employees

Why: A SIMPLE IRA is for small employers (generally up to 100 employees) and combines employee salary-reduction contributions with required employer contributions.

Since 2006, a newly issued Medicare Supplement (Medigap) policy may NOT include:

1. Coverage of the Part A coinsurance
2. Prescription drug coverage ✓
3. Coverage for the first three pints of blood
4. The Part B coinsurance benefit

Why: Drug coverage is provided through Part D; Medigap policies issued after 2005 cannot include prescription drug benefits.

A member insurer fails to pay an assessment when due. What may the commissioner do under 38a-868(b)?

1. Suspend or revoke the insurer's certificate of authority after notice and hearing, or as an alternative levy a forfeiture not exceeding one per cent of the unpaid assessment per month, with no minimum amount.
2. Apply to the Superior Court for an order compelling payment, together with interest at fifteen per cent per annum, the certificate of authority being unaffected until judgment is entered.
3. Suspend or revoke the certificate of authority after notice and hearing, or instead levy a forfeiture of up to five per cent of the unpaid assessment a month, never less than five hundred dollars a month. ✓
4. Levy a forfeiture of five hundred dollars for each day the assessment remains unpaid, and refer the insurer to the Attorney General if it remains unpaid after ninety days.

Why: 38a-868(b): the commissioner may suspend or revoke, after notice and hearing, the certificate of authority of any member insurer that fails to pay an assessment when due or fails to comply with the plan of operation; as an alternative the commissioner may levy a forfeiture, which shall not exceed five per cent of the unpaid assessment per month, but no forfeiture shall be less than five hundred dollars per month.

An applicant who regularly scuba dives in caves is most likely to be:

1. Declined outright, as no insurer covers a hazardous hobby
2. Charged a higher (rated) premium or have the avocation excluded ✓
3. Required to buy an annuity rather than life insurance
4. Offered the preferred rate class, since diving is a sport

Why: Hazardous avocations increase risk; insurers respond with a rating, an exclusion rider, or a higher premium.

The plan of operation may delegate the association's powers and duties. To whom, on what conditions, and with what exceptions, under 38a-867(d)?

1. To any third-party administrator licensed in this state, with the approval of the commissioner alone, provided the administrator is bonded in an amount the commissioner fixes; no power may be delegated that involves the payment of a covered claim.
2. To the National Organization of Life and Health Insurance Guaranty Associations without further approval, provided the delegation is recorded in the plan of operation and reported to the commissioner annually.
3. To a corporation or organisation doing similar work in two or more states, approved by the board and the commissioner, and only where its protection is not substantially less favourable; 38a-865(k)(3) and 38a-866 stay. ✓
4. To a corporation performing similar functions in another state, with the approval of the board alone, provided the delegation may be revoked at will; only the assessment power under section 38a-866 may not be delegated.

Why: 38a-867(d): the plan may provide that any or all powers and duties of the association, EXCEPT those under 38a-865(k)(3) and section 38a-866, are delegated to a corporation, association or other organisation performing similar functions in two or more states; the delegation takes effect only with the approval of both the board of directors and the commissioner, and may be made only to a body which extends protection not substantially less favourable and effective than the chapter provides.

Under 38a-14(d), when may the commissioner accept another state's examination report on a foreign or alien insurer instead of examining it?

1. When the insurer has been licensed in Connecticut for at least five years and the other state's report is less than twelve months old on the date on which the commissioner accepts it.
2. When that state's department was NAIC-accredited at the time, or the examination was supervised by or done with examiners of an accredited department who so state under oath. ✓
3. When the insurer's Connecticut premium is below one per cent of its total premium and the report has been approved by the NAIC's Financial Analysis Working Group.
4. Never as a complete substitute; the commissioner may rely on the other report only for the balance sheet and must examine the insurer's Connecticut business directly.

Why: 38a-14(d): the commissioner may accept an examination report prepared by the insurance department of the insurer's state of domicile or port-of-entry state if (1) that department was, at the time of the examination, accredited under the NAIC's financial regulation standards and accreditation program, or (2) the examination was performed under the supervision of an accredited department or with the participation of one or more of its examiners who, after review, state under oath that it met their department's standards.

Joint life (first-to-die) insurance pays the death benefit:

1. In equal installments to each surviving insured person
2. Upon the first death among the insureds covered ✓
3. When both insureds covered by the policy have died
4. Only if the insureds die within thirty days of each other

Why: Joint (first-to-die) life pays at the first death of the covered insureds; survivorship (second-to-die) pays at the second death.

What does 38a-41(b) require the commissioner to do by regulation?

1. Specify the minimum capital and surplus a company must maintain for each line of insurance it is authorised to write in this state.
2. Specify the accounting standards on which a company's statement of financial condition shall be prepared and the date to which it shall be made up.
3. Specify the information and evidence a company seeking to obtain or renew a licence shall submit and the requirements it shall comply with. ✓
4. Specify the grounds on which the commissioner may suspend, revoke or refuse to renew a licence and the procedure at any hearing on such action.

Why: 38a-41(b): the commissioner shall adopt regulations specifying the information and evidence that an insurance company or health care center desiring to obtain or renew a license shall submit and the requirements with which it shall comply.

A policy has become paid up, or is continued under a paid-up nonforfeiture benefit effective on or after the third policy anniversary for ordinary insurance. Within what period after a policy anniversary must surrender produce a cash surrender value, under 38a-439(a)(4)?

1. Within thirty days after the anniversary. ✓
2. Within sixty days after that policy anniversary.
3. Within ninety days after that policy anniversary.
4. At any time during the policy year concerned.

Why: 38a-439(a)(4): if the policy has become paid up by completion of all premium payments, or is continued under a paid-up nonforfeiture benefit which became effective on or after the third policy anniversary for ordinary insurance or the fifth for industrial insurance, the company will pay a cash surrender value upon surrender of the policy within thirty days after any policy anniversary.

Who bears the cost of the transcript of a hearing arising from a producer's failure to complete the continuing education requirements, under R.C.S.A. 38a-782a-17?

1. The Insurance Department in every case.
2. The producer's appointing insurer.
3. The producer or sponsor concerned. ✓
4. The party against whom the decision goes.

Why: R.C.S.A. 38a-782a-17: the cost for the transcript of any hearing resulting from the failure of a producer to successfully complete the continuing education requirements, or requested by a producer or sponsor aggrieved by a decision of the commissioner concerning a violation of the regulation, shall be borne by the producer or sponsor.

What is the association's overall cap on benefits under 38a-860(g)(1)?

1. The benefits may in no event exceed the contractual obligations for which the insurer is liable, the dollar limits applying only where the insurer has been placed under an order of liquidation.
2. The lesser of the contractual obligations for which the insurer is or would have been liable were it not impaired, and the dollar limits set out in the subsection. ✓
3. The benefits may in no event exceed the dollar limits set out in the subsection, whether or not the insurer's own contractual obligation was smaller than those limits at the date of impairment.
4. The benefits may in no event exceed the reserves the insurer should have established for the covered policies, calculated as at the date of the order of rehabilitation or liquidation.

Why: 38a-860(g): the benefits for which the association may become liable shall in no event exceed the LESSER of (1) the contractual obligations for which the insurer is liable or would have been liable if it were not an impaired insurer, or (2) the dollar limits that follow.

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

1. Double the face amount, since the rider doubles every death claim
2. The face amount only, with no doubling ✓
3. Only the accumulated cash value
4. Face amount tripled by the rider

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

Within what period must an insurer act on a written request to correct, amend or delete recorded personal information, and what are its two options under 38a-984(a)?

1. Twenty-one business days; either correct, amend or delete the disputed portion, or notify the individual of the refusal and of the right to a hearing before the commissioner.
2. Thirty business days; either correct, amend or delete the disputed portion, or notify the individual of the refusal, the reasons for it and the right to file a statement. ✓
3. Thirty calendar days; either correct, amend or delete the disputed portion, or refer the dispute to the institutional source that supplied the information for its decision.
4. Sixty business days; either correct, amend or delete the disputed portion, or notify the individual of the refusal, the reasons for it and the right to bring an action for equitable relief.

Why: 38a-984(a): not later than thirty business days from receipt of a written request the insurer, agent or insurance-support organization shall (1) correct, amend or delete the portion of the recorded personal information in dispute, or (2) notify the individual of its refusal, the reasons for the refusal, and the individual's right to file a statement under subsection (c).

A licensed company writes nothing in one of its authorised lines for two consecutive calendar years. What does 38a-41(a) say about that?

1. It terminates the company's authority to write those lines automatically at the end of the second year.
2. It may constitute sufficient cause for revocation of the company's authority to write those lines. ✓
3. It requires the company to file a fresh plan of operation for those lines before writing them again.
4. It has no consequence, the licence covering every line for which the company was first authorised.

Why: 38a-41(a): failure of a licensed company to exercise its authority to write a particular line or lines of business in this state for two consecutive calendar years may constitute sufficient cause for revocation of the company's authority to write those lines of business.

A Medicare Supplement (Medigap) policy is designed to:

1. Pay only for outpatient prescription drug costs
2. Cover gaps like deductibles and coinsurance in Original Medicare ✓
3. Provide long-term custodial nursing-home care benefits for an indefinite period of time
4. Replace Original Medicare with a private network plan

Why: Medigap fills cost-sharing gaps in Original Medicare and is sold in standardized plans.

A disability policy has a 90-day elimination period and a $3,000 monthly benefit. If the insured is totally disabled for 8 months, the approximate total paid is:

1. $15,000 ✓
2. $24,000
3. $9,000
4. $21,000

Why: The first ~3 months (90-day elimination) pay nothing; benefits are paid for the remaining 5 months × $3,000 = $15,000.

A policy owner asks to borrow, surrender or withdraw policy values. What notice does R.C.S.A. 38a-435-6(3) require, and how must it be sent?

1. A notice that the policy will lapse unless the amount released is repaid within thirteen months, sent with the cheque in every case and repeated at the next policy anniversary.
2. A notice that the release of values may be a financed purchase requiring the replacement forms, sent to the producer of record rather than to the policy owner, who is notified by the producer.
3. A notice that releasing policy values may affect the guaranteed elements, non-guaranteed elements, face amount or surrender value, sent apart from the cheque if that goes elsewhere. ✓
4. A notice of the tax consequences of the release, sent separately from the cheque in every case and accompanied by a revised illustration of the policy's future values.

Why: R.C.S.A. 38a-435-6(3): upon receipt of a request to borrow, surrender or withdraw any policy values the existing insurer shall send the policy owner a notice advising that the release of policy values may affect the guaranteed elements, non-guaranteed elements, face amount or surrender value of the policy from which the values are released; the notice shall be sent separately from the cheque if the cheque is sent to anyone other than the policy owner, and for consecutive automatic premium loans the notice is required only at the time of the first loan.

Because an insurance policy is drafted entirely by the insurer and the applicant simply accepts it, it is legally a contract of:

1. Aleatory exchange, in which the dollar amounts traded by the parties are unequal
2. Indemnity
3. Adhesion ✓
4. Warranty

Why: A contract of adhesion is written by one party and offered on a take-it-or-leave-it basis, so ambiguities are construed against the drafter (the insurer).

An insured and the sole primary beneficiary die in the same crash, order of death unknown. Under the Uniform Simultaneous Death Act, proceeds go to:

1. The contingent beneficiary or the insured's estate ✓
2. Whoever was pronounced dead first at the scene
3. The insurer, as unclaimed property
4. The primary beneficiary's own heirs, through that beneficiary's estate

Why: The Act presumes the insured survived the beneficiary, so the proceeds pass to the contingent beneficiary or the insured's estate.

On or before the effective date of a substantial premium increase, what two offers must the insurer make under R.C.S.A. 38a-501-19(d)?

1. An offer to cut the current coverage's benefits without further underwriting so the premium does not rise, and an offer to convert to paid-up status with a shortened benefit period. ✓
2. An offer to refund all premiums paid less any benefits received, and an offer to transfer the policyholder to a different policy form of the same insurer at the original premium rate.
3. An offer to waive the increase for policyholders aged eighty or over, and an offer to spread the increase over three years for all other policyholders of that form.
4. An offer to reduce policy benefits subject to fresh underwriting, and an offer to convert to a partnership-approved policy under the Connecticut Partnership for Long-Term Care.

Why: R.C.S.A. 38a-501-19(d): on or before the effective date of a substantial premium increase the insurer shall (1) offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased, and (2) offer to convert the coverage to paid-up status with a shortened benefit period.

In group underwriting, a 'guaranteed issue' limit is the amount of coverage that:

1. Members can obtain without providing individual evidence of insurability ✓
2. Is automatically doubled for any employee who enrolls one or more dependents in the plan
3. The employer is required to buy for every eligible employee, whatever the resulting rate
4. Each member must pay for entirely out of pocket

Why: Up to the guaranteed issue limit, members are covered without individual medical evidence; amounts above it require proof of insurability.

Which contracts does 38a-440(a) put OUTSIDE the annuity nonforfeiture requirements?

1. Reinsurance and group annuities of every kind, including those funding individual retirement accounts and annuities, together with any contract delivered in this state through an agent of the issuing company.
2. Individual deferred annuities issued to persons aged sixty-five or over, immediate annuities and structured settlement annuities, together with any contract issued under a governmental retirement plan.
3. Reinsurance, employer or employee-organisation group annuities under a retirement or deferred compensation plan other than individual retirement plans, premium deposit funds, variable, investment, immediate, contingent deferred and reversionary annuities, and deferred annuities after payments begin. It also excludes contracts delivered outside this state. ✓
4. Reinsurance, variable annuities and investment annuities only; all other annuity contracts delivered or issued for delivery in this state fall within the nonforfeiture requirements.

Why: 38a-440(a): the section does not apply to reinsurance, a group annuity purchased under a retirement plan or plan of deferred compensation established by an employer or employee organisation (other than a plan providing individual retirement accounts or annuities under Section 408 of the Internal Revenue Code), a premium deposit fund, a variable annuity, an investment annuity, an immediate annuity, a contingent deferred annuity, any deferred annuity contract after annuity payments have commenced, or a reversionary annuity, nor to a contract delivered outside this state through an agent or other representative of the issuing company.

Under a term insurance 're-entry' option, the insured can obtain lower 'select' renewal rates by:

1. Automatically renewing without any proof of good health
2. Converting the policy to whole life at the original age
3. Paying a single lump-sum premium for the entire new term
4. Providing new evidence of insurability at the end of the term ✓

Why: Re-entry term lets an insured requalify with fresh evidence of insurability for lower select rates; without requalifying, higher rates apply.

38a-9(c) establishes a second division within the Insurance Department. What is it, what does it do, and what must the commissioner report about it?

1. The Division of Rate Review, which assists the commissioner in reviewing rates and supplementary rate information for compliance and refers suspected violations to the commissioner; the commissioner reports to the insurance committee by January fifteenth annually on the number and type of reviews and the percentage change in rates by line and subline. ✓
2. The Division of Rate Review, which approves or disapproves rates and supplementary rate information filed with the department and may order an insurer to withdraw a rate found not to comply; the commissioner reports to the insurance committee by January fifteenth annually on the number and type of reviews conducted in the prior calendar year.
3. The Division of Market Conduct, which assists the commissioner in examining the underwriting and claim practices of insurers for compliance with sections 38a-663 to 38a-696; the commissioner reports to the insurance committee by January fifteenth annually on the number and type of examinations conducted in the prior calendar year.
4. The Division of Rate Review, which assists the commissioner in reviewing rates and supplementary rate information for compliance and refers suspected violations to the Attorney General for enforcement; the commissioner reports to the insurance committee by March thirty-first annually on the percentage change in rates by line and subline.

Why: 38a-9(c) establishes A DIVISION OF RATE REVIEW WITHIN THE INSURANCE DEPARTMENT, WHICH DIVISION SHALL ACT ON THE COMMISSIONER'S BEHALF AND AT THE COMMISSIONER'S DIRECTION. Subject to 38a-663 to 38a-696, THE DIVISION SHALL ASSIST THE COMMISSIONER IN REVIEWING RATES AND SUPPLEMENTARY RATE INFORMATION FILED WITH THE DEPARTMENT FOR COMPLIANCE WITH STATUTORY REQUIREMENTS AND STANDARDS. ITS STAFF SHALL INCLUDE RATING EXAMINERS WITH SUFFICIENT ACTUARIAL EXPERTISE, and ANY SUSPECTED VIOLATION ... SHALL BE REFERRED TO THE COMMISSIONER FOR APPROPRIATE ACTION. The commissioner reports to the insurance committee ON OR BEFORE JANUARY FIFTEENTH ANNUALLY on (1) THE NUMBER AND TYPE OF REVIEWS CONDUCTED BY THE DIVISION IN THE PRIOR CALENDAR YEAR, AND (2) THE PERCENTAGE OF INCREASE OR DECREASE IN RATES REVIEWED ... BY LINE AND SUBLINE OF INSURANCE. The division assists and refers; the commissioner acts. 38a-9(d) provides that the directors and staff of BOTH divisions are appointed by the commissioner under chapter 67.

A rider that keeps a policy in force by waiving premiums during a qualifying total disability is the:

1. Guaranteed insurability rider
2. Waiver of premium rider ✓
3. Accidental death benefit rider
4. Cost-of-living rider

Why: Waiver of premium waives premiums after an elimination period while the insured is totally disabled, keeping coverage in force.

How are the benefits of a specified disease policy affected by the insured's other coverage, under R.C.S.A. 38a-505-13(b)(8)?

1. They shall be paid regardless of other coverage. ✓
2. They are reduced by the amount any other coverage pays for the same loss.
3. They are payable only after the other coverage's benefits are exhausted.
4. They are coordinated with other coverage under the rules in 38a-480-5.

Why: R.C.S.A. 38a-505-13(b)(8): the benefits of a specified disease policy shall be paid regardless of other coverage.

Under the ACA, in-network preventive services such as immunizations and screenings must be covered:

1. Only after the deductible is fully met
2. With no cost-sharing to the insured ✓
3. At 50% coinsurance in every plan
4. Only for insureds under age 40

Why: ACA-compliant plans must cover specified preventive services in-network with no copay, coinsurance, or deductible.

A terminally ill insured accesses the accelerated death benefit for $40,000 on a $100,000 policy. At death, the beneficiary receives:

1. $40,000, matching the amount already advanced
2. $140,000 (the face amount plus the advance)
3. $60,000 (the death benefit reduced by the advance) ✓
4. $100,000, because an accelerated payment is treated as a policy loan

Why: The accelerated benefit advances part of the face amount; the death benefit is reduced accordingly: $100,000 − $40,000 = $60,000.

The period during which an annuity owner pays premiums and the contract grows is the:

1. Elimination period
2. Accumulation period ✓
3. Probationary period
4. Annuitization period

Why: During the accumulation period money is paid in and grows tax-deferred; the annuitization (payout) period is when income payments are made.

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

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

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

38a-8(g) permits the commissioner to engage third-party actuaries and specialists to review a rate, form or similar filing. Who bears the cost?

1. The person who submitted the filing to the commissioner. ✓
2. The Insurance Department, from the fees paid under 38a-11.
3. All licensed insurers, through the 38a-47 assessment.
4. The state's general fund, on the Comptroller's certification.

Why: 38a-8(g): the commissioner may engage third-party actuaries, professionals and specialists to assist in reviewing any rate, form or similar filing, and the cost of such services shall be borne by the person who submitted the filing.

A Medicare beneficiary delayed Part D for three years without other creditable drug coverage. The result is:

1. A one-time penalty collected at the first prescription fill
2. A permanent late-enrollment surcharge added to the Part D premium ✓
3. No consequence, because Part D enrollment is voluntary
4. A permanent bar from enrolling in any Part D drug plan

Why: Going without creditable coverage adds a permanent late-enrollment surcharge to the Part D premium.

An insurer incorporated in another U.S. state but doing business in this state is a(n) ____ insurer.

1. Foreign ✓
2. Alien
3. Admitted
4. Domestic

Why: Domestic = incorporated in this state; foreign = another state; alien = another country.

To be tax-qualified under federal law, a long-term care insurance contract must:

1. Have no cash surrender value that can be borrowed or pledged ✓
2. Be noncancelable, with premiums fixed for life at issue
3. Require a prior hospital stay before paying nursing home benefits
4. Pay benefits only after the insured has exhausted Medicaid

Why: A qualified contract must be guaranteed renewable and may not provide a cash surrender value or other money that can be paid, assigned, pledged or borrowed. Guaranteed renewable is enough; noncancelable status with locked premiums is not required.

Higher-income Medicare beneficiaries pay an income-related monthly adjustment amount (IRMAA) that:

1. Reduces their Part A hospital deductible each year
2. Increases their Part B and Part D premiums ✓
3. Exempts them from all Medicare cost sharing
4. Converts their coverage to Medicaid automatically

Why: IRMAA adds a surcharge to Part B and Part D premiums for beneficiaries whose income exceeds set thresholds.

The 'human life value' approach to determining life insurance need estimates:

1. The present value of the insured's expected future earnings ✓
2. The cash value the insured could accumulate by retirement
3. The face amount of every policy the insured already owns
4. The total of the family's current outstanding debts only

Why: The human life value approach bases the need on the present value of future income the insured would provide; the needs approach instead totals specific obligations and goals.

What must a decision disapproving a policy form contain, and what grounds does R.C.S.A. 38a-430-3(d) give for disapproval?

1. It must specify the sections of the policy at fault and the amendments required; the grounds are that the form does not comply with the law or is not in the public interest as the commissioner sees it.
2. It must specify the reason; the grounds are that the form does not comply with law, or contains provisions that are unfair or deceptive or encourage misrepresentation of the policy. ✓
3. It must be accompanied by a notice of the insurer's right to a hearing within thirty days; the grounds are that the form is contrary to law or that its premium rates are inadequate or excessive.
4. It must specify the reason for disapproval; the grounds are that the form fails the Flesch reading ease test or is not state specific in its language.

Why: R.C.S.A. 38a-430-3(d): the commissioner shall issue a decision disapproving the use of any such form if it does not comply with the requirements of law, or if it contains a provision or provisions which are unfair or deceptive or which encourage misrepresentation of the policy, and any such decision shall specify the reason for disapproval. Approved forms are labelled 'Approved' with the name and signature of the staff member and the date, under subsection (e).

After a genuine hospital stay, a policyholder adds two extra days to the bill she submits to her insurer. This is best described as:

1. Soft fraud: padding an otherwise legitimate claim ✓
2. Hard fraud: staging or inventing a loss on purpose
3. Misrepresentation: a producer's false sales statement
4. Concealment: withholding a fact on the application

Why: Inflating a real claim is soft (opportunistic) fraud; hard fraud is deliberately fabricating the loss itself. Both are insurance fraud.

The federal Gramm-Leach-Bliley Act requires financial institutions, including insurers, to:

1. Protect the privacy of customers' nonpublic personal information ✓
2. Sell insurance only through federally chartered national banks
3. Report all claims directly to the Internal Revenue Service
4. Charge identical premiums to every applicant in the country

Why: Gramm-Leach-Bliley requires privacy notices and limits on sharing nonpublic personal financial information, with an opt-out for consumers.

How does 38a-1(3) define ANNUITIES, and what does the definition expressly exclude?

1. All agreements to make periodical payments where the making or continuance of the payments, or their amount, depends on the continuance of human life or is for a specified term of years; life policy payments are excluded. ✓
2. All agreements to make periodical payments for the lifetime of the annuitant, whether the payments begin at once or at a future date; payments for a specified term of years are excluded, being instalment contracts rather than annuities.
3. All agreements under which an insurer accepts a single premium and pays it back with interest over a period exceeding one year; payments made under a policy of life insurance or an endowment contract are excluded from the definition.
4. All agreements to make periodical payments that depend on the continuance of human life, including the settlement options of a life insurance policy; payments for a fixed term independent of life are excluded.

Why: 38a-1(3): annuities means all agreements to make periodical payments where the making or continuance of all or some of the series of the payments, or the amount of the payment, is dependent upon the continuance of human life or is for a specified term of years; this definition does not apply to payments made under a policy of life insurance.

A child is covered under both parents' plans; the father's birthday is March 3 and the mother's is May 10. Under the birthday rule, the primary plan is the:

1. Plan with the higher benefit limit
2. Mother's plan
3. Father's plan ✓
4. Plan purchased most recently

Why: The birthday rule makes primary the plan of the parent whose birthday falls earlier in the calendar year — here, March (the father).

Financial underwriting of a life insurance application ensures that:

1. Confirm through an MIB search that the applicant holds no in-force coverage with any other insurer
2. The amount of coverage is justified by the applicant's financial situation ✓
3. Guarantee that premiums will be paid on schedule throughout the entire premium-paying period
4. A paramedical exam and blood profile were completed

Why: Financial underwriting confirms the requested amount is reasonable relative to income, net worth, or the economic loss being insured.

A vision care plan most commonly covers:

1. Eye exams, lenses, frames, and contact lenses ✓
2. Long-term care provided in an assisted-living facility
3. Inpatient surgery for any unrelated medical condition
4. Prescription drugs for chronic systemic illnesses

Why: Vision plans cover routine eye exams and corrective eyewear (lenses, frames, contacts), usually on a scheduled-benefit basis.

A '20-pay whole life' policy:

1. Requires premium payments every year for the insured's entire lifetime
2. Is paid up after twenty years of premiums but covers the insured for life ✓
3. Provides level coverage for exactly twenty years, then terminates
4. Builds no cash value at all because the premium period ends early

Why: Limited-pay whole life concentrates premiums into a set period (here 20 years) while coverage lasts for life.

How does 38a-289 treat contracts of reinsurance, and what does it say about the form provisions of the insurance law?

1. They are deemed insurance contracts in every respect, so that the provisions of this title relating to the form of insurance contracts apply to them exactly as they apply to a policy issued to a member of the public.
2. They are not insurance contracts at all, being agreements between insurers, and no provision of this title applies to them except those sections expressly naming reinsurance agreements.
3. They are deemed insurance contracts, but the hazard under them is declared distinct from the hazard originally insured; the form provisions of the insurance law do not apply unless made specifically applicable. ✓
4. They are deemed insurance contracts where the ceding insurer is domiciled in this state, and the form provisions of this title then apply to them unless the commissioner exempts the treaty on application.

Why: 38a-289: contracts for reinsurance shall be deemed insurance contracts, but the hazard under such contracts is declared to be distinct in nature from the hazard originally insured; no provision of law relative to the form of insurance contracts or policies shall apply to contracts of reinsurance unless made specifically applicable thereto, and each corporation issuing a reinsurance contract in this state continues to be subject to its charter and to the statutes so far as applicable.

What may the commissioner do under 38a-771(c) where investigation shows a producer has violated the reporting duty in 38a-771(b)?

1. Suspend the licence immediately and hold a hearing within twenty days, the fine being limited to one thousand dollars.
2. Refer the matter to the Attorney General for an injunction restraining the producer from transacting insurance business.
3. Impose a fine upon the producer and suspend or revoke the licence, after a hearing as specified in section 38a-774. ✓
4. Impose a fine only, the reporting duty being administrative, and note the violation on the producer's licence record.

Why: 38a-771(c): if, upon investigation, the commissioner determines that a producer has violated subsection (b), the commissioner may, following a hearing as specified in section 38a-774, impose a fine upon and suspend or revoke the license of the producer.

A point-of-service (POS) health plan is best described as:

1. A plan that provides absolutely no benefits for any care received out of network
2. A hybrid using HMO or PPO features chosen at the time of care ✓
3. A government plan available only to low-income families and their children
4. A supplement designed to pay the cost-sharing gaps in Original Medicare

Why: A POS plan blends HMO and PPO features: lower cost in-network with a gatekeeper, but out-of-network care is allowed at higher cost.

A client wants the chance for higher returns and accepts market risk on the annuity's value. The best fit is a:

1. Immediate fixed annuity
2. Bank certificate of deposit
3. Variable annuity ✓
4. Fixed annuity

Why: A variable annuity invests in separate accounts where the owner bears market risk and reward; a fixed annuity guarantees a set return.

A survivorship (second-to-die) life policy pays the death benefit when:

1. Either insured becomes disabled
2. The first insured dies
3. The policy is surrendered
4. The second insured dies ✓

Why: Survivorship pays at the second death; it is common in estate planning to fund estate taxes.

In an annuity, the person whose life the income payments are based on is the:

1. Insurer
2. Annuitant ✓
3. Beneficiary
4. Owner

Why: The annuitant is the measuring life for payments; the owner controls the contract and the beneficiary receives any death proceeds.

R.C.S.A. 38a-782a-9(b) prescribes what an advertisement for an approved course must contain. Which item is required?

1. The statement “This course has been submitted to the Insurance Commissioner for continuing education approval”.
2. The name of every approved instructor who may deliver the course and the professional designations each of them holds.
3. The statement “Approved by the State of Connecticut Insurance Department for insurance producer continuing education credit”. ✓
4. The date of the commissioner's approval of the course and the date on which that approval is due for recertification.

Why: R.C.S.A. 38a-782a-9(b): the advertising shall include (1) the sponsor name and course title; (2) the statement 'Approved by the State of Connecticut Insurance Department for insurance producer continuing education credit'; (3) the number of approved credit hours; (4) the type of licensee for whom the course would be most applicable; and (5) all fees and associated expenses. Subsection (a) forbids advertising a course as approved before written approval is granted.

What is the Connecticut Insurance Guaranty Association, and who belongs to it?

1. A state agency within the Insurance Department, funded by an annual appropriation and staffed by employees of the department assigned to it by the commissioner from time to time.
2. A nonprofit unincorporated legal entity created by 38a-839, membership of which every member insurer must keep as a condition of its authority to transact insurance in this state. ✓
3. A voluntary association of admitted insurers, membership being open to any insurer writing the covered lines that chooses to contribute to the assessments levied under the plan of operation.
4. A private corporation chartered by special act of the General Assembly, whose shareholders are the domestic insurers writing property and casualty business within this state at the time of its formation.

Why: 38a-839 creates A NONPROFIT UNINCORPORATED LEGAL ENTITY TO BE KNOWN AS THE CONNECTICUT INSURANCE GUARANTY ASSOCIATION, and provides that ALL INSURERS DEFINED AS MEMBER INSURERS IN SECTION 38a-838 SHALL BE MEMBERS OF SAID ASSOCIATION AS A CONDITION OF THEIR AUTHORITY TO TRANSACT INSURANCE IN THIS STATE. Membership is compulsory, not elective, and the association is not a state agency.

R.C.S.A. 38a-505-7(G) lists the only permitted exclusions by type of illness, accident, treatment or condition. Which of these is on the list?

1. Any injury sustained while the insured was a passenger in a private motor vehicle driven by another person.
2. Any sickness caused by the insured's use of tobacco products, whatever the duration or level of use.
3. Any sickness first diagnosed after the insured has reached the age of sixty-five, whatever its cause.
4. Pre-existing conditions or diseases, except for congenital anomalies of a covered dependent child. ✓

Why: R.C.S.A. 38a-505-7(G)(1): the permitted exclusions include pre-existing conditions or diseases, except for congenital anomalies of a covered dependent child; the list also covers mental or emotional disorders, alcoholism and drug addiction except as 38a-488a provides, pregnancy except complications, war and related risks, suicide and self-inflicted injury with an exception for the listed health coverages, aviation, inter-scholastic sports for short-term renewable policies, cosmetic surgery excluding reconstructive surgery, government and no-fault benefits, dental care, eye glasses and hearing aids, rest cures and custodial care, and territorial limitations. Nothing on the list permits an exclusion for injuries sustained as a passenger in a motor vehicle, for sickness caused by tobacco use, or by the age at which a sickness is first diagnosed.

What must an AGENT list under R.C.S.A. 38a-501-22(b)?

1. Any other long-term care policies the agent has sold to the applicant in the past three years, whether or not those policies remain in force at the date of the application.
2. Any commission the agent will receive on the new policy and on any policy the agent previously sold to the applicant that is being replaced by it.
3. Any other health insurance policies the agent has sold to the applicant: those still in force, and those sold in the past five years that are no longer in force. ✓
4. Any other insurer the agent represents that offers long-term care insurance, so that the applicant may compare the available policies before applying.

Why: R.C.S.A. 38a-501-22(b): agents shall list any other health insurance policies they have sold to the applicant, listing (1) policies sold which are still in force and (2) policies sold in the past five years which are no longer in force.

In a cross-purchase buy-sell agreement among four business owners, the number of life insurance policies required is:

1. 12 ✓
2. 4
3. 8
4. 16

Why: Cross-purchase requires each owner to insure every other owner: n(n−1) = 4 × 3 = 12 policies; an entity plan would need only 4.

Beyond the documents filed, what must an applicant for a company licence DEMONSTRATE under 38a-41(a)?

1. An orderly pattern of growth in its marketing territories in the region, except for a newly formed health care center, expertise in marketing and servicing the lines it wants to write, and an ability to settle claims continuously and promptly. ✓
2. An orderly pattern of growth in premium volume over the preceding five years, expertise in marketing and servicing the lines it desires to write, and an ability to meet the risk-based capital requirements of its domiciliary state at all times.
3. A plan of operation for each line of insurance it desires to write, an ability to provide continuous and timely claims settlement, and the appointment of at least one resident producer for each county in this state.
4. An orderly pattern of growth in its marketing territories, expertise in underwriting the lines it desires to write, and an ability to settle claims through an adjuster licensed in this state under section 38a-792.

Why: 38a-41(a): an applicant shall demonstrate an orderly pattern of growth in its marketing territories in the geographic region, with the exception of a newly formed health care center, and an expertise in marketing and servicing the lines of insurance or the health care center business it desires to write; it shall submit evidence of its ability to provide continuous and timely claims settlement.

A producer offers a prospect free airline tickets, not part of the policy, to induce the purchase. This is:

1. A permissible marketing gift
2. Rebating ✓
3. Defamation
4. Twisting

Why: Offering an inducement not specified in the policy to persuade a purchase is rebating, prohibited in most states.

An owner surrenders a policy with a $22,000 cash value after paying $15,000 in premiums. The taxable gain is:

1. $7,000 ✓
2. $22,000
3. $15,000
4. $0

Why: Gain over basis is taxable: $22,000 − $15,000 = $7,000 of ordinary income.

Which occupations does 38a-769(a) require to apply to the commissioner for a licence, as distinct from the producer licence governed by chapter 701a?

1. Public adjuster, casualty adjuster, motor vehicle physical damage appraiser, certified insurance consultant and surplus lines broker, plus any other insurance-related occupation needing a licence. ✓
2. Third-party administrator, pharmacy benefits manager, preferred provider network and medical discount plan organisation, and any other insurance-related entity for which the commissioner has by regulation deemed a licence necessary.
3. Life settlement provider, life settlement broker, reinsurance intermediary and rental company, and any other insurance-related occupation for which the commissioner has adopted a licensing regulation.
4. Insurance producer, fraternal agent, surety bail bond agent and limited lines travel insurance producer, together with any occupation for which the commissioner deems a licence necessary.

Why: 38a-769(a): the section governs a person desiring to act as a public adjuster, casualty adjuster, motor vehicle physical damage appraiser, certified insurance consultant or surplus lines broker, or to engage in any insurance-related occupation for which a license is deemed necessary by the commissioner, OTHER THAN an occupation as an insurance producer. Subsection (j) then applies subsections (b) to (i) to producers as well.

A two-tier annuity is one in which the contract has:

1. Two named annuitants, both of whom must survive for the income payments to continue
2. Two declared interest rates, one for new deposits and one for older money, that the owner switches between each year
3. A higher value if annuitized and a lower value if surrendered for cash ✓
4. A death benefit equal to twice the account value if the owner dies during the accumulation period

Why: A two-tier annuity credits a higher value when the owner annuitizes and a lower value on cash surrender, incentivizing annuitization.