Connecticut Life & Health Insurance License, Practice Exams

What must an insurer do with the policies required by 38a-999, under subsections (b) and (c)?

1. Make them available for review by the Insurance Commissioner, and make a summary of them available to enrollees upon enrolment and upon request. ✓
2. File them with the Insurance Commissioner before they take effect, and publish a summary of them on the insurer's public web site within thirty days.
3. Make them available for review by the Insurance Commissioner, and provide a full copy of them to every enrollee at enrolment and at each renewal.
4. File a certificate of compliance with the Insurance Commissioner each year, and make a summary of the policies available to enrollees upon request.

Why: 38a-999(b): the insurer, agent or insurance support organization shall make the policies, standards and procedures available for review by the Insurance Commissioner. 38a-999(c): a summary of them shall be made available to enrollees upon enrollment and upon request.

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policies the agent has sold to the applicant: those still in force, and those sold in the past five years that are no longer in force.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applicant, listing (1) policies sold which are still in force and (2) policies sold in the past five years which are no longer in force.

An individual producer working for a corporation commits a violation. When may the corporation's own licence be suspended, revoked or refused under 38a-702k(c)?

1. Where the commissioner finds, after hearing, that the individual licensee's violation was actually known to one or more of the partners, officers or managers acting on behalf of the entity, constructive knowledge being insufficient, and the violation was neither reported to the commissioner nor corrective action taken by the entity.
2. Whenever an individual licensee of the entity has a licence revoked, the entity's licence and the licences of every principal, officer and director following automatically unless the commissioner determines that the principal, officer or director was not personally at fault in the matter.
3. Where the commissioner finds, after hearing, that the individual licensee's violation was known or should have been known by one or more of the partners, officers or managers acting on behalf of the entity, and the violation was neither reported to the commissioner nor corrective action taken. ✓
4. Where the commissioner finds, after hearing, that the individual licensee's violation was known or should have been known by one or more of the partners, officers or managers, whether or not the violation was reported to the commissioner or corrective action was taken by the entity in respect of it.

Why: 38a-702k(c) provides that THE LICENSE OF A BUSINESS ENTITY MAY BE SUSPENDED, REVOKED OR REFUSED IF THE COMMISSIONER FINDS, AFTER HEARING, THAT AN INDIVIDUAL LICENSEE'S VIOLATION WAS KNOWN OR SHOULD HAVE BEEN KNOWN BY ONE OR MORE OF THE PARTNERS, OFFICERS OR MANAGERS ACTING ON BEHALF OF THE PARTNERSHIP OR CORPORATION AND THE VIOLATION WAS NEITHER REPORTED TO THE COMMISSIONER NOR CORRECTIVE ACTION TAKEN. Constructive knowledge is enough, but reporting it or correcting it is a complete answer. The third option is 38a-774(b), which runs the other way: it takes the licences of principals, officers and directors DOWN WITH a revoked entity licence unless they were not personally at fault. 38a-702k(d) adds that in addition to or in lieu of any denial, suspension or revocation, a person may after hearing be fined under 38a-774.

How does 38a-841 require the association to deal with claims brought against it, and how may it handle them?

1. It must investigate, and adjust, compromise, settle and pay covered claims to the extent of its obligations and deny all other claims; it must pay strictly in the order in which the claims were received; and it may handle claims only through its own employees, the act not permitting it to delegate claim handling to a member insurer.
2. It must investigate, and adjust, compromise, settle and pay covered claims to the extent of its obligations and deny all other claims; it may pay in any order it deems reasonable; and it may handle claims through its own employees or through servicing facilities approved by the commissioner, which a member insurer may decline to be. ✓
3. It must pay every claim presented to it that the receiver of the insolvent insurer has allowed, the receiver rather than the association determining covered claim eligibility; it may pay in any order it deems reasonable; and it may handle claims through servicing facilities designated by the commissioner.
4. It must investigate, and adjust, compromise, settle and pay covered claims to the extent of its obligations and deny all other claims; it may pay in any order it deems reasonable; and it may handle claims through servicing facilities of its own choosing, which a member insurer that is designated may not decline.

Why: 38a-841(a)(4) requires the association to INVESTIGATE CLAIMS BROUGHT AGAINST SAID ASSOCIATION AND ADJUST, COMPROMISE, SETTLE, AND PAY COVERED CLAIMS TO THE EXTENT OF SAID ASSOCIATION'S OBLIGATIONS AND DENY ALL OTHER CLAIMS. THE ASSOCIATION SHALL PAY CLAIMS IN ANY ORDER IT DEEMS REASONABLE INCLUDING, BUT NOT LIMITED TO, PAYMENT IN THE ORDER OF RECEIPT OR BY CLASSIFICATION, and it MAY REVIEW SETTLEMENTS, RELEASES AND JUDGMENTS TO WHICH THE INSOLVENT INSURER OR ITS INSUREDS WERE PARTIES TO DETERMINE THE EXTENT TO WHICH SUCH SETTLEMENTS, RELEASES AND JUDGMENTS MAY BE PROPERLY CONTESTED. 38a-841(a)(6) lets it HANDLE CLAIMS THROUGH ITS EMPLOYEES OR THROUGH ONE OR MORE INSURERS OR OTHER PERSONS DESIGNATED BY SAID ASSOCIATION AS SERVICING FACILITIES, PROVIDED SUCH DESIGNATION ... IS APPROVED BY THE COMMISSIONER AND MAY BE DECLINED BY A MEMBER INSURER. Note that 38a-844(b) binds the receiver to the ASSOCIATION'S determinations, not the other way round.

Which type of life insurance provides lifelong coverage with a level premium and a guaranteed cash value?

1. Annually renewable term
2. Whole (ordinary) life ✓
3. Level term to age 65
4. Credit life

Why: Whole life is permanent coverage with a level premium and a guaranteed, tax-deferred cash value. Term provides only temporary coverage with no cash value.

R.C.S.A. 38a-495a-14(a) prescribes statements for Medicare supplement application forms. Which statement does it require?

1. “You do not need more than one Medicare supplement policy.” ✓
2. “This policy does not cover long-term care or custodial care of any kind.”
3. “Medicare supplement policies are not available to persons under sixty-five.”
4. “Your premium is guaranteed for the first three years of this policy.”

Why: R.C.S.A. 38a-495a-14(a): the prescribed statements include 'You do not need more than one Medicare supplement policy'; that the applicant may want to evaluate existing coverage; that the applicant may be eligible for Medicaid and may not need a Medicare supplement policy; the Medicaid and employer-plan suspension rules; and the availability of counselling services in the state.

What does the TIME LIMIT ON CERTAIN DEFENSES provision in 38a-483(a)(2) make the policy, and after how long?

1. Incontestable for any reason whatever, including nonpayment of premium, after it has been in force for two years.
2. Incontestable, except for fraudulent misstatement in the application, after it has been in force for three years.
3. Incontestable, except for nonpayment of premium, after two years in force from its date of issue. ✓
4. Incontestable, except for nonpayment of premium, after it has been in force for one year from its date of issue.

Why: 38a-483(a)(2): 'TIME LIMIT ON CERTAIN DEFENSES: This policy shall be incontestable, except for nonpayment of premium, after it has been in force for two years from its date of issue.'

A candidate studying an older Connecticut outline finds a reference to 38a-831 on solicitation of insurance. What is its present status?

1. It remains in force and prohibits solicitation by an unlicensed person.
2. It was recodified as 38a-832 and now governs communications to claimants.
3. It was repealed, effective 1 October 1999. ✓
4. It was suspended pending the adoption of regulations that have not yet been made.

Why: The chapter records that SECTION 38a-831 IS REPEALED, EFFECTIVE OCTOBER 1, 1999. It is a dead section and nothing in this bank rests on it. It is worth knowing because study material that predates the repeal still cites it, and 38a-832 - which does exist - addresses a different subject entirely.

Sharing or paying a commission to an unlicensed individual is generally:

1. Required by most state laws
2. Permitted for referrals only
3. Prohibited ✓
4. Allowed if the amount is small

Why: Commissions may be paid only to properly licensed persons; paying an unlicensed individual is prohibited (limited nominal referral fees aside).

An insurer advertises its financial standing by stating its assets. What does 38a-829 require?

1. That it give its liabilities in the same advertisement, printed in type no smaller than half the size of the type used for the statement of assets on which it relies.
2. That it give its liabilities and a summary of operations with equal conspicuousness, and make no such announcement until the statement has been filed with the department. ✓
3. That it file the advertisement with the commissioner for approval at least thirty days before it is first published, and republish it only on the same terms as approved.
4. That it state the basis of accounting on which the figures were computed and identify the certified public accountant who audited the annual statement relied on.

Why: 38a-829 requires each advertisement, public announcement, circular or card purporting to make known the financial standing of a company by a statement of its assets to, WITH EQUAL CONSPICUOUSNESS, GIVE ITS LIABILITIES AND A SUMMARY OF OPERATIONS COMPUTED ON THE BASIS ALLOWED FOR ITS ANNUAL STATEMENT, AND NO SUCH PUBLIC ANNOUNCEMENT SHALL BE MADE UNTIL SUCH STATEMENT HAS BEEN FILED WITH THE INSURANCE DEPARTMENT OF THIS STATE. Statements sent to shareholders are treated separately in the same section.

Under the PAYMENT OF CLAIMS provision in 38a-483(a)(9), to whom is indemnity for loss of life payable where no beneficiary designation is effective?

1. To the insured's surviving spouse, or if none, to the insured's children in equal shares.
2. To any relative by blood or connection by marriage whom the insurer deems equitably entitled.
3. To the person who has paid the expenses of the insured's last illness and burial.
4. To the estate of the insured. ✓

Why: 38a-483(a)(9): indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment effective at the time of payment; if no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. The 'relative by blood or connection by marriage' option is a facility of payment clause the insurer may add, capped at an amount not exceeding one thousand dollars.

A tax-sheltered annuity (TSA / 403(b)) is available to employees of:

1. Only for-profit corporations listed on a stock exchange
2. Public schools and certain tax-exempt nonprofit organizations ✓
3. Any employer, with no limits on annual contribution amounts
4. Federal agencies exclusively, in place of Social Security

Why: 403(b) tax-sheltered annuities are for employees of public schools and 501(c)(3) tax-exempt organizations; contributions are pre-tax and grow tax-deferred.

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 whole life policyowner borrows against the cash value and does not repay it. At death, the death benefit is:

1. Paid in full, with the loan forgiven
2. Forfeited entirely because of the loan
3. Replaced by a refund of premiums
4. Reduced by the outstanding loan and interest ✓

Why: An unpaid policy loan plus interest is subtracted from the death benefit paid to the beneficiary.

Medicare Savings Programs (such as QMB) help low-income beneficiaries by:

1. Adding dental and vision to Medicare
2. Eliminating the need to enroll in Part A
3. Providing tax-free life insurance
4. Paying Medicare premiums and cost-sharing ✓

Why: Medicaid-administered Medicare Savings Programs (QMB, SLMB, QI) help pay Medicare premiums, deductibles, and coinsurance for those with limited means.

A company wishes to defer payment of an ANNUITY cash surrender benefit under 38a-440(b)(2). What does the statute require?

1. The right is reserved for not more than six months after demand with surrender, and may be exercised without any application to the commissioner, the deferral being a term of the contract itself.
2. For not more than six months after demand with surrender, after written request to and written approval of the commissioner, the request addressing the deferral's necessity and equitability. ✓
3. The right is reserved for not more than three months after demand, and may be exercised only where the commissioner has declared a state of financial emergency affecting the insurer.
4. The right is reserved for not more than twelve months after demand with surrender, provided the company credits interest on the deferred amount at the contract rate.

Why: 38a-440(b)(2): the company may reserve the right to defer the payment of such cash surrender benefit for a period not to exceed six months after demand therefor with surrender of the contract, after making written request and receiving written approval of the commissioner, provided such request addresses the deferral's necessity and equitability with respect to all policyholders.

A cash refund annuity guarantees that, if the annuitant dies early, the beneficiary receives:

1. Double the original premium as an accidental-death style bonus payment
2. Any premium not yet paid out, in a lump sum ✓
3. Nothing, because all annuity payments stop at the annuitant's death
4. Continued lifetime payments for the rest of the beneficiary's own life

Why: A cash refund pays the beneficiary, in a lump sum, the difference between premiums paid and payments already received; an installment refund pays it out in continued installments.

A 'shortened benefit period' nonforfeiture option in an LTC policy provides that, if the insured stops paying premiums:

1. All premiums paid are refunded in cash within 30 days of the lapse
2. The policy converts into a paid-up life contract
3. Coverage lapses entirely, since nonforfeiture applies only to life policies
4. Paid-up coverage continues, but for a reduced benefit period ✓

Why: The shortened benefit period option keeps the same daily benefit as paid-up coverage but limits the total benefit period based on premiums paid.

Amounts a company allocates to separate accounts under 38a-459(b) are owned by whom, and what protects them?

1. They are owned by the contract holders in proportion to their deposits, the company acting as trustee of the account for their benefit under the terms of the agreement.
2. They are owned by the company and are chargeable with its liabilities generally, the contract holder ranking as a general creditor in any insolvency proceeding.
3. They are owned by the company, which shall not be or hold itself out as their trustee, except that they are not chargeable with liabilities from any other business it conducts. ✓
4. They are owned by the company but held on a statutory trust for the persons entitled under the agreement, and are exempt from claims by the company's creditors.

Why: 38a-459(b): amounts allocated by an insurance company to separate accounts in the exercise of the power granted by the section shall be owned by the company, and the company shall not be, or hold itself out to be, a trustee in respect to such amounts, except that such amounts shall not be chargeable with liabilities arising out of any other business the company may conduct.

What grace periods does the GRACE PERIOD provision in 38a-483(a)(3) require, by premium mode?

1. Not less than ten days for weekly premium policies, twenty for monthly premium policies and thirty-one for all other policies.
2. Not less than seven days for weekly premium policies, fifteen for monthly premium policies and thirty for all other policies.
3. Thirty-one days for every policy, whatever the mode in which the premium for that policy is payable by the insured.
4. Not less than seven days for weekly premium policies, ten for monthly premium policies and thirty-one for all other policies. ✓

Why: 38a-483(a)(3): a grace period of a number of days not less than seven for weekly premium policies, ten for monthly premium policies and thirty-one for all other policies will be granted for the payment of each premium falling due after the first, during which the policy shall continue in force.

The commissioner determines that a producer named in a notice of appointment is ineligible. What does 38a-702m(c) require?

1. The commissioner shall notify the insurer and the producer within thirty days of the determination.
2. The commissioner shall hold a hearing under section 38a-19 before notifying the appointing insurer.
3. The commissioner shall return the appointment fee to the insurer with the notice of ineligibility.
4. The commissioner shall notify the insurer not later than five days after making the determination. ✓

Why: 38a-702m(c): upon receipt of the notice of appointment the commissioner shall verify within a reasonable time not to exceed thirty days that the producer is eligible for appointment, and if the producer is determined to be ineligible, the commissioner shall notify the insurer not later than five days after the determination.

The optional 'misstatement of age' provision in a health policy provides that, if the insured's age was misstated, the benefits will be:

1. Adjusted to what the premium paid would have purchased at the correct age ✓
2. Doubled as a penalty against the insurer for issuing the policy at the wrong age
3. Forfeited in full, with every premium the policyowner paid returned without interest
4. Paid in full, since age never affects health benefits

Why: Benefits are adjusted to the amount the premium actually paid would have bought at the correct age, rather than voiding coverage.

R.C.S.A. 38a-782a-7 imposes a condition on who may administer the examination for a self-study course. What is it?

1. An impartial and disinterested person not in the direct line of supervision of any person taking the examination and with no financial interest in that person's success. ✓
2. An instructor approved by the commissioner under section 38a-782a-6, who must hold at least two of the qualifications that section lists for classroom instructors.
3. An officer of the sponsor, who must certify to the commissioner that the examination was administered under conditions preventing the use of reference material.
4. A person designated by the producer's employer, provided the employer is an insurer authorised to transact insurance business in this state at the time.

Why: R.C.S.A. 38a-782a-7: self-study courses may receive approval provided they include an examination on course material approved by the commissioner and administered by an impartial and disinterested person who shall not be in the direct line of supervision of any person taking the examination, nor have any financial interest in the success of any person taking the examination.

Under 38a-11(a)(12), what fees does the commissioner collect from insurance producers?

1. Fifteen dollars for each examination taken, eighty dollars for each licence issued and eighty dollars per year or part of a year for each licence renewed. ✓
2. Twenty dollars for each examination taken, one hundred dollars for each licence issued and one hundred dollars for each two-year renewal of the licence.
3. Twenty-six dollars for each examination taken, two hundred fifty dollars for each licence issued and two hundred fifty dollars for each licence renewed.
4. Fifteen dollars for each examination taken, fifty dollars for each licence issued and eighty dollars for each licence renewed, payable every two years.

Why: 38a-11(a)(12): with respect to insurance producers, an examination fee of fifteen dollars for each examination taken (paid by the testing service where one is used), a fee of eighty dollars for each license issued, and a fee of eighty dollars per year, or any portion thereof, for each license renewed. The $26/$250 schedule is the certified insurance consultant's under subdivision (16).

Current assumption (interest-sensitive) whole life differs from traditional whole life because its premiums and cash values:

1. Adjust with current interest and mortality experience ✓
2. Are fixed by contract and can never be changed for the life of the policy
3. Decrease automatically each year until the policy becomes paid up
4. Are invested entirely in equity sub-accounts selected by the policyowner

Why: Current assumption whole life uses current interest and mortality assumptions, so premiums and cash values can be redetermined periodically.

How often must the variable death benefit and the cash value of a variable life insurance policy be determined, under R.C.S.A. 38a-433-4(b)?

1. Changes in variable death benefits at least monthly; the cash value at least annually each year.
2. Both the variable death benefit and the cash value at least monthly in every case.
3. Changes in variable death benefits at least annually; the cash value at least monthly. ✓
4. Both the variable death benefit and the cash value at least annually in every case.

Why: R.C.S.A. 38a-433-4(b)(5) and (6): any changes in variable death benefits of each variable life insurance policy shall be determined at least annually, and the cash value of each variable insurance policy shall be determined at least monthly.

An authorisation is signed to collect information in connection with a CLAIM. How long may it remain valid under 38a-981(a)(7)(B)?

1. The duration of the claim where it involves a health insurance benefit; the term of coverage of the policy where the benefit is not a health insurance benefit.
2. Thirty months from the date the authorisation is signed where the claim involves a health insurance benefit, and one year in the case of any other benefit.
3. The term of coverage of the policy in every case, whether or not the claim involves a health insurance benefit under that policy.
4. The term of coverage of the policy where the claim involves a health insurance benefit; the duration of the claim where it does not. ✓

Why: 38a-981(a)(7)(B): in the case of authorisations signed for the purpose of collecting information in connection with a claim for benefits, the authorisation may last not longer than (i) the term of coverage of the policy if the claim involves a health insurance benefit, or (ii) the duration of the claim if it involves a benefit which is not a health insurance benefit.

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.

To be eligible to contribute to a Health Savings Account (HSA), an individual must be covered by a:

1. An employer-sponsored group HMO with $20 office copays
2. A Medicare Advantage Part C plan
3. A qualified high-deductible health plan (HDHP) ✓
4. State Medicaid coverage of any kind

Why: HSA contributions require enrollment in a qualified HDHP (and no disqualifying coverage).

What free look does the long-term care replacement notice in R.C.S.A. 38a-501-22(c) tell the applicant the new policy provides?

1. Ten days within which the applicant may decide, without cost, whether to keep the policy.
2. Twenty days within which the applicant may return the policy and have the premium refunded.
3. Sixty days within which the applicant may cancel and receive a pro rata refund of the premium.
4. Thirty days within which the applicant may decide, without cost, whether to keep the policy. ✓

Why: R.C.S.A. 38a-501-22(c): the notice to applicant regarding replacement of accident and sickness or long-term care insurance states 'Your new policy provides thirty (30) days within which you may decide, without cost, whether you desire to keep the policy.' The ten-day figure is the individual accident and sickness free look in R.C.S.A. 38a-505-10(A)(7).

How does Conn. Gen. Stat. 38a-1 distinguish a FOREIGN insurer from an ALIEN insurer?

1. A foreign insurer is chartered or organised under the laws of another state or a territory of the United States; an alien insurer is chartered or organised under the laws of a jurisdiction or country outside the United States. ✓
2. A foreign insurer is chartered or organised under the laws of any jurisdiction outside this state, whether or not within the United States; an alien insurer is one whose controlling shareholders are not citizens of the United States.
3. A foreign insurer is one admitted to do business here under a certificate of authority but domiciled elsewhere; an alien insurer is one not admitted here at all and therefore able to write only surplus lines business.
4. A foreign insurer is chartered outside the United States but maintains a trusteed deposit in a state of the United States; an alien insurer maintains no such deposit anywhere within the United States.

Why: 38a-1(9) defines FOREIGN INSURER as ANY INSURER THAT HAS BEEN CHARTERED BY OR ORGANIZED OR CONSTITUTED WITHIN OR UNDER THE LAWS OF ANOTHER STATE OR A TERRITORY OF THE UNITED STATES, and 38a-1(2) defines ALIEN INSURER as ANY INSURER THAT HAS BEEN CHARTERED BY OR ORGANIZED OR CONSTITUTED WITHIN OR UNDER THE LAWS OF ANY JURISDICTION OR COUNTRY WITHOUT THE UNITED STATES. 38a-1(6) completes the set: a DOMESTIC INSURER is chartered, incorporated, organised or constituted under the laws of THIS state. The test is where the company was organised, not where it is admitted.

What is the effect of R.C.S.A. 38a-475-3 on a long-term care policy that does not meet the partnership requirements?

1. It may not be delivered or issued for delivery in this state at all, the partnership requirements applying to every long-term care policy.
2. It shall not be precertified as partnership-approved for the purposes of the Connecticut Partnership for Long-Term Care. ✓
3. It may be sold but may not be described as long-term care insurance in any advertisement or outline of coverage used in this state.
4. It shall be deemed disapproved by the commissioner and may not be renewed at the end of its current term of coverage.

Why: R.C.S.A. 38a-475-3: no long-term care insurance policy shall be precertified as partnership-approved for purposes of the Connecticut Partnership for Long-Term Care unless the requirements of sections 38a-475-1 to 38a-475-6 are complied with. Partnership approval is a status a policy may hold; it is not a condition of selling long-term care insurance in the state.

What must the FACE of every accelerated benefits policy contain, under 38a-457(e)(1) and R.C.S.A. 38a-457-5(a)?

1. A description of coverage using the term “accelerated” and the statement that benefits under the policy will be reduced upon receipt of an accelerated benefit. ✓
2. A description of coverage using the terminology “living benefit” and the statement: “This benefit is payable only on proof of a terminal illness certified by a physician.”
3. A description of coverage using the terminology “accelerated” and the statement: “This policy is a long-term care policy as defined in sections 38a-501 and 38a-528.”
4. A description of coverage using the terminology “accelerated” and a statement of the actuarial discount and mortality charge applied to the benefit.

Why: 38a-457(e)(1) and R.C.S.A. 38a-457-5(a): the face of every accelerated benefits policy shall contain a description of coverage which uses the terminology 'accelerated' and the statement 'Benefits as specified under this policy will be reduced upon receipt of an accelerated benefit.' The regulation adds that accelerated benefits products shall not be described or marketed as long-term care insurance or as providing long-term care benefits.

What remedies does 38a-995 give an individual, and what does 38a-995(e) say about any other remedy?

1. Damages and equitable relief for any violation of the privacy sections, with double damages where the violation was intentional; the section is in addition to any other remedy available to the individual at law or in equity.
2. Equitable relief for a failure to comply with 38a-983, 38a-984 or 38a-985, and damages capped at actual damages for a disclosure violating 38a-988; otherwise no remedy in law or equity for a violation of these sections. ✓
3. Equitable relief for any violation of the privacy sections, and damages only where the commissioner has first found a violation after a hearing; other remedies are preserved where the violation also breaches another statute.
4. Damages limited to actual damages for any violation of the privacy sections, together with costs and attorney's fees to the prevailing party; no equitable relief is available to an individual under the chapter.

Why: 38a-995(a): a person whose rights under 38a-983, 38a-984 or 38a-985 are violated may bring an action for equitable relief. 38a-995(b): an insurer, agent or insurance-support organization that discloses information in violation of 38a-988 is liable for damages, capped at the actual damages sustained. 38a-995(c): the court may award costs and reasonable attorney's fees to the prevailing party. 38a-995(e): except as specifically provided in the section, there shall be no remedy available to individuals, in law or in equity, for occurrences constituting a violation of the privacy sections.

The commissioner calls an investigatory hearing on a financial examination report under 38a-14(e)(3)(C). How does 38a-14(f)(2) say it is conducted?

1. As a nonadversarial confidential investigatory proceeding, not conducted by an examiner; testimony under oath; cross-examination only by the commissioner or the commissioner's representative; an order within twenty days after it ends. ✓
2. Conducted by the commissioner as a contested investigatory case under chapter 54, before a hearing officer drawn from the department's examination staff; testimony under oath; cross-examination by counsel for either side; a written final decision within ninety days after the hearing ends.
3. As a public hearing noticed in a newspaper of general circulation; testimony not under oath; questioning by the company's counsel first and the department's counsel second; a written order within sixty days after the hearing ends.
4. As an adversarial proceeding in which the examiner in charge presides; documents produced are excluded from the record; cross-examination by the company's counsel only; a written order within thirty days after the hearing ends.

Why: 38a-14(f)(2): the hearing shall be conducted as a nonadversarial confidential investigatory proceeding; the commissioner shall not appoint an examiner as an authorized representative to conduct it; testimony shall be under oath and preserved for the record; cross-examination shall be conducted only by the commissioner or the commissioner's authorized representative; and not later than twenty days after the conclusion of the hearing the commissioner shall enter an order under (e)(3)(A).

An individual makes a proper written request for access to recorded personal information. Within what period must the insurer respond under 38a-983(a), and what must the response include?

1. Thirty calendar days; the nature and substance of the information, the chance to see and copy it, the identity of every person who supplied any part of it, and a summary of the correction procedure.
2. Twenty-one business days; the nature and substance of the information, a copy of the whole file, the identity of those to whom it was disclosed within the previous five years, and the reasons for any adverse decision.
3. Thirty business days; the nature and substance of the information, the chance to see and copy it, the identity of those it was disclosed to within two years, and a summary of the correction procedure. ✓
4. Thirty business days; the nature and substance of the information, the chance to see and copy it, and the identity of those to whom it was disclosed at any time since the information was first recorded.

Why: 38a-983(a): within thirty business days of receiving the request the insurer, agent or insurance-support organization shall (1) inform the individual of the nature and substance of the recorded personal information, (2) permit the individual to see and copy it or obtain a copy by mail, with a readable translation of coded information, (3) disclose the identity, if recorded, of persons to whom it was disclosed within two years before the request, or otherwise the names of those to whom such information is normally disclosed, and (4) provide a summary of the correction procedure.

How does 38a-862 distinguish an IMPAIRED INSURER from an INSOLVENT INSURER?

1. An impaired insurer is one whose surplus has fallen below the minimum required for its licence; an insolvent insurer is one that has ceased to pay claims as they fall due, whether or not a court has acted.
2. An impaired insurer is one the commissioner has placed under administrative supervision; an insolvent insurer is one whose certificate of authority has been revoked under section 38a-41 for cause.
3. An impaired insurer is one under an order of liquidation without a finding of insolvency; an insolvent insurer is one under an order of rehabilitation or conservation made by a court of this state.
4. An impaired insurer is not insolvent and is under a court order of rehabilitation or conservation; an insolvent insurer is under a court order of liquidation with a finding of insolvency. ✓

Why: 38a-862(11): impaired insurer means a member insurer that, after October 1, 1972, is not an insolvent insurer and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction. 38a-862(12): insolvent insurer means a member insurer that after October 1, 1972 is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.

A course of ten credit hours has an examination. The producer attends seventy-five per cent of the course and FAILS the examination. What credit follows under R.C.S.A. 38a-782a-8(f)?

1. One hundred per cent of the credit hours assigned to the course.
2. Seventy-five per cent of the credit hours assigned to the course.
3. No credit, the examination being a condition of any credit at all.
4. Seventy per cent of the credit hours assigned to the course. ✓

Why: R.C.S.A. 38a-782a-8(f): if more than six credit hours are assigned to a course for which there is an examination, and the producer does not pass the examination but attends at least seventy percent of the course, the producer shall receive seventy percent of the credit hours assigned. Passing the examination with seventy per cent attendance earns the full credit under subsection (e).

Nonforfeiture provisions in an annuity guarantee the owner:

1. A doubling of the account value after ten years
2. Free withdrawals of the entire balance in the first year
3. A minimum surrender value if the contract is cashed in ✓
4. The full original premium back with no charges at any time

Why: Annuity nonforfeiture laws guarantee a minimum cash surrender value, protecting the owner's accumulated funds.

In scheduling and setting the scope of financial examinations under 38a-14(b), what must the commissioner consider?

1. The number of complaints against the company in the Division of Consumer Affairs' reports, its market share in each line and the date of its last market conduct examination under 38a-15.
2. The company's premium volume in the state, the length of time since it was licensed, its rating by a nationally recognised rating agency and whether it is domestic, foreign or alien.
3. The recommendation of the guaranty association, the company's risk-based capital level alone and any request for examination made by the regulator of another state in which it is licensed.
4. Financial statement analyses and ratios, changes in management or ownership, actuarial opinions, independent CPA reports and the other criteria in the NAIC examiners' handbook in effect at the time. ✓

Why: 38a-14(b): in scheduling and determining the nature, scope and frequency of the examinations, the commissioner shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and such other criteria as set forth in the examiners' handbook adopted by the NAIC and in effect at the time.

The 'reduced paid-up' nonforfeiture option uses the policy's cash value to:

1. Pay the entire surrender value to the owner in one lump sum
2. Buy a smaller, fully paid-up permanent policy ✓
3. Convert the coverage into an immediate lifetime income annuity
4. Keep the full face amount in force as term insurance for a limited time

Why: Reduced paid-up uses the net cash value as a single premium to purchase a smaller amount of fully paid-up permanent insurance; extended term instead keeps the full face for a limited period.

A person other than the commissioner conducts the hearing on a company licence under 38a-41(c). What must that person do?

1. Submit to the commissioner a memorandum of findings and recommendations, on which the commissioner may base a decision. ✓
2. Issue a proposed final decision which becomes the commissioner's decision unless the company objects within thirty days of receiving it.
3. Certify the record of the hearing to the Superior Court for the judicial district of New Britain within thirty days of its conclusion.
4. Report the findings to the Attorney General, who advises the commissioner whether the licence should be suspended or revoked.

Why: 38a-41(c): hearings may be held by the commissioner or any person designated by the commissioner, and whenever a person other than the commissioner acts as the hearing officer, the person shall submit to the commissioner a memorandum of the person's findings and recommendations upon which the commissioner may base a decision. The same machinery appears for producer licences in 38a-774(a).

What may the company substitute for the stipulated paid-up nonforfeiture benefit under 38a-439(a)(1), and on what terms?

1. A cash surrender value equal to the reserve held for the policy at the date of default, less any indebtedness to the company and any surrender charge stated in the policy.
2. Extended term insurance for the period the policy's table of values shows, whether or not the policyholder requests it, provided the company gives notice of the substitution.
3. An actuarially equivalent alternative paid-up nonforfeiture benefit giving a greater amount or longer period of death benefits, or a greater or earlier endowment benefit. ✓
4. A reduced paid-up policy for the amount the cash value will purchase at the insured's attained age, provided the amount is not less than the minimum the commissioner approves.

Why: 38a-439(a)(1): in lieu of the stipulated paid-up nonforfeiture benefit the company may substitute, upon request made not later than sixty days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits.

A family deductible provision in a health plan provides that:

1. The individual deductible is doubled for each additional dependent added to the contract
2. Only the named policyholder's own expenses count toward it, never a covered dependent's bills
3. Once a set aggregate amount is met, the deductible is satisfied for the whole family ✓
4. Each covered family member must satisfy the full individual deductible over again every month

Why: A family deductible caps total deductible exposure: when the combined family expenses reach the stated aggregate, the deductible is met for all members.

38a-981(a) governs disclosure authorisation forms. How long may an authorisation signed for an application for LIFE, HEALTH OR DISABILITY insurance remain valid?

1. Not longer than twenty-four months from the date the authorisation is signed.
2. Not longer than one year from the date the authorisation is signed.
3. Not longer than thirty months from the date the authorisation is signed. ✓
4. Not longer than the term of coverage of the policy applied for.

Why: 38a-981(a)(7)(A): an authorisation signed to collect information in connection with an application for a policy, a reinstatement or a request for a change in benefits may last not longer than (i) thirty months from the date signed if the application or request involves life, health or disability insurance, or (ii) one year if it involves property or casualty insurance.

'Misrepresentation' as an unfair trade practice means:

1. Returning part of an unearned premium to a policyowner who cancels coverage before the end of the policy period
2. Making false statements about a policy's terms or benefits to induce action ✓
3. Recommending the lowest-cost policy an applicant qualifies for after comparing the rates of several insurers
4. Charging an applicant in poor health a higher premium that reflects the substandard rate class underwriting assigned

Why: Misrepresentation is issuing or circulating untrue statements about the terms, benefits, or nature of a policy.

An immediate annuity is purchased with the proceeds of an existing contract. How does R.C.S.A. 38a-435-1(b)(9) treat it, and how does it treat one purchased with the proceeds of an existing POLICY?

1. The annuity bought with contract proceeds is exempt; one bought with the proceeds of an existing policy is not. ✓
2. Both are exempt, an immediate annuity being incapable of replacement because annuity payments begin at once under the new contract.
3. Neither is exempt, the exemption extending only to immediate annuities purchased with funds from a source outside the insurance market.
4. The annuity bought with policy proceeds is exempt; one purchased with the proceeds of an existing contract remains subject to the requirements.

Why: R.C.S.A. 38a-435-1(b)(9): immediate annuities that are purchased with proceeds from an existing CONTRACT are excluded, but immediate annuities purchased with proceeds from an existing POLICY are NOT exempted from the requirements of the replacement sections.

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.

A person advertises in this state on behalf of an unauthorised insurer, soliciting business from Connecticut residents. What penalty does 38a-703 provide?

1. A fine of not more than two thousand dollars or imprisonment for not more than six months, or both. ✓
2. A fine of not more than fifteen thousand dollars under the general penalty in section 38a-2.
3. A fine of not more than five thousand dollars and revocation of any licence held under this title.
4. A fine of not more than two thousand dollars for each advertisement published in this state.

Why: 38a-703: any person who aids any corporation, association or person not authorized to do insurance business in this state in soliciting such business from residents of this state, by means of any advertisement published in this state or by any other means, shall be fined not more than two thousand dollars or imprisoned not more than six months, or both.

A plan has a $500 deductible, 80/20 coinsurance, and a $2,500 out-of-pocket maximum. On a $25,000 bill, the insured pays:

1. $2,500 ✓
2. $5,400
3. $4,900
4. $500

Why: Deductible $500 + 20% of $24,500 = $5,400, but the $2,500 out-of-pocket maximum caps the insured's cost at $2,500.

Medicare Part C (Medicare Advantage) plans:

1. Are available exclusively to people under age 65 with disabilities
2. Replace the need to ever enroll in Original Medicare at all
3. Are private plans that bundle Part A and B coverage, often with drugs ✓
4. Pay only for inpatient hospital stays and nothing else

Why: Medicare Advantage (Part C) is offered by private insurers and combines Part A and B benefits, frequently including Part D drug coverage.

Once inflation protection benefit increases are in a policy, what does R.C.S.A. 38a-501-20(c) say about their continuance?

1. They shall continue until the insured attains the age of eighty-five, or until a claim is made under the policy, whichever occurs the earlier of the two.
2. They shall continue while the insured is not receiving benefits, increases being suspended for any period during which a claim is being paid.
3. They shall continue for twenty years from the date of issue, after which the benefit level is frozen at the amount then reached under the policy.
4. They continue regardless of the insured's age, claim status or claim history, or how long the person has been insured. ✓

Why: R.C.S.A. 38a-501-20(c): inflation protection benefit increases under a policy which contains such benefits shall continue without regard to an insured's age, claim status or claim history, or the length of time the person has been insured under the policy.

A temporary insurance license is most commonly issued to:

1. Anyone who has applied but has not yet passed the state licensing exam
2. Permit unlimited new sales for a full year without any supervision
3. Substitute for the continuing-education credits owed at each renewal
4. Continue the business of a producer who died or became disabled ✓

Why: Temporary licenses (no exam) let someone service an existing book when a producer dies, becomes disabled, or enters military service.

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 policy was procured with intent to defraud creditors. What happens to the proceeds under 38a-453(b)?

1. They are payable to the creditors of the insured in proportion to their proved claims, the beneficiary taking nothing under the policy however large the proceeds may be.
2. They are forfeited to the state as the proceeds of a fraudulent transaction, subject to the creditors' right to apply for payment out of the sum forfeited.
3. They remain payable to the beneficiary, but the beneficiary must account to the estate for the premiums paid, with interest, out of the proceeds received.
4. They become part of the insured's estate; the executor collects the insurance, applies it to administration expenses and debts, and pays any balance to the beneficiary. ✓

Why: 38a-453(b): if the policy was procured or the designation made with intent to defraud creditors, the proceeds become part of the estate of the insured, and the executor or administrator shall collect the insurance and use the proceeds so far as required for the expenses of administration and the payment of debts, paying the balance, if any, to the beneficiary. Where only premiums were paid with that intent, the amount of those premiums with interest becomes part of the estate.

What does 38a-458(d) require of a producer selling a life insurance policy or annuity with long-term care benefits?

1. The producer must hold a long-term care certification approved by the commissioner.
2. The producer must be appointed by an insurer licensed for health insurance here.
3. The producer must be licensed to sell both life and health insurance in this state. ✓
4. The producer must have completed eight hours of long-term care continuing education.

Why: 38a-458(d): no insurance producer shall sell any such policy, certificate, rider or endorsement unless the producer is licensed to sell both life and health insurance in this state. Subsections (a) and (b) impose the parallel requirement on the company, which must be licensed for both life and health insurance to issue them.

An insurance contract is 'aleatory,' meaning that:

1. The premiums paid in and the benefits paid out must always come out to equal dollar values
2. The dollar amounts exchanged by the parties may be unequal and depend on chance ✓
3. A court must approve the contract before it takes effect
4. Only the insured gives a legally enforceable promise

Why: In an aleatory contract the values exchanged are unequal and contingent on an uncertain event (a small premium may yield a large benefit, or none).

A Medicare Advantage plan (Part C):

1. Is a government-run supplement plan that fills the gaps left by Original Medicare coverage
2. Replaces Medicaid for people who have very limited financial means
3. Provides only prescription drug coverage and nothing else at all
4. Is offered by private insurers and bundles Part A and B benefits, often with drugs ✓

Why: Part C (Medicare Advantage) plans are offered by private insurers approved by Medicare and combine Part A and B (usually Part D) coverage.

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.

What does the ENTIRE CONTRACT: CHANGES provision in 38a-483(a)(1) say about the authority of an agent?

1. An agent may waive a provision of the policy in writing, but may not change it.
2. No agent has authority to change the policy or to waive any of its provisions. ✓
3. An agent may change the policy with the written consent of the policyholder.
4. An agent has the authority the insurer gives in the agency contract itself.

Why: 38a-483(a)(1): 'ENTIRE CONTRACT: CHANGES: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.'

What must the EXISTING insurer do on receiving notice that its policy is being replaced, under R.C.S.A. 38a-435-6(2)?

1. Send the owner an in force illustration within five business days of the notice in every case, together with a written recommendation whether the existing policy should be retained or surrendered.
2. Send the owner a letter about the right to information on the existing policy's values, with an in force illustration or, if none is available within five business days, a policy summary. ✓
3. Send the replacing insurer a policy summary within five business days of the notice, so that the producer may compare the two policies before the new one is delivered to the owner.
4. Send the owner a notice that the existing policy will be cancelled unless the owner confirms in writing within twenty days that it is to remain in force alongside the new policy.

Why: R.C.S.A. 38a-435-6(2): the existing insurer shall send a letter to the policy or contract owner of the right to receive information regarding the existing policy or contract values including, if available, an in force illustration, or if an in force illustration cannot be produced not later than five business days after receiving notice that the policy is being replaced, a policy summary; the information shall be provided not later than five business days after receiving the owner's request.

Social Security and Medicare (Part A) are funded primarily through:

1. FICA payroll taxes on earnings ✓
2. General federal income-tax revenue alone
3. Premiums charged on private life insurance policies
4. Voluntary contributions made by retirees

Why: Social Security (OASDI) and Medicare Part A (Hospital Insurance) are funded by FICA payroll taxes paid by employees and employers.

The maximum assessment on an account in one year is not enough to meet the payments due from it, and one member insurer cannot pay without impairing its capital. What does 38a-841(a)(3) allow?

1. The funds available may be prorated and the unpaid portion paid as soon as funds become available; and the association may defer a member's assessment where paying it would take the member's capital or surplus below the minimum required for a certificate of authority, no dividends being paid during the deferment. ✓
2. The association must borrow the shortfall under its plan of operation and may not prorate the payments; and it may defer a member's assessment where paying it would take the member's capital or surplus below the minimum required for a certificate of authority, the deferred amount being forgiven if the member is still impaired a year later.
3. The funds available may be prorated and the unpaid portion paid as soon as funds become available; and a member whose capital or surplus would be impaired is exempt from the assessment, the amount being reallocated among the remaining members of the account in proportion to their net direct written premiums.
4. The commissioner may levy a supplemental assessment exceeding the two per cent cap to make up the shortfall; and the association may defer a member's assessment where paying it would impair the member's capital or surplus, the member remaining free to pay dividends to shareholders or policyholders during the deferment.

Why: 38a-841(a)(3) provides that IF THE MAXIMUM ASSESSMENT, TOGETHER WITH THE OTHER ASSETS OF SAID ASSOCIATION IN ANY ACCOUNT, DOES NOT PROVIDE IN ANY ONE YEAR IN ANY ACCOUNT AN AMOUNT SUFFICIENT TO MAKE ALL NECESSARY PAYMENTS FROM THAT ACCOUNT, THE FUNDS AVAILABLE MAY BE PRORATED AND THE UNPAID PORTION SHALL BE PAID AS SOON THEREAFTER AS FUNDS BECOME AVAILABLE, and that the association MAY DEFER, IN WHOLE OR IN PART, THE ASSESSMENT OF ANY MEMBER INSURER IF THE ASSESSMENT WOULD CAUSE THE MEMBER INSURER'S FINANCIAL STATEMENT TO REFLECT AMOUNTS OF CAPITAL OR SURPLUS LESS THAN THE MINIMUM AMOUNTS REQUIRED FOR A CERTIFICATE OF AUTHORITY BY ANY JURISDICTION IN WHICH THE MEMBER INSURER IS AUTHORIZED TO TRANSACT INSURANCE, PROVIDED DURING THE PERIOD OF DEFERMENT, NO DIVIDENDS SHALL BE PAID TO SHAREHOLDERS OR POLICYHOLDERS. Deferral is not forgiveness: the assessment is paid when it will not impair the minimum, and those payments are refunded to the insurers who were assessed more because of the deferment, or credited against their future assessments at their election. A member serving as a SERVICING FACILITY may also set off authorised payments it made on covered claims chargeable to that account.

38a-860(e) addresses the risk of two associations covering the same person. What rule does it lay down?

1. A person covered by more than one association may claim from either, the two associations then apportioning the loss between them in proportion to the premiums written in each state.
2. A person otherwise covered here but covered under another state's law is not covered here, the sections being read with other states' laws so that only one association covers. ✓
3. A person covered by the association of the insurer's state of domicile is covered here in addition, up to the difference between the two states' limits on the benefit concerned.
4. A person may claim from this association only where no other association covers the loss, and must first exhaust any remedy against the receiver of the insolvent insurer.

Why: 38a-860(e): the sections provide coverage to a resident and, in special circumstances, to a nonresident; to avoid duplicate coverage, a person who would otherwise receive coverage here but is provided coverage under the laws of any other state shall not be provided coverage here, and the sections are construed in conjunction with other states' laws to result in coverage by only one association.

What standing does 38a-871(c) give the association in the estate of the impaired insurer?

1. It ranks after the policyholders but before the general creditors of the impaired insurer, and may claim only the amounts it has actually paid out on covered policies at the date of distribution.
2. It is deemed a creditor of the impaired insurer to the extent of assets attributable to covered policies, less sums due to it as subrogee; those assets continue covered policies and pay obligations. ✓
3. It is deemed the owner of the assets attributable to covered policies, which are transferred to it on the entry of the order of liquidation and administered outside the receivership.
4. It has no standing as a creditor, its recoveries being confined to the subrogation rights it takes over from each covered person to whom it makes a payment.

Why: 38a-871(c): for the purpose of carrying out its obligations the association shall be deemed a creditor of the impaired insurer to the extent of assets attributable to covered policies, reduced by any amounts to which it is entitled as subrogee under 38a-865(i); all assets of the impaired insurer attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations as the chapter requires.

Under the Uniform Simultaneous Death Act, if the insured and the primary beneficiary die together and the order of death is unknown, it is presumed that:

1. Both parties forfeit the proceeds back to the issuing insurance company
2. The beneficiary survived the insured and the proceeds go through that person's estate
3. The proceeds are split equally between both estates by the probate court
4. The insured survived the beneficiary ✓

Why: The Act presumes the insured outlived the beneficiary, so proceeds pass to the contingent beneficiary or the insured's estate, not the deceased beneficiary's estate.

A nonqualified annuity owner (age 45) surrenders the contract for a $30,000 gain. The tax consequence is:

1. Ordinary income tax on the $30,000 plus a 10% penalty ✓
2. Tax-free treatment, because the entire surrender is a return of premiums already taxed to the owner
3. A 10% penalty but no income tax
4. Capital-gains tax on the $30,000 only

Why: Annuity gain is ordinary income; surrender before 59½ also triggers the 10% premature-distribution penalty.

How long must an insurer retain a signed basic illustration, or the certification that none was used, under R.C.S.A. 38a-819-64(d)?

1. Until three years after the policy is issued; and a copy must be retained even where no policy is issued.
2. Until five years after the policy is no longer in force; and no copy need be retained if no policy is issued.
3. For the lifetime of the policy and for one year after it terminates; a copy is retained even if no policy issues.
4. Until three years after the policy is no longer in force; no copy need be kept if no policy is issued. ✓

Why: R.C.S.A. 38a-819-64(d): a copy of the basic illustration and any revised basic illustration, signed as applicable, together with any certification that no illustration was used or that the policy was applied for other than as illustrated, shall be retained by the insurer until three years after the policy is no longer in force, and a copy need not be retained if no policy is issued.

What do R.C.S.A. 38a-495-4(c) and (d) provide about the term MEDIGAP and about duplicate benefits?

1. The terms Medicare Supplement and Medigap may be used by any insurer authorised to write accident and health insurance here; and a Medicare supplement policy may duplicate Medicare benefits provided the duplication is disclosed in the outline of coverage.
2. The terms may be used only with the commissioner's written approval for each policy form; and a Medicare supplement policy may duplicate Medicare benefits only to the extent of the Part A and Part B deductibles.
3. The terms may be used in advertising but not in the policy itself; and no Medicare supplement policy may pay a benefit for a service Medicare has denied as not medically necessary.
4. The terms “Medicare Supplement”, “Medigap” and words of like import may not be used unless the policy complies with the regulation; and no such policy in force here may duplicate Medicare's benefits. ✓

Why: R.C.S.A. 38a-495-4(c): the terms 'Medicare Supplement', 'Medigap' and words of similar import shall not be used unless the policy is issued in compliance with the regulation. 38a-495-4(d): no Medicare supplement insurance policy, contract or certificate in force in the state shall contain benefits which duplicate benefits provided by Medicare.

What must an insurer mail to each variable life insurance policyholder within thirty days after each policy anniversary, under R.C.S.A. 38a-433-9(a)?

1. A statement of the separate account's financial position, the net investment return for the year and a list of the investments held by the account at the end of the last year for which an annual statement was filed.
2. A statement of the premiums paid during the year, the charges deducted from them and the projected cash value at the end of the next policy year assuming the guaranteed rate of return.
3. A statement of the policy's guaranteed and non-guaranteed values for the next twenty years on the current illustrated scale, together with a warning that the values are not guaranteed.
4. A statement of cash surrender value, death benefit, any partial withdrawal or loan, interest charge and optional payments allowed, as of the anniversary, noting values may rise or fall with the account. ✓

Why: R.C.S.A. 38a-433-9(a): within thirty days after each policy anniversary the insurer shall mail a statement of the cash surrender value, death benefit, any partial withdrawal or policy loan, any interest charge and any optional payments allowed under 38a-433-4(d), computed as of the anniversary date; it shall state that in accordance with the separate account's investment experience the cash values and variable death benefit may increase or decrease, and identify any value that may be recomputed before the next statement. The annual separate account summary and investment list are required by subsection (b).

A course carries four credit hours. How much of it must a producer attend under R.C.S.A. 38a-782a-8(b) to receive any credit?

1. Eighty per cent of the course, as for a class generally.
2. One hundred per cent of the course. ✓
3. Seventy per cent of the course, as for longer courses.
4. Fifty per cent of the course, with an examination pass.

Why: R.C.S.A. 38a-782a-8(b): if six credit hours or less are assigned to a course, the producer shall attend one hundred percent of the course to receive any credit hours. The seventy per cent rules in subsections (d) to (f) apply only to courses of more than six credit hours.

What waiting or probationary period does R.C.S.A. 38a-505-7(A) allow in an individual accident and sickness policy?

1. A period not exceeding six months for any specified disease or condition the insurer names in the policy, provided the period is disclosed in the outline of coverage given to the applicant.
2. A period not exceeding twelve months for any condition the applicant disclosed in the application, and a period not exceeding six months for any other condition or disease named in the policy.
3. A period not exceeding thirty days for any sickness, and a period not exceeding six months for hernia, varicose veins, adenoids, appendix and tonsils, whether or not treated on an emergency basis.
4. None, except a period of up to six months for hernia, disorder of reproductive organs, varicose veins, adenoids, appendix and tonsils, and not then if treated as an emergency. ✓

Why: R.C.S.A. 38a-505-7(A): no policy shall contain provisions establishing a probationary or waiting period during which no coverage is provided, subject to the exception that a policy may specify a probationary or waiting period not to exceed six months for hernia, disorder of reproductive organs, varicose veins, adenoids, appendix and tonsils; the exception does not apply where those conditions are treated on an emergency basis, and accident policies shall not contain probationary or waiting periods.

Who is excluded from the definition of EMPLOYEE in 38a-564(3)?

1. An individual and that individual's spouse as to a trade or business wholly owned by either or both, and a partner and that partner's spouse as to the partnership. ✓
2. Any individual who works a normal work week of less than thirty hours, and any individual employed for fewer than six months in the preceding calendar year by that employer.
3. Any individual who is eligible for coverage under another employer's group health plan, and any individual covered by Medicare or Medicaid at the date of enrolment.
4. Any officer or director of a corporate employer, and any individual whose compensation from the employer is reported otherwise than on a federal Form W-2.

Why: 38a-564(3): employee means an individual employed by an employer, and does not include (A) an individual and such individual's spouse with respect to an incorporated or unincorporated trade or business wholly owned by such individual, by the spouse, or by both, or (B) a partner in a partnership and that partner's spouse with respect to the partnership.

A variable life insurance policy typically guarantees:

1. A fixed cash value that can never decline in any market
2. That the policy can never become a modified endowment contract
3. A level premium that is invested entirely in government bonds
4. A minimum death benefit regardless of separate-account performance ✓

Why: Variable life guarantees a minimum death benefit, but the cash value (and any benefit above the minimum) varies with the separate accounts the owner directs.

What procedures may a market conduct examination under Conn. Gen. Stat. 38a-15(a) follow, and which entities may be examined?

1. The procedures and definitions in the NAIC Market Regulation Handbook, applied to insurance companies, health care centers, third-party administrators and fraternal benefit societies. ✓
2. The procedures in the NAIC Financial Condition Examiners Handbook, applied only to insurance companies and health care centers that are both domiciled in this state and licensed to do business here.
3. Procedures the commissioner adopts by regulation under chapter 54, applied to any person holding a licence issued under Title 38a.
4. The procedures agreed between the commissioner and the examined company before the examination begins, applied to insurers and their producers.

Why: 38a-15(a) provides that the commissioner may undertake a market conduct examination of ANY INSURANCE COMPANY, HEALTH CARE CENTER, THIRD-PARTY ADMINISTRATOR, AS DEFINED IN SECTION 38a-720, OR FRATERNAL BENEFIT SOCIETY DOING BUSINESS IN THIS STATE, and that ANY SUCH EXAMINATION MAY BE CONDUCTED IN ACCORDANCE WITH THE PROCEDURES AND DEFINITIONS SET FORTH IN THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS' MARKET REGULATION HANDBOOK. Note the handbook named here is the MARKET REGULATION handbook; the EXAMINERS' handbook at 38a-14(b) is a different NAIC publication serving financial examinations.

The replacing insurer and the existing insurer are the same company or affiliates under common control. What does R.C.S.A. 38a-435-5(b) require?

1. The replacement must be treated as a contractual change exempt from the replacement sections, the applicant being given the Appendix A notice as a matter of good practice only.
2. A fresh incontestability and suicide period must run from the issue of the new policy, the earlier period being of no effect once the existing policy has been surrendered.
3. Credit must be allowed for the time elapsed under the replaced policy's incontestability and suicide periods without limit, whatever the face amount of the existing policy.
4. Credit for time elapsed under the replaced policy's incontestability and suicide periods, up to its face amount; for a financed purchase, limited to the reduction in that amount. ✓

Why: R.C.S.A. 38a-435-5(b): where the replacing and existing insurers are the same or are subsidiaries or affiliates under common ownership or control, the insurer shall allow credit for the period of time that has elapsed under the replaced policy's or contract's incontestability and suicide period up to the face amount of the existing policy; with regard to financed purchases the credit may be limited to the amount by which the face amount of the existing policy is reduced by the use of its values to fund the new policy.

What must a sponsor give each student on completion of a course under R.C.S.A. 38a-782a-4(f)?

1. A certificate showing the credit hours earned, the student's examination score where an examination was set, and the date on which the roster was filed with the department.
2. A certificate showing the date the course was completed, the attendance percentage the student achieved, and the course name and number with the sponsor's name and number. ✓
3. A certificate showing the course name and number and the credit hours earned, countersigned by the approved instructor who delivered the course to that student.
4. A transcript showing every course the student has completed with that sponsor during the current biennium and the total credit hours those courses carry.

Why: R.C.S.A. 38a-782a-4(f): each sponsor shall provide to each student upon completion of a course a certificate showing (1) the date on which the course was completed; (2) the attendance percentage of the course achieved by the student; and (3) the course name and number, and the sponsor's name and number.