Kansas Life & Health Insurance License, Practice Exams

An alien insurer is one that is:

1. Incorporated in this state
2. Incorporated outside the United States ✓
3. Incorporated in another U.S. state
4. Not licensed in any state

Why: Alien = incorporated in another country; domestic = this state; foreign = another U.S. state.

Under K.A.R. 40-2-14, what does Kansas require or forbid when an annuity is sold?

1. 'Risk free' is forbidden, and a single premium deferred annuity needs a signed disclosure form. ✓
2. 'Risk free' is forbidden in advertising, but permitted in an oral sales presentation.
3. 'Risk free' is permitted for fixed annuities, and no disclosure form is prescribed.
4. 'Risk free' is forbidden, and every annuity application, of any kind, needs a signed disclosure form.

Why: K.A.R. 40-2-14(d) has two paragraphs. Under (d)(1) NO ANNUITY shall be advertised or solicited using any language IN ADVERTISEMENTS OR SOLICITATION MATERIAL OF ANY KIND that refers to it as being 'RISK FREE' or a similar connotation. The ban covers solicitation as well as advertising, and it applies to every annuity, fixed or variable. Under (d)(2), AT THE TIME AN APPLICATION IS TAKEN FOR A SINGLE PREMIUM DEFERRED ANNUITY, the disclosure form prescribed by the commissioner shall be EXECUTED BY THE APPLICANT AND THE SELLING AGENT and ATTACHED TO THE APPLICATION. That requirement is specific to single premium deferred annuities, not to every annuity application.

An insured dies with a $20,000 policy loan outstanding. The beneficiary receives:

1. Nothing, because the loan voids the coverage
2. The full death benefit, with the loan forgiven entirely
3. Only the policy's remaining cash value
4. The death benefit minus the outstanding loan and any interest ✓

Why: An outstanding loan plus interest is deducted from the death benefit paid to the beneficiary.

At the end of a group insurance policy year a Kansas insurer readjusts the rate of premium on the basis of the loss and expense experience under the policy. Under K.S.A. 40-2404, what does the rebate paragraph permit?

1. The readjustment, made retroactive for as many prior years as the experience covers.
2. The readjustment, made retroactive only for that policy year. ✓
3. The readjustment prospectively only; no retroactive adjustment is ever permitted.
4. Nothing; a group premium readjustment is a rebate however it is calculated.

Why: K.S.A. 40-2404 paragraph (8)(b)(iii) excepts the readjustment of the rate of premium for a GROUP insurance policy based on the loss or expense experience under it, at the end of the first or any subsequent policy year - and limits it in one respect: the readjustment 'may be made retroactive only for such policy year'. So retroactivity is permitted but confined to the single year whose experience justified it. The exception is for group policies; it does not reach individual contracts.

A point-of-service (POS) plan member who self-refers out of network will typically:

1. Pay higher cost-sharing than for in-network, gatekept care ✓
2. Pay the same $20 copay as for in-network care
3. Be disenrolled from the plan for bypassing the primary care gatekeeper
4. Receive no benefits at all for that visit

Why: A POS plan combines HMO and PPO features: in-network care needs a gatekeeper referral, while out-of-network self-referral is allowed at higher cost.

A Kansas individual agent's renewal application does not reach the commissioner by the agent's biennial due date. Under K.S.A. 40-4915, what happens at that point?

1. Automatic expiry of the licence on the biennial due date, with no suspension period.
2. A 30-day grace period, after which the licence is suspended without any penalty.
3. Automatic suspension for 90 calendar days, and a penalty of $100 for each licence. ✓
4. A hearing under the Kansas administrative procedure act before any action is taken.

Why: Section 40-4915(c) suspends the agent's qualification and each corresponding licence AUTOMATICALLY for 90 calendar days, or until the agent satisfactorily submits a completed application, whichever happens first, and the commissioner assesses a penalty of $100 for each licence suspended. Expiry comes later and only on a further failure: if the renewal application and the penalty are not furnished within those 90 calendar days, the qualification and each licence expire - and they expire ON THE BIENNIAL DUE DATE, not at the end of the suspension. The commissioner may waive a penalty under the subsection on written application claiming extreme hardship.

On written application by an individual agent, K.S.A. 40-4903 lets the commissioner extend the time within which to fulfil the minimum continuing education requirements in two kinds of case. What are they, and what is the longest extension available?

1. Medical hardship or military service, for not more than 90 days.
2. Extreme financial hardship or military service, for not more than 180 days.
3. Medical hardship or military service, for not more than 180 days. ✓
4. Any hardship the commissioner accepts, for not more than one full biennium.

Why: Section 40-4903(e)(4) confines the extension to cases involving MEDICAL HARDSHIP OR MILITARY SERVICE, requires a written application from the agent, and caps it at a period not to exceed 180 days. Financial hardship is not a ground for this extension - 'extreme hardship' appears elsewhere in the section, at (e)(2), and there it goes to waiver of the $100 penalty rather than to extra time for the credits themselves. The reserve-forces exemption and extension in subsection (c)(5) are a separate route with its own trigger.

The Medicare General Enrollment Period (GEP) runs:

1. On a single fixed date set individually by each state
2. From October 15 to December 7 every year
3. January 1 through March 31 each year ✓
4. Only during the week of the beneficiary's birthday

Why: Those who miss their IEP can sign up during the GEP (Jan 1–Mar 31), with coverage beginning later and a possible late penalty.

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).

A Kansas insurer repeatedly breaches a requirement that appears not in K.S.A. 40-2404(9)'s lettered list but in a regulation about claims settlement. Under K.S.A. 40-2404, can that be an unfair claim settlement practice?

1. No - only conduct in the lettered paragraphs can be an unfair practice.
2. Yes - it reaches the listed practices or any regulations pertaining to them. ✓
3. Yes, but the flagrancy and frequency threshold applies only to the list.
4. No - a regulation breach falls under the rule-making powers alone.

Why: K.S.A. 40-2404(9) opens on 'any of the following OR ANY RULES AND REGULATIONS PERTAINING THERETO'. That is the hook by which K.A.R. 40-1-34, which adopts the NAIC unfair claims settlement practices model regulation by reference subject to Kansas exceptions, is enforced as an unfair claim settlement practice. Two consequences follow: a regulation breach is within the paragraph, and the SAME threshold governs it. So it is wrong to say the flagrancy and frequency threshold applies only to the lettered list: the regulation must also be breached flagrantly and in conscious disregard, or with such frequency as to indicate a general business practice.

A producer licensed only for the life line of authority is asked to sell a disability income policy. The producer:

1. May sell it, since disability income is classed as life insurance
2. May sell it if the policy is written by the same insurer
3. May sell it under a temporary license issued by the insurer
4. May not sell it without an accident and health line ✓

Why: Disability income falls under the accident and health (sickness) line of authority, so a life-only producer cannot solicit it. Insurers do not issue licenses; the state does.

K.S.A. 40-2203(A) prints the wording of the provisions a Kansas accident and sickness policy must contain. May an insurer use different words?

1. Yes, if the commissioner approves them, whether or not they are as favourable to the insured.
2. Yes, if they are not less favourable; the commissioner's approval is not needed.
3. Yes, if the commissioner approves them and they are not less favourable in any respect. ✓
4. No; the statutory wording must be reproduced exactly in every policy.

Why: K.S.A. 40-2203(A) requires every such policy delivered or issued for delivery in this state to contain the specified provisions IN THE WORDS IN WHICH THE SAME APPEAR IN THIS SECTION - but allows the insurer, AT ITS OPTION, to SUBSTITUTE CORRESPONDING PROVISIONS OF DIFFERENT WORDING APPROVED BY THE COMMISSIONER OF INSURANCE WHICH ARE IN EACH INSTANCE NOT LESS FAVORABLE IN ANY RESPECT TO THE INSURED OR THE BENEFICIARY. Both conditions must hold: approval alone is not enough if the wording is less favourable, and favourable wording alone is not enough without approval. The same subsection requires the provisions to be preceded individually by the caption printed in the statute, or by such individual or group captions as the commissioner may approve.

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.

In a variable annuity, the assumed interest rate (AIR) is used to:

1. Benchmark whether each payout rises or falls during the annuity period ✓
2. Set the surrender charge percentage that applies in each year of the withdrawal charge period
3. Guarantee the separate account a fixed minimum return in every year of the payout period
4. Determine the commission credited to the selling registered representative each year

Why: The AIR is a benchmark: if separate-account performance exceeds the AIR, the next variable payment rises; if it lags, the payment falls.

Which policy combines flexible premiums with cash value invested in separate accounts and requires a securities license to sell?

1. Universal life with flexible premiums crediting a declared interest rate to cash value
2. Group annually renewable term funded by the employer
3. Variable universal life with separate-account investing ✓
4. Whole life with a guaranteed level premium

Why: Variable universal life adds separate-account investing (securities-licensed) to universal life's flexible premiums.

A provision allowing a terminally ill insured to receive part of the death benefit while still living is the:

1. An accelerated (living) death benefit for the terminally ill ✓
2. An automatic premium loan against the death benefit, used by the terminally ill to keep the policy in force while living
3. A reinstatement putting a lapsed policy back in force after proof of insurability
4. A coordination-of-benefits offset

Why: The accelerated death benefit lets a terminally or chronically ill insured access part of the face amount before death; the remainder goes to beneficiaries.

A surrender charge on a deferred annuity typically:

1. Increases each year the contract remains in force
2. Applies only if the annuitant dies before annuitization
3. Declines over a set number of years and then disappears ✓
4. Stays at the same flat percentage for the life of the contract

Why: Surrender charges usually start high and decline to zero over a defined surrender period (often 5–10 years).

Under K.S.A. 40-2404, what is the effect of the paragraph headed 'Statutory violations'?

1. A violation of certain other named Kansas insurance sections is itself an unfair practice. ✓
2. A violation of any provision of chapter 40 whatever is itself an unfair practice.
3. A violation of another section is an unfair practice only on a second occurrence.
4. A violation of another section is referred to the attorney general rather than the commissioner.

Why: K.S.A. 40-2404 paragraph (13) is a single line that folds four other provisions into the unfair trade practices act: any violation of K.S.A. 40-216, 40-276a, 40-2,155 or 40-1515, and amendments thereto. The mechanism matters more than the list - a breach of one of those sections is not merely a breach of that section, it is also an unfair method of competition or an unfair or deceptive act, carrying this act's enforcement machinery with it. The paragraph names four sections, not the whole of chapter 40, and it bites on the first violation.

Credit disability insurance is designed to:

1. Replace the borrower's full salary during any period of unemployment
2. Cover the lender's legal costs of collecting on a defaulted loan
3. Pay off the entire loan balance immediately upon any minor injury
4. Make a borrower's loan payments if the borrower becomes disabled ✓

Why: Credit disability covers the loan payments (often monthly) while the insured borrower is disabled; credit life instead pays off the balance at death.

A premium on a Kansas life policy remains unpaid after the period the policy specifies. Under K.S.A. 40-412, within what time must an action on the contract, or an action to reinstate it as premium-paying, be commenced?

1. Six months after the expiration of the period specified for that premium. ✓
2. One year after the expiration of the period specified for that premium.
3. Two years after that period expires, as for other contract actions.
4. Three years after expiry, matching the policy's reinstatement right.

Why: K.S.A. 40-412 bars an action on or in respect of a life insurance contract on which a premium remains unpaid after the period specified in the policy - for the enforcement of any right conditioned on that premium, or subject to termination for failing to pay it - unless the action, OR AN ACTION TO REINSTATE THE POLICY AS A PREMIUM-PAYING POLICY, is commenced WITHIN SIX MONTHS after that period expires. Both kinds of action are on the same clock. This is a different six months from K.S.A. 40-410's, which governs how long after default a cancellation needs prior notice, and it is not the three-year reinstatement provision K.S.A. 40-420(9) requires the policy to contain - that is a contractual right, this is a limitation on suing.

K.S.A. 40-239 defines an insurance agent. On what does that definition turn?

1. Written authorisation from a company to negotiate or effect contracts on its behalf. ✓
2. Receipt of commission from the company on business the person places with it.
3. Holding a licence issued by the commissioner, whatever authority the company has given.
4. Soliciting insurance from the public, whether or not any company has authorised the person to do so.

Why: K.S.A. 40-239 defines an insurance agent as AN INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP OR OTHER LEGAL ENTITY AUTHORIZED IN WRITING, BY ANY INSURANCE COMPANY OR HEALTH MAINTENANCE ORGANIZATION lawfully qualified to transact business in this state, TO NEGOTIATE OR EFFECT CONTRACTS OF INSURANCE, SURETYSHIP OR INDEMNITY ON BEHALF OF such company - and also as ANY MEMBER OF A PARTNERSHIP OR ASSOCIATION, OR ANY STOCKHOLDER, OFFICER OR AGENT OF A CORPORATION, permitted by law to negotiate or effect such contracts WHERE THAT ENTITY HOLDS A DIRECT AGENCY APPOINTMENT from a company. The hinge is the company's WRITTEN AUTHORISATION, not the licence and not the commission. The section closes with the consequence: ALL SUCH AGENTS SHALL THEREBY BECOME LIABLE TO ALL THE DUTIES, REQUIREMENTS, LIABILITIES AND PENALTIES AS PROVIDED IN THIS CODE. K.S.A. 40-4902 defines the same words differently for the uniform insurance agents licensing act, where the test is being required to be licensed.

Under K.A.R. 40-7-20a, for which continuing education courses is an examination required before the course can be approved?

1. All courses, without exception.
2. Classroom courses only.
3. Courses carrying more than four credits.
4. Self-study courses only. ✓

Why: K.A.R. 40-7-20a(b)(4) provides that course examinations shall not be required for approval of continuing education courses EXCEPT SELF-STUDY COURSES. The reason is in (b)(11)(A): the credit an agent receives for a self-study course rests on successful completion of the course AND an independently monitored examination, because there is no classroom attendance to evidence the learning. Under (b)(11)(B) the monitor may not be affiliated in any way with the providing organisation or the licensee, every examination must be included in the material submitted for approval, and no examination is approved unless the commissioner is satisfied that its integrity can be protected - if security is compromised, no credit is granted.

An insured can no longer perform bathing, dressing, and toileting without help. Under a typical LTC policy requiring loss of 2 of 6 ADLs, benefits:

1. Are triggered, because at least two ADLs cannot be performed ✓
2. Are denied unless the insured cannot perform all six of the listed ADLs
3. Begin only after the insured reaches age 80
4. Require a physician to certify severe cognitive impairment as well

Why: Inability to perform 2 of the 6 ADLs (or severe cognitive impairment) triggers LTC benefits; here three ADLs are affected.

A Kansas Medicare supplement policyholder misses a premium. Under K.S.A. 40-2221a, what must the insurer send before terminating, and what happens if the premium is then paid?

1. A notice within 30 days of the due date; payment within 30 days of its mailing reinstates the policy.
2. A notice within 45 days of the due date; payment within 10 days of its mailing reinstates the policy.
3. A notice within 45 days of the due date; payment within 45 days of its mailing reinstates the policy. ✓
4. No notice is required; the policy terminates at the end of the grace period.

Why: K.S.A. 40-2221a(a) forbids terminating a Medicare supplement policy for failure to pay premium unless the insurer SENDS THE INSURED A NOTICE, to the last address of record, saying the policy terminated for non-payment as of the due date. The envelope must carry, in BOLD-FACED TYPE IN A CONSPICUOUS PLACE ON THE FRONT, the words IMPORTANT - PREMIUM RENEWAL NOTICE ENCLOSED. The notice must be SENT NO LATER THAN 45 DAYS FOLLOWING THE DATE ON WHICH PREMIUM WAS DUE and must state the amount needed to reinstate and the time in which it must be remitted. On payment WITHIN 45 DAYS OF THE INSURER'S HAVING MAILED THE NOTICE, the policy is AUTOMATICALLY REINSTATED AS CONTINUOUS COVERAGE WITHOUT LAPSE - WITHOUT ANY NEW EXCLUSIONS, REDUCTIONS OR WAITING PERIODS AND WITHOUT PROOF OF INSURABILITY. Two 45s, running from different events.

A person makes false statements on an application for an insurance policy in order to obtain a commission from an insurer. Under K.S.A. 40-2404, is that within the section, and does it matter who the benefit was sought from?

1. Yes, but only where the benefit is sought from an insurer rather than a person.
2. No; false statements on an application are dealt with only by the licensing act.
3. Yes, but only where the false statement concerns the proposed insured's health.
4. Yes; the benefit may be sought from an insurer, agent, broker or individual. ✓

Why: K.S.A. 40-2404 paragraph (12) covers making false or fraudulent statements or representations on or relative to an application for an insurance policy, FOR THE PURPOSE OF OBTAINING a fee, commission, money or other benefit FROM ANY INSURER, AGENT, BROKER OR INDIVIDUAL. The list of possible sources is deliberately wide, and the paragraph is not confined to any particular subject matter within the application. Note that the same conduct is separately a ground for licence discipline under K.S.A. 40-4909 - being an unfair trade practice under this section does not displace that.

K.S.A. 40-4909 lists grounds on which the commissioner may deny, suspend, revoke or refuse renewal of a licence. One of them is a failure to respond to an inquiry from the commissioner. Within what period must a licensee respond?

1. 10 business days of the inquiry.
2. 15 business days of the inquiry. ✓
3. 30 business days of the inquiry.
4. 45 business days of the inquiry.

Why: Section 40-4909(a)(17) makes it a ground for discipline to have failed to respond to an inquiry from the commissioner within 15 BUSINESS days. The period is counted in business days, not calendar days. Simply not answering the department is a stand-alone ground; nothing about the underlying subject matter has to be established first, and any action taken still requires notice and an opportunity for a hearing under the Kansas administrative procedure act.

An employee has $100,000 of employer-paid group term life. The amount subject to imputed income is:

1. $50,000 ✓
2. $100,000
3. $0
4. $25,000

Why: The first $50,000 is tax-free; the cost of the remaining $50,000 is imputed taxable income.

Coordination of benefits (COB) provisions exist to:

1. Allow the insured to collect the full benefit separately from every plan
2. Force the insured to choose only one health plan at open enrollment
3. Split every claim evenly between the insured and the insurer
4. Determine which plan pays first and prevent paying more than 100% of the loss ✓

Why: COB establishes primary and secondary payers so that combined benefits do not exceed the actual covered expense.

In an equity-indexed annuity, the 'cap rate' is the:

1. Maximum interest rate credited even if the index rises more ✓
2. Share of the index gain that the insurer credits to the contract
3. Guaranteed minimum rate credited when the index loses value in a year
4. Fee deducted on surrender in year one

Why: The cap is the ceiling on credited interest; the participation rate sets the share of the gain and the floor sets the minimum.

K.S.A. 40-2404 states the unfair discrimination test twice, once for life insurance and life annuities and once for accident or health insurance. How do the two tests differ?

1. Life uses the same class and equal expectation of life; accident and health, essentially the same hazard. ✓
2. Life uses the same class and essentially the same hazard; accident and health, equal expectation of life.
3. Both use the same class and equal expectation of life; only the remedies differ between them.
4. Life uses the same class alone; accident and health adds equal expectation of life to it.

Why: K.S.A. 40-2404 paragraph (7)(a) forbids unfair discrimination between individuals of the same class AND EQUAL EXPECTATION OF LIFE, in the rates charged for a life insurance contract or life annuity, in the dividends or other benefits payable, or in any other term or condition. Paragraph (7)(b) forbids it between individuals of the same class AND OF ESSENTIALLY THE SAME HAZARD, in the amount of premium, policy fees or rates for accident or health insurance, in the benefits payable, in any term or condition, or in any other manner whatever. Both tests share 'the same class'; the second element differs between the two lines.

'Coercion' as an unfair trade practice occurs when someone:

1. Uses physical or economic pressure to force the purchase of insurance ✓
2. Charges two identical risks two different premium amounts
3. Replaces a policy at another insurer through misrepresentation
4. Offers a small gift not specified in the policy to close a sale

Why: Coercion uses force or intimidation (for example, a lender requiring a borrower to buy insurance from a particular insurer) to induce an insurance transaction.

A plan has a $500 deductible and 75/25 coinsurance. On a $4,500 covered bill, the insured pays:

1. $1,500 ✓
2. $1,000
3. $1,125
4. $2,000

Why: Deductible $500 + 25% of the remaining $4,000 ($1,000) = $1,500.

At death, the insurer learns the insured's age was understated on the application. Under the misstatement-of-age provision, the benefit is:

1. Denied in full, with every premium returned to the beneficiary with interest
2. Paid in full at the applied-for face amount, with no adjustment for the error
3. Adjusted to what the premium paid would have purchased at the true age ✓
4. Raised to the face amount the insured's true age would have required in premium

Why: Misstatement of age adjusts the benefit to the amount the premium would have bought at the correct age, rather than voiding the policy.

Pension maximization is a strategy in which a retiree:

1. Takes the larger single-life pension and buys life insurance to protect the spouse ✓
2. Delays starting the pension indefinitely in order to keep earning additional years of service credit
3. Withdraws the entire pension as a lump sum, drops all coverage, and self-insures the survivor need
4. Always elects the reduced joint-and-survivor pension on the view that it is the safest possible choice

Why: Pension max takes the higher single-life payout and uses life insurance to provide for the surviving spouse, instead of accepting a smaller joint-and-survivor benefit.

Which premium payment mode generally produces the lowest total annual cost?

1. Semiannual
2. Monthly
3. Annual ✓
4. Quarterly

Why: Paying annually avoids the loading/carrying charges added to more frequent payment modes.

A Kansas insurer defends an accident and sickness claim on the basis of a statement in the application. No copy of the application was attached to or endorsed on the policy when it was issued. Under K.S.A. 40-2205, may the statement be used?

1. Yes, if the insurer can prove that the applicant made the statement in the application and that it was material.
2. No, unless the insured was given a copy of the application within fifteen days of issue.
3. Yes; attaching the application is a formality that does not affect the insurer's defences.
4. No; the insured is not bound by any statement in an application not attached to the policy. ✓

Why: K.S.A. 40-2205(A) provides that THE INSURED SHALL NOT BE BOUND BY ANY STATEMENT MADE IN AN APPLICATION FOR A POLICY UNLESS A COPY OF SUCH APPLICATION IS ATTACHED TO OR ENDORSED ON THE POLICY WHEN ISSUED AS A PART THEREOF. A separate rule governs REINSTATEMENT OR RENEWAL: on written request by the insured, beneficiary or assignee, the insurer must deliver or mail a copy of that application WITHIN FIFTEEN DAYS of receipt at its home or any branch office, and if it does not, IT IS PRECLUDED FROM INTRODUCING THE APPLICATION AS EVIDENCE in any action on the policy. That fifteen days belongs to the reinstatement case, not to the original issue, so it cannot rescue a statement from an unattached original application. Subsection (B) also forbids anyone but the applicant altering a written application without the applicant's written consent, save for clearly marked administrative insertions by the insurer.

Under K.S.A. 40-2209f, when may a Kansas small employer carrier exclude a late enrollee?

1. At any time, including during an open enrolment period.
2. Only where the late enrollee declined coverage in writing when first eligible.
3. Never; a carrier must accept an eligible employee whenever application is made.
4. At any time except during an open enrolment period. ✓

Why: K.S.A. 40-2209f(c) is a single sentence: A CARRIER MAY EXCLUDE A LATE ENROLLEE EXCEPT DURING AN OPEN ENROLLMENT PERIOD. The open enrolment window is therefore the whole of the late enrollee's protection, and no written declination or other condition is attached to the carrier's right. Read it with K.S.A. 40-2209p, which requires an insurer offering such coverage to accept every small employer that applies, subject to that section's exclusions.

The four essential elements required to form a valid insurance contract are offer and acceptance, competent parties, legal purpose, and:

1. A guaranteed minimum interest rate
2. A medical examination of the applicant
3. Approval by the state insurance commissioner
4. Consideration ✓

Why: A valid contract requires agreement (offer/acceptance), consideration, competent parties, and a legal purpose.

Under federal law (18 U.S.C. 1033), a person convicted of a felony involving dishonesty or breach of trust may work in the business of insurance only if:

1. Seven years have passed since the sentence was completed
2. The insurer files a surety bond on the person's behalf
3. The conviction occurred in a state other than the home state
4. The state insurance regulator gives written consent ✓

Why: Section 1033 bars such a person from the business of insurance unless the insurance regulator gives written consent. There is no waiting period that lifts the bar automatically.

An insurer's conduct on Kansas claims matches three of the practices listed in K.S.A. 40-2404(9). It happened once each, none of it deliberate, and no pattern is shown. Under that paragraph, what is the position?

1. Three unfair claim settlement practices are established, one for each matching paragraph.
2. One unfair claim settlement practice is established, because three matches show a pattern.
3. No unfair claim settlement practice is established, because neither threshold limb is met. ✓
4. The position depends on whether the insurer has been examined since the conduct occurred.

Why: Matching a lettered description is necessary but not sufficient. K.S.A. 40-2404(9) requires in addition that the conduct be committed FLAGRANTLY AND IN CONSCIOUS DISREGARD of the provisions, or WITH SUCH FREQUENCY AS TO INDICATE A GENERAL BUSINESS PRACTICE. Three isolated and unintentional lapses across three different paragraphs meet neither limb: frequency means repetition amounting to a general business practice, not a count of how many different descriptions the conduct touched. Whether the insurer has since been examined does not change the test.

K.S.A. 40-2203 lets an insurer use a shorter 'Incontestable' provision instead of the time limit on certain defenses. Which policies may use it?

1. Those continuable by timely premium to at least age 50, or five years if issued after 44. ✓
2. Those continuable by timely premium to at least age 65, or ten years if issued after age 55.
3. Any policy, the two provisions being alternatives the insurer may freely choose between.
4. Only non-cancellable policies, which alone may be made incontestable in Kansas.

Why: K.S.A. 40-2203(A)(2) offers the alternative only to A POLICY WHICH THE INSURED HAS THE RIGHT TO CONTINUE IN FORCE SUBJECT TO ITS TERMS BY THE TIMELY PAYMENT OF PREMIUM (1) UNTIL AT LEAST AGE 50, OR (2) IN THE CASE OF A POLICY ISSUED AFTER AGE 44, FOR AT LEAST FIVE YEARS FROM ITS DATE OF ISSUE. The substitute provision reads that after the policy has been in force for two years DURING THE LIFETIME OF THE INSURED - excluding any period during which the insured is disabled, a clause the insurer may omit - it becomes incontestable as to the statements contained in the application. That age-50 or five-year test is the same condition the statute attaches to several other optional inserts, including the relation of earnings provision in (B)(6) and the option to omit the 60-day premium sentence from the reinstatement provision in (A)(4).

Under K.A.R. 40-1-34, when may a Kansas insurer tell a third party claimant that their rights may be impaired if a form or release is not completed within a given period?

1. Only where the insurer has already made an offer of settlement to that claimant.
2. Only to notify the claimant of a statute of limitations. ✓
3. At any time, provided the period the insurer specifies is a reasonable one.
4. Never; a statement of that kind is prohibited in every circumstance.

Why: K.A.R. 40-1-34's exception (j) adds a subsection providing that no insurer shall make statements indicating that the rights of a THIRD PARTY claimant may be impaired if a form or release is not completed within a given period of time, UNLESS THE STATEMENT IS GIVEN FOR THE PURPOSE OF NOTIFYING THE THIRD PARTY CLAIMANT OF THE PROVISION OF A STATUTE OF LIMITATIONS. So the prohibition is not absolute, but the only permitted purpose is notice of a statute of limitations; a period the insurer sets itself, however reasonable, does not qualify, and a prior settlement offer does not change that.

A self-funded employer wants protection against one employee's catastrophic claim. It should buy:

1. A fully insured HMO contract covering the entire employee group
2. A minimum premium funding arrangement run by a third-party administrator
3. Specific (individual) stop-loss insurance ✓
4. Aggregate stop-loss insurance alone, which caps the group's total annual claims

Why: Specific stop-loss caps the employer's liability for any single individual's claims; aggregate stop-loss caps total claims.

Choosing the cash surrender nonforfeiture option means the owner:

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

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

The 'needs approach' to setting the amount of life insurance focuses on:

1. The projected cash value the policy is expected to build over twenty years
2. The total dollar amount of premium the applicant is willing to pay monthly
3. A simple fixed multiple of the insured's current gross annual salary
4. The family's actual financial obligations and goals ✓

Why: The needs approach totals the specific obligations and goals the coverage must fund, versus the human-life-value (income multiple) approach.

A Kansas individual insurance agent holds only a crop qualification. Under K.S.A. 40-4903, what is that agent's biennial continuing education requirement?

1. 2 C.E.C.s in courses certified as crop C.E.C.s. ✓
2. 18 C.E.C.s, the general agent requirement.
3. None; a crop-only agent is exempt.
4. 2 C.E.C.s in any certified category.

Why: Section 40-4903(c)(1) reduces the requirement for an individual agent holding ONLY a crop qualification to a minimum of two C.E.C.s, in courses certified as crop C.E.C.s under the property and casualty category. The word 'only' is what triggers the reduction - an agent who holds crop alongside any other qualification is back on the general 18-credit requirement in subsection (c). The reduced requirement is not an exemption: two credits are still owed, and they must be crop-certified.

The Kansas insurance department sends an insurer an inquiry concerning a complaint about a particular matter. Under K.S.A. 40-2404, within what period must the insurer furnish an adequate response before the failure becomes an unfair practice?

1. 14 calendar days of receipt of the inquiry. ✓
2. 15 calendar days of receipt of the inquiry.
3. 21 calendar days of receipt of the inquiry.
4. 30 calendar days of receipt of the inquiry.

Why: K.S.A. 40-2404 paragraph (10) makes it an unfair practice for an INSURER, on receipt of any inquiry from the insurance department concerning a complaint or inquiry related to a particular matter, to fail within 14 CALENDAR DAYS of receipt to furnish the department with an ADEQUATE response. Two things are easy to get wrong. The response must be adequate, not merely prompt. And this is not the deadline that binds an individual agent: under K.S.A. 40-4909(a)(17) a licensee who fails to respond to an inquiry from the commissioner within 15 BUSINESS days is exposed to discipline. Different actor, different unit, and the two figures are one apart.

A statement on an application that is believed true to the best of the applicant's knowledge is a:

1. Concealment
2. Waiver
3. Warranty
4. Representation ✓

Why: A representation is believed true to the applicant's best knowledge; a warranty is guaranteed to be literally true. Most life applications are treated as representations.

A plan has a $1,500 deductible, 80/20 coinsurance, and a $4,000 out-of-pocket maximum. On a $30,000 bill, the insured pays:

1. $4,000 ✓
2. $7,200
3. $5,700
4. $1,500

Why: Deductible $1,500 + 20% of $28,500 = $7,200, but the $4,000 out-of-pocket maximum caps the insured's cost at $4,000.

A beneficiary receives a $250,000 life insurance death benefit as a lump sum. For federal income tax, the beneficiary:

1. Owes tax only on amounts over $100,000
2. Owes no income tax on the death benefit ✓
3. Owes capital-gains tax on the full amount
4. Owes ordinary income tax on the full death benefit

Why: Life insurance death benefits paid as a lump sum are generally received income-tax-free.

An owner withdraws from a deferred annuity during its surrender-charge period. The result is:

1. Forfeiture of all interest credited to date
2. No charge at all, because annuity withdrawals are always penalty-free
3. A surrender charge on the amount above any free-withdrawal allowance ✓
4. Immediate annuitization of the entire contract into a life income option

Why: Withdrawals beyond the free-withdrawal amount during the surrender period incur a declining surrender charge.

A disability policy has a 30-day probationary period for sickness. An insured who becomes ill on day 20 of coverage:

1. Receives only accident benefits for it
2. Has no benefit for that sickness ✓
3. Is fully covered like any other claim
4. Must restart the entire policy

Why: The probationary period excludes sicknesses that begin during the initial waiting span (here, the first 30 days); accidents are usually covered immediately.

A Kansas agent takes an application for an individual accident and sickness policy and the policy will be delivered later. Under K.S.A. 40-2219, when must the outline of coverage be given, and what must the insurer receive?

1. At the time application is made, with no acknowledgment being required.
2. With the policy when delivered, whether or not an outline was given earlier.
3. At the time application is made, with an acknowledgment of receipt provided to the insurer. ✓
4. Within fifteen days of the application, with an acknowledgment of receipt provided to the insurer.

Why: K.S.A. 40-2219(a) allows two routes and this is the second of them. Either the OUTLINE OF COVERAGE ACCOMPANIES THE POLICY, or IN ALL OTHER CASES it IS DELIVERED TO THE APPLICANT AT THE TIME APPLICATION IS MADE and AN ACKNOWLEDGMENT OF RECEIPT OR CERTIFICATE OF DELIVERY IS PROVIDED THE INSURER WITH THE APPLICATION. There is a third rule for a mismatch: if the policy is ISSUED ON A BASIS OTHER THAN THAT APPLIED FOR, an outline properly describing the policy issued must accompany it AND CLEARLY STATE THAT IT IS NOT THE POLICY FOR WHICH APPLICATION WAS MADE. Subsection (b) lets the commissioner prescribe format and content, and requires the outline to identify the K.S.A. 40-2218 category, describe the principal benefits, state the exceptions, reductions and limitations, state the renewal provisions including any reserved right to change premiums, and say that it is only a summary.

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.

A collateral assignment of a life insurance policy transfers:

1. The right to change the insured named in the contract
2. Some rights temporarily to a lender as security for a loan ✓
3. The death benefit to the state's insurance guaranty fund
4. Complete and permanent ownership of the policy to another person

Why: A collateral assignment is a partial, temporary transfer; the lender is entitled only to the amount of the debt, with the balance going to the named beneficiary.

A $2,000 covered expense goes to two plans; the primary pays $1,500. Under coordination of benefits, the secondary pays up to:

1. $500 ✓
2. $1,500
3. $2,000
4. $1,000

Why: COB caps total payment at the actual expense; the secondary pays the remaining $500.

For a life insurance policy, insurable interest must exist:

1. Continuously throughout the policy
2. At the time of the insured's death
3. Only if the beneficiary is a relative
4. At the time of application ✓

Why: For life insurance, insurable interest must exist at the inception of the contract (time of application); it need not exist at the time of loss.

The common disaster provision is designed to address a situation in which:

1. A natural disaster damages the insurer's ability to pay claims
2. The insured and the primary beneficiary die in the same event ✓
3. Several insureds under one group policy die within the same year
4. The insured dies before the contestable period has expired

Why: The common disaster (simultaneous death) provision presumes the beneficiary died first so proceeds pass to the contingent beneficiary or as the insured intended.

The ownership provision of a life policy establishes that the policyowner has the right to:

1. Name the beneficiary, take loans, and surrender the policy ✓
2. Only pay premiums, with no other rights over the contract
3. Receive the death benefit even while the insured is still living
4. Change the insurer's underwriting decision after the policy is issued

Why: The owner holds the contractual rights (naming beneficiaries, loans, surrender, assignment); the owner and the insured may be different people.

A Kansas long-term care insurer wishes to non-renew a policy because the insured has grown older and frailer. Under K.S.A. 40-2228, may it?

1. No; no such policy may be terminated solely on age or deterioration of health. ✓
2. No; a long-term care policy may not be terminated on any ground once issued.
3. Yes, provided it non-renews the whole class of policies on the same basis.
4. Yes, on the ordinary renewal date, subject to the notice the policy requires.

Why: K.S.A. 40-2228(d)(1) provides that NO LONG-TERM CARE INSURANCE POLICY MAY BE CANCELED, NONRENEWED, OR OTHERWISE TERMINATED SOLELY ON THE GROUNDS OF THE AGE OR THE DETERIORATION OF THE MENTAL OR PHYSICAL HEALTH of the insured individual or certificateholder. The word doing the work is SOLELY - the bar is on terminating for age or health alone, so saying a policy can never be terminated on any ground goes too far. Paragraph (d)(2) adds the companion protection: no such policy may contain a provision ESTABLISHING ANY NEW WAITING PERIOD where existing coverage is CONVERTED TO OR REPLACED BY a new or other form WITHIN THE SAME COMPANY, except as to an increase in benefits the insured voluntarily selects.

A second surgical opinion provision is a cost-management feature that:

1. Pays for two operations whenever the insured requests them
2. Encourages or requires another opinion before elective surgery ✓
3. Requires the insurer to approve the choice of surgeon
4. Guarantees the insured a second free hospital stay each year

Why: Second surgical opinion programs seek an independent opinion before non-emergency surgery to avoid unnecessary procedures.

'Twisting' is an unfair trade practice defined as:

1. Using misrepresentation to induce a client to replace an existing policy ✓
2. Charging two clients different premiums for identical coverage by mistake
3. Sharing a small portion of one's commission with a licensed co-agent
4. Recommending the lowest-cost policy a client genuinely qualifies for

Why: Twisting is inducing a policy replacement through misrepresentation or incomplete comparisons; doing so within the same insurer is called churning.

In a cross-purchase buy-sell agreement funded with life insurance:

1. A bank holds the policies in trust until an owner retires fully
2. Each owner buys a policy on each of the other owners ✓
3. The business entity itself owns one policy on every individual owner
4. The policies must always be term insurance with no cash value

Why: In a cross-purchase plan, each owner owns a policy on each other owner; in an entity plan, the business owns the policies.

How does Kansas regulate suitability in annuity transactions, and from when?

1. By a schedule of suitability standards written into the regulation, since 1974.
2. By adopting the NAIC annuity suitability model regulation, in force since 2010.
3. It does not; annuity suitability is left to federal securities regulation.
4. By adopting a Department policy and procedure by reference, effective 1 January 2024. ✓

Why: K.A.R. 40-1-53 provides that the Kansas insurance department's 'policy and procedure regarding suitability in annuity transactions,' INCLUDING THE APPENDICES, DATED JANUARY 10, 2023, is adopted by reference, and that the regulation is EFFECTIVE ON AND AFTER JANUARY 1, 2024. It implements K.S.A. 40-222, 40-2403, 40-2404, 40-2406, 40-2407 and 40-4916, so Kansas annuity suitability rests on the examination power, the unfair trade practices act and the producer licensing act together. The suitability standards themselves are in the adopted department document, not written out in the regulation, and the regulation does not adopt an NAIC model by its own terms.

In a typical dental plan, routine cleanings and exams fall under which category?

1. Orthodontic treatment subject to a separate lifetime maximum
2. Basic services such as fillings and routine tooth extractions
3. Major restorative services such as crowns, bridges, and full dentures
4. Preventive care ✓

Why: Preventive care (cleanings, exams, x-rays) is usually covered at the highest level; basic and major services and orthodontia follow with greater cost sharing.

An accelerated death benefit (living benefit) provision allows the insured to:

1. Receive part of the death benefit early if terminally or chronically ill ✓
2. Convert the death benefit into a lifetime annuity at no extra charge
3. Increase the total death benefit after a qualifying critical illness
4. Borrow the full face amount at a guaranteed zero-interest policy rate

Why: An accelerated death benefit pays a portion of the face amount while living upon a qualifying terminal or chronic illness; it reduces the death benefit later.

In which annuity does the owner bear the investment risk, with values held in separate accounts?

1. Single-premium deferred fixed annuity
2. Fixed annuity
3. Immediate fixed annuity
4. Variable annuity ✓

Why: A variable annuity's value depends on separate-account performance; the owner bears investment risk, and a securities license is required to sell it.

The provision that automatically uses available cash value to pay a premium not paid by the end of the grace period is the:

1. Paid-up addition
2. Reinstatement provision
3. Automatic premium loan ✓
4. Accelerated benefit

Why: The automatic premium loan provision borrows against cash value to cover an unpaid premium, preventing a lapse.

A Kansas county attorney learns of a suspected insurance fraud from an independent source. The criminal anti-fraud division has referred nothing. Under K.S.A. 40-113, may the county attorney institute criminal proceedings?

1. No - a reference from the criminal anti-fraud division is a condition precedent to any fraud charge.
2. No - insurance fraud may be prosecuted only by the attorney general.
3. Yes - a prosecutor may act in that discretion with or without a reference from the division. ✓
4. Yes, but only once the commissioner of insurance has certified in writing that fraud is suspected.

Why: Section 40-113(a), having described the division's duty to refer, adds that the prosecutor may, in such prosecutor's discretion, WITH OR WITHOUT SUCH A REFERENCE, institute the appropriate criminal proceedings under the laws of this state. The division's referral route and the prosecutor's independent charging discretion are two separate things, and the statute is explicit that the second does not depend on the first. Nothing in the section makes a certification by the commissioner a precondition either.

Under capitation, a network physician is paid:

1. Only when a member files a claim for reimbursement
2. A fixed amount per member per month, regardless of services rendered ✓
3. A share of the plan's collected premiums, paid quarterly in proportion to enrollment
4. A negotiated fee for each individual service, billed after the visit occurs

Why: Capitation pays providers a set per-member-per-month amount regardless of utilization, shifting some risk to the provider.

A failed Kansas member insurer had written all four of the following. Under K.S.A. 40-3008, which one falls outside the guaranty association's protection?

1. A Medicare Advantage plan under part C. ✓
2. A Medicare supplement policy issued by a member insurer.
3. An individual major medical expense policy issued by a member insurer.
4. A long-term care policy issued by a member insurer.

Why: K.S.A. 40-3008(o)(11) excludes a policy or contract providing any hospital, medical, prescription drug or other healthcare benefits PURSUANT TO PART C OR PART D of subchapter XVIII, chapter 7 of title 42 of the United States code - MEDICARE PARTS C AND D - or under MEDICAID, or any regulations issued under them. A MEDICARE SUPPLEMENT policy is not on that list: it is direct health insurance issued by a member insurer, within K.S.A. 40-3003(b)(1). So is long-term care insurance - K.S.A. 40-3008(p) says expressly that the (o)(3) interest-rate exclusion does not apply to any portion of a policy, including a rider, that provides long-term care or other health insurance benefits, and 40-3009 provides a special assessment allocation for long-term care.

A client asks a life and health producer for advice on homeowners coverage, a line the producer is not licensed to sell. The appropriate response is to:

1. Give general advice, provided no premium changes hands
2. Write the policy and have a licensed colleague sign it
3. Refer the client to a producer licensed for that line ✓
4. Quote it informally and apply for the license later

Why: Acting outside one's license, even informally, exposes the client to poor advice and the producer to discipline. Referral protects both and is the ethical course.

In a variable annuity, accumulation units measure the contract's value:

1. During the pay-in phase before income payments begin ✓
2. Only after the contract has been fully annuitized into a stream of income
3. While the annuitant is receiving level, guaranteed monthly income payments
4. According to a fixed interest rate the insurer declares anew each year

Why: Accumulation units track value during the accumulation phase; annuity units are used during the payout phase.

The HIPAA Privacy Rule primarily protects:

1. Producers against errors-and-omissions lawsuits by clients
2. Individuals' protected health information from improper disclosure ✓
3. Employers from the cost of group health premiums
4. Insurers from paying claims they consider disputed or fraudulent

Why: HIPAA's Privacy Rule safeguards protected health information (PHI), generally requiring authorization before disclosure.

A Kansas homeowner's insurer and a Kansas life insurer both become insolvent in the same year. Which association stands behind each?

1. The life and health association for both of them, its act covering every class of insurance.
2. The insurance guaranty association for both of them, the life association covering annuities alone.
3. Neither; a single Kansas guaranty association covers every class under one act.
4. The life and health association for the life insurer; the guaranty association for the other. ✓

Why: Kansas has TWO guaranty associations under TWO separate acts. The KANSAS LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION is created under article 30, and K.S.A. 40-3002(a) confines its protection to LIFE, HEALTH AND ANNUITY policies, plans and contracts, so it does not cover every class of insurance and does not cover annuities alone. The KANSAS INSURANCE GUARANTY ASSOCIATION under article 29 (K.S.A. 40-2901 et seq.) is the other: K.S.A. 40-2902 applies that act to the kinds of direct insurance in K.S.A. 40-901 and 40-1102, with listed exceptions. So the life insurer's insolvency goes to the life and health association, and the homeowner's insurer's to the insurance guaranty association.

A Medicare SELECT policy is a type of Medigap that:

1. Charges a lower premium in exchange for using a provider network ✓
2. Pays cash directly to enrollees regardless of where they get care
3. Covers only long-term custodial nursing-home expenses
4. Replaces both Medicare Part A and Part B entirely

Why: Medicare SELECT is a Medigap policy that requires using network providers (except emergencies) in return for a lower premium.

An owner assigns a policy to a bank only as security for a loan. This is a(n):

1. Irrevocable beneficiary designation
2. Change of insured
3. Collateral assignment ✓
4. Absolute assignment

Why: A collateral assignment is a partial, temporary transfer for loan security; the lender is entitled only to the amount owed.