Kansas Life & Health Insurance License, Practice Exams

An individual allows their insurance agent licence in Kansas, and in every other state where they hold one, to expire for more than four consecutive years. Under K.S.A. 40-4903, what is required before that individual can be licensed here again?

1. A new licence application, and proof of continuing education for the prior biennium.
2. A reinstatement fee of $100 for each licence that had been suspended.
3. Nothing beyond a renewal application; the four-year rule applies only in Kansas.
4. A new licence application, and passing the required examination. ✓

Why: Section 40-4903(e)(6) provides that any individual who allows their insurance agent licence IN THIS STATE AND IN ALL OTHER STATES where they are licensed to expire for a period of four or more consecutive years shall apply for a new licence and pass the required examination. The all-states condition is what the last option misses: keeping a licence alive elsewhere keeps the paragraph from biting. Note the contrast with the adjacent paragraph (e)(5): a four-year INACTIVE STATUS is granted by the commissioner and ends with a report and a fee, while a four-year EXPIRY is something the licensee allows to happen and ends with a fresh examination. Same number, opposite situations - though both, in the end, require a new licence.

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.

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 Kansas insurance agent has failed to comply with a court order imposing a child support obligation, and separately has not paid state income tax. Under K.S.A. 40-4909, what may the commissioner do?

1. Deny, suspend, revoke or refuse renewal - each is a listed ground on its own. ✓
2. Nothing; the grounds in the section are confined to insurance-related conduct.
3. Act only on the tax failure; child support is enforced by the district court alone.
4. Act only once a criminal conviction has been entered on one matter or the other.

Why: Section 40-4909(a)(13) makes it a ground to have failed to comply with any administrative or court order imposing a child support obligation, and (a)(14) makes it a ground to have failed to pay any state income tax or to comply with an order directing its payment. Neither has anything to do with insurance conduct, and neither depends on a criminal conviction - conviction of a misdemeanour or felony is a separate ground, at (a)(6). Any action the commissioner takes still requires notice and an opportunity for a hearing under the Kansas administrative procedure act.

Business overhead expense (BOE) disability insurance reimburses a disabled owner for:

1. Covered business operating costs such as rent and staff salaries ✓
2. Medical and rehabilitation bills the owner incurs while being treated
3. The total fair-market value of the business at the moment of disability
4. The owner's own lost personal salary and ordinary household living expenses

Why: BOE covers ongoing business expenses (rent, utilities, employee salaries) — not the owner's personal income.

A Kansas agent has been granted inactive status. Under K.S.A. 40-4903, what must the agent do before returning to active status, and what happens if it is not done by the end of the inactive period?

1. File a continuing education report only; the renewal fee is waived for an inactive agent.
2. Pay the renewal fee only; continuing education does not apply to an inactive agent at all.
3. File a continuing education report and pay the renewal fee; otherwise the licence expires. ✓
4. Nothing; inactive status converts back to active on written notice to the commissioner.

Why: Section 40-4903(e)(5) suspends the continuing education section during a period of inactivity and defines that period as a continuous period of not more than four years starting from the date inactive status is granted by the commissioner. Before returning to active status the agent must do two things: file a report certifying that the continuing education requirement has been met, AND pay the renewal fee. If both are not furnished by the end of the inactive period, the qualification and every corresponding licence expire at the end of that period - and a new licence then requires an application AND passing the required examination. So the exemption during inactivity is real, but it is not a waiver: the credits are owed before the agent comes back.

Under K.A.R. 40-2-12, what must a Kansas life insurance agent do in connection with EVERY life insurance application, whether or not a replacement is involved?

1. Obtain a signed statement from the applicant only; the agent's own view is not recorded.
2. Submit the agent's own statement only; the applicant signs nothing about replacement.
3. Nothing; both statements are required only once a replacement is known to be involved.
4. Obtain a signed statement from the applicant, and submit the agent's own statement. ✓

Why: K.A.R. 40-2-12(c) imposes two duties on every application. The agent must OBTAIN A STATEMENT SIGNED BY THE APPLICANT as part of each life insurance application as to whether the new insurance will replace existing life insurance, and must SUBMIT TO THE INSURER a statement as to whether, TO THE BEST OF THE AGENT'S KNOWLEDGE, a replacement is involved. Two statements, two sources, and neither waits for a replacement to be identified - which is what the fourth option misses. Subsection (e) is the mirror image on the insurer's side: it must inform its field representatives of the regulation and require both statements with each application.

A graded-premium whole life policy charges premiums that:

1. Are invested in equity sub-accounts chosen by the policyowner each year
2. Decrease every year until the coverage is fully paid up
3. Start low and increase for a period, then level off ✓
4. Stay exactly the same for the entire life of the policy

Why: Graded-premium whole life begins with low premiums that rise over an initial period before leveling, easing early affordability.

Under K.S.A. 40-417, a Kansas agent knowingly makes a false statement in connection with an application for life insurance. Separately, a claimant wilfully makes a false statement of material fact in a sworn statement of death. How does the section classify each?

1. Both a misdemeanour, punishable in the same way.
2. The first perjury; the second a misdemeanour.
3. Both perjury, since each concerns a material fact.
4. The first a misdemeanour; the second perjury. ✓

Why: K.S.A. 40-417 makes any solicitor, agent, examining physician or other person who knowingly or wilfully makes a false or fraudulent statement in or with reference to an application for life insurance - or who makes such a statement to obtain a fee, commission, money or benefit from a company - guilty of a MISDEMEANOUR, punishable by a fine of not more than five hundred dollars, imprisonment in the county jail for not more than one year, or both, at the court's discretion. It then treats the other case differently: any person who wilfully makes a false statement of a material fact in a SWORN STATEMENT AS TO DEATH OR DISABILITY, for the purpose of procuring payment of a benefit, is guilty of PERJURY. The difference is the oath, and it changes the offence rather than merely the penalty.

The principle of indemnity, which applies to medical expense insurance, means the insured is:

1. Restored to their pre-loss condition, but not allowed to profit ✓
2. Paid a stated daily sum no matter what the medical care actually cost
3. Paid only after suing the provider who furnished the care
4. Entitled to keep a gain above the actual medical bills

Why: Indemnity restores the insured to their prior financial position without gain; reimbursement-type medical plans follow this principle.

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 - non-payment of premium remains available, so the second option 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.

An insurer defends a Kansas life claim on the basis of something the insured said when applying. There was no fraud, and the statement was made orally and never written into any application. Under K.S.A. 40-420, can the statement be used?

1. Yes - any statement of the insured may be used, whether written or oral.
2. Yes, provided the insurer can prove the statement was made and was material.
3. No - only a statement in a written application attached to the policy may be used. ✓
4. No - statements made by the insured may never be used in defence of a claim in Kansas.

Why: K.S.A. 40-420(2) carries two rules about the insured's statements alongside the incontestability clause. First, all statements made by the insured shall, IN THE ABSENCE OF FRAUD, be deemed REPRESENTATIONS AND NOT WARRANTIES - which lowers what the insurer must show to a question of materiality rather than of literal truth. Second, no such statement may be used in defence of a claim UNLESS it is contained in a written application AND a copy of it is endorsed upon or attached to the policy when issued. Both conditions are required, so an application that was not attached is as unusable as one that was never written. The same paragraph makes the policy and the attached application the entire contract.

Under K.S.A. 40-431, when is a premium on a Kansas life policy in default, and what does that mean for the grace period?

1. In default after the date payable without grace, but payable during grace. ✓
2. In default only at the end of the grace period, which extends the due date itself.
3. In default after the date payable without grace, and the grace period is then lost.
4. In default when the insurer gives notice, whichever date the policy specifies.

Why: K.S.A. 40-431 defines the due date for the payment of premiums as THE DATE SPECIFIED IN THE POLICY WHEN ANY PREMIUM WILL BE DUE AND PAYABLE WITHOUT GRACE, and deems premiums to be in default if not paid on or before that date - then adds that this shall not be deemed to preclude the right to pay the premium during the grace period. So the premium is technically in default while the grace period is still running, and both things are true at once. The distinction matters because other sections in the article run their clocks from DEFAULT: K.S.A. 40-410's six months, and K.S.A. 40-420(9)'s three-year reinstatement window.

'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.

Intentional deception by an applicant or insurer to gain an unfair or unlawful benefit is:

1. Insurance fraud ✓
2. A unilateral contract feature
3. An innocent misrepresentation
4. A permissible representation

Why: Fraud is intentional deception for unlawful gain and can void coverage and carry civil or criminal penalties.

The beneficiary of a Kansas life policy dies before the insured. The insured then dies without naming another beneficiary and without disposing of the insurance by will. Under K.S.A. 40-415, where do the proceeds go?

1. To the estate of the insured, like other non-exempt property. ✓
2. To the estate of the deceased beneficiary, as a vested interest.
3. To the insurer, the policy having lapsed for want of a beneficiary.
4. To the insured's next of kin, taking outside the estate.

Why: K.S.A. 40-415 provides that in all cases of the death of the beneficiary before the death of the insured, where the insured then dies WITHOUT HAVING NAMED ANOTHER BENEFICIARY AND WITHOUT HAVING DISPOSED OF THE INSURANCE BY WILL, the insurance goes to the ESTATE OF THE INSURED, the same as other property not exempt. Both negative conditions must hold - a later designation or a testamentary disposition each displaces the rule. The closing words matter too: proceeds reaching the estate this way lose the creditor protection that K.S.A. 40-414 gives proceeds payable to a named beneficiary, which is a real consequence of letting a designation lapse.

A salary continuation plan funded with life or disability insurance is designed to:

1. Pay the business's monthly rent, utilities, and supplier invoices while the owner is away on a long vacation
2. Provide every employee a guaranteed annual cost-of-living raise
3. Continue income to a key employee (or their family) during disability or after death ✓
4. Refund payroll taxes the employer paid during a profitable year

Why: A salary continuation plan provides continued income to a selected employee or their survivors upon disability, retirement, or death.

Under K.A.R. 40-2-31, what is the minimum payment where the insured's life expectancy is 25 months or more?

1. The lesser of the cash surrender value and the accelerated death benefit.
2. Fifty-five percent of the remaining death benefit, continuing the schedule downward.
3. Nothing; the schedule stops at 25 months and such a policy may not be viaticated.
4. The greater of the cash surrender value and the accelerated death benefit. ✓

Why: K.A.R. 40-2-31(b)(2) breaks out of the percentage schedule at 25 MONTHS OR MORE and requires the provider to pay THE GREATER OF THE CASH SURRENDER VALUE OR THE ACCELERATED DEATH BENEFIT of the policy, again after deducting any outstanding loans. That is the regulation matching the statute: K.S.A. 40-5002(o)(1) already requires the minimum value of a viatical settlement contract to be greater than the cash surrender value or accelerated death benefit available at application, and here the same two amounts become the floor outright. The reason is that at that life expectancy a percentage of the death benefit stops being the right measure, and the viator's real alternative is to use the policy itself - which is the alternative K.S.A. 40-5008(a)(1) requires them to be told about.

A Kansas group health policy places no aggregate lifetime limit on hospital, medical and surgical benefits, but proposes one on mental illness and substance use disorder benefits. Under K.S.A. 40-2258, is that permitted?

1. No; with no lifetime limit on medical benefits, none may be imposed on those benefits. ✓
2. No; a lifetime limit on those benefits is prohibited in a Kansas group policy in every case.
3. Yes, provided the limit is disclosed in the certificate of coverage.
4. Yes; the section governs annual limits only, not aggregate lifetime limits.

Why: K.S.A. 40-2258(a) applies to a group policy under K.S.A. 40-2209 that INCLUDES mental illness or alcoholism, drug abuse or other substance use disorder benefits, and works by parity rather than by prohibition. If the policy DOES NOT include an aggregate lifetime limit on SUBSTANTIALLY ALL hospital, medical and surgical benefits, it MAY NOT IMPOSE ANY aggregate lifetime limit on those benefits. If it DOES include one, it must either apply the same limit to both WITHOUT DISTINGUISHING between them, or set no lifetime limit on those benefits that is LESS THAN the medical one. Paragraphs (3) and (4) repeat the structure for ANNUAL limits, which is the fourth option's error. Nothing here requires the policy to cover mental illness in the first place; the section bites once it does.

Under K.S.A. 40-2404, which of these describes a listed unfair claim settlement practice concerning an insurer's internal systems rather than its handling of one claim?

1. Refusing to pay a claim without conducting a reasonable investigation of it.
2. Failing to affirm or deny coverage within a reasonable time after proof of loss.
3. Failing to adopt and implement reasonable standards for prompt investigation. ✓
4. Misrepresenting pertinent facts or policy provisions relating to the coverages at issue.

Why: K.S.A. 40-2404(9)(c) is the systems obligation in the list: failing to ADOPT AND IMPLEMENT reasonable standards for the prompt investigation of claims arising under insurance policies. Both verbs matter - having standards on paper without implementing them is within the paragraph. The other three options are all listed practices too, at (d), (e) and (a) respectively, but each describes conduct on a particular claim. The distinction is worth holding because it changes what evidence establishes a breach, and because a systems failure is the kind of thing most likely to satisfy the frequency limb of the paragraph's threshold.

A Kansas policy has two viators who own it equally and live in different states. Under K.S.A. 40-5003, which state's law governs the viatical settlement?

1. The state the two viators agree on in writing. ✓
2. The state where the policy was originally delivered.
3. Kansas, as the state whose act is being applied.
4. The state where the insured, rather than either viator, resides.

Why: K.S.A. 40-5003(a) requires a licence from THE COMMISSIONER OR THE INSURANCE REGULATORY OFFICIAL OF THE STATE OF RESIDENCE OF THE VIATOR, so the viator's residence, not the provider's, fixes the regulator. Where there is MORE THAN ONE VIATOR ON A SINGLE POLICY and they reside in different states, the settlement is GOVERNED BY THE LAW OF THE STATE IN WHICH THE VIATOR HAVING THE LARGEST PERCENTAGE OWNERSHIP RESIDES - or, IF THE VIATORS HOLD EQUAL OWNERSHIP, THE STATE OF RESIDENCE OF ONE VIATOR AGREED UPON IN WRITING BY ALL VIATORS. The stem is the equal-ownership case, so the tie-break applies. Neither the place of delivery nor the insured's residence appears in the rule.

A Kansas insurance agent voluntarily surrenders their licence while a departmental investigation into their conduct is under way. Under K.S.A. 40-4909, what is the effect on the commissioner's power to proceed?

1. None at all; the commissioner may proceed at any time after the surrender.
2. The surrender ends the matter; no disciplinary proceeding may follow it.
3. None, provided the proceeding begins within two years of the licence's termination. ✓
4. The commissioner may proceed only if the former licensee consents in writing.

Why: Section 40-4909(f) lists four things that do NOT deprive the commissioner of jurisdiction or of the right to institute or continue a disciplinary proceeding, to decide it, or to make a record of the facts of a violation for any lawful purpose: an administrative penalty already imposed, a lapse or suspension by operation of law, a failure to renew, and a VOLUNTARY SURRENDER. The subsection then closes with the limit that makes this item turn: no such proceeding shall be instituted after the expiration of two years from the termination of the licence. Surrender does not end exposure, but it does start a clock.

K.S.A. 40-4903 exempts an individual agent who holds only certain qualifications from obtaining continuing education credits outright, with no reporting obligation put in their place. Which set of qualifications?

1. Bail bond, self-service storage unit or travel insurance. ✓
2. Bail bond, crop insurance or title insurance.
3. Credit, personal lines or travel insurance.
4. Bail bond, self-service storage unit or pre-need funeral insurance.

Why: Section 40-4903(c)(4) exempts an individual agent holding only a bail bond, self-service storage unit or travel insurance qualification from the requirement to obtain C.E.C.s, and attaches nothing further. Pre-need funeral insurance is the trap: an agent selling only pre-need is also exempt from obtaining credits, but under (c)(3), which substitutes a report and a company certification for them. Crop and title are not exemptions at all - (c)(1) and (c)(2) reduce the requirement to two and four credits respectively rather than removing it.

An insured is totally disabled and, after the waiting period, the policy's waiver of premium takes effect. This means the insured:

1. Must repay the waived premiums after recovering
2. Owes no premiums while the disability continues ✓
3. Receives double the monthly disability benefit
4. Loses all coverage until premiums resume

Why: Once the disability-based waiver of premium applies, premiums are waived (often retroactive to the start) while the disability continues, keeping coverage in force.

Renewable term insurance lets the owner renew at the end of each term:

1. Only until the insured reaches age 40, when renewal rights end
2. Without evidence of insurability, at a premium that rises each term ✓
3. At the premium fixed at issue, which stays level for the insured's lifetime
4. Only after a fresh medical exam at each renewal date

Why: Renewability guarantees renewal without proving insurability, though the premium rises with age.

A Kansas policyholder never received the guaranty association summary document when their policy was delivered, and the insurer has now failed. Under K.S.A. 40-3013a, what does that omission give them?

1. No greater rights than the act itself gives them. ✓
2. A claim against the association for the full policy benefit, whatever the act's limits.
3. A presumption that the policy is covered, which the association must rebut.
4. Nothing against the association, but a claim against the agent who delivered the policy.

Why: K.S.A. 40-3013a(b) requires the association to prepare a SUMMARY DOCUMENT describing the act's general purposes and current limitations, to submit it to the commissioner for approval, and - sixty days after approval - forbids any member insurer to deliver a policy or contract UNLESS THE SUMMARY DOCUMENT IS DELIVERED AT THE TIME OF DELIVERY of the policy. It must also be available on request. But the subsection is careful to stop the document becoming a promise: THE DISTRIBUTION, DELIVERY OR CONTENTS OR INTERPRETATION OF THIS SUMMARY DOCUMENT SHALL NOT MEAN THAT THE POLICY OR THE HOLDER WOULD BE COVERED in the event of impairment or insolvency, and FAILURE TO RECEIVE THIS DOCUMENT DOES NOT GIVE THE POLICYHOLDER, CONTRACT HOLDER, CERTIFICATE HOLDER, ENROLLEE OR INSURED ANY GREATER RIGHTS THAN THOSE STATED IN THIS ACT. The delivery duty is real and the sanction is not an enlargement of cover.

Under K.S.A. 40-453, at what point is the existence and extent of an insurable interest in a life insurance policy determined?

1. When the loss occurs, so that a lapsed interest defeats the claim.
2. When the contract becomes effective; it need not exist when the loss occurs. ✓
3. At both moments - at the making of the contract and at the loss.
4. Whenever the insurer reviews it during the contestable period.

Why: K.S.A. 40-453(a) fixes the moment: the existence and extent of the insurable interest is determined AT THE TIME THE CONTRACT OF INSURANCE BECOMES EFFECTIVE, BUT NEED NOT EXIST AT THE TIME THE LOSS OCCURS. That is the general rule for life insurance and it is what distinguishes it from property insurance, where the interest must exist at the loss. The subsection then adds a term-policy qualification: for a policy issued or renewed for a specific term, no insurable interest exists for a term with respect to a person previously insured who has asked the insurer IN WRITING to terminate or nonrenew the insurance on their life. Subsection (b) makes an exception for an employer's or trust's interest in employees under the benefit plans it names.

A policy was funded faster than the 7-pay limit, making it a MEC. A subsequent policy loan is:

1. Completely free of any income tax
2. Considered a tax-free return of the premiums the owner originally paid into the policy
3. Deductible by the owner as interest expense
4. Taxed on a gains-first (LIFO) basis, with a possible penalty ✓

Why: In a MEC, living distributions and loans are taxed gains-first (LIFO) and may carry a 10% penalty before age 59½.

Under K.A.R. 40-2-12, how long must the replacement records be kept, and by whom?

1. Three years or until the next regular examination, whichever is later, by the replacing insurer only.
2. Three years or until the next regular examination, whichever is later, by both insurers. ✓
3. Three years from the date of the replacement, by both insurers, with no examination proviso.
4. Five years or until the next regular examination, whichever is earlier, by both insurers.

Why: K.A.R. 40-2-12(f)(5) has two halves and they match. The replacing insurer keeps copies of each sales proposal used, proof of the applicant's receipt of the replacement notice, and the applicant's signed replacement statement, in its home office, FOR AT LEAST THREE YEARS OR UNTIL THE CONCLUSION OF THE NEXT SUCCEEDING REGULAR EXAMINATION by the insurance department of its state of domicile, WHICHEVER IS LATER. Each insurer RECEIVING notice that its insurance may be replaced keeps a copy of that notice, INDEXED BY INSURER, on the same 'whichever is later' basis. So the duty runs both ways, and the examination proviso can only extend the period, never shorten it - which is what the fourth option inverts.

Under a universal life policy's Option A (Option 1), the death benefit is:

1. Reduced each year by the amount of interest the policy earns
2. Equal to the face amount plus the entire accumulated cash value at all times
3. Level, while the cash value grows inside it ✓
4. Tied directly to the performance of a chosen stock-market index

Why: Option A keeps a level death benefit (cash value accumulates within it); Option B pays the face amount plus the cash value, so it increases.

What does the Kansas life and health insurance guaranty association exist to do, and how is it funded?

1. Protect against a member insurer's failure to perform, funded by policyholder levies.
2. Guarantee the investment performance of policies, funded by assessments on members.
3. Protect against a member insurer's failure to perform, funded by assessments on members. ✓
4. Regulate the solvency of member insurers, funded by fees paid with their licences.

Why: K.S.A. 40-3002(a) states the purpose: to PROTECT, SUBJECT TO CERTAIN LIMITATIONS, the persons specified in K.S.A. 40-3003 AGAINST FAILURE IN THE PERFORMANCE OF CONTRACTUAL OBLIGATIONS under life, health and annuity policies, plans and contracts BECAUSE OF THE IMPAIRMENT OR INSOLVENCY OF THE MEMBER INSURER that issued them. Subsection (b) then says how: AN ASSOCIATION OF MEMBER INSURERS IS CREATED to pay benefits and continue coverages AS LIMITED HEREIN, and MEMBERS OF THE ASSOCIATION ARE SUBJECT TO ASSESSMENT to provide the funds. Three words control the whole article - 'subject to certain limitations' and 'as limited herein' - and they are why the exclusions and caps in K.S.A. 40-3008 matter more than the promise does. The association does not guarantee investment performance and does not regulate solvency; the commissioner does the latter.

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 contingent (secondary) beneficiary receives the death benefit:

1. Immediately and jointly alongside the primary beneficiary at death
2. In all cases, regardless of whether the primary beneficiary is living
3. Only if the primary beneficiary dies before the insured ✓
4. Only after a probate court has approved the overall distribution

Why: The contingent beneficiary is paid only if no primary beneficiary is living when the insured dies.

A Kansas payee agrees to transfer structured settlement payment rights and the annuity issuer is asked to pay the transferee. Under K.S.A. 40-463, what must have happened first?

1. The annuity issuer must have consented in writing to the transfer.
2. The payee must have obtained independent professional advice, which may not be waived.
3. Nothing; the transfer agreement binds the annuity issuer once the payee has signed it.
4. A court or administrative authority must have approved it on express findings. ✓

Why: K.S.A. 40-463(a) makes advance approval a condition of effectiveness: no transfer is effective and no obligor or annuity issuer is required to pay a transferee UNLESS THE TRANSFER HAS BEEN APPROVED IN ADVANCE IN A FINAL COURT ORDER or order of a responsible administrative authority, BASED ON EXPRESS FINDINGS that the transfer is IN THE BEST INTEREST OF THE PAYEE, taking into account the welfare and support of the payee's dependents; that the payee HAS BEEN ADVISED IN WRITING BY THE TRANSFEREE TO SEEK INDEPENDENT PROFESSIONAL ADVICE and has either received it OR KNOWINGLY WAIVED IT IN WRITING - which is why the third option is wrong; and that the transfer does not contravene any statute or court order. K.S.A. 40-464 then discharges the obligor and the annuity issuer from all liability for the transferred payments as against everyone except the transferee, and provides that neither may be required to split a periodic payment between payee and transferee or between transferees.

'Defamation' in insurance regulation refers to:

1. Sharing part of a commission with another licensed producer
2. Making false or maligning statements about an insurer's financial condition ✓
3. Filing a consumer complaint with the state insurance department about an unreasonably delayed claim
4. Refusing to renew a policy after a single claim is filed

Why: Defamation is making, publishing, or circulating false statements that are maligning, especially about the financial condition of an insurer.

Under K.S.A. 40-112, the annual assessment on a group of affiliated insurers is set in proportion to the group's total assets, but is bounded at both ends. What are the floor and the ceiling?

1. Not less than $100, and not more than .0000015 of total assets or $10,000, whichever is less.
2. Not less than $500, and not more than .0000015 of total assets or $25,000, whichever is less. ✓
3. Not less than $500, and not more than .0000015 of total assets or $25,000, whichever is greater.
4. Not less than $1,000, and not more than .000015 of total assets or $50,000, whichever is less.

Why: Section 40-112(c) sets the assessment in proportion to the group's total assets as reported under K.S.A. 40-225, and provides that it shall not be less than $500 and shall not be more than .0000015 of those total assets or $25,000, WHICHEVER IS LESS. Reading that as whichever is greater inverts the ceiling and would let the assessment run past $25,000 for a large group, which is exactly what the words prevent. The subsection also caps the growth of the total assessment at 15% of the preceding year's approved programme budget, and allows the commissioner to set a lower minimum where the $500 floor applied to every insurer would overshoot the amount needed.

A Kansas insurer, on one claim and on one occasion, fails to acknowledge a claimant's letter reasonably promptly. It is an isolated lapse, not deliberate, and nothing like it has happened before. Under K.S.A. 40-2404, is that an unfair claim settlement practice?

1. No - it must be flagrant, or frequent enough to be a general business practice. ✓
2. Yes - the paragraph lists the conduct, and a single instance is enough to breach it.
3. Yes, but only where the claimant can show actual loss caused by the delay.
4. No - a failure to acknowledge a communication is not among the listed practices.

Why: This is the threshold that governs the whole of K.S.A. 40-2404(9), and it is the point a candidate who learned the list in another state is most likely to miss. The paragraph opens by providing that it is an unfair claim settlement practice if any of the following, or any rules and regulations pertaining thereto, are EITHER committed FLAGRANTLY AND IN CONSCIOUS DISREGARD of the provisions, OR committed WITH SUCH FREQUENCY AS TO INDICATE A GENERAL BUSINESS PRACTICE. Failing to acknowledge and act reasonably promptly upon communications about claims is indeed listed, at (b) - so the last option is wrong on the facts - but matching a lettered description is only half of what the paragraph requires. The two routes are alternatives: flagrant single conduct qualifies without frequency, and frequent conduct qualifies without flagrancy. Proof of loss to the claimant is not part of either test.

A Kansas licensed agent who is a member of a reserve component of the armed services of the United States is called to active duty and serves for four months. Under K.S.A. 40-4903, what follows for that agent's continuing education?

1. Exemption while on active duty, with no extension once the duty ends.
2. No exemption; only a 180-day extension for military service is available.
3. Exemption while on active duty, and an extension after the duty ends. ✓
4. Exemption only where the active duty runs for a full biennium or longer.

Why: Section 40-4903(c)(5)(A) exempts a licensed agent who is a member of the national guard or any reserve component and who serves on active duty for AT LEAST 90 CONSECUTIVE DAYS from the requirement to obtain C.E.C.s during the time on active duty. Four months clears that threshold. Subparagraph (B) then requires the commissioner to grant an extension until the biennial due date occurring in the year NEXT SUCCEEDING the year in which the active duty ceases - so the agent does not step off active duty into an immediate deadline. The separate 180-day extension for military service in subsection (e)(4) is a different provision, available on written application and not confined to reserve members.

Increasing term insurance is characterized by a death benefit that:

1. Falls steadily until it reaches zero at the end of the term
2. Is determined each year by the performance of a market index
3. Rises over the policy term ✓
4. Stays exactly level for the whole duration of the contract

Why: Increasing term's face amount grows over time (often used with return-of-premium or to track inflation); decreasing term does the opposite.

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. The second element tracks what each line actually underwrites - mortality for life, morbidity risk for accident and health - which is why the formulas are not interchangeable.

A 'per stirpes' beneficiary designation means that, if a beneficiary dies before the insured, that beneficiary's share:

1. Is forfeited and retained by the insurance company as a windfall
2. Is divided equally among all of the other surviving named beneficiaries
3. Reverts entirely to the policyowner's estate for probate distribution
4. Passes to that beneficiary's own descendants (their branch of the family) ✓

Why: Per stirpes sends a deceased beneficiary's share down to that person's descendants; per capita splits only among surviving named beneficiaries.

A Kansas agent sells a new life policy knowing that, as part of the transaction, the applicant's existing policy will be continued as extended term insurance. Under K.A.R. 40-2-12, is that a replacement?

1. No; a replacement requires the existing policy to lapse or be surrendered.
2. No; the existing policy remains in force, so nothing has been replaced.
3. Yes; a non-forfeiture continuation is one of the listed outcomes. ✓
4. Only if the agent knew for certain, rather than reasonably should have known.

Why: K.A.R. 40-2-12(a)(7) defines a replacement as each transaction in which new life insurance may be purchased from an agent WHO KNOWS, OR REASONABLY SHOULD KNOW, that as part of the transaction or in consequence of it a previously existing life insurance has been or is likely to be: lapsed or surrendered; CONVERTED INTO PAID-UP INSURANCE, CONTINUED AS EXTENDED TERM INSURANCE OR ANOTHER FORM OF NON-FORFEITURE BENEFIT; converted to reduce either the amount or the period of the existing cover; reissued with a reduction in amount so that substantial cash values are released; or assigned as collateral or subjected to substantial borrowing. Two things follow. Surrender is only one of five routes, so the second and third options are too narrow. And the knowledge test is CONSTRUCTIVE - 'reasonably should know' - so the fourth option states a standard the regulation does not use. 'Life insurance' here includes annuities and variable annuity contracts, by (a)(3).

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. Those benefits are federal programmes delivered through contracts with the federal government, and their own machinery, not a state guaranty association, stands behind them. A MEDICARE SUPPLEMENT policy is a different animal: it is direct insurance issued by a member insurer to the insured, and it is covered. 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 Kansas employee's group life coverage ends because their employment ends. Under K.S.A. 40-434, what must the group policy provide for?

1. Continuation of the group coverage for a further ninety days.
2. A refund of the employee's own contributions toward the premium.
3. Nothing; group coverage ends with the employment that supported it.
4. A right to an individual policy without evidence of insurability. ✓

Why: K.S.A. 40-434(8) requires a provision that where the insurance, or any portion of it, on a person covered under the policy ceases because of TERMINATION OF EMPLOYMENT OR OF MEMBERSHIP in the class eligible, that person is entitled to have an individual policy issued WITHOUT EVIDENCE OF INSURABILITY, subject to applying and paying the first premium within the period the policy specifies. Two companion provisions complete the scheme: paragraph (9) does the same where the group policy itself terminates or is amended to terminate a class, and paragraph (10) provides for death during the conversion window. K.S.A. 40-435 then governs what happens when the person is not told the right exists.

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

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

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

Kansas law suspends an individual agent's qualification and every corresponding licence automatically for 90 calendar days, and assesses a penalty of $100 for each licence suspended, on two distinct failures. What are they?

1. Failure to file proof of continuing education, and failure to pay the $100 biennial renewal fee.
2. Failure to file proof of continuing education, and failure to file the renewal application. ✓
3. Failure to file the renewal application, and failure to answer a commissioner's inquiry within 15 business days.
4. Failure to file proof of continuing education, and conviction of a felony or of a misdemeanour involving fraud.

Why: The same machinery is written twice in the agents licensing act. Section 40-4903(e)(2) fires when the report showing proof of continuing education completion does not reach the commissioner by the biennial due date; K.S.A. 40-4915(c) fires when the renewal application does not. Both then run identically: automatic suspension for 90 calendar days or until the agent cures, whichever is sooner; a penalty of $100 for each licence suspended; expiry of the qualification and each licence ON THE BIENNIAL DUE DATE if the failure is not cured within those 90 days; the same two reinstatement routes at three-to-twelve months and after twelve months; and the same power to waive the penalty on a written claim of extreme hardship. Failing to answer an inquiry within 15 business days and being convicted of a crime are grounds for discretionary discipline under K.S.A. 40-4909, not triggers for this automatic suspension.

Under K.S.A. 40-421, may a Kansas life policy provide that the agent who solicited the insurance is the agent of the person insured, so that the agent's acts and representations bind the insured?

1. Yes - the parties may allocate the agency relationship by contract.
2. Yes, provided the provision is disclosed in the application as well.
3. No - unless the insured signs a separate acknowledgment of the arrangement.
4. No - such a provision is forbidden in terms. ✓

Why: K.S.A. 40-421(4) forbids a provision to the effect that the agent soliciting the insurance is the agent of the person insured under the policy, or making the acts or representations of such agent binding upon the person so insured. The prohibition is unqualified: no disclosure and no separate acknowledgment cures it. The point of it is that a soliciting agent acts for the insurer, so the insurer bears the consequences of what its agent does - which is also why K.S.A. 40-420(2) confines the statements usable against a claim to those written into an application attached to the policy.

Under K.S.A. 40-3009, how is a class B assessment for long-term care insurance written by an impaired or insolvent Kansas insurer allocated?

1. Wholly to accident and health member insurers, long-term care being health insurance.
2. Half to accident and health member insurers and half to life and annuity member insurers. ✓
3. Wholly to life and annuity member insurers, long-term care being written as a life rider.
4. In the same way as any other class B assessment, by an allocation formula the board chooses.

Why: K.S.A. 40-3009(c)(2) singles long-term care out. The amount of a class B assessment for long-term care insurance written by the impaired or insolvent insurer SHALL BE ALLOCATED ACCORDING TO A METHODOLOGY INCLUDED IN THE PLAN OF OPERATION AND APPROVED BY THE COMMISSIONER, and THE METHODOLOGY SHALL PROVIDE FOR 50% OF THE ASSESSMENT TO BE ALLOCATED TO ACCIDENT AND HEALTH MEMBER INSURERS AND 50% TO LIFE AND ANNUITY MEMBER INSURERS. Subsection (c)(1) makes the contrast explicit by excepting long-term care from the ordinary rule, under which the board allocates a class B assessment among the accounts on a formula based on premiums or reserves or any other standard it considers fair. The even split reflects what long-term care actually is - a product sold by both halves of the industry and classifiable as neither.

Under K.A.R. 40-2-12, what must a Kansas replacing insurer do about the new policy's contestability, and how?

1. Limit it to the replaced policy's, which the regulation achieves without any policy wording.
2. Nothing; a replacement policy is contestable on its own terms from its own date of issue.
3. Make the new policy incontestable from issue, whatever the replaced policy provided.
4. Limit it to the replaced policy's, by including the limit in the policy or a rider. ✓

Why: K.A.R. 40-2-12(f)(6) requires the replacing insurer, EITHER BY INCLUSION IN THE REPLACEMENT POLICY OR BY A RIDER ATTACHED TO IT, to provide that the new insurance will not be contestable by it, on the insured's death, to any greater extent than the replaced insurance would have been contestable had the replacement not occurred - and the protection does not extend to any amount by which the new cover EXCEEDS the old. The keyed point is the mechanism. The rule does not operate on its own; the insurer must put it in the contract, which is what the second option denies. Kansas reaches the same result by statute for a creditor's replacement of insurance on its debtors, at K.S.A. 40-449, and there no policy wording is needed.

An endowment policy is distinguished by the fact that it:

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

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

A Kansas Medicare supplement policy lapsed four months ago. The insured's family now produces a clinical diagnosis of cognitive impairment and asks for reinstatement. Under K.S.A. 40-2221a, what is the position?

1. It shall be reinstated, and the insurer may not collect any premium for the lapsed period.
2. It may be reinstated at the insurer's own discretion, on satisfactory evidence of insurability.
3. It may not be reinstated; the 45-day reinstatement window has closed.
4. It shall be reinstated; proof came within five months and past due premium may be collected. ✓

Why: K.S.A. 40-2221a(b) is a separate and longer route than the 45-day one in subsection (a). Medicare supplement policies SHALL BE REINSTATED IN THE EVENT OF LAPSE IF THE INSURER IS PROVIDED PROOF OF COGNITIVE IMPAIRMENT OR THE LOSS OF FUNCTIONAL CAPACITY WITHIN FIVE MONTHS AFTER TERMINATION AND THE INSURED REQUESTS SUCH REINSTATEMENT. The verb is SHALL, so it is not discretionary, which is the third option's error. COLLECTION OF PAST DUE PREMIUM WILL BE ALLOWED, WHERE APPROPRIATE - the reinstatement is not free, which the second option supposes. And the standard is fixed: proof by CLINICAL DIAGNOSIS BY A PERSON LICENSED TO PRACTICE MEDICINE AND SURGERY AND QUALIFIED TO MAKE SUCH DIAGNOSIS. The rationale is plain enough - the very condition the policy exists to meet is the one most likely to cause the premium to be forgotten.

A 401(k) plan is a qualified plan that primarily allows employees to:

1. Withdraw funds before age 59 1/2 with no tax or penalty
2. Contribute after-tax dollars only, with no employer match
3. Defer part of their salary on a pre-tax basis, often with an employer match ✓
4. Receive a guaranteed monthly pension based on years of service, not contributions

Why: A 401(k) is a defined-contribution plan funded by pre-tax salary deferrals (Roth option aside), commonly with an employer match.

A Kansas surety company and a Kansas indemnity association each argue that the commissioner of insurance has no authority over them, because neither writes what the public would ordinarily call insurance. What does K.S.A. 40-103 provide?

1. The commissioner supervises insurance business only; indemnity and suretyship writers answer instead to the secretary of state.
2. Indemnity and suretyship writers come under the commissioner only when the legislature charters them by a separate special act.
3. The commissioner has general supervision, control and regulation of anyone authorized to transact insurance, indemnity or suretyship here. ✓
4. The commissioner supervises suretyship writers, while indemnity contracts are left to the district courts to construe as written.

Why: Section 40-103 names three kinds of business - insurance, indemnity and suretyship - and gives the commissioner general supervision, control and regulation over the corporations, companies, associations, societies, exchanges, partnerships or persons authorized to transact any of them in Kansas. The same sentence gives the commissioner power to make all reasonable rules and regulations necessary to enforce the related laws. An argument that a surety or indemnity writer falls outside the department therefore fails on the face of the section.

Under a 'noncancelable' health insurance policy, the insurer:

1. Cannot cancel the policy or raise the premium before a stated age ✓
2. Renews the policy only if certain stated conditions are met each year
3. May raise the premium for the whole class but must always renew
4. Can cancel the coverage at any time by giving advance written notice

Why: Noncancelable means premiums are fixed and the policy cannot be cancelled (renewable to a stated age); guaranteed renewable allows class-wide premium increases.

A Kansas insurer denies a claim, and separately offers a compromise settlement on another. In each case it gives the claimant no explanation of why. Under K.S.A. 40-2404, which of those attracts the listed practice about explanations?

1. Only the denial; a compromise offer carries no obligation to explain its basis.
2. Both - the paragraph covers a denial and an offer of a compromise settlement alike. ✓
3. Only the compromise offer, because a denial is governed by the affirm-or-deny paragraph.
4. Neither, unless the claimant has first requested an explanation in writing from the insurer.

Why: K.S.A. 40-2404(9)(n) lists failing to promptly provide a REASONABLE EXPLANATION OF THE BASIS IN THE INSURANCE POLICY, in relation to the facts or applicable law, FOR DENIAL OF A CLAIM OR FOR THE OFFER OF A COMPROMISE SETTLEMENT. Both are named, and neither depends on a request. Note what the explanation must be grounded in: the basis IN THE POLICY, related to the facts or the applicable law - so a bare assertion that the claim is not covered does not discharge the duty. Paragraph (e), affirming or denying coverage within a reasonable time after proof of loss, is a different obligation about timing rather than reasons.

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. 40-4903, and assuming the licence has not been suspended, revoked or refused renewal, a Kansas insurance agent's licence remains in effect so long as three things are done. Education requirements are met by the biennial due date and a renewal application is submitted on the prescribed form. What is the third?

1. Payment of a biennial renewal application fee not to exceed $40.
2. Payment of a biennial renewal application fee not to exceed $4. ✓
3. Payment of an annual renewal application fee not to exceed $30.
4. Certification by at least one appointing insurance company each biennium.

Why: Section 40-4903(b)(3) caps the biennial renewal application fee at 'not to exceed $4'. The figure is genuinely that small, and it is easy to misread as $40 beside the $30 application-fee ceiling in K.S.A. 40-4905 and the $50 biennial fee for a nonresident in K.S.A. 40-4906. It is also only the renewal APPLICATION fee - it is not the cost of the continuing education the same subsection requires, nor the certification fees an appointing company pays under K.S.A. 40-252.

A Kansas life policy has lapsed and its value has been applied to purchase other insurance, which remains in force. The original policy has not been surrendered. Under K.S.A. 40-420, on what terms may it be reinstated?

1. Within two years of default, on payment of arrears alone, without evidence of insurability.
2. Within five years of default, on evidence of insurability and payment of arrears.
3. Within three years of default, on evidence of insurability and payment of arrears. ✓
4. At any time while the substitute insurance remains in force, on payment of arrears.

Why: K.S.A. 40-420(9) requires a reinstatement provision on these facts - the value applied to other insurance, that insurance in force, the original policy not surrendered and cancelled - allowing reinstatement WITHIN THREE YEARS FROM THE DEFAULT, upon evidence of insurability satisfactory to the company and payment of arrears of premiums, together with payment or reinstatement of any other indebtedness, with interest on the premiums at a rate NOT EXCEEDING 6% PER ANNUM payable annually. The paragraph then limits what the reinstatement reopens: the reinstated policy is contestable ONLY on account of fraud or misrepresentation of material facts PERTAINING TO THE REINSTATEMENT, for the same period after reinstatement as the policy provides for an original issue. Note the two rates in this section are different and adjacent - 8% on a policy loan under (5), 6% on arrears under (9).

A Kansas applicant is found trustworthy and competent, passes the examination, and is issued an insurance agent licence. No insurance company has yet certified the new agent. Under K.S.A. 40-241, what may the agent do?

1. Transact business in any line the licence names, since the licence has now been issued.
2. Transact business for 90 days, after which certification by a company is required.
3. Nothing yet - the licence confers no authority to transact until a company certifies. ✓
4. Transact only limited lines business until a company certification is recorded.

Why: Section 40-241 requires the commissioner, on finding the applicant trustworthy, competent and successful in the examination, to issue a licence forthwith - and then says in terms that 'the issuance of such license shall confer no authority to transact business in this state until the agent has been certified by a company pursuant to K.S.A. 40-4912'. Holding the licence and being authorised to act are two different things in Kansas, with no grace period and no partial authority in the meantime. K.S.A. 40-4912 then governs how a company makes that appointment and certification.

A state insurance guaranty association exists to:

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

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

An annuitant has an $80,000 basis and a $200,000 expected return. Of each $10,000 payment, the taxable amount is:

1. $6,000 ✓
2. $4,000
3. $10,000
4. $2,000

Why: Exclusion ratio = 80,000/200,000 = 40%; $4,000 excluded, $6,000 taxable per payment.

Under K.S.A. 40-420, when must settlement be made once a Kansas life policy becomes a claim by the death of the insured?

1. Upon receipt of due proof of death. ✓
2. Within 30 days of the insurer learning of the death.
3. Within 60 days of the beneficiary submitting a claim form.
4. Upon completion of the insurer's own investigation of the death.

Why: K.S.A. 40-420(10) requires a provision that when a policy becomes a claim by the death of the insured, settlement shall be made UPON RECEIPT OF DUE PROOF OF DEATH. The trigger is the proof, not a fixed number of days and not the completion of the insurer's own inquiries - which is what makes the fourth option wrong even though an insurer may of course investigate. Delay after due proof engages the unfair claim settlement practices in K.S.A. 40-2404(9), and interest on the proceeds is separately governed by K.S.A. 40-447.

A Kansan held life insurance, an annuity and a disability income policy with one failed member insurer, and no health benefit plan. Under K.S.A. 40-3008, what is the most the association will pay in respect of that life?

1. $300,000 in aggregate across all of the categories. ✓
2. $500,000 in aggregate across all of the categories.
3. $850,000, being the sum of the applicable category limits.
4. There is no aggregate cap; each category limit applies independently.

Why: K.S.A. 40-3008(q)(2)(E)(i) caps the association at AN AGGREGATE OF $300,000 IN BENEFITS WITH RESPECT TO ANY ONE LIFE under subparagraphs (A), (B), (C) and (D) - the life, health, annuity and structured settlement limits - EXCEPT WITH RESPECT TO BENEFITS FOR HEALTH BENEFIT PLANS UNDER (q)(2)(B)(iii), IN WHICH CASE THE AGGREGATE LIABILITY SHALL NOT EXCEED $500,000 WITH RESPECT TO ANY ONE INDIVIDUAL. So the category limits are ceilings within an aggregate, not amounts to be added up, which is what the second option does. There is no health benefit plan here, so the aggregate is $300,000. A separate cap at (E)(ii) applies to ONE HOLDER OF MULTIPLE NONGROUP LIFE POLICIES - whether an individual, firm, corporation or other person, and whether the persons insured are officers, managers, employees or others - of $5,000,000 in benefits regardless of the number of policies held.

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 the grace period provision required by K.S.A. 40-2203, what is the minimum grace period for a Kansas accident and sickness policy, and on what does it depend?

1. 10 days weekly premium, 31 days monthly premium, 31 days for all others.
2. 31 days for every policy, whatever the premium payment frequency.
3. 7 days weekly premium, 10 days monthly premium, 31 days all other policies. ✓
4. 7 days for every policy, with longer periods at the insurer's option.

Why: K.S.A. 40-2203(A)(3) prints the provision with a blank and tells the insurer what to put in it: INSERT A NUMBER NOT LESS THAN '7' FOR WEEKLY PREMIUM POLICIES, '10' FOR MONTHLY PREMIUM POLICIES AND '31' FOR ALL OTHER POLICIES. The period runs for the payment of each premium falling due AFTER THE FIRST, and DURING THE GRACE PERIOD THE POLICY SHALL CONTINUE IN FORCE. They are minima, so an insurer may be more generous. A policy containing a cancellation provision may add, at the end, that the grace is subject to the insurer's right to cancel under that provision.

Under K.S.A. 40-434, what must a Kansas group life insurer give the policyholder for each person insured?

1. A copy of the master policy, for delivery to that person.
2. A written notice of the premium apportioned to that person.
3. An individual certificate, for delivery to that person. ✓
4. Nothing; the master policy is the only document the section requires.

Why: K.S.A. 40-434(7) requires a provision that the insurer will issue TO THE POLICYHOLDER, FOR DELIVERY TO EACH PERSON INSURED, an individual certificate setting forth a statement of the insurance protection to which that person is entitled. The route matters: the certificate goes to the policyholder, who delivers it - which is consistent with the group structure, where the employer or trustee holds the contract and the insured holds evidence of cover rather than the contract itself. Paragraph (3) separately governs the application: a copy of the policyholder's application, if any, must be attached to the policy when issued.

An annuitant has a $90,000 basis and a $150,000 expected return. Of each $15,000 payment, the taxable amount is:

1. $6,000 ✓
2. $9,000
3. $15,000
4. $3,000

Why: Exclusion ratio = 90,000/150,000 = 60%; $9,000 excluded, $6,000 taxable.

A Kansas group health policy providing inpatient hospital and medical-surgical benefits expires while a covered insured is in hospital. Under K.S.A. 40-2254, how long do benefits continue?

1. Until discharge or 31 days after the expiration date, whichever is later.
2. Until discharge, however long the confinement lasts.
3. Until discharge or 31 days after the expiration date, whichever is earlier. ✓
4. They stop on the expiration date; the insured must look to any replacement policy.

Why: K.S.A. 40-2254(a) requires every issuer of a group accident and sickness policy providing INPATIENT HOSPITAL, MEDICAL-SURGICAL BENEFITS to include a provision EXTENDING PAYMENT OF SUCH BENEFITS UNTIL DISCHARGED OR FOR A PERIOD NOT LESS THAN 31 DAYS FOLLOWING THE EXPIRATION DATE OF THE POLICY, WHICHEVER IS EARLIER, for a covered insured CONFINED IN A HOSPITAL ON THE DATE OF TERMINATION. Two things are easy to get backwards. The comparison is 'whichever is EARLIER', so a long confinement is cut off at thirty-one days. And the thirty-one days is a FLOOR on what the provision must give - 'not less than' - so a policy may be more generous. This 31 days is not the group life grace period in K.S.A. 40-434(1); that one runs to the policyholder for paying premium.

A Kansas individual insurance agent is licensed only for title insurance. Under K.S.A. 40-4903, how many C.E.C.s must that agent obtain biennially, and who certifies the courses?

1. Two, in courses certified by the board of abstract examiners.
2. Four, in courses certified by the commissioner of insurance.
3. Four, in courses certified by the board of abstract examiners. ✓
4. Eighteen, in courses certified by the board of abstract examiners.

Why: Section 40-4903(c)(2) requires an individual agent licensed only for title insurance to obtain biennially a minimum of four C.E.C.s in courses certified BY THE BOARD OF ABSTRACT EXAMINERS as title C.E.C.s under the property and casualty category. Two things are being tested at once: the number, which is different from the crop reduction in the preceding paragraph, and the certifying body, which is not the commissioner. Title is one of the few places in the Kansas scheme where another body's certification governs.

Under K.A.R. 40-7-11, on whose written request is an agent's certification cancelled, and who is responsible for telling the agent that it has been?

1. The commissioner, who cancels on the company's request and then notifies the agent.
2. The agent alone, whose own written request is the only route to cancelling a certification.
3. The company, with the commissioner bearing the duty to notify the agent of the cancellation.
4. The company or entity holding the direct appointment, which notifies the agent. ✓

Why: K.A.R. 40-7-11 separates two things. Under (a), LICENCES or certifications are cancelled on the written request of the agent. Under (b), CERTIFICATIONS are cancelled on the written request of the insurance company - or of a corporation, association, partnership, sole proprietorship or other legal entity acting as an insurance agent and holding a direct agency appointment from an insurance company - which submits the prescribed cancellation form on termination of the agent's contract. The regulation then puts the duty to tell the agent on THE REQUESTING ENTITY, not on the commissioner. Compare K.A.R. 40-7-25, under which the termination of an agency's contract terminates a derived certification automatically, with no request needed at all.

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

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

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

An individual born in November is first licensed as a Kansas insurance agent in March of this year. Under K.S.A. 40-4902, when does that agent's biennial due date fall?

1. The last day of November in the year following initial licensure, without exception.
2. The last day of March, the month of initial licensure, and every two years after.
3. The last day of November, but not earlier than two years after initial licensure. ✓
4. The last day of the calendar year, for every agent licensed in that same year.

Why: Section 40-4902(b) fixes the biennial due date at the last day of the BIRTH MONTH of a licensed agent required to complete and report continuing education credits, and then adds a floor: the due date shall not be earlier than two years from the date of initial licensure. Both halves are needed - the birth month alone would put a newly licensed agent's first report only months after licensure. The month-of-licensure rule in the distractor is real, but it is the rule for a registered BUSINESS ENTITY, whose biennial due date is the last day of the month of its initial licensure.

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.

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.

A disability policy has a 14-day elimination period and a $200 weekly benefit. If the insured is disabled for 10 weeks, the total paid is:

1. $1,600 ✓
2. $2,000
3. $1,400
4. $1,800

Why: The first 2 weeks (14-day elimination) pay nothing; 8 weeks × $200 = $1,600.

A person subject to a cease and desist order issued by the Kansas commissioner under the unfair trade practices act violates it. Under K.S.A. 40-2411, what may follow after notice and hearing?

1. A penalty of up to $5,000 per act only; licence action needs a fresh determination.
2. Referral to the district court for contempt proceedings, which is the sole remedy available.
3. A penalty of up to $1,000 per act, with no aggregate limit over any period at all.
4. A penalty of up to $10,000 per act, suspension or revocation, or redress of the injury. ✓

Why: Section 40-2411 gives the commissioner, after notice and hearing under the Kansas administrative procedure act and at the commissioner's discretion, any one or more of: a monetary penalty of not more than $10,000 for each and every act or violation, not exceeding an aggregate of $50,000 in any six-month period; suspension or revocation of the person's licence; and redress of the injury by refund of premiums, payment of moneys withheld and appropriate public notification. Two points of contrast with K.S.A. 40-2407 are worth holding: the per-act figure here is the highest in the act, and licence action does not depend on any finding of knowledge, because breaching an order the person already has is knowledge enough.

Under the uniform 'time limit on certain defenses' provision in a health policy, after a stated period (e.g., two years) the insurer generally cannot:

1. Require the insured to furnish written proof of loss within 90 days of the date of loss
2. Deny a claim based on a pre-existing condition or application misstatement ✓
3. Enforce a named exclusion such as war or self-inflicted injury
4. Raise the premium for an entire underwriting class

Why: After the stated period, the insurer cannot void coverage or deny non-fraudulent claims for pre-existing conditions or misstatements — the health-policy analog of incontestability.