Maine Life, Accident & Health Insurance License, Practice Exams

On which factor may a carrier NOT vary the premium for an individual health plan, under 24-A M.R.S. s 2736-C(2)(B)?

1. Family membership in the plan.
2. Health status or claims experience. ✓
3. Geographic area within the limit.
4. Age, under the uniform age curve.

Why: 24-A M.R.S. s 2736-C(2)(B) forbids varying the premium rate by gender, health status, occupation or industry, claims experience, policy duration or any factor not specified in the subsection; family membership, geographic area and age (within limits) are permitted factors under paragraphs C, C-1 and D.

What is the status of premiums and return premiums received by a producer under 24-A M.R.S. s 1449?

1. They are trust funds received by the licensee in a fiduciary capacity, the section laying this down as a rule for all premiums and return premiums received by a producer rather than leaving it to the agency contract. ✓
2. They are the property of the insurer from the moment of receipt, the producer holding them as bailee and being answerable for them in conversion rather than under any fiduciary obligation to account for them.
3. They are the property of the producer until accounted for to the insurer under the agency contract, the relationship between producer and insurer being one of debtor and creditor rather than of trustee and beneficiary.
4. They are trust funds only where the producer has agreed in the agency contract to hold them as such, the section operating as a default rule which the parties to that contract may displace between themselves.

Why: 24-A M.R.S. s 1449, opening words: ALL PREMIUMS AND RETURN PREMIUMS RECEIVED BY AN INSURANCE PRODUCER ARE TRUST FUNDS RECEIVED BY THE LICENSEE IN A FIDUCIARY CAPACITY in accordance with this section. It is not a term of the agency contract and it cannot be contracted out of.

What is the most an HMO may spend on out-of-plan services in a point-of-service product, under 24-A M.R.S. s 4207-A(3)(A)?

1. 20% of its total annual health care expenditures. ✓
2. 10% of its total annual health care and administrative spending.
3. 30% of the total annual premium it collects.
4. 50% of the premium paid for the point-of-service product.

Why: 24-A M.R.S. s 4207-A(3)(A) caps out-of-plan covered services at 20% of total annual health care expenditures. If not shown quarterly, the superintendent may bar new or renewed point-of-service business.

What must every Maine HMO plan include, under 24-A M.R.S. s 4236?

1. Chiropractic services by qualified chiropractic providers. ✓
2. Acupuncture on the same terms as physician services.
3. Dental care for all enrollees under age 26.
4. Vision care, including one pair of glasses a year.

Why: 24-A M.R.S. s 4236 requires every HMO plan to include chiropractic services, paying chiropractors at least equally with other providers treating similar neuro-musculoskeletal conditions.

An employee has $150,000 of employer-paid group term life. How much of that coverage is subject to imputed taxable income?

1. $100,000 ✓
2. $150,000
3. $50,000
4. $0

Why: The first $50,000 of employer-paid group term life is tax-free; the cost of the remaining $100,000 is imputed income (per IRS Table I).

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

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

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

What may a replacing insurer NOT do for a person protected under 24-A M.R.S. s 2849(3)?

1. Ask that person for evidence of individual insurability. ✓
2. Use group health information to set the rates for the group.
3. Apply its own benefit design and limits to the replacement group.
4. Charge the group the premium it has filed for the new policy.

Why: 24-A M.R.S. s 2849(3) bars requesting evidence of insurability, declining enrolment on that basis, imposing a new exclusion or waiting period, or steering the person to an individual plan. Using group health information for rating is expressly preserved.

What must a Maine health policy sold to Medicare-eligible people, that is not a Medicare supplement, carry under 24-A M.R.S. s 5013?

1. A notice in at least 12-point type that it is not a Medicare supplement. ✓
2. A signed waiver from the applicant that Medicare supplement cover was offered.
3. A 10-day free look and the Medicare supplement buyer's guide.
4. A bureau approval stamp on the first page of the policy.

Why: 24-A M.R.S. s 5013 requires a notice, in no less than 12-point type on the first page of the outline or policy, stating it is not a Medicare supplement policy. Disability income policies and employer or union plans are excepted.

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.

Medicare Part A covers skilled nursing facility care for up to how many days in each benefit period?

1. 20 days
2. 60 days
3. 100 days ✓
4. 150 days

Why: Coverage runs to day 100 of each benefit period, with no coinsurance for days 1-20 and a daily coinsurance for days 21-100. The 150 figure belongs to inpatient hospital care: 90 days per benefit period plus 60 lifetime reserve days.

How long may a disclosure authorization remain valid for HEALTH or MEDICAL insurance under 24-A M.R.S. s 2208(8)?

1. No longer than 30 months from the date the authorization is signed, which is the same outer limit the subsection sets for life, disability and long-term care insurance taken in connection with an application or a request for a change in policy benefits.
2. No longer than the duration of the claim for which it was signed, health and medical authorizations being treated by the subsection as claim-specific and expiring as soon as the claim to which they relate has been paid, denied or otherwise closed.
3. No longer than one year from the date the authorization is signed, that being the same period section 2215 allows for an authorization submitted by a person other than a regulated insurance entity or an insurance support organization.
4. No longer than the term of coverage of the policy and any renewals of that policy - a period fixed by the line of insurance rather than by the purpose for which the authorization was signed or by any date computed from the date of signature. ✓

Why: 24-A M.R.S. s 2208(8)(B): in the case of HEALTH OR MEDICAL insurance, the period may be no longer than THE TERM OF COVERAGE OF THE POLICY AND ANY RENEWALS OF THAT POLICY. The 30-month and duration-of-the-claim limits are s 2208(8)(A) and apply to life, disability and long-term care. The one-year figure is s 2215(1)(A)(2)(c) and is about third-party authorizations, not about the line of insurance.

What does 24-A M.R.S. s 1420-N provide for an insurer or producer that fails to report a termination as required?

1. After notice and hearing, the licence may be suspended or revoked and a fine may be levied in accordance with section 12-A; the same applies to an insurer or producer found by a court to have reported with actual malice. ✓
2. After notice and hearing, a fine may be levied in accordance with section 12-A, suspension and revocation being reserved for the causes listed in section 1420-K and not available for a mere failure to report a termination.
3. The failure is a Class E crime punishable by a fine of not less than $100 nor more than $1,000 or by imprisonment for not more than 6 months, in the same way as a violation of section 1412 of the Insurance Code.
4. The superintendent may cancel any appointment held by the producer with the insurer concerned, no sanction attaching to the licence itself because the reporting duty falls on the insurer rather than on the licensee.

Why: 24-A M.R.S. s 1420-N(7), PENALTIES FOR FAILING TO REPORT: an insurer, producer or an employee or agent acting for either THAT FAILS TO REPORT as required, OR THAT IS FOUND TO HAVE REPORTED WITH ACTUAL MALICE by a court of competent jurisdiction, MAY, AFTER NOTICE AND HEARING, HAVE ITS LICENSE SUSPENDED OR REVOKED AND MAY BE FINED in accordance with s 12-A. Failing to report and reporting maliciously carry the same sanction.

Credit life insurance is typically written as:

1. A variable policy whose benefit rises and falls with interest rates
2. Whole life insurance with a growing cash value that the borrower may freely access at any time
3. Decreasing term equal to the outstanding loan balance, payable to the creditor ✓
4. Level term naming the borrower's family as the primary beneficiary

Why: Credit life is decreasing term tied to the loan balance; if the borrower dies, it pays the remaining debt to the creditor.

The 'facility of payment' provision in a health policy allows the insurer to:

1. Refuse any claim submitted by anyone other than the insured personally named in the policy
2. Hold payment of any claim until the close of the calendar year in which the loss occurred
3. Pay a relative if there is no named beneficiary or the payee is a minor ✓
4. Pay every claim by direct deposit into a bank account the insurer selects for the insured

Why: Facility of payment lets the insurer pay a relative or other appropriate person (up to a limit) when no beneficiary is named or the beneficiary cannot give valid release.

Which word may a Maine HMO NOT use in its name or literature unless licensed as an insurer, under 24-A M.R.S. s 4212(3)?

1. Health.
2. Maine.
3. Plan.
4. Insurance. ✓

Why: 24-A M.R.S. s 4212(3) bars an HMO not licensed as an insurer from using 'insurance', 'casualty', 'surety', 'mutual' or other words descriptive of the insurance business.

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

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

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

How does 24-A M.R.S. s 401 define a 'mutual' insurer?

1. An unincorporated association of policyholders who agree to indemnify one another, the governing body being the attorney-in-fact appointed under the subscribers' agreement to act for all of them in the conduct of the business.
2. An incorporated insurer with permanent capital stock which is owned by its policyholders rather than by outside investors, each policy in force carrying one share of that stock for so long as the policy remains in force.
3. An incorporated insurer without permanent capital stock of any kind, the governing body of which is elected by its own policyholders, or else by those particular policyholders who are specified in its own charter. ✓
4. An incorporated insurer without permanent capital stock whose governing body is appointed by the superintendent from among its policyholders, on nomination by the outgoing governing body, at intervals fixed in its charter.

Why: 24-A M.R.S. s 401: a mutual insurer is an incorporated insurer without permanent capital stock, the governing body of which is elected by its policyholders or those specified in its charter (or by another reasonable method the section allows). It is incorporated; an unincorporated association of subscribers exchanging indemnity through an attorney-in-fact is a reciprocal, a separate form listed in s 406.

Within what period must written notice of sickness or injury be given under a Maine group health policy, 24-A M.R.S. s 2823?

1. Within 30 days after the sickness or injury occurred. ✓
2. Within 10 days after the injury or sickness began.
3. Within 60 days after the sickness or injury first occurred.
4. Within 90 days after the sickness or injury was diagnosed.

Why: 24-A M.R.S. s 2823 requires written notice of sickness or injury within 30 days after it occurred. Late notice does not invalidate or reduce the claim if notice was not reasonably possible and was given as soon as reasonably possible.

When may a provider make health inquiries directly to an insured who has named a designee, under 24-A M.R.S. s 6809(9)?

1. Only if it cannot contact the designee for more than 30 days after diligent effort. ✓
2. Only if the designee consents in writing to each contact the provider proposes.
3. Only after the insured has personally asked the provider in writing to make its inquiries directly.
4. Only after the insured's life expectancy has fallen to 6 months or less.

Why: 24-A M.R.S. s 6809(9) lets the insured designate adults in regular contact for all health status inquiries, and bars the provider from making them to the insured unless, for more than 30 days after diligent effort, it is unable to contact the designee. The insured may change the designation on written notice.

A consumer who buys insurance through a producer representing the buyer (not the insurer) is working with a(n):

1. Adjuster
2. Underwriter
3. Captive agent
4. Broker ✓

Why: A broker legally represents the insurance buyer; an agent represents the insurer.

If a plan covers emergency room services, how must out-of-network emergency cost sharing be set, under 24-A M.R.S. s 4320-C?

1. At the out-of-network rate, after a prior authorization.
2. The same as for in-network services, without prior authorization. ✓
3. At double the in-network rate, capped at the annual maximum.
4. At the provider's billed rate, less the plan's deductible.

Why: 24-A M.R.S. s 4320-C requires emergency services to be covered without prior authorization, with out-of-network cost sharing the same as in network, and the enrollee held harmless from any further out-of-network charge.

An employee's dependent child loses coverage by aging out of the plan. The maximum COBRA continuation for that child is:

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

Why: A dependent aging out is a qualifying event allowing up to 36 months of COBRA continuation.

How many home health care visits must a Maine long-term care policy cover, under 24-A M.R.S. s 5051-A(2)(C)?

1. At least 90 visits in any continuous 12-month period. ✓
2. At least 60 visits in any 12-month period.
3. At least 90 visits over the lifetime of the policy.
4. At least 120 visits in each calendar year of cover.

Why: 24-A M.R.S. s 5051-A(2)(C) requires home health care coverage for at least 90 visits in any continuous 12-month period during which coverage is in force.

Short-term disability (STD) coverage differs from long-term disability (LTD) primarily in that STD has:

1. No elimination period and benefits payable for the insured's life
2. A shorter benefit period and a shorter elimination period ✓
3. A higher monthly benefit and lifetime coverage for any cause
4. Coverage that applies only to injuries occurring while at work

Why: STD has short elimination periods (days) and short benefit periods (weeks up to ~2 years); LTD has longer elimination and benefit periods.

Medicare Part A would help pay for which of the following?

1. A routine outpatient physician office visit
2. A covered inpatient hospital stay ✓
3. Long-term custodial care in a nursing home
4. A self-administered prescription filled at a pharmacy

Why: Part A covers inpatient hospital, skilled nursing, hospice, and some home health; physician visits are Part B and drugs are Part D.

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.

A deductible 'carryover' provision in a major medical plan allows expenses incurred in the last months of the year to:

1. Be refunded in full to the insured at year end
2. Double the plan's annual out-of-pocket maximum amount
3. Apply toward the next year's deductible ✓
4. Permanently eliminate the deductible for all future years

Why: A carryover provision lets eligible expenses from the final months (often the last three) count toward the following year's deductible.

For how long may a Maine Medicare supplement policy exclude a preexisting condition, under 24-A M.R.S. s 5002-A(3)?

1. Not for losses incurred more than 12 months after coverage starts.
2. Not for losses incurred over 3 months after the coverage starts.
3. Not for losses incurred more than 6 months after coverage starts. ✓
4. Not at all.

Why: 24-A M.R.S. s 5002-A(3) bars excluding or limiting benefits for losses incurred more than 6 months from the effective date because of a preexisting condition, defined no more restrictively than advice or treatment within 6 months before coverage.

A life insurer is formed under the laws of New Hampshire and licensed in Maine. How does 24-A M.R.S. s 6 classify it in Maine?

1. As a foreign insurer. ✓
2. As an alien insurer.
3. As a domestic insurer.
4. As a nonadmitted insurer.

Why: 24-A M.R.S. s 6(2): a foreign insurer is one formed under the laws of any jurisdiction other than this State. A domestic insurer is formed under Maine law; an alien insurer is formed outside the United States.

What does 24-A M.R.S. s 221 say about the scope of an examination of an ALIEN insurer?

1. It is limited to the insurer's insurance transactions and affairs in this State, its assets and trust deposits elsewhere in the United States being a matter for the regulator of its port-of-entry state alone.
2. It extends to the insurer's worldwide transactions, assets and affairs, an alien insurer being subject to fuller examination than a domestic one precisely because its head office lies outside the United States.
3. It is limited to the insurer's trust deposits in the United States, the remainder of the examination being carried out by the insurance supervisory official of the country in which the insurer is domiciled.
4. It is limited to that insurer's insurance transactions, its assets, its trust deposits and its affairs within the United States, except as the superintendent may otherwise require of it. ✓

Why: 24-A M.R.S. s 221(1): EXAMINATION OF AN ALIEN INSURER IS LIMITED TO ITS INSURANCE TRANSACTIONS, ASSETS, TRUST DEPOSITS AND AFFAIRS IN THE UNITED STATES, EXCEPT AS OTHERWISE REQUIRED BY THE SUPERINTENDENT. Four things, measured at the United States level rather than at Maine's border, and the superintendent may still require more.

Under the entire contract provision, the contract consists of the policy and:

1. The attached copy of the application for the policy ✓
2. A separate buyer's guide kept on file by the agent
3. The insurer's internal underwriting guidelines manual
4. Any verbal promises the producer made at the sale

Why: The entire contract is the policy plus the attached application; no outside documents can be incorporated by reference.

Preauthorization (precertification) is a managed-care cost control that requires:

1. The insured to pay double coinsurance on all elective surgeries
2. An automatic second opinion from a state-appointed physician
3. Providers to accept a fixed monthly payment per enrolled member
4. Approval before certain services or hospitalizations ✓

Why: Preauthorization requires the plan's approval before specified non-emergency procedures or admissions for them to be covered.

Under the HIPAA Privacy Rule, when a health plan discloses protected health information for a routine business purpose, it should generally limit the disclosure to:

1. Information the individual has marked non-sensitive
2. Records created in the previous twelve months
3. Whatever the recipient requests in writing
4. The minimum necessary to accomplish the purpose ✓

Why: The minimum necessary standard confines routine uses and disclosures to what the task actually requires. A written request does not widen it, and age of the record is irrelevant.

What is 'spread pricing', prohibited by 24-A M.R.S. s 4350-F?

1. A carrier's use of different copays for generic and brand-name drugs.
2. A pharmacy's practice of selling a drug above the plan's allowed cost.
3. A PBM charge above ingredient cost plus dispensing fee, less the PBM fee. ✓
4. A manufacturer's rebate paid through the PBM to the plan sponsor.

Why: 24-A M.R.S. s 4350-F(1)(B) defines spread pricing as any amount charged by a PBM above the ingredient cost plus dispensing fee paid to the pharmacy, less any pharmacy benefits management fee. It is prohibited, with annual certification.

A 66-year-old just enrolled in Part B applies for a Medigap policy two months later. The insurer must:

1. Offer only its most comprehensive plan, at the highest premium
2. Decline the application, since Medigap open enrollment closed at age 65
3. Require a health questionnaire and an attending physician statement
4. Issue any offered plan on a guaranteed-issue basis ✓

Why: Within the 6-month Medigap open enrollment period (age 65 + Part B), coverage is guaranteed issue regardless of health.

May a producer contract with a financial institution under 24-A M.R.S. s 1442?

1. Yes - a producer may join a financial institution's finance programme, and the institution need not be licensed if the purpose is for the producer to refer customers for loans or to arrange leases, loans or credit applications. ✓
2. Yes - but only if the financial institution is itself licensed as an insurance producer in this State, the exception in the paragraph applying to the institution's employees rather than to the institution.
3. No - an arrangement between a producer and a financial institution for the referral of customers is an unlawful inducement, the referral fee being a commission paid to an unlicensed person contrary to section 1450.
4. Yes - provided the arrangement is filed with and approved by the superintendent before it takes effect, and the producer receives no compensation from the financial institution for any referral made under it.

Why: 24-A M.R.S. s 1442(1)(D): a producer may ENTER INTO A CONTRACT OR ARRANGEMENT WITH A FINANCIAL INSTITUTION for the purpose of PARTICIPATING IN A FINANCE PROGRAM, and IN THIS CASE THE FINANCIAL INSTITUTION NEED NOT BE LICENSED AS A PRODUCER, as long as the purpose is to authorize the producer TO FACILITATE, DIRECT OR REFER insureds, prospective insureds or other customers to the institution for loans, or to facilitate arrangements for LEASES, LOANS OR CREDIT APPLICATIONS.

A policy has a 90-day elimination period and a $2,500 monthly benefit. If the insured is disabled for 12 months, the total paid is about:

1. $22,500 ✓
2. $30,000
3. $25,000
4. $20,000

Why: The first ~3 months pay nothing; 9 months × $2,500 = $22,500.

A variable life insurance policy typically guarantees:

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

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

To which of these does 24-A M.R.S. ch. 67 NOT apply, under s 5001-A(2)?

1. A group Medicare supplement certificate delivered to a resident of Maine by mail.
2. A plan of an employer or union for its employees, former employees or members. ✓
3. An individual Medicare supplement policy sold by a Maine HMO to a resident aged 65.
4. A Medicare supplement policy issued by a fraternal benefit society.

Why: 24-A M.R.S. s 5001-A(2) excludes policies of employers or labour organizations, or trustees of their funds, for employees, former employees or members. 'Issuer' in s 5001(2-B) includes HMOs and fraternal benefit societies.

The cash value in a permanent life insurance policy accumulates:

1. As taxable income each year
2. Tax-free with no conditions
3. Only when dividends are paid
4. Tax-deferred ✓

Why: Cash value grows tax-deferred while the policy is in force.

A modified-premium whole life policy charges:

1. Lower premiums for an initial period, then higher level premiums ✓
2. The same premium every year for the entire life of the policy
3. A single large premium that makes the policy paid up at issue
4. Premiums that decline a little bit every single year until paid up

Why: Modified whole life has reduced premiums during the early years (often the first five) followed by higher level premiums for life.

Compared with an HMO, a PPO generally:

1. Is offered only to Medicare-eligible senior enrollees
2. Provides no coverage at all outside its provider network
3. Allows out-of-network care at higher cost without referrals ✓
4. Requires a primary care physician and referrals to specialists

Why: A PPO offers more flexibility: out-of-network care is covered at higher cost, with no gatekeeper or referrals required.

What insertions may an insurer itself make on a life or health application, under 24-A M.R.S. s 2409?

1. Any correction of the medical history the applicant gave.
2. Administrative ones, clearly shown as not the applicant's. ✓
3. Changes of beneficiary, if the producer agrees to them.
4. Answers the applicant left blank, from its own records.

Why: 24-A M.R.S. s 2409 allows the insurer to make insertions for administrative purposes only, in a way that clearly indicates they are not to be ascribed to the applicant.

Which nonforfeiture option uses the cash value to buy a smaller, fully paid-up whole life policy?

1. Automatic premium loan
2. Cash surrender
3. Reduced paid-up ✓
4. Extended term

Why: The reduced paid-up option applies the net cash value as a single premium to buy a smaller permanent policy with no further premiums due.

A probationary period in a disability or health policy is a span after issue during which:

1. No premium is due from the newly insured policyowner
2. Losses from sickness are not yet covered ✓
3. Benefits are automatically paid without any proof of loss
4. The insurer may cancel the policy for any reason at all

Why: The probationary period is an initial waiting span (often for sickness, not accidents) before certain new claims become payable.

A life policy has a two-year suicide clause. The insured dies by suicide in the third policy year. The insurer:

1. Pays the full death benefit ✓
2. Denies the claim and keeps the premiums
3. Pays one half of the policy's face amount
4. Refunds only the premiums that were paid

Why: Because the suicide occurred after the two-year period, the death is treated as any other and the full benefit is paid.

What does 24-A M.R.S. s 5012 require of every Medicare supplement issuer each year?

1. A guaranteed issue period of at least 6 months for all plans.
2. A rate review filed with the superintendent before each renewal.
3. An open enrolment of 30 days for any of its standardized plans.
4. A guaranteed issue period of at least one month for Plan A. ✓

Why: 24-A M.R.S. s 5012 requires a guaranteed issue period of at least one month each calendar year during which standardized Plan A is offered to all applicants without regard to health status, claims experience or medical condition.

A Social Insurance Supplement (SIS) rider on a disability policy pays a benefit:

1. As a permanent addition paid on top of the insured's full Social Security check
2. Only once Social Security has approved the claim and the first federal check arrives
3. Only to insureds with no Social Security work credits, since others are covered federally
4. When the insured is disabled but Social Security benefits are not yet payable ✓

Why: An SIS rider supplements income when the insured is disabled but Social Security disability is denied or not yet being paid.

What may an administrator of a preferred provider arrangement NOT do, under 24-A M.R.S. s 2674-A(3)?

1. Register with the superintendent each year.
2. Accept insurance risk, except as s 2676 allows. ✓
3. Provide administrative services for carriers.
4. Keep a current list of all of its preferred providers.

Why: 24-A M.R.S. s 2674-A(3): except as specifically authorized in s 2676, an administrator may provide administrative services only and may not accept insurance risk.

Whom does a settlement producer represent under 24-A M.R.S. s 6803-A?

1. The settlement provider, if the provider pays the producer's commission.
2. Only the viator, to whom the producer owes a fiduciary duty, however paid. ✓
3. Both viator and provider equally, as a neutral intermediary between them.
4. The insurer that issued the policy, as its appointed life producer.

Why: 24-A M.R.S. s 6803-A provides that, irrespective of the manner in which the settlement producer is compensated, the settlement producer may represent only the interests of the viator and owes a fiduciary duty to the viator.

Which condition must a nonresident meet to be issued a Maine producer licence, under 24-A M.R.S. s 1420-G(1)?

1. The applicant must pass the Maine state law examination first.
2. The applicant must keep a Maine office.
3. The home state licenses Maine residents on the same basis. ✓
4. The applicant must have held a licence for at least 2 years.

Why: 24-A M.R.S. s 1420-G(1) requires a current resident licence in good standing in the home state, the proper request and fees, the home state or uniform application, and that the home state awards nonresident licences to Maine residents on the same basis.

A SIMPLE IRA retirement plan is intended for:

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

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

When must the outline of coverage be delivered for a Maine Medicare supplement policy, under 24-A M.R.S. s 5005(1)?

1. When the policy is delivered to the insured.
2. Within 30 days after the policy is issued.
3. When the application is made. ✓
4. On request, before the first renewal date.

Why: 24-A M.R.S. s 5005(1): no Medicare supplement policy or certificate may be delivered unless an outline of coverage is delivered to the applicant at the time the application is made.

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.

What is the effect of failing to tender the settlement consideration under 24-A M.R.S. s 6809(5)?

1. The contract is void from the start, and cannot be revived by a later tender of it.
2. The contract stands, the viator's only remedy being a claim for interest on the sum.
3. The contract is voidable for lack of consideration until it is tendered and accepted. ✓
4. The contract is suspended for 90 days, after which it lapses unless the sum is paid.

Why: 24-A M.R.S. s 6809(5) provides that failure to tender consideration under the terms of the settlement contract renders the contract voidable for lack of consideration until the consideration is tendered to and accepted by the viator.

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

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

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

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

1. Provide temporary coverage only, expiring with no cash value at the end of a stated 10- or 20-year term
2. Invest part of each premium in the mutual fund subaccounts the policyowner selects and may switch at will
3. Decrease the death benefit gradually as the children grow up and the family's income need falls away
4. Pay an income for a set period beginning at the insured's death, then the face amount ✓

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

Which provision is prohibited in a Maine long-term care policy by 24-A M.R.S. s 5051-A(1)?

1. Paying custodial care at half the skilled rate.
2. Covering home health care by a licensed provider.
3. Requiring a prior hospital stay for any benefit. ✓
4. A 90-day elimination period before benefits.

Why: 24-A M.R.S. s 5051-A(1) bars skilled-nursing-only cover, excluding skilled, intermediate or custodial care in a facility, requiring a prior hospital stay, a prior skilled stay for intermediate care, or prior institutionalization for home health care.

What does 24-A M.R.S. s 1442 permit a licensed insurance producer in this State to do?

1. Engage in producer activities throughout this State within the scope of the producer's licence, the authority granted by the insurer going to the producer's contractual position rather than to what may lawfully be done.
2. Engage in producer activities throughout this State within the authority granted by the insurer, society or organization and within the scope of the producer's own licence, both limits applying at once. ✓
3. Engage in producer activities throughout this State and in any other state in which the risk is located, the Maine licence carrying authority wherever the producer's appointing insurer is itself authorized to write.
4. Engage in producer activities throughout this State within the authority granted by the appointing insurer, the scope of the licence being relevant only to the examination the producer had to pass to obtain it.

Why: 24-A M.R.S. s 1442(1)(A): a licensed producer may ENGAGE IN INSURANCE PRODUCER ACTIVITIES THROUGHOUT THIS STATE WITHIN THE AUTHORITY GRANTED THE INSURANCE PRODUCER BY THE INSURER, health maintenance organization, fraternal benefit society or nonprofit hospital or medical service organization AND THE SCOPE OF THE PRODUCER'S LICENSE. Two limits, not one.

A Maine domestic insurer wants to solicit applications in New Hampshire. What does 24-A M.R.S. s 404 require of it?

1. It must notify the superintendent of the lines it intends to write outside this State and file a copy of the New Hampshire certificate of authority with the Bureau within 30 days of its issue, but needs nothing further.
2. Nothing under this section, which governs only the transaction of insurance within this State, an outward-bound solicitation being a matter for the regulator of the state in which the application is solicited.
3. It must hold a subsisting Maine certificate of authority for the same kind or kinds of insurance, the same rule applying to a foreign insurer operating from offices, personnel or facilities located in this State. ✓
4. It must obtain the superintendent's written approval for the specific programme of solicitation, approval being granted only where the superintendent finds that Maine policyholders will not be prejudiced by it.

Why: 24-A M.R.S. s 404(2): NO INSURER FORMED UNDER THE LAWS OF THIS STATE, AND NO FOREIGN INSURER FROM OFFICES OR BY PERSONNEL OR FACILITIES LOCATED IN THIS STATE, shall solicit applications or otherwise transact insurance IN ANOTHER STATE OR COUNTRY unless it holds A SUBSISTING CERTIFICATE OF AUTHORITY granted by the superintendent for THE SAME KIND OR KINDS.

A multiple employer welfare arrangement (MEWA) allows:

1. Insurers to avoid all state regulation of their group products
2. Several small employers to pool together to provide group benefits ✓
3. An individual to buy coverage directly from a reinsurance company
4. One large corporation to self-insure all of its own employees alone

Why: A MEWA lets small employers band together to offer health and welfare benefits, gaining some advantages of a larger group.

A parent signs a disclosure authorization for a minor's health claim. When is it valid under 24-A M.R.S. s 2208(1)(A)(2)?

1. Always, for any information about the child, until the child reaches the age of 18.
2. Only if both parents sign it together and the form is witnessed by a notary public.
3. Where the holder can reasonably infer the parent's interest is not adverse to the child's. ✓
4. Only if the child also signs it, whatever the child's age at the time of signing.

Why: 24-A M.R.S. s 2208(1)(A)(2): a parent or guardian's authorization is valid only insofar as that person has exclusive authority to consent to the minor's care, and only for disclosures where the holder can reasonably infer the parent's interest is not adverse.

If an insured dies during the grace period with a premium still unpaid, the insurer:

1. Pays the death benefit minus the premium that was owed ✓
2. Refunds only the prior premiums and pays no benefit
3. Denies the claim entirely because the premium was late
4. Pays double the face amount as a good-faith gesture

Why: Coverage stays in force during the grace period; a death claim is paid, with the overdue premium deducted from the proceeds.

A fraternal benefit society provides insurance:

1. To its members through a lodge or membership system, on a nonprofit basis ✓
2. To the general public for a profit, distributing earnings to its stockholders
3. Exclusively through group annuity contracts sold to employers
4. Only to federal, state, and municipal government employees

Why: Fraternal benefit societies are nonprofit membership organizations providing insurance to members under a lodge system.

A 'Social Insurance Supplement' (SIS) rider stops paying once the insured:

1. Recovers fully from the disabling condition
2. Begins receiving the expected Social Security benefit ✓
3. Returns to any form of part-time employment
4. Reaches the policy's stated benefit maximum age

Why: An SIS rider supplements income while Social Security is not yet payable; it reduces or stops once Social Security benefits begin.

A rehabilitation benefit in a disability income policy:

1. Refunds all premiums once the insured fully recovers from disability
2. Provides a lump sum to the insured's family upon accidental death
3. Doubles the monthly benefit for any injury caused by an accident
4. Helps pay for training to return the insured to work ✓

Why: A rehabilitation benefit covers vocational training or programs intended to help a disabled insured return to gainful employment.

What must an individual health policy make available for a domestic partner under 24-A M.R.S. s 2741-A?

1. The option of benefits only where the partner is shown to be financially dependent on the policyholder.
2. Benefits automatically, at no extra premium, once the partnership is registered with the insurer.
3. Nothing; domestic partners must buy separate individual policies of their own in every case.
4. The option of benefits on the same terms as for spouses, without requiring financial dependency. ✓

Why: 24-A M.R.S. s 2741-A requires individual policies to make available the option of benefits for a policyholder's domestic partner at appropriate rates and on the same terms as for spouses; financial dependency may not be required, though the insurer may require an affidavit and evidence of joint ownership, occupancy or finances.

What may the insurer charge or deduct in respect of the grace period under 24-A M.R.S. s 2505?

1. Interest of not more than 10% a year for the days of grace, and the whole annual premium may be deducted from the proceeds.
2. Interest of not more than 6% a year for the days of grace, and any premium due may be deducted from the proceeds of a claim. ✓
3. No interest at all, though any premium due may be deducted from the proceeds of a claim arising in the grace period.
4. A flat late fee of $25 for each day of grace, the claim being denied if death occurs before the premium is paid.

Why: 24-A M.R.S. s 2505 allows an interest charge not exceeding 6% a year for the days of grace elapsing before payment and, if a claim arises during the grace period, the deduction from the proceeds of any premium due or overdue, with interest and any deferred instalment of the annual premium.

What caps the assessments on a member insurer for each account in a calendar year under 24-A M.R.S. s 4609(4)?

1. 5% of its Maine premiums on the policies within the account.
2. 2% of its Maine premiums on the policies covered by the account. ✓
3. 2% of its premiums written in all states on every line of business.
4. Nothing; the board may assess whatever the account needs that year.

Why: 24-A M.R.S. s 4609(4) provides that the total of all assessments on a member insurer for each account may not in any one calendar year exceed 2% of its premiums in this State on the policies covered by the account. A shortfall assessed on other accounts under s 4609(8) is similarly capped at 2%.

How must maternity benefits be provided for unmarried women policyholders, under 24-A M.R.S. s 2741?

1. Only on payment of a separate maternity premium set above that charged to married policyholders.
2. Only after a 12-month waiting period that does not apply to married policyholders with the cover.
3. On the same terms as for married policyholders or wives of policyholders with maternity cover. ✓
4. Not at all, maternity cover being limited by the section to married policyholders and their wives.

Why: 24-A M.R.S. s 2741 requires all health insurance policies and plans to provide, at appropriate rates, the same maternity benefits for unmarried women policyholders and minor dependants of policyholders with family coverage on the same terms as for married policyholders or wives of policyholders.

A producer convinces a client to drop a policy at Company A and buy one at Company B using misleading comparisons. This is:

1. Coercion
2. Churning
3. Twisting ✓
4. Rebating

Why: Inducing a replacement between different insurers through misrepresentation is twisting; doing it within the same insurer is churning.

When a covered employee leaves the company, the group life conversion privilege generally allows them to:

1. Continue the identical group term certificate at the employer's group rate for up to 18 months under COBRA
2. Convert within 60 days, but only after passing a paramedical exam and blood profile
3. Convert to an individual permanent policy within 31 days without evidence of insurability ✓
4. Receive a cash surrender value equal to the employer's share of past premiums

Why: On termination, the employee may convert group coverage to an individual permanent policy (usually within 31 days) without proving insurability, though at individual rates.

Medicaid differs from Medicare in that Medicaid is:

1. Available only to honorably discharged veterans of the U.S. armed forces
2. A needs-based program jointly funded by federal and state governments ✓
3. Funded entirely by payroll taxes withheld from current workers' paychecks
4. An age-based program automatically available to everyone at age sixty-five

Why: Medicaid is a means-tested (needs-based) program jointly funded by the states and federal government; Medicare is primarily age/disability-based.

May a LIFE AND HEALTH consultant charge a consulting fee and also receive commissions, under 24-A M.R.S. s 1466?

1. Yes - if the consulting fee and the commissions are disclosed by the consultant to the client in writing before the advice is given, no agreement signed by both parties being required so long as the disclosure is made and kept on file.
2. Yes - if both the consulting fee and the insurance commissions are provided for in a written agreement in a form approved by the superintendent signed by the client and by the consultant as the section has it. ✓
3. No - the restriction in subsection 1 applies to every consultant licensed under the subchapter, the reference to property and casualty consultants being descriptive of the commonest case rather than limiting.
4. Yes - if the advice given as producer falls at least 12 months before or after the period of consulting employment, which is the same test the subchapter applies to a property and casualty consultant.

Why: 24-A M.R.S. s 1466(2): a LIFE AND HEALTH consultant MAY CHARGE A CONSULTING FEE AND RECEIVE COMMISSIONS for the sale of insurance as a producer IF BOTH the consulting fee AND the insurance commissions ARE PROVIDED FOR IN A WRITTEN AGREEMENT, IN A FORM APPROVED BY THE SUPERINTENDENT, SIGNED BY THE CLIENT AND THE CONSULTANT. THE TWO SUBSECTIONS ARE NOT THE SAME RULE: the P&C consultant faces a 12-month separation, the life and health consultant a signed written agreement.

To keep a producer license active, most states require the producer to:

1. Maintain membership in a fraternal benefit society or trade association
2. Re-take and pass the original state licensing examination every two years
3. Sell a minimum of $250,000 in new annual premium each calendar year
4. Complete continuing education and renew the license periodically ✓

Why: License renewal generally requires periodic continuing education; specific hours and cycles are set by each state.

A 52-year-old withdraws $8,000 of gain from a nonqualified annuity. The IRS penalty (besides income tax) is:

1. $800 ✓
2. $1,600
3. $400
4. $0

Why: Premature distributions before 59½ incur a 10% penalty: 10% × $8,000 = $800.

How may an insurer DISPUTE a claim under 24-A M.R.S. s 2436(2)?

1. By furnishing the insured, beneficiary or a representative a written statement that the claim is disputed with the grounds, based upon a reasonable investigation and in sufficient detail to permit the insured to understand and respond to the insurer's position. ✓
2. By notifying the insured orally or in writing that the claim is not accepted, the subsection requiring no statement of grounds because the grounds will emerge in any proceeding the insured afterwards brings on the claim against the insurer.
3. By filing with the superintendent a statement of the grounds of the dispute within 30 days of receiving the proof of loss, the superintendent then notifying the insured and fixing a time within which the insured may answer the insurer's statement.
4. By tendering the undisputed part of the claim and stating that the balance is contested, no further explanation being required of the insurer where a payment on account has been made to the insured within the period allowed for payment.

Why: 24-A M.R.S. s 2436(2): an insurer may dispute a claim BY FURNISHING to the insured or beneficiary, OR A REPRESENTATIVE, A WRITTEN STATEMENT THAT THE CLAIM IS DISPUTED WITH A STATEMENT OF THE GROUNDS upon which it is disputed. The statement MUST BE BASED UPON A REASONABLE INVESTIGATION of the claim and MUST INCLUDE SUFFICIENT DETAIL TO PERMIT THE INSURED OR BENEFICIARY TO UNDERSTAND AND RESPOND to the insurer's position.