Maine Life, Accident & Health Insurance License, Practice Exams

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%.

When must a Maine long-term care claim be paid or denied in writing, under 24-A M.R.S. s 5083(3)?

1. Within 60 days after the notice of claim is received.
2. Within 30 days after the necessary documentation is received. ✓
3. Within 10 business days after the statement is sent.
4. Within 45 days after the insured first receives care.

Why: 24-A M.R.S. s 5083(3): the claim is payable within 30 days after receipt of the documentation reasonably necessary to pay it, and within that time the insurer must pay or give written notice of denial with specific reasons.

When must the settlement proceeds be paid into escrow under 24-A M.R.S. s 6809(4)?

1. Within 30 calendar days after the insurer acknowledges the transfer of ownership to the settlement provider.
2. Within 3 business days after the escrow agent, or erroneously the provider, receives the transfer documents. ✓
3. On the date the settlement contract is signed by all parties, before any transfer documents are executed.
4. Within 15 business days after the viator's rescission period has expired without the contract being rescinded.

Why: 24-A M.R.S. s 6809(4) requires the provider to designate an independent escrow agent and, within 3 business days after the escrow agent (or, if the viator sends them there by mistake, the provider) receives the transfer documents, to pay the proceeds into an escrow or trust account at an FDIC-insured institution; the agent pays the viator on the insurer's acknowledgment of the transfer.

A carrier that stops writing new business in Maine's small or large group market may not re-enter it for how long, under 24-A M.R.S. s 2850-B(4)?

1. 3 years after the final policy has ended.
2. 5 years after the last policy ends. ✓
3. 2 years after notice.
4. 10 years after notice to the bureau.

Why: 24-A M.R.S. s 2850-B(4)(C) bars a carrier that ceases writing new business in a market from writing new business there for 5 years after the last policy terminates. Notice is 3 months to the bureau and 6 months before any nonrenewal.

When may a carrier issue a health plan that includes a preferred provider arrangement, under 24-A M.R.S. s 2674-A(4)?

1. At once, if the filing is made within 30 days after issue.
2. After giving 60 days' notice to the providers in the plan.
3. Only after the superintendent approves the arrangement. ✓
4. At the next renewal after its network is fully contracted.

Why: 24-A M.R.S. s 2674-A(4): a carrier may not issue a plan incorporating a preferred provider arrangement, nor an administrator market one, until the superintendent has approved the arrangement under s 2673-A.

What follows if the insurer does not furnish claim forms within 15 days, under 24-A M.R.S. s 2710?

1. The time for proofs of loss is extended by 15 days, the claimant still being bound to use the forms.
2. The insurer must pay the claim in full without any proof of loss, having waived every condition.
3. The claimant may sue at once, the policy's 60-day waiting period for actions no longer applying.
4. The claimant complies by giving written proof of the loss's occurrence, character and extent in time. ✓

Why: 24-A M.R.S. s 2710 requires the provision that if claim forms are not furnished within 15 days after notice of claim, the claimant is deemed to comply on submitting, within the time for proofs of loss, written proof covering the occurrence, character and extent of the loss.

What remedy does 24-A M.R.S. s 2436-A(1) give, and against whom?

1. A person injured by any of the listed actions taken by that person's own insurer may bring a civil action against it and recover damages, together with costs and disbursements, reasonable attorney's fees and interest on damages at 1 1/2% per month. ✓
2. A person injured by any of the listed actions may complain to the superintendent, who may impose civil penalties under section 12-A, the section creating no private remedy because the conduct it describes is a regulatory matter for the Bureau of Insurance.
3. A person injured by any of the listed actions taken by any insurer, whether or not that insurer is the person's own, may bring a civil action, so that a claimant injured by the conduct of a liability insurer defending another party may sue on the section.
4. A person injured by any of the listed actions may bring a civil action for damages alone, the section leaving costs, attorney's fees and interest to be dealt with under the general law of this State applicable to civil actions on a contract.

Why: 24-A M.R.S. s 2436-A(1): A PERSON INJURED BY ANY OF THE FOLLOWING ACTIONS TAKEN BY THAT PERSON'S OWN INSURER MAY BRING A CIVIL ACTION AND RECOVER DAMAGES, TOGETHER WITH COSTS AND DISBURSEMENTS, REASONABLE ATTORNEY'S FEES AND INTEREST ON DAMAGES AT THE RATE OF 1 1/2% PER MONTH. Note the contrast with s 2164-D(8), which creates NO private cause of action - that is the chapter 23 section and is enforced by the superintendent.

May a Maine group life policy insure employees' spouses and children without insuring the employees themselves against their deaths, under 24-A M.R.S. s 2611-A?

1. No, dependants may be insured only as a rider to the employee's own group cover under the same policy.
2. Yes, but only where the employer pays the whole premium and every dependant gives evidence of insurability.
3. Yes, within the premium and eligibility rules; the insurer may limit cover lacking evidence. ✓
4. No, group life may never insure dependants, who must buy individual policies of their own.

Why: 24-A M.R.S. s 2611-A allows a group life policy to insure the lives of spouses and dependent children of employees or members without also insuring the employees or members, subject to rules on who pays the premium, and allows the insurer to exclude or limit cover on any dependant whose evidence of insurability is not satisfactory.

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

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

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

What life insurance limits apply with respect to one life under 24-A M.R.S. s 4603(3)(B)(1)?

1. $500,000 in death benefits, but not more than $50,000 in net cash surrender and withdrawal values.
2. $300,000 in death benefits, but not more than $100,000 in net cash surrender and withdrawal values. ✓
3. $100,000 in death benefits, and not more than $10,000 in net cash surrender and withdrawal values.
4. $300,000 in death benefits, and up to $300,000 more in net cash surrender and withdrawal values too.

Why: 24-A M.R.S. s 4603(3)(B)(1) limits the association, with respect to one life regardless of the number of policies, to $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values.

A producer who holds client premiums must keep them in a fiduciary capacity, which means the producer must:

1. Report each premium directly to the federal tax authorities
2. Lend the premiums to other clients who are short on funds
3. Invest the premiums for personal profit until they are remitted
4. Keep those funds separate and not mix them with personal money ✓

Why: As a fiduciary, the producer holds premiums in trust for the insurer and must not commingle them with personal funds (doing so is commingling).

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.

An applicant seeks two kinds of licence and more than one authority under one of them. What does 24-A M.R.S. s 1410 require?

1. The applicant may sit a single combined examination covering every category and authority applied for, the superintendent being required to construct such an examination on request where more than one category is sought.
2. The applicant must be separately examined for each category of licence, but not for each authority under a single licence, the authorities within one licence being covered by the one examination for that licence.
3. The applicant must be separately examined only where the categories are held under different subchapters of chapter 16, authorities and licences arising under the same subchapter being examined together in one sitting.
4. The applicant must be separately examined for each category of licence applied for The very same rule applies to each and every authority sought under any one of those licences separately again indeed without more. ✓

Why: 24-A M.R.S. s 1410(7), SEPARATE EXAMINATION FOR EACH CATEGORY: an applicant FOR MORE THAN ONE KIND OF LICENSE OR FOR MORE THAN ONE AUTHORITY UNDER A LICENSE MUST BE SEPARATELY EXAMINED FOR EACH CATEGORY. Both limbs are caught - kinds of licence and authorities within one.

When is a claim for benefits payable under 24-A M.R.S. s 2436(1), and when does it become OVERDUE?

1. Payable within 30 days after the date of the loss itself, and overdue thereafter whether or not the insurer has received a proof of loss, the section running its period from the event insured against rather than from anything the claimant afterwards does.
2. Payable within 30 days after the insurer completes its investigation of the claim for benefits, and overdue only where the superintendent afterwards finds on complaint that the investigation was not conducted with reasonable diligence by the insurer in the circumstances.
3. Payable within 30 days after proof of loss is received and ascertainment of the loss is made by written agreement or by the filing of an arbitrators' award; a claim neither disputed nor paid within 30 days is overdue. 'Insured or beneficiary' includes a person to whom benefits have been assigned. ✓
4. Payable within 60 days after proof of loss is received in every line of insurance written in this State, and overdue thereafter, the section fixing a single period rather than distinguishing among fire, life and the other classes of business.

Why: 24-A M.R.S. s 2436(1): a claim under a policy delivered or issued for delivery in this State is PAYABLE WITHIN 30 DAYS AFTER PROOF OF LOSS IS RECEIVED BY THE INSURER AND ASCERTAINMENT OF THE LOSS IS MADE, either by WRITTEN AGREEMENT between insurer and insured or beneficiary or by FILING an ARBITRATORS' AWARD as the policy provides. A CLAIM THAT IS NEITHER DISPUTED NOR PAID WITHIN 30 DAYS IS OVERDUE. 'Insured or beneficiary' includes A PERSON TO WHOM BENEFITS HAVE BEEN ASSIGNED.

An insurer terminates a producer's appointment for one of the reasons in 24-A M.R.S. s 1420-K. What does s 1420-N require of the insurer?

1. Notice to the superintendent within 30 days following the effective date of the termination, in a format the superintendent prescribes; and on the superintendent's written request, additional information, documents, records or other data. ✓
2. Notice to the superintendent within 15 days following the effective date of the termination, and a copy of that notice to the producer within a further 30 days at the producer's last known address by ordinary mail.
3. Notice to the superintendent before the termination takes effect, the superintendent having 30 days in which to object to it, the termination being suspended in the meantime so far as the producer's appointment is concerned.
4. Notice to the superintendent within 30 days, but only where the producer has been found by a court or government body to have engaged in the conduct, the insurer's own belief that a cause exists not being reportable.

Why: 24-A M.R.S. s 1420-N(1), TERMINATION FOR CAUSE: the insurer SHALL NOTIFY THE SUPERINTENDENT WITHIN 30 DAYS FOLLOWING THE EFFECTIVE DATE OF THE TERMINATION, in a prescribed format, if the reason is one of those in s 1420-K OR the insurer has knowledge the producer WAS FOUND by a court, government body or self-regulatory organization to have engaged in such activities. Either basis triggers it. s 1420-N(2) imposes the same 30 days for a termination WITHOUT cause.

A Maine Superintendent of Insurance resigns 20 months into a five-year term. How is the vacancy filled under 24-A M.R.S. s 201?

1. By appointment for the unexpired portion of the term, so that the person who is appointed serves out the remaining 40 months of that term rather than beginning a fresh five-year term of their own. ✓
2. By appointment for a fresh five-year term beginning on the date the new superintendent qualifies, the unexpired portion of the predecessor's term being disregarded once the office has actually fallen vacant.
3. By the senior deputy superintendent serving as acting superintendent for the unexpired portion, the Governor being unable to make a permanent appointment until the term would have expired in the ordinary course.
4. By appointment for the unexpired portion, but only after the joint standing committee has certified that no qualified candidate within the Bureau is available to serve in an acting capacity for the balance of the term.

Why: 24-A M.R.S. s 201(3): ANY VACANCY OCCURRING MUST BE FILLED BY APPOINTMENT FOR THE UNEXPIRED PORTION OF THE TERM. The appointee inherits the balance of the predecessor's term and does not start the clock again.

What must a Maine group policy covering medical care on an expense-incurred basis allow, under 24-A M.R.S. s 2827-A?

1. Payment of all benefits directly to the policyholder for the group.
2. Assignment of benefits by the insured to the provider of the care. ✓
3. A waiver of the proof-of-loss rules for claims under 500 dollars.
4. Assignment only with the prior written consent of the employer.

Why: 24-A M.R.S. s 2827-A requires a provision permitting the insured to assign benefits for medical or dental care to the provider of the care.

How should the examination of a foreign or alien insurer be carried out, as far as practical, under 24-A M.R.S. s 221(4)?

1. In cooperation with officials of the other states where it does business. ✓
2. By Maine examiners alone, without relying on the officials of any other state.
3. By the NAIC, with the bureau reviewing its findings afterwards.
4. By an outside audit firm chosen by the insurer and paid by it.

Why: 24-A M.R.S. s 221(4): as far as practical, the examination of a foreign or alien insurer must be made in cooperation with the supervisory officials of other states where it transacts business, and duties may be divided among the participating states.

What must happen before an HMO evidence of coverage is issued in Maine, under 24-A M.R.S. s 4207(2)?

1. It must be reviewed by the HMO's enrollee advisory committee.
2. It must be signed by each enrollee before the cover begins.
3. Its form must be filed with and approved by the superintendent. ✓
4. It must be published on the HMO's website for 30 days.

Why: 24-A M.R.S. s 4207(2): no evidence of coverage, amendment or underlying contract may be issued until its form is filed with and approved by the superintendent, electronically unless exempted.

What does 24-A M.R.S. s 2160(2) say about a benefit not associated with indemnification or loss, and does the same rule appear elsewhere?

1. A provision may not be included in an insurance policy unless it is associated with indemnification or loss, the rule applying to annuities as well because an annuity is a contract of insurance within the meaning of the Insurance Code.
2. A provision giving a benefit not associated with indemnification or loss must be filed with and approved by the superintendent before use, the subsection being a filing requirement rather than a prohibition on such provisions.
3. A provision may not be included if its sole intent is to give a benefit not associated with indemnification or loss, and the prohibition appears nowhere else in the chapter, property and casualty policies being free of the restriction.
4. A provision may not be included in an insurance policy if its sole intent is to give the insured a benefit not associated with indemnification or loss; the subsection does not apply to annuities, and section 2162(1)(A) repeats it. ✓

Why: 24-A M.R.S. s 2160(2): UNLESS OTHERWISE PROVIDED BY LAW, A PROVISION MAY NOT BE INCLUDED WITHIN AN INSURANCE POLICY IF THE SOLE INTENT OF THE PROVISION IS TO GIVE TO THE INSURED A BENEFIT THAT IS NOT ASSOCIATED WITH INDEMNIFICATION OR LOSS. THIS SUBSECTION DOES NOT APPLY TO ANNUITIES. The identical prohibition appears for P&C and surety in s 2162(1)(A).

What does 24-A M.R.S. s 406 require of a FOREIGN insurer as to reserves?

1. It must maintain, as to insurance written anywhere in the world, reserves at least equal to those its state of domicile requires, the superintendent accepting the domiciliary standard in place of chapter 11 for a foreign insurer.
2. It must maintain reserve as required by chapter 11 only where it writes life or health insurance in this State, property and casualty reserves being governed by the rating provisions of chapter 25 instead.
3. It need maintain no separate Maine reserve, the requirement of chapter 11 applying to domestic insurers alone, provided that it files its annual statement with the Bureau within the time allowed by chapter 3.
4. As to insurance written in this State it must maintain reserve as required by chapter 11, and the exception also reaches an insurer other than a property or casualty insurer that transacts business anywhere in the United States on the assessment plan, the stipulated premium plan or any similar plan. ✓

Why: 24-A M.R.S. s 406(1): no foreign insurer is authorized unless AS TO INSURANCE WRITTEN IN THIS STATE IT MAINTAINS RESERVE AS REQUIRED BY CHAPTER 11, or which, IF OTHER THAN A PROPERTY OR CASUALTY INSURER, transacts business anywhere in the United States on the ASSESSMENT PLAN, STIPULATED PREMIUM PLAN OR ANY SIMILAR PLAN.

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 2159-A provide about blindness?

1. No insurer may refuse to insure or charge a different rate solely because of blindness or partial blindness, unless the basis for the action is clearly demonstrated through sound actuarial evidence filed with the superintendent.
2. No insurer authorized in this State may refuse to insure or continue to insure, limit the amount, extent or kind of coverage, or charge a different rate solely because the insured or applicant is blind or partially blind. ✓
3. No insurer may refuse to insure solely because of blindness, but may limit the amount, extent or kind of coverage available to a blind applicant where the limitation is applied uniformly to all such applicants.
4. No insurer may refuse to insure solely because of blindness in property and casualty insurance, the section applying to life and health insurance only where the disability is shown to affect mortality or morbidity.

Why: 24-A M.R.S. s 2159-A, first paragraph: no authorized insurer may REFUSE TO INSURE OR CONTINUE TO INSURE, LIMIT THE AMOUNT, EXTENT OR KIND OF COVERAGE, OR CHARGE A RATE DIFFERENT FROM THAT NORMALLY CHARGED, SOLELY BECAUSE THE INSURED OR APPLICANT IS BLIND OR PARTIALLY BLIND. That first paragraph carries NO actuarial exception - the sound-actuarial-evidence proviso belongs to the SECOND paragraph, which covers other physical or mental disabilities.

When is a person 'chronically ill' for the Maine settlements chapter, under 24-A M.R.S. s 6802-A(3)?

1. Unable to perform at least 2 activities of daily living, or needing substantial supervision for severe cognitive impairment. ✓
2. Unable to perform at least 4 activities of daily living, or needing substantial supervision for any cognitive impairment.
3. Expected by a physician to die within 24 months, whatever the person's ability to perform daily activities at the time.
4. Confined to a nursing home for at least 90 days, whatever the cause of the confinement or the person's cognitive state.

Why: 24-A M.R.S. s 6802-A(3) defines chronically ill as being unable to perform at least 2 activities of daily living, requiring substantial supervision to protect against threats to health and safety due to severe cognitive impairment, or having a similar level of disability as determined by the federal Secretary of Health and Human Services.

How may the superintendent use the enforcement options in 24-A M.R.S. s 12-A, under subsection 5?

1. Only one of them for any single violation.
2. Only in the exact order in which the section lists them.
3. Any or all of them, in combination or in sequence. ✓
4. Only with the approval of the Superior Court.

Why: 24-A M.R.S. s 12-A(5) lets the superintendent use any or all of the enforcement options, in combination or in sequence, and makes them additional to any other penalty. Subsection 6 adds restitution for injured insureds.

If an HMO becomes insolvent, what must other carriers that recently offered cover to its groups provide, on the superintendent's order under 24-A M.R.S. s 4231(1)?

1. A 90-day enrollment period from the date of the order.
2. Individual conversion policies without any underwriting.
3. A 30-day enrollment period from the date of insolvency. ✓
4. Free cover for 60 days while the enrollees choose a plan.

Why: 24-A M.R.S. s 4231(1): carriers that offered cover to a group contract holder at the last purchase or renewal must offer its enrollees a 30-day enrollment period beginning on the date of insolvency, on the coverage and rates previously offered.

May the Attorney General act outside Maine's courts to enforce an order of the superintendent, under 24-A M.R.S. s 214?

1. No - the section reaches only the Superior Court of this State, and an order of the superintendent can be enforced elsewhere only by the regulator of the state in which the person against whom it runs is domiciled.
2. Yes, but only in the courts of another state, and only where that state has adopted the National Association of Insurance Commissioners' model on reciprocal enforcement of insurance regulatory orders.
3. Yes, but only in the federal courts, and to enforce an order there the Attorney General needs a separate authorisation from the Governor before appearing on the superintendent's behalf.
4. Yes - upon request of the superintendent the Attorney General is authorized to proceed in the courts of any other state, or in any federal court or agency, to enforce an order or decision made in any court proceeding or in any administrative proceeding before the superintendent. ✓

Why: 24-A M.R.S. s 214(3): the Attorney General, UPON REQUEST OF THE SUPERINTENDENT, is authorized to proceed IN THE COURTS OF ANY OTHER STATE OR IN ANY FEDERAL COURT OR AGENCY to enforce an order or decision of any court proceeding or any administrative proceeding before the superintendent. All three forums are covered.

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.

Up to what portion of Social Security benefits may be subject to federal income tax for higher-income recipients?

1. 100% in all cases
2. Exactly 50% always
3. Up to 85% ✓
4. 0%, benefits are never taxed

Why: Depending on combined income, up to 85% of Social Security benefits may be taxable.

How can a Maine group health policy validly be changed, under 24-A M.R.S. s 2817?

1. By officer approval shown by endorsement, or by an amendment the policyholder and insurer sign. ✓
2. By the producer of record, in a signed letter sent to the policyholder and filed with the insurer.
3. By the policyholder alone, on written notice to all certificate holders 30 days ahead.
4. By the superintendent only, on a joint written request by the insurer and the policyholder.

Why: 24-A M.R.S. s 2817: no change is valid unless approved by an officer of the insurer and evidenced by endorsement on the policy, or by an amendment signed by the policyholder and the insurer. No agent may change the policy or waive its provisions.

Which of the following states the superintendent's general duty under 24-A M.R.S. s 211?

1. To enforce the provisions of the Insurance Code only where a complaint has been made by an insured, a producer or another insurer, the superintendent having no authority to act on the superintendent's own motion.
2. To enforce the provisions of the Insurance Code and, where the Code is silent, to apply the National Association of Insurance Commissioners' model acts as though they had been enacted by the Legislature of this State.
3. To enforce the provisions of, and execute the duties imposed upon the superintendent by, the Insurance Code, together with such additional rights, powers and duties as may be provided by other laws. ✓
4. To advise the Governor and the Legislature on insurance policy and to publish the Bureau's annual report, enforcement of the Insurance Code being reserved to the Attorney General under Title 5.

Why: 24-A M.R.S. s 211(1) requires the superintendent to ENFORCE THE PROVISIONS OF, AND EXECUTE THE DUTIES IMPOSED BY, this Title, and s 211(3) adds SUCH ADDITIONAL RIGHTS, POWERS AND DUTIES AS MAY BE PROVIDED BY OTHER LAWS. Nothing conditions the duty on a complaint, and NAIC models are not law in Maine unless enacted.

On what basis may HMO charges NOT be set for an individual enrollee, under 24-A M.R.S. s 4207(6)?

1. The enrollee's category of coverage.
2. Actuarial principles for the class.
3. The HMO's actuarially certified rates.
4. The enrollee's own health status. ✓

Why: 24-A M.R.S. s 4207(6) allows charges by actuarial principles for categories of enrollees, so long as charges for an enrollee are not individually determined based on health status, and are not excessive, inadequate or unfairly discriminatory.

What other actions does 24-A M.R.S. s 2436-A(1) list?

1. Failing to maintain a complete record of every claim for six years; failing to provide claim forms within fifteen days of a request; and failing to adopt and implement reasonable standards for the prompt investigation of claims arising under its policies.
2. Misrepresenting policy provisions only where the misrepresentation is made in writing; refusing to arbitrate a disputed claim; and compelling insureds to institute litigation by offering substantially less than the amounts ultimately recovered in such actions.
3. Knowingly misrepresenting pertinent facts or policy provisions; failing to acknowledge and review claims within a reasonable time; failing to affirm or deny coverage, reserving defences, within a reasonable time after investigation; and failing without just cause to settle promptly. ✓
4. Failing to acknowledge a claim within ten working days; failing to complete an investigation within thirty days of the proof of loss; and failing to give written notice of the need for additional time within forty-five days of the notice of claim.

Why: 24-A M.R.S. s 2436-A(1) lists five actions: (A) KNOWINGLY MISREPRESENTING pertinent FACTS OR POLICY PROVISIONS relating to coverage at issue; (B) FAILING TO ACKNOWLEDGE AND REVIEW CLAIMS, which may include payment or denial, WITHIN A REASONABLE TIME following receipt of written notice; (C) the arbitration-appeal threat; (D) FAILING TO AFFIRM OR DENY COVERAGE, RESERVING ANY APPROPRIATE DEFENSES, WITHIN A REASONABLE TIME AFTER HAVING COMPLETED ITS INVESTIGATION; and (E) WITHOUT JUST CAUSE, FAILING TO EFFECTUATE PROMPT, FAIR AND EQUITABLE SETTLEMENT of claims in which LIABILITY HAS BECOME REASONABLY CLEAR.

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.

How much notice must a carrier give before discontinuing a large group product, under 24-A M.R.S. s 2850-B(3)(G)?

1. At least 90 days before termination. ✓
2. At least 30 days before the termination date.
3. At least 60 days before the termination date.
4. At least 180 days, to the bureau only.

Why: 24-A M.R.S. s 2850-B(3)(G)(1) requires notice to the policyholder and certificate holders at least 90 days before termination, with an offer of any other large group product, acting uniformly without regard to claims or health status.

A joint and survivor annuity covering a couple continues full or reduced payments:

1. Only until the first annuitant dies
2. Until the second of the two annuitants dies ✓
3. To the couple's heirs after both die
4. For a fixed ten-year term regardless of survival

Why: A joint and survivor annuity pays as long as either annuitant lives, often reducing to a percentage for the survivor.

After what period may non-fraudulent misstatements no longer void a Maine health policy, under 24-A M.R.S. s 2706?

1. 2 years from the date of issue.
2. 3 years from the date of issue. ✓
3. 1 year from the date of issue.
4. 5 years from the date of issue.

Why: 24-A M.R.S. s 2706 requires the provision that after 3 years from the date of issue no misstatements, except fraudulent misstatements, may be used to void the policy or deny a claim for loss commencing after that period. Maine uses three years where the model provision uses two.

Does soliciting Maine residents only by mail count as transacting insurance under 24-A M.R.S. s 9?

1. Yes, whether by mail or any other means. ✓
2. No, unless an agent visits the resident in person.
3. No, if the insurer has no Maine office.
4. Only once a policy is actually issued.

Why: 24-A M.R.S. s 9: 'transact' includes solicitation or inducement, negotiations, effectuation and later matters arising from the contract, whether by mail or any other means.

The superintendent needs a court's help to enforce a lawful order. How does 24-A M.R.S. s 214 say that is done?

1. Through the Attorney General, by proceedings instituted in the Superior Court in any county of this State, in which the court may make such orders, preliminary or final, as it considers proper on the facts established before it. ✓
2. By the superintendent directly, filing a petition in the Superior Court for the county in which the Bureau of Insurance maintains its principal office, the Attorney General appearing only if the court requests it.
3. Through the Attorney General, by proceedings in the District Court for the county in which the person against whom the order runs resides or has a place of business, with appeal to the Superior Court.
4. By referring the matter to the joint standing committee of the Legislature having jurisdiction over banking and insurance, which may then direct the Attorney General to seek enforcement in the Superior Court.

Why: 24-A M.R.S. s 214(1): the superintendent may, THROUGH THE ATTORNEY GENERAL, INVOKE THE AID OF THE SUPERIOR COURT through proceedings instituted IN ANY COUNTY of this State, and the court MAY MAKE SUCH ORDERS, EITHER PRELIMINARY OR FINAL, AS IT CONSIDERS PROPER. Not the District Court, not a fixed county, and not the superintendent acting alone.

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.

What records must a producer or business entity keep at the place of business under 24-A M.R.S. s 1447?

1. A copy of the written appointment from each insurer with which there is an appointment, transaction records being kept instead by the appointing insurer, which is the party subject to examination as to the business written.
2. A copy of the written appointment or designation from each insurer with which there is an appointment, and complete records of transactions under the licence, which may be maintained in electronic form. ✓
3. Complete records of transactions under the licence for the current calendar year only, earlier records being transferable to storage away from the place of business once the year to which they relate has closed.
4. A copy of the written appointment from each insurer, and complete records of transactions, which must be kept in paper form at the place of business and may not be maintained electronically for examination purposes.

Why: 24-A M.R.S. s 1447(1): the producer or business entity shall KEEP OR MAKE ACCESSIBLE at the place of business A COPY OF THE WRITTEN APPOINTMENT OR DESIGNATION FROM EACH INSURER, HMO, fraternal benefit society or nonprofit hospital or medical service organization with which there is an appointment, and shall keep COMPLETE RECORDS OF TRANSACTIONS UNDER THE LICENSE. For examination or investigation by the superintendent, RECORDS MAY BE MAINTAINED IN ELECTRONIC FORM.

Under 24-A M.R.S. s 5002-A(1), may a Medicare supplement policy include benefits that duplicate Medicare benefits?

1. Yes, if disclosed in the outline.
2. Yes, for Part B services only.
3. Only with the superintendent's approval.
4. No. ✓

Why: 24-A M.R.S. s 5002-A(1): a Medicare supplement policy or certificate in force in the State may not contain benefits that duplicate benefits provided by Medicare.

The primary purpose of the Medical Information Bureau (MIB) is to:

1. Help member insurers detect omissions or fraud on applications ✓
2. Sell consumer medical histories directly to the general public
3. Set the premium rates that all member companies must charge
4. Provide free medical examinations to insurance applicants

Why: The MIB is a nonprofit information exchange whose coded reports help member insurers identify errors, omissions, or misrepresentations on applications.

What is the geographic reach of the producer licensing requirement in 24-A M.R.S. s 1411?

1. A person may not act as an insurance producer with respect to insurance risks resident, located or to be performed in this State, the requirement stopping at the border so that out-of-state risks need no Maine licence.
2. A person may not act as or purport to be an insurance producer with respect to insurance risks resident, located or to be performed in this state or elsewhere unless licensed for that kind or those kinds under subchapter ii-A. ✓
3. A person may not act as an insurance producer with respect to any risk unless licensed either in this State or in the state in which the risk is located, a licence from either jurisdiction satisfying the requirement.
4. A person may not act as an insurance producer with respect to risks located in this State unless licensed here, and with respect to risks located elsewhere unless appointed by an insurer authorized to write them there.

Why: 24-A M.R.S. s 1411(1): the prohibition runs to insurance risks RESIDENT, LOCATED OR TO BE PERFORMED IN THIS STATE OR ELSEWHERE. The words 'or elsewhere' are the point - Maine's licensing requirement follows the producer, not only the risk.

What additional conversion period applies if the insured is not told of the right at least 15 days before it expires, under 24-A M.R.S. s 2625?

1. A period ending 30 days after notice is given, but never beyond 90 days after the original period.
2. A period ending 15 days after notice is given, but never beyond 60 days after the original period. ✓
3. A period of 60 days in every case, running from the expiry of the original conversion period.
4. None; the right expires with the original period whether or not any notice was ever given.

Why: 24-A M.R.S. s 2625 provides that an individual not given notice of the conversion right at least 15 days before the period expires has an additional period expiring 15 days after notice is given, but not extending beyond 60 days after the original period expires. No insurance is continued beyond the original period.

Where an appeal is taken from the superintendent's failure or refusal to act, when must the petition for review be filed under 24-A M.R.S. s 236(3)?

1. Within 30 days after the person first asked the superintendent in writing to act.
2. Within 40 days after the superintendent's last written communication on it.
3. Within 1 year after the matter was first brought to the bureau.
4. Within 6 months after the time the action should reasonably have occurred. ✓

Why: 24-A M.R.S. s 236(3): for an appeal from a failure or refusal to act, the petition must be filed within 6 months of the expiration of the time within which the action should reasonably have occurred.

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

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

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

What must happen if a long-term care applicant declines the nonforfeiture benefit offer, under 24-A M.R.S. s 5077(1)?

1. The policy must carry a 10-day notice before any lapse.
2. The insurer must provide a contingent benefit upon lapse. ✓
3. The applicant must sign a waiver filed with the bureau.
4. The premium must be reduced by the value of the benefit.

Why: 24-A M.R.S. s 5077(1) requires an offer of a nonforfeiture benefit. If declined, the insurer must provide a contingent benefit upon lapse, available for a period after a substantial premium increase.

On which ground must the superintendent disapprove a filed preferred provider arrangement, under 24-A M.R.S. s 2673-A(1)?

1. It pays preferred providers less than their billed charges.
2. It uses more than one tier of preferred providers in a plan.
3. It covers a smaller area than the whole of the State.
4. It unreasonably restricts access to health care services. ✓

Why: 24-A M.R.S. s 2673-A(1) requires disapproval of an arrangement with unjust, unfair or inequitable provisions, one that unreasonably restricts access and availability of care, or one that fails to comply with ch. 32, ch. 56-A or the rules.

In a variable life insurance policy, the investment risk on the cash value is borne by:

1. The producer who originally sold the policy contract
2. The state insurance guaranty association at all times
3. The insurance company, which guarantees the cash value in full
4. The policyowner ✓

Why: In variable life the cash value is held in separate accounts the owner directs, so the policyowner assumes the investment risk (a minimum death benefit is usually guaranteed).

The Medicare Initial Enrollment Period (IEP) is:

1. A single day, falling exactly on the person's 65th birthday
2. An annual period every December for all current beneficiaries
3. A 7-month window around the month a person turns 65 ✓
4. A 60-day window that opens only after retirement from work

Why: The IEP spans 7 months: the 3 months before, the month of, and the 3 months after the 65th-birthday month.

A self-funded employer buys aggregate stop-loss insurance. It pays once total claims for the year exceed a set amount, protecting the employer from:

1. A single catastrophic individual claim only
2. The administrative fees of the plan
3. Higher-than-expected total claims ✓
4. The cost of routine preventive care

Why: Aggregate stop-loss caps the employer's exposure to total claims exceeding an attachment point; specific stop-loss covers individual large claims.

Annuitization differs from a systematic withdrawal because annuitization:

1. Always returns the full account value in one immediate lump sum
2. Lets the owner take any amount at any time with no schedule at all
3. Permanently freezes the account so no further access is possible
4. Converts the account into a guaranteed stream of income payments ✓

Why: Annuitization exchanges the accumulated value for a guaranteed income stream; systematic withdrawal keeps the account and takes flexible amounts.

What does 24-A M.R.S. s 2157 prohibit?

1. Making, publishing or circulating any oral or written statement, pamphlet or article which is false, or maliciously critical of an insurer, and which is calculated to injure a person in the business of insurance. ✓
2. Making any statement critical of a competing insurer, whether or not the statement is false or malicious, the section protecting insurers from adverse comment by those engaged in the same business in this State.
3. Publishing a false statement about an insurer's financial condition, statements about other aspects of an insurer's business falling under section 2153 as misrepresentations rather than under this section as defamation.
4. Making a false statement about an insurer where the maker knew it to be false, a statement made honestly but carelessly falling outside the section because no intention to injure can be inferred from carelessness alone.

Why: 24-A M.R.S. s 2157, DEFAMATION: no person shall make, publish, disseminate or circulate, DIRECTLY OR INDIRECTLY, OR AID, ABET OR ENCOURAGE the making, publishing, disseminating or circulating of, any ORAL OR WRITTEN STATEMENT or any PAMPHLET, CIRCULAR, ARTICLE OR LITERATURE WHICH IS FALSE, OR MALICIOUSLY CRITICAL OF OR DEROGATORY TO AN INSURER, or an organization PROPOSING to become an insurer, AND WHICH IS CALCULATED TO INJURE any person engaged or proposing to engage in the business of insurance. False OR maliciously critical - either will do.

What does 24-A M.R.S. s 2735 provide where an age limit date falls in a period for which premium was accepted?

1. Cover ends on the age limit date and the premium for the rest of the period is refunded to the insured.
2. Cover continues for 31 days after the age limit date only, whatever period the accepted premium covers.
3. Cover continues for the whole of the next policy year, the insurer having waived the age limit entirely.
4. Cover continues, subject to termination rights, to the end of the period for which premium was paid. ✓

Why: 24-A M.R.S. s 2735 provides that if an age limit date falls within a period for which premium is accepted, or premium is accepted after it, coverage continues, subject to any right of termination, until the end of the period for which premium was accepted; where a misstated age means cover never applied, liability is limited to a refund of premium for the period not covered.

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

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

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

An unlicensed business entity receives compensation for insurance. What does 24-A M.R.S. s 1450 say?

1. An unlicensed business entity may receive compensation where each individual acting in its name is licensed, the entity licence going to the use of the entity's name rather than to the receipt of money for insurance.
2. An unlicensed person or business entity may not receive or accept any commission or compensation for insurance unless licensed pursuant to chapter 16. ✓
3. An unlicensed business entity may receive compensation where the payment is made by a licensed producer rather than directly by an insurer, the prohibition in the section being directed at insurers and their payments.
4. The prohibition applies only to a natural person, a business entity being dealt with under section 1413, which requires an entity licence in order to authorize individual licensees to act on the entity's behalf.

Why: 24-A M.R.S. s 1450(1), closing sentence: AN UNLICENSED PERSON OR BUSINESS ENTITY MAY NOT RECEIVE OR ACCEPT ANY COMMISSION OR COMPENSATION FOR INSURANCE UNLESS LICENSED PURSUANT TO THIS CHAPTER. The entity is named expressly, and s 1413(1) separately confirms that a business entity has no authority to act on its own without an individual licensee.

Which term life policy has a face amount that declines over the term and is commonly used to cover a mortgage balance?

1. Increasing term
2. Decreasing term ✓
3. Level term
4. Renewable term

Why: Decreasing term's face amount drops over time (premium usually level), matching a declining debt such as a mortgage.

A flexible spending account (FSA) is characterized by which feature?

1. Generally 'use it or lose it' — unused funds may be forfeited each year ✓
2. Full portability, moving with the employee from job to job for life
3. Eligibility only for those enrolled in a high-deductible health plan
4. Tax-free growth of invested balances over the employee's career

Why: An FSA is employer-established, funded with pre-tax salary deferrals, and is generally use-it-or-lose-it within the plan year (limited carryover/grace).

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.

What does 24-A M.R.S. s 404 require before a person may act as an insurer or an insurer may transact insurance in Maine?

1. A certificate of authority issued by the superintendent, except where the insurer transacts business in this State only by mail from an office outside the State and does not maintain any personnel or facility within it.
2. A certificate of authority issued by the superintendent under this Title and then in full force and effect, the prohibition reaching transactions conducted by mail or otherwise and yielding only to transactions the Title expressly provides for otherwise. ✓
3. Either a certificate of authority issued by the superintendent or a current certificate of authority from the insurer's state of domicile, the latter being recognised in this State on the principle of reciprocity.
4. A certificate of authority issued by the superintendent, unless the insurance is placed through a licensed surplus lines producer, in which case no certificate of authority of any kind is required of the insurer.

Why: 24-A M.R.S. s 404(1): NO PERSON SHALL ACT AS AN INSURER AND NO INSURER SHALL TRANSACT INSURANCE IN THIS STATE BY MAIL OR OTHERWISE unless authorized by a certificate of authority issued by the superintendent AND THEN IN FULL FORCE AND EFFECT, except as to transactions expressly otherwise provided in the Title. Mail is caught, not excepted.

What conversion right follows termination of employment under 24-A M.R.S. s 2621?

1. An individual policy with the same disability benefits as the group, if applied and paid for within 60 days.
2. An individual policy without evidence or disability benefits, applied and paid for in 31 days. ✓
3. An individual term policy only, on evidence of insurability, if applied and paid for within 31 days.
4. A continuation of the group cover itself for 18 months, at 102% of the group premium rate.

Why: 24-A M.R.S. s 2621 entitles a person whose cover ceases on termination of employment or membership to an individual life policy, without evidence of insurability and without disability or supplementary benefits, if application is made and the first premium paid within 31 days, on any customary form (the group policy may exclude term).

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 time limits apply to proof of loss under 24-A M.R.S. s 2711?

1. 90 days after the loss or end of the liability period; no later than 1 year after, save legal incapacity. ✓
2. 60 days after the loss or end of the liability period; no later than 2 years after, save legal incapacity.
3. 90 days after the loss, a late proof invalidating the claim whatever the reason may have been for the delay.
4. 1 year after the loss in every case, no shorter period being allowed in a Maine policy.

Why: 24-A M.R.S. s 2711 requires written proof of loss within 90 days after the end of the period of liability (periodic payments) or after the date of loss (other loss); late proof is not fatal if it was not reasonably possible and is given as soon as reasonably possible, and in no event, save absence of legal capacity, later than one year from the time otherwise required.

What training must an individual complete before selling long-term care insurance in Maine, under 24-A M.R.S. s 5081(1)?

1. A 4-hour one-time course, then 8 more hours every 24 months.
2. An 8-hour one-time course, then 4 hours a year.
3. An 8-hour one-time course, then 4 hours every 24 months. ✓
4. A 16-hour one-time course, then 8 hours every 2 years.

Why: 24-A M.R.S. s 5081(1) requires a life or health licence, a one-time course of at least 8 hours, and ongoing training of at least 4 hours every 24 months. Training in another state satisfies the requirement.

Self-insurance (retention) is a risk-handling method in which a business:

1. Shares the risk with other businesses by contract
2. Sets aside its own funds to pay for potential losses ✓
3. Transfers the risk entirely to an insurer
4. Avoids the activity that creates the risk

Why: Retention/self-insurance means bearing the loss with one's own funds; transfer (insurance), avoidance, and sharing are the alternatives.

Which losses does a reinstated individual health policy cover under 24-A M.R.S. s 2708?

1. Accidents after reinstatement, and sickness beginning more than 30 days after it.
2. Accidents after reinstatement, and sickness beginning more than 10 days after it. ✓
3. Any accident or sickness, whenever it began, once the renewal premium has been accepted.
4. Sickness after reinstatement, and accidents occurring more than 10 days after it.

Why: 24-A M.R.S. s 2708 provides that the reinstated policy covers only loss from accidental injury sustained after the date of reinstatement and loss due to sickness beginning more than 10 days after that date.

An owner assigned a policy to a lender as collateral for a $30,000 loan. At the insured's death (face $200,000, loan still $30,000), the lender receives:

1. $100,000, split evenly with the beneficiary
2. The full $200,000 death benefit
3. Nothing, because collateral assignments end at death
4. $30,000, with the remaining $170,000 to the beneficiary ✓

Why: Under a collateral assignment, the lender is paid only the amount of the debt ($30,000); the balance goes to the named beneficiary.

What fraud warning does 24-A M.R.S. s 2186 require, and on what documents?

1. A statement printed on all applications for insurance warning that a false statement may void the contract, claim forms being outside the requirement because the contract is already in force when a claim is made under it.
2. A statement, or one substantially similar, permanently affixed to all applications and claim forms used by insurers in this State whatever the form of transmission: that it is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding it, and that penalties may include imprisonment, fines or a denial of insurance benefits. ✓
3. A statement read aloud to the applicant by the producer at the time the application is taken, and recorded in the producer's file, the warning being a spoken one so that the applicant cannot say it was overlooked.
4. A statement in a form prescribed by rule of the superintendent, which each insurer must file for approval before use and may vary to suit the line of insurance and the manner in which the form is transmitted.

Why: 24-A M.R.S. s 2186(3)(A): ALL APPLICATIONS AND CLAIM FORMS used by insurers in this State, REGARDLESS OF THE FORM OF TRANSMISSION, must contain the statement or a SUBSTANTIALLY SIMILAR one, PERMANENTLY AFFIXED. s 2186(3)(B): THE LACK OR OMISSION OF THE STATEMENT DOES NOT CONSTITUTE A DEFENSE in any criminal prosecution or civil action for a fraudulent insurance act. s 2186(3)(C): the subsection APPLIES TO ALL INSURERS EXCEPT REINSURERS.

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.

Life insurance is generally a 'valued' (not indemnity) contract because it pays:

1. A benefit reduced by other coverage in force
2. Nothing unless the beneficiary documents expenses
3. Only the actual financial loss the family proves
4. A stated face amount, not the measured economic loss ✓

Why: Life insurance pays the agreed face amount regardless of proven loss; medical expense insurance instead indemnifies actual costs.

A pure (straight) life annuity payout option provides:

1. Equal payments split between the annuitant and a surviving spouse
2. A guaranteed refund of all unused premiums to a named beneficiary
3. The largest periodic payment, but nothing to anyone after the annuitant dies ✓
4. Payments for a fixed number of years regardless of the annuitant's life

Why: Pure life pays the highest income because payments stop at death with no refund or beneficiary payment; refund and period-certain options pay less but protect a beneficiary.

Who may convert when the group policy itself terminates, and how may the amount be capped, under 24-A M.R.S. s 2622?

1. Persons insured for at least 3 years; the policy may cap it at the smaller of the ceasing cover less new group cover and $2,000.
2. Every person insured on the date of termination, whatever the period of cover, with no cap on the amount at all.
3. Persons insured for at least 5 years; the amount may never be less than twice the cover ceasing on termination.
4. Persons insured for at least 5 years; the policy may cap it at the smaller of the ceasing cover less new group cover and $10,000. ✓

Why: 24-A M.R.S. s 2622 gives persons insured for at least 5 years before the group policy terminates, or is amended to end a class's cover, a conversion right on the terms of s 2621, and allows the policy to cap the individual policy at the smaller of the ceasing protection less other group cover obtained within 31 days and $10,000.

Under 24-A M.R.S. s 2814, where a blanket health benefit is due to a minor, to whom may the insurer pay it?

1. The superintendent, to hold on trust until the minor reaches age 18.
2. The school or organization that holds the blanket policy.
3. The minor's parent or guardian, or the person actually supporting the minor. ✓
4. The probate court of the county where the minor ordinarily resides.

Why: 24-A M.R.S. s 2814 makes blanket benefits payable to the insured, a designated beneficiary or the estate, but where the insured is a minor they may be paid to the parent, guardian or other person actually supporting the minor, or to a person chiefly dependent on the minor.

What does 24-A M.R.S. s 2164-D say about compelling insureds to sue?

1. It is an unfair claims practice to compel insureds to sue to recover amounts due by offering substantially less than the amounts ultimately recovered, with such frequency as to indicate a general business practice. ✓
2. It is an unfair claims practice to offer less than the amount claimed under a policy, the insurer being required to pay the sum demanded or to deny the claim outright and give written reasons for the denial.
3. It is an unfair claims practice to compel an insured to institute suit, whether or not the insurer has any basis for contesting liability, the section requiring every disputed claim to be referred to arbitration instead.
4. It is an unfair claims practice to compel insureds to institute suits by offering substantially less than the amounts ultimately recovered, a single instance being enough because each insured is compelled to sue separately.

Why: 24-A M.R.S. s 2164-D(4): it is an unfair claims practice TO COMPEL INSUREDS TO INSTITUTE SUITS TO RECOVER AMOUNTS DUE under its policies BY OFFERING SUBSTANTIALLY LESS THAN THE AMOUNTS ULTIMATELY RECOVERED IN SUITS BROUGHT BY THEM WITH SUCH FREQUENCY AS TO INDICATE A GENERAL BUSINESS PRACTICE; EXCEPT THAT THIS PROVISION DOES NOT APPLY WHEN THE INSURER HAS A REASONABLE BASIS TO CONTEST LIABILITY OR DISPUTE THE AMOUNT of any damages or the extent of any injuries claimed.

What does 24-A M.R.S. s 2153 prohibit?

1. Making any statement about a policy that turns out to be inaccurate, whether or not the maker knew it to be so, the section imposing strict liability for the accuracy of every representation made about a contract of insurance.
2. Making, issuing or circulating any estimate, illustration, circular or statement misrepresenting the terms, benefits, advantages, dividends or surplus of a policy, or using a name or title misrepresenting its true nature. ✓
3. Advertising insurance in a newspaper, magazine, circular or broadcast in a manner that is untrue, deceptive or misleading, which is the misrepresentation this chapter is principally directed against in the marketing of insurance.
4. Misrepresenting the terms of a policy for the purpose of inducing a policyholder to lapse, forfeit, surrender, exchange or convert it, which is the practice the section is aimed at and by which it is generally known.

Why: 24-A M.R.S. s 2153, MISREPRESENTATION; FALSE ADVERTISING OF POLICIES, reaches any ESTIMATE, ILLUSTRATION, CIRCULAR OR STATEMENT misrepresenting the TERMS, BENEFITS OR ADVANTAGES or the DIVIDENDS OR SHARE OF SURPLUS; any FALSE OR MISLEADING STATEMENT as to dividends or surplus PREVIOUSLY PAID on similar policies; any misrepresentation as to an insurer's FINANCIAL CONDITION or a life insurer's LEGAL RESERVE SYSTEM; and USING ANY NAME OR TITLE ON ANY POLICY MISREPRESENTING ITS TRUE NATURE. The third option is s 2154 and the fourth is s 2155.

Under 24-A M.R.S. s 2833-B, a group policy that covers dependent children must offer that cover, at the parent's option, until the child reaches what age?

1. 21.
2. 19.
3. 26. ✓
4. 25.

Why: 24-A M.R.S. s 2833-B(2) requires a group policy offering dependent child coverage to offer it, at the parent's option, until the child attains 26 years of age, with disabled children covered under s 2833-C.