Montana Life & Disability (Accident & Health) Insurance License, Practice Exams

Mental health parity requires a group plan that covers mental health to apply treatment and financial limits that are:

1. Applied only to inpatient psychiatric stays, not outpatient therapy
2. Capped at a federal maximum of 20 outpatient visits each plan year
3. No more restrictive than those for medical/surgical benefits ✓
4. Stricter than the medical/surgical limits, to control behavioral costs

Why: Parity requires mental health/substance use cost-sharing and limits be no more restrictive than comparable medical/surgical benefits.

A producer tells a client false negative information about a competing insurer to win the sale. This is:

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

Why: Making false, maligning statements about another insurer is defamation, an unfair trade practice.

An individual asks a Montana insurance institution to correct recorded personal information. What are the institution's choices, and by when, under MCA 33-19-302?

1. Within 30 business days it must correct the information if the individual produces documentary evidence that it is wrong, and otherwise take no action, the individual's remedy being an application to the commissioner for an order that the information be corrected.
2. Within 21 business days it must either correct the information or refer the dispute to the commissioner for determination, the commissioner's decision being final and binding on both the institution and the individual who made the request for the correction.
3. Within 30 calendar days it must correct, amend or delete the information as requested; the chapter gives the institution no power to refuse, the accuracy of its records being a matter on which the individual's own account is taken to be conclusive against the institution.
4. Within 30 business days it must either correct, amend or delete the portion in dispute, or notify the individual of its refusal, the reasons, and the individual's right to file a statement. ✓

Why: MCA 33-19-302(1): WITHIN 30 BUSINESS DAYS from receipt of a written request to correct, amend or delete recorded personal information, the institution, producer or insurance-support organization SHALL EITHER (a) CORRECT, AMEND, OR DELETE THE PORTION IN DISPUTE; or (b) NOTIFY THE INDIVIDUAL OF ITS REFUSAL, THE REASONS FOR THE REFUSAL, AND THE INDIVIDUAL'S RIGHT TO FILE A STATEMENT under subsection (3). If it does correct, (2) it must NOTIFY THE INDIVIDUAL IN WRITING and furnish the correction to ANY PERSON SPECIFICALLY DESIGNATED BY THE INDIVIDUAL who may have received the information WITHIN THE PRECEDING 2 YEARS; to ANY INSURANCE-SUPPORT ORGANIZATION whose primary source is insurance institutions that has SYSTEMATICALLY RECEIVED the information WITHIN THE PRECEDING 7 YEARS; and to ANY INSURANCE-SUPPORT ORGANIZATION THAT FURNISHED the information. (7): INSURANCE-SUPPORT ORGANIZATION here DOES NOT INCLUDE A CONSUMER REPORTING AGENCY.

What remedies does the Montana privacy chapter give an individual, and within what time?

1. Damages, including exemplary damages, for any violation of the chapter, together with costs and attorney fees as of right to a successful plaintiff, the action to be brought within three years of the violation or within one year of its discovery, whichever is the later.
2. None. The chapter is enforced by the commissioner alone, by examination and by the civil penalty in 33-1-317; an individual aggrieved by a breach of it may complain to the commissioner but has no remedy in law or in equity against the institution concerned.
3. For a failure to comply with 33-19-301, 33-19-302 or 33-19-303, equitable relief. For a disclosure breaching 33-19-306 or 33-19-307, damages capped at actual damages. Costs and reasonable attorney fees may go to the prevailing party, within 2 years of discovery. ✓
4. Equitable relief for any violation of the chapter and damages for a wrongful disclosure, with no statutory cap on the damages recoverable and no limitation period, the general limitation provisions of Title 27 applying instead to an action brought under the chapter.

Why: MCA 33-19-407(1): if an institution, producer or insurance-support organization FAILS TO COMPLY WITH 33-19-301, 33-19-302, OR 33-19-303, ANY PERSON WHOSE RIGHTS ARE VIOLATED MAY APPLY TO THE DISTRICT COURT of this State or any other court of competent jurisdiction FOR APPROPRIATE EQUITABLE RELIEF. (2) One that DISCLOSES INFORMATION IN VIOLATION OF 33-19-306 OR 33-19-307 IS LIABLE FOR DAMAGES SUSTAINED by the individual, but AN INDIVIDUAL IS NOT ENTITLED TO A MONETARY AWARD THAT EXCEEDS THE ACTUAL DAMAGES SUSTAINED. (3) THE COURT MAY AWARD THE COST OF THE ACTION AND REASONABLE ATTORNEY FEES TO THE PREVAILING PARTY. (4) AN ACTION MUST BE BROUGHT WITHIN 2 YEARS FROM THE DATE THE ALLEGED VIOLATION IS OR SHOULD HAVE BEEN DISCOVERED. (5) EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION, THERE IS NO REMEDY OR RECOVERY AVAILABLE TO INDIVIDUALS, IN LAW OR IN EQUITY, for a violation of any provision of the chapter.

State guaranty association protection may NOT be:

1. Used by producers as a selling point in advertising ✓
2. Subject to statutory coverage limits
3. Available to policyholders of an insolvent insurer
4. Funded by assessments on member insurers

Why: Using guaranty fund protection to induce a sale is prohibited; the fund exists to protect policyholders of insolvent insurers, within limits.

What counts as 'personal information' for the purposes of the Montana insurance computer security breach section?

1. Any information about an identified or identifiable natural person held by a licensee, including the person's name and address standing alone, the section adopting the broadest available definition so that no item of information falls outside the notice requirement.
2. An individual's first name or initial and last name in combination with any of: Social Security number; driver's license, state or tribal identification card number; account or card number with security code; medical record information; a taxpayer identification number; or an IRS identity protection number, unencrypted. ✓
3. A social security number, a driver's licence number or a financial account number, each standing alone and whether or not accompanied by the individual's name, together with any medical record information about the individual held in the licensee's computer systems.
4. An individual's name in combination with a social security number or a financial account number only; medical record information and taxpayer identification numbers are dealt with under the federal privacy regulations and are outside the definition in this section.

Why: MCA 33-19-321(6)(b)(i): PERSONAL INFORMATION means AN INDIVIDUAL'S FIRST NAME OR FIRST INITIAL AND LAST NAME IN COMBINATION WITH ANY ONE OR MORE OF THE FOLLOWING DATA ELEMENTS, WHEN THE NAME AND THE DATA ELEMENTS ARE NOT ENCRYPTED - (A) SOCIAL SECURITY NUMBER; (B) DRIVER'S LICENSE NUMBER, STATE IDENTIFICATION CARD NUMBER, OR TRIBAL IDENTIFICATION CARD NUMBER; (C) ACCOUNT NUMBER OR CREDIT OR DEBIT CARD NUMBER, IN COMBINATION WITH ANY REQUIRED SECURITY CODE, ACCESS CODE, OR PASSWORD THAT WOULD PERMIT ACCESS TO AN INDIVIDUAL'S FINANCIAL ACCOUNT; (D) MEDICAL RECORD INFORMATION; (E) A TAXPAYER IDENTIFICATION NUMBER; or (F) AN IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBER ISSUED BY THE UNITED STATES INTERNAL REVENUE SERVICE. (ii) It DOES NOT INCLUDE PUBLICLY AVAILABLE INFORMATION LAWFULLY MADE AVAILABLE TO THE GENERAL PUBLIC FROM FEDERAL, STATE, OR LOCAL GOVERNMENT RECORDS. (6)(a) BREACH OF THE SECURITY OF THE SYSTEM means UNAUTHORIZED ACQUISITION OF COMPUTERIZED DATA THAT COMPROMISES THE SECURITY, CONFIDENTIALITY, OR INTEGRITY of personal information.

To what do MCA 33-1-501 and 33-1-502 NOT apply, and what special rule governs group certificates issued outside Montana?

1. Not to reinsurance; to policies not issued for delivery in Montana; or to ocean marine and foreign trade insurances. But group certificates delivered in Montana for group policies effectuated and delivered outside Montana but covering Montana residents must be filed here. ✓
2. They do not apply to reinsurance or to surplus lines insurance, and a group certificate issued outside Montana is outside the section altogether because the master policy on which it depends was neither delivered nor issued for delivery within this State at any time.
3. They do not apply to ocean marine and foreign trade insurances, which are the only exception; reinsurance contracts must be filed like any other, and a group certificate covering Montana residents must be approved before issue whatever Montana law may say about its provisions.
4. They do not apply to reinsurance, to policies not issued for delivery here, or to ocean marine and foreign trade insurances, and group certificates issued outside Montana are governed by the law of the state in which the master policy was effectuated and delivered.

Why: MCA 33-1-501(9): section 33-1-502 and this section DO NOT APPLY TO (a) REINSURANCE; (b) POLICIES OR CONTRACTS NOT ISSUED FOR DELIVERY IN MONTANA OR DELIVERED IN MONTANA, EXCEPT AS PROVIDED IN SUBSECTION (8); (c) OCEAN MARINE AND FOREIGN TRADE INSURANCES. (10): EXCEPT AS PROVIDED IN CHAPTER 21, GROUP CERTIFICATES THAT ARE DELIVERED OR ISSUED FOR DELIVERY IN MONTANA FOR GROUP INSURANCE POLICIES EFFECTUATED AND DELIVERED OUTSIDE MONTANA BUT COVERING PERSONS RESIDENT IN MONTANA MUST BE FILED WITH THE COMMISSIONER. THE CERTIFICATES MUST MEET THE MINIMUM PROVISIONS MANDATED BY MONTANA IF MONTANA LAW PREVAILS OVER CONFLICTING PROVISIONS OF OTHER STATE LAW.

Which permanent policy features flexible premiums and an adjustable death benefit?

1. Level term
2. Universal life ✓
3. Whole life
4. Single-premium whole life

Why: Universal life allows the owner to vary premium payments and adjust the death benefit (subject to underwriting); cash value earns a declared interest rate.

Who may be treated as an employee under 33-20-1101(2), and who may not?

1. Employees of subsidiaries and commonly controlled affiliates and retired employees may be; a proprietor or partner may never be, and a corporate director may be whatever services that person performs.
2. Only current employees of the employer itself may be; retired employees, employees of affiliates and proprietors or partners fall outside the term in every case under the subsection.
3. Any person the employer designates in writing may be, including independent contractors and directors, provided the policy lists them by name when it is issued to the employer.
4. Employees of subsidiaries and affiliates under common control, proprietors or partners and retired employees may be; a director may not unless also a bona fide employee in other work. ✓

Why: 33-20-1101(2)(a) allows the policy to include employees of subsidiaries and of affiliated corporations, proprietors or partnerships under common control, the individual proprietor or partners, and retired employees. 33-20-1101(2)(b) excludes a corporate director unless otherwise eligible as a bona fide employee performing services other than the usual duties of a director, and (2)(c) requires a proprietor or partner to be actively engaged in the business for a substantial part of working hours.

How are statements in the application for a fraternal benefit contract treated under 33-7-523(1)?

1. As warranties, any untrue statement voiding the certificate from its issue.
2. As representations, unless the member signs a waiver making them warranties.
3. As representations and not warranties, any waiver of the rule being void. ✓
4. As warranties for the first two years, then as representations thereafter.

Why: 33-7-523(1) requires the certificate to state what constitutes the benefit contract, a copy of the application and any declaration of insurability being endorsed on or attached to it, and provides that all statements on the application are representations and not warranties, any waiver of the provision being void.

What grace period does 33-20-104 require?

1. Thirty days in every case, the section drawing no distinction between an ordinary policy and an industrial policy whose premiums are payable more frequently than monthly.
2. Thirty-one days, or at the insurer's option one month of not less than thirty-one days, or four weeks for an industrial policy whose premiums are payable more frequently than monthly.
3. Thirty days, or at the insurer's option one calendar month however short, or four weeks for an industrial policy whose premiums are payable more frequently than monthly under the terms of that policy.
4. Thirty days, or at the insurer's option one month of not less than thirty days, or four weeks for an industrial policy whose premiums are payable more frequently than monthly. ✓

Why: 33-20-104 requires a grace period of thirty days or, at the insurer's option, of one month of not less than thirty days, or of four weeks in the case of an industrial life policy whose premiums are payable more frequently than monthly. The policy continues in full force during the grace period, but if a claim arises during it, any premium due or overdue may be deducted from the policy proceeds.

When must the association's approved summary document reach the policyowner, under 33-10-210(2)?

1. Within 30 days after delivery of the policy; failure to receive it makes the policy voidable at the owner's option.
2. Only when the insurer becomes impaired or insolvent, as part of the notice of the association's liability.
3. Before the application is taken; failure to deliver it entitles the owner to double the statutory limits.
4. Before or at delivery of the policy; not receiving it gives no greater rights than the part confers. ✓

Why: 33-10-210(2) provides that 60 days after approval of the association's summary document a member insurer may not deliver a covered policy unless the document is delivered to the owner before or at the time of delivery of the policy, and that failure to receive it gives no greater rights than those stated in the part. Under 33-10-210(3) it must carry a clear and conspicuous disclaimer.

What may never be excluded as a preexisting condition in group coverage under 33-22-514(2) and (3)?

1. Any condition diagnosed within the 6 months before the enrollment date of coverage.
2. Pregnancy only, genetic information being excludable whether or not diagnosed.
3. Mental illness, and any condition for which prescription drugs were ever taken.
4. Pregnancy, and genetic information without a diagnosis of the related condition. ✓

Why: 33-22-514(2) provides that genetic information may not be treated as a preexisting condition in the absence of a diagnosis of the condition related to it, and 33-22-514(3) that pregnancy may not be excluded as a preexisting condition.

May the creditor act as the insurer's claim representative under 33-21-105(3)?

1. Yes, where the creditor is also licensed as an insurance producer and the insurer has given it written authority to adjust claims.
2. No, and no group policyholder may ever draw drafts or checks in payment of claims due to it, whatever arrangement the insurer makes with it.
3. Yes, in every case, the creditor being the party best placed to settle claims promptly as the claim is made on the debt it is owed.
4. No, except that a group policyholder may by arrangement draw drafts or checks for claims due to it, subject to the insurer's audit and review. ✓

Why: 33-21-105(3) forbids any plan under which a person other than the insurer or its designated claim representative settles or adjusts claims, and provides that the creditor may not be designated as claim representative, except that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to it, subject to audit and review by the insurer.

What may the commissioner do if an approved continuing education activity is not being operated properly, under MCA 33-17-1204?

1. Revoke approval, place the activity under probationary approval, or issue a cease and desist order under 33-1-318 - and in conducting the periodic review the commissioner may exercise any investigative power provided for in 33-1-311 or 33-1-315. ✓
2. Refer the matter to the attorney general, the commissioner's own powers being confined to the initial approval of a course and the department having no continuing supervisory jurisdiction over a provider once approval has been granted to it in this State under this part as enacted.
3. Withdraw approval only, the probationary and cease and desist remedies being available against licensees rather than against course providers, who are not licensed by the commissioner and are therefore outside the enforcement provisions of this chapter of the code here.
4. Impose a civil penalty of up to $50,000 on the provider and require it to refund the fees paid by licensees who attended the activity, the section providing a monetary remedy rather than any power to revoke or restrict the approval previously given in this State under this part.

Why: MCA 33-17-1204: (3) in conducting PERIODIC REVIEW of course content, instructors, material, instructional format or a sponsoring organization, THE COMMISSIONER MAY EXERCISE ANY INVESTIGATIVE POWER OF THE COMMISSIONER PROVIDED FOR IN 33-1-311 OR 33-1-315. (4) IF AFTER REVIEW OR INVESTIGATION THE COMMISSIONER DETERMINES AN APPROVED ACTIVITY IS NOT BEING OPERATED IN COMPLIANCE WITH THE STANDARDS, THE COMMISSIONER MAY REVOKE APPROVAL, PLACE THE ACTIVITY UNDER PROBATIONARY APPROVAL, OR ISSUE A CEASE AND DESIST ORDER UNDER 33-1-318. (2) allows the commissioner to CONTRACT with a person to review and recommend courses.

What does 33-22-603 dispense with for persons covered under a blanket policy?

1. Any proof of loss, benefits being paid on the notice of claim.
2. Filing of the policy form with the commissioner under 33-1-501.
3. An individual application, and a certificate for each person. ✓
4. The entire contract provision required of other disability forms.

Why: 33-22-603 provides that an individual application is not required from a person covered under a blanket disability policy, and that the insurer need not furnish each person a certificate. The policy form itself must still be filed under 33-22-602.

To whom must a life or disability policy procured by or for a minor be payable, under 33-15-103(4)?

1. The minor, the minor's estate, or a person with an insurable interest in the minor's life. ✓
2. The minor's parents only, jointly, whatever their own interest in the life of the minor concerned.
3. Any person the minor names, whether or not that person has any insurable interest.
4. The minor's guardian only, as trustee for the minor until the minor comes of age.

Why: 33-15-103(4) requires any annuity contract or policy of life or disability insurance procured by or for a minor under 33-15-103(2) to be payable either to the minor, to the minor's estate, or to a person having an insurable interest in the life of the minor under 33-15-201.

What choice does a debtor have under 33-21-104 when credit insurance is required as additional security?

1. To procure it only through the insurer the creditor designates, the creditor being free to refuse existing policies that the debtor owns or controls.
2. To furnish it through existing policies only where the creditor consents in writing and the commissioner has approved the substitution in advance.
3. To furnish the required amount through existing policies the debtor owns or controls, or to procure it through any insurer authorized in Montana. ✓
4. None; the creditor selects the insurer and the debtor may only decline the credit if the premium charged is more than the rate the insurer has filed.

Why: 33-21-104 gives the debtor, on request to the creditor, the option of furnishing the required amount of insurance through existing policies owned or controlled by the debtor or of procuring and furnishing it through an insurer authorized to transact insurance within Montana.

At what level must mental illness and substance use disorders be covered under 33-22-703(1)?

1. No less favorable than the level provided for physical illness generally. ✓
2. At least half the level provided for physical illness generally.
3. At the level the commissioner sets by rule for each separate disorder.
4. At any level the insurer chooses, provided the limits are disclosed.

Why: 33-22-703(1) requires a health insurance issuer to provide for the necessary care and treatment of mental illness, severe mental illness and substance use disorders at a level of benefits no less favorable than that provided for physical illness generally, including inpatient, outpatient, emergency care and prescription drugs, 'no less favorable' meaning federal parity.

The same producer instead lets the policyholder run 90 days past the due date, again with nothing signed. What does MCA 33-18-213(2) allow?

1. Interest may be charged at not more than one and one-half per cent a month on the unpaid balance from the date the premium originally fell due, the whole of the 90 days bearing interest once the arrangement has run past the 30-day mark the subsection fixes for it.
2. Interest may be charged for credit extended after 30 days at a rate not more than 1 1/2% A month on the unpaid balance - so the first 30 days carry no interest and the charge runs only on what is extended beyond them. ✓
3. Interest may be charged at the legal rate authorized in 31-1-107 on the unpaid balance from the thirty-first day, the one and one-half per cent ceiling applying only where the extension of credit has been reduced to a written instrument signed by the policyholder.
4. No interest may be charged at all, because credit extended for more than 30 days must be evidenced by a written instrument signed by the policyholder, and a producer who extends credit beyond 30 days without one forfeits any right to interest on the unpaid balance.

Why: MCA 33-18-213(2): IF CREDIT IS EXTENDED TO A POLICYHOLDER FOR MORE THAN 30 DAYS FROM THE DATE THE PREMIUM IS DUE AND THE CREDIT IS NOT EVIDENCED BY A WRITTEN INSTRUMENT, INTEREST MAY BE CHARGED FOR CREDIT EXTENDED AFTER 30 DAYS AT A RATE NOT MORE THAN 1 1/2% A MONTH ON THE UNPAID BALANCE. The words AFTER 30 DAYS matter: the interest-free first month survives.

A Medicare Special Enrollment Period (SEP) without penalty is available to a person who:

1. Simply forgot to sign up during their initial enrollment window
2. Has decided to drop Medicare entirely and rely on Medicaid
3. Delayed Part B because of active employer group coverage past age 65 ✓
4. Wishes to switch from one Medigap letter plan to a different one

Why: Those who kept employer group coverage (their own or a spouse's) past 65 may enroll later during a SEP without a late penalty.

When must the commissioner hold a hearing on a written demand under MCA 33-1-701?

1. The commissioner must hold a hearing whenever a person demands one in writing, the demand needing to state no grounds, and the hearing being set for a date not more than 30 days after the demand is received at the commissioner's office.
2. The commissioner may hold hearings at discretion, and a written demand that is not answered within 30 days is considered granted, the section putting the risk of inaction on the commissioner rather than on the person who asked for the hearing.
3. The commissioner may hold hearings for any purpose within the scope of the code; a written demand must specify the grounds relied on for the relief sought; and if no order granting the request is issued within 30 days of receiving it, the hearing is considered refused. ✓
4. The commissioner must hold a hearing before taking any action affecting a licensee, and a written demand is unnecessary, the right to be heard arising automatically whenever the commissioner proposes to act against a person under this code.

Why: MCA 33-1-701: (1) THE COMMISSIONER MAY HOLD HEARINGS FOR ANY PURPOSE WITHIN THE SCOPE OF THIS CODE CONSIDERED NECESSARY. (2) A PERSON MAY PROVIDE THE COMMISSIONER WITH A WRITTEN DEMAND FOR A HEARING, WHICH MUST SPECIFY THE GROUNDS RELIED UPON as a basis for the relief sought. IF THE COMMISSIONER DOES NOT ISSUE AN ORDER GRANTING THE REQUEST WITHIN 30 DAYS OF RECEIVING IT, THE HEARING IS CONSIDERED REFUSED. (3) ALL HEARINGS MUST BE CONDUCTED PURSUANT TO THE MONTANA ADMINISTRATIVE PROCEDURE ACT, Title 2 chapter 4 part 6.

What must a continuing education PROVIDER file under MCA 33-17-1205(4), and what follows a failure?

1. Quarterly, a return of the fees collected from licensees attending its courses, and on failure the commissioner may suspend the provider's registration until the outstanding returns have been filed and any fee due to the department has been paid in full in this State.
2. Annually, a list of the courses it offered during the preceding year, the names of individuals attending being confidential and not reportable, and on failure the provider commits a misdemeanour punishable on conviction in the district court of the county concerned in this State.
3. Annually, an alphabetical list of the names and addresses of all individuals who successfully completed an approved activity during the preceding calendar year; and on failure the commissioner may withdraw approval of all its activities following the 33-1-314 process, and may impose a fine after a 33-1-701 hearing. ✓
4. Nothing - the obligation to record completion rests on the licensee alone through the biennial certification, and a provider's approval may be withdrawn only where the content of a course is found on review to fall below the standards the commissioner has established for approval here.

Why: MCA 33-17-1205(4): EACH PERSON PROVIDING APPROVED COURSES, LECTURES, SEMINARS, AND INSTRUCTIONAL PROGRAMS, INCLUDING INSURANCE COMPANY EDUCATION PROGRAMS, SHALL FILE ANNUALLY WITH THE COMMISSIONER AN ALPHABETICAL LIST OF THE NAMES AND ADDRESSES OF ALL INDIVIDUALS WHO HAVE SUCCESSFULLY COMPLETED AN APPROVED CONTINUING EDUCATION ACTIVITY DURING THE PRECEDING CALENDAR YEAR. (5) THE COMMISSIONER MAY, FOLLOWING THE PROCESS PROVIDED FOR IN 33-1-314, WITHDRAW APPROVAL OF ALL COURSES of any person that fails to comply, AND MAY, AFTER A HEARING PURSUANT TO 33-1-701, IMPOSE A FINE not exceeding the penalty permitted by 33-1-317.

In which cases may the commissioner issue a TEMPORARY producer licence under MCA 33-17-216(1)?

1. To any applicant who has passed the producer examination but has not yet completed the background examination, so that business may be written while the report is awaited, the temporary licence lapsing when the background examination has been completed and considered by the commissioner.
2. To any person the commissioner considers qualified, on payment of the fee and without examination, the section being a general dispensing power that allows the commissioner to admit a person to the business for a limited period whenever it seems convenient to do so in this State.
3. To the surviving spouse, next of kin, administrator or executor on a producer's death; to the spouse, next of kin, employee or legal guardian of one disabled by injury or illness; to an employee or officer of a licensed firm on the death or disability of the designated individual; to the designee of a producer entering active military service; and where the public interest is best served. ✓
4. To the surviving spouse of a deceased producer alone, the section being confined to that one case, and the business of a disabled producer or of one entering military service having to be transferred to another licensed producer rather than carried on under a temporary licence in this State.

Why: MCA 33-17-216(1): the commissioner MAY ISSUE A TEMPORARY LICENSE to an individual QUALIFIED ONLY AS TO AGE, RESIDENCE, AND TRUSTWORTHINESS AND WITHOUT REQUIRING AN EXAMINATION, (a) to the SURVIVING SPOUSE OR NEXT OF KIN OR TO THE ADMINISTRATOR OR EXECUTOR, or their employee, UPON THE PRODUCER'S DEATH; (b) to the SPOUSE, NEXT OF KIN, EMPLOYEE, OR LEGAL GUARDIAN of a producer DISABLED BY INJURY OR PHYSICAL OR MENTAL ILLNESS; (c) to an EMPLOYEE OF A PARTNERSHIP or OFFICER OR EMPLOYEE OF A CORPORATION licensed as a producer, on the death or disability of the individual designated in the licence; (d) to the DESIGNEE OF A PRODUCER ENTERING UPON ACTIVE SERVICE IN THE ARMED FORCES; and (e) IN ANY OTHER CIRCUMSTANCE in which the commissioner finds THE PUBLIC INTEREST WILL BEST BE SERVED.

Is the beneficiary's consent needed to change the beneficiary under 33-22-215?

1. No, unless the insured has made an irrevocable designation of the beneficiary. ✓
2. Yes, in every case, the beneficiary having a vested interest from issue.
3. No, and an irrevocable designation may be changed by the insured as well.
4. Yes, unless the insurer's executive officer approves the change in writing.

Why: 33-22-215(1) requires the provision that, unless the insured makes an irrevocable designation of beneficiary, the right to change a beneficiary is reserved to the insured and the consent of the beneficiary is not requisite to surrender or assignment of the policy, to any change of beneficiary or to any other change in the policy.

Which of these must be disclosed to a viatical settlement purchaser under 33-20-1317?

1. That the purchaser will not receive payment until the insured dies and that an annual guaranteed rate of return is not determinable; the liquidity of the purchase and the secondary market for it are outside the disclosure the section requires.
2. The name and medical history of the insured whose life is the subject of the settlement, the life expectancy the provider has used, and the identity of the attending physician who made the determination of terminal illness.
3. That the purchaser will receive payment on a date the provider fixes when the agreement is signed, that the annual rate of return is guaranteed by the provider, and that the purchase may be resold on an established secondary market.
4. That the purchaser will not receive payment until the insured dies, that an annual guaranteed rate of return is not determinable, and that the purchase is not liquid and has no established secondary market. ✓

Why: 33-20-1317(1) requires the provider to disclose the listed information to a viatical settlement purchaser before the purchase agreement is signed, and 33-20-1317(2) requires the purchaser to date and sign the disclosure and the provider to give the purchaser a copy. The disclosure must state that the purchaser will not receive payment until the insured dies; that the actual annual rate of return depends on an accurate projection of life expectancy and the actual date of death and that an annual guaranteed rate is not determinable; and that the purchase is not liquid, the funds are probably not available until death, and there is no established secondary market for resale.

What must precede issue of an HMO enrollment form or evidence of coverage under 33-31-301(2)?

1. Filing with the commissioner, approval not being required.
2. Approval by the HMO's governing body and enrollee council.
3. Filing with and approval by the commissioner under 33-1-501. ✓
4. Publication of the form in a newspaper of general circulation.

Why: 33-31-301(2) forbids an HMO to issue or deliver an enrollment form, an evidence of coverage or an amendment to either to a person in this State before a copy has been filed with and approved by the commissioner in accordance with 33-1-501.

What does the Misstatement of Age provision in 33-22-223 provide?

1. The policy is void and the premium is refunded, whatever the size of the misstatement.
2. The insured must pay the premium difference at the correct age before any claim is paid.
3. All amounts payable are reduced by one half where the true age is higher than stated.
4. All amounts payable are those the premium paid would have bought at the correct age. ✓

Why: 33-22-223 allows the provision that if the age of the insured has been misstated, all amounts payable under the policy shall be such as the premium paid would have purchased at the correct age.

What training must a producer complete to sell long-term care insurance under 33-22-1128?

1. A one-time course of at least 4 hours, and at least 8 hours of ongoing training in every 24-month period.
2. A one-time course of at least 8 hours, no ongoing training being required once it is completed.
3. A one-time course of at least 16 hours, and at least 8 hours of ongoing training each 12 months.
4. A one-time course of at least 8 hours, and at least 4 hours of ongoing training in every 24-month period. ✓

Why: 33-22-1128(1) forbids an individual to sell, solicit or negotiate long-term care insurance unless licensed as a producer for disability or life insurance, having completed a one-time training course and completing ongoing training in every 24-month period, and 33-22-1128(3) sets the one-time course at not less than 8 hours and the ongoing training at not less than 4 hours for each 24-month period.

A dread disease (specified disease) policy provides benefits:

1. Only for the specific disease or diseases named in the policy, such as cancer ✓
2. As a full replacement for comprehensive major medical coverage
3. For any illness or injury the insured experiences during the year
4. In the form of a guaranteed lifetime monthly income beginning once the insured retires from work

Why: A specified/dread disease policy is a limited policy covering only the named condition(s); it is supplemental, not comprehensive coverage.

What forms of unfair discrimination does MCA 33-18-210(5) forbid, and what does subsection (6) expressly preserve?

1. Unfair discrimination between individuals of the same class and equal expectation of life in the rates charged, that being the formula this subsection uses; subsection (6) preserves the insurer's right to classify risks according to its own filed underwriting rules and manuals.
2. Unfair discrimination in premium or rates, in dividends or benefits, or in any other term, either between insureds or property of like risk character or because of race, color, creed, religion or national origin - while subsection (6) preserves commissions and the dividends. ✓
3. Unfair discrimination on the ground of race, colour, creed, religion, national origin, sex, marital status or physical impairment, all seven grounds being gathered into this one subsection; subsection (6) preserves an insurer's right to decline a risk for any other cause.
4. Unfair discrimination in the premium charged between insureds having like risk characteristics; subsection (6) preserves the payment of commissions to producers but not the return of dividends or unabsorbed premium deposits, which are governed by chapter 15 instead.

Why: MCA 33-18-210(5): AN INSURER MAY NOT MAKE OR PERMIT UNFAIR DISCRIMINATION IN THE PREMIUM OR RATES CHARGED FOR INSURANCE, IN THE DIVIDENDS OR OTHER BENEFITS PAYABLE ON INSURANCE, OR IN ANY OTHER TERMS AND CONDITIONS OF THE INSURANCE EITHER BETWEEN INSUREDS OR PROPERTY HAVING LIKE INSURING OR RISK CHARACTERISTICS OR BETWEEN INSUREDS BECAUSE OF RACE, COLOR, CREED, RELIGION, OR NATIONAL ORIGIN. Subsection (6): the section MAY NOT BE CONSTRUED AS PROHIBITING THE PAYMENT OF COMMISSIONS OR OTHER COMPENSATION TO LICENSED INSURANCE PRODUCERS OR AS PROHIBITING AN INSURER FROM ALLOWING OR RETURNING LAWFUL DIVIDENDS, SAVINGS, OR UNABSORBED PREMIUM DEPOSITS to its participating policyholders, members, or subscribers. Sex and marital status are subsection (9); impairment is subsection (10).

For how long must a viatical settlement provider keep its transaction records under 33-20-1310(2)?

1. Not less than five years from their creation, available to the commissioner for inspection during reasonable business hours. ✓
2. Not less than three years from their creation, available to the commissioner for inspection during reasonable business hours.
3. Not less than five years from the viator's death, available to the commissioner only on a subpoena issued by a district court.
4. Until the policy matures on the insured's death, after which the provider may destroy the records without notice.

Why: 33-20-1310(2) requires a viatical settlement provider to maintain records of all its viatical settlement transactions and to make them available to the commissioner for inspection during reasonable business hours, the records being kept for not less than five years from the date of their creation. Under 33-20-1310(1) the licensee or applicant pays the expenses of an examination.

What protection do examiners' WORKING PAPERS have under MCA 33-1-409(6)?

1. They must be given confidential treatment, are not subject to subpoena and are not discoverable or admissible as evidence in any private action; a person given access must agree beforehand to treat them so. ✓
2. They are public records available on request once the examination report has been opened for public inspection, the confidentiality of the papers lasting only so long as the confidentiality of the report itself under this section.
3. They are confidential as against the public but discoverable in a private action against the company examined, a litigant being entitled to the material on which the commissioner's findings about that company were based.
4. They are confidential only so far as they contain trade secrets or personal information, the remainder of an examiner's papers being open to inspection at the department's office during ordinary business hours in this State.

Why: MCA 33-1-409(6)(a): WORKING PAPERS MUST BE GIVEN CONFIDENTIAL TREATMENT, ARE NOT SUBJECT TO SUBPOENA, ARE NOT DISCOVERABLE OR ADMISSIBLE AS EVIDENCE IN ANY PRIVATE ACTION, AND MAY NOT BE MADE PUBLIC by the commissioner or anyone else except as provided in 33-1-311(5) and subsection (5). PERSONS GIVEN ACCESS SHALL AGREE, PRIOR TO RECEIVING THE INFORMATION, to treat it as the section requires unless the company consents in writing. (6)(b) defines WORKING PAPERS to include all papers created or obtained in the course of an examination or analysis, CONFIDENTIAL CRIMINAL JUSTICE INFORMATION, PERSONAL INFORMATION protected by a privacy interest, and identified TRADE SECRETS.

'Twisting' is an unfair trade practice defined as:

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

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

On which of these may group eligibility rules not be based, under 33-22-526(1)?

1. An individual's status as a full-time or part-time employee.
2. An individual's claims experience or genetic information. ✓
3. An individual's length of service with the employer.
4. An individual's membership of a bargaining unit class.

Why: 33-22-526(1)(a) forbids a group health plan or issuer to base eligibility or continued eligibility on health status-related factors of an individual or dependent, including health status, medical condition, claims experience, receipt of health care, medical history, genetic information and evidence of insurability.

How long before delivery must a Montana form filing be made, and how must it be sent?

1. Not less than 30 days before delivery, by any means giving proof of dispatch, the commissioner's office recording the date of posting rather than the date of receipt because the insurer cannot know when a filing sent to Helena will reach the commissioner's office.
2. Not less than 90 days before delivery, by certified mail only, the period being longer for a property or casualty form than for a life or disability form because a property form is commonly filed by a rating organization on behalf of a number of its members at once.
3. Not less than 60 days before delivery, and it must be delivered by hand or sent by certified mail with a return receipt requested. The commissioner's office shall mark a filing with the date of receipt. ✓
4. At any time before the form is used, the section fixing no minimum period; the insurer must simply wait for the commissioner's approval, or for the running of the deemer period, before it delivers or issues the form for delivery anywhere in this State.

Why: MCA 33-1-501(2)(a): THE FILING MUST BE MADE NOT LESS THAN 60 DAYS BEFORE DELIVERY AND MUST BE DELIVERED BY HAND OR SENT BY CERTIFIED MAIL WITH A RETURN RECEIPT REQUESTED. THE COMMISSIONER'S OFFICE SHALL MARK A FILING WITH THE DATE OF RECEIPT BY THE COMMISSIONER'S OFFICE.

How is service made on an out-of-state insurance-support organization affecting a Montana resident, under 33-19-403?

1. Only by personal service on its chief officer in the state where it is organized.
2. Only by publication in a newspaper in the county where the resident lives.
3. It cannot be served, the chapter reaching only organizations inside the State.
4. It is treated as having appointed the commissioner to accept service for it. ✓

Why: 33-19-403 provides that an insurance-support organization transacting business outside the State that has an effect on a Montana resident is considered to have appointed the commissioner to accept service of process on its behalf, the procedure in 33-1-606 being followed. Under 33-19-401(2) the commissioner may also examine such an organization.

Withdrawing taxable gains from a deferred annuity before age 59½ generally results in:

1. No tax consequence of any kind on the withdrawal
2. A 10% IRS penalty plus ordinary income tax on the gain ✓
3. Immediate forfeiture of the entire annuity principal balance
4. Favorable long-term capital-gains tax treatment instead

Why: Pre-59½ distributions of gains are subject to ordinary income tax plus a 10% IRS penalty.

Retirement plan 'catch-up' contributions allow individuals to contribute additional amounts once they reach age:

1. 50 ✓
2. 40
3. 59 and one half
4. 65

Why: Participants age 50 and older may make catch-up contributions above the standard annual limits to IRAs and employer plans.

To reinstate a lapsed policy, an insured must typically provide evidence of insurability and:

1. Wait five years from the lapse date
2. Pay only the single current premium
3. Purchase an additional rider
4. Pay all back premiums with interest ✓

Why: Reinstatement requires proof of insurability plus payment of overdue premiums with interest (and any loan), within the allowed window.

Concealment in an insurance application is best defined as:

1. A guarantee written into the policy that proves to be false
2. A statement the applicant believes to be true but is not
3. An innocent misstatement of the applicant's exact birth date
4. The failure to disclose a known material fact ✓

Why: Concealment is the intentional withholding of a material fact the applicant knows; if material, it can void the contract.

A 68-year-old retiree wants income payments to begin next month from a lump sum. The suitable product is a(n):

1. 20-year level term policy
2. Variable universal life policy
3. Single-premium immediate annuity ✓
4. Flexible-premium deferred annuity

Why: A single-premium immediate annuity converts a lump sum into income beginning within one payment period.

To which contract does the Standard Nonforfeiture Law for Individual Deferred Annuities apply, under 33-20-502?

1. A variable annuity or an investment annuity sold to an individual in this State.
2. An individual retirement annuity under section 408 of the federal Internal Revenue Code. ✓
3. An immediate annuity, or a deferred annuity after annuity payments have commenced.
4. A group annuity purchased under an employer's retirement plan for its employees.

Why: 33-20-502 excludes reinsurance, a group annuity purchased under an employer retirement or deferred compensation plan other than one providing individual retirement accounts or annuities under section 408 of the Internal Revenue Code, premium deposit funds, variable and investment annuities, immediate annuities, deferred annuities after payments have commenced, reversionary annuities and contracts delivered outside this State through a producer.

What deferral does 33-20-131(1) reserve to the insurer?

1. The right to defer the granting of a loan, including one for the payment of a premium to the insurer, for six months after application for the loan.
2. The right to defer the granting of a loan, other than one for the payment of a premium to the insurer, for six months after application. ✓
3. The right to defer the granting of a loan, other than one for the payment of a premium to the insurer, for thirty days after application for it.
4. No right of deferral at all; the loan must be advanced on proper assignment or pledge of the policy as soon as it is applied for.

Why: 33-20-131(1) requires the policy to reserve to the insurer the right to defer the granting of a loan, OTHER THAN for the payment of a premium to the insurer, for six months after application for the loan.

What does 33-20-103(2) except from the standard provisions, and what does it preserve?

1. Annuity contracts and any provision relating to disability benefits or accidental death benefits are excepted, and nothing in the part applies to an annuity contract in any circumstances at all.
2. Disability and accidental death provisions alone are excepted; an annuity contract carries the whole of the standard provisions this part requires of a life insurance policy issued here.
3. Annuity contracts and any provision relating to disability benefits or accidental death benefits are excepted; but 33-20-114, payment of claims and interest, does apply to annuity contracts. ✓
4. Annuity contracts alone are excepted; a provision relating to disability benefits or to accidental death benefits in a life policy carries the standard provisions in full under the section.

Why: 33-20-103(2) provides that the section does not apply to annuity contracts, or to any provision of a life policy or supplemental contract relating to disability benefits or to additional benefits in the event of death by accident or accidental means. It then preserves one: the provisions of 33-20-114 DO apply to annuity contracts.

Distributions from a qualified annuity (funded with pre-tax dollars) are:

1. Entirely income-tax-free in all circumstances
2. Taxed only on the portion above the cost basis
3. Fully taxable as ordinary income when received ✓
4. Subject to capital-gains rates on the whole amount

Why: Because a qualified annuity has no after-tax cost basis, the entire distribution is taxable as ordinary income; required minimum distributions also apply.

A temporary insurance license is most commonly issued to:

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

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

How are statements by applicants treated under a group disability policy, under 33-22-502(1)?

1. As warranties; any untrue statement avoids the cover whether or not it is contained in a signed written instrument.
2. Absent fraud, as representations; one may avoid the cover whether or not a copy of the statement was ever furnished.
3. Absent fraud, as representations; one may avoid the cover only if in a signed instrument furnished in copy. ✓
4. As warranties where made by the policyholder, and as representations where made by an insured person under the policy.

Why: 33-22-502(1) requires a provision that, in the absence of fraud, all statements by applicants, the policyholder or an insured person are representations and not warranties, and that no statement made to effect insurance may avoid the insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to that person or the beneficiary.

What interest rate is used in determining annuity minimum nonforfeiture amounts under 33-20-505(3)(a)?

1. The greater of 3% a year and the five-year constant maturity treasury rate, rounded, reduced by 125 basis points.
2. The lesser of 3% a year and the five-year constant maturity treasury rate, rounded, reduced by 125 basis points. ✓
3. The lesser of 5% a year and the ten-year constant maturity treasury rate, rounded, reduced by 100 basis points.
4. The rate of interest the contract specifies for accumulating considerations, whatever rate the company chooses.

Why: 33-20-505(3)(a)(i) sets the interest rate as the lesser of 3% a year or the amount under (3)(a)(ii), which may be the five-year constant maturity treasury rate reported by the federal reserve board, rounded to the nearest 1/20th of 1% and reduced by 125 basis points.

What must a policy containing a permitted exclusion also provide, under 33-20-121(2)?

1. That on a death within the exclusion the insurer will return the premiums paid, with interest at the rate stated in the policy for the calculation of nonforfeiture benefits, adjusted for indebtedness or dividend credit.
2. That on a death within the exclusion the insurer will pay not less than a reserve computed on the commissioner's reserve valuation method using the policy's mortality table and interest rate, adjusted for indebtedness or dividend credit. ✓
3. That on a death within the exclusion the insurer will pay the full face amount of the policy, the exclusion going only to the additional benefits payable in the event of death by accident or accidental means.
4. Nothing further; a policy containing a permitted exclusion may deny liability altogether for a death occurring in the excluded manner or while the insured had the excluded status under the terms of the policy.

Why: 33-20-121(2) requires a policy containing an exclusion or restriction under 33-20-121(1) to provide that on a death in the excluded circumstances the insurer will pay an amount not less than a reserve determined by the commissioner's reserve valuation method on the mortality table and interest rate specified in the policy for nonforfeiture benefits (or, where there are none, a table and rate the insurer determines and specifies) or by any method more favourable to the policyholder, adjusted for indebtedness or dividend credit.

What penalty does MCA 33-18-1005 impose for violating a cease and desist order?

1. A civil penalty not to exceed $1,000, each day of violation being a separate violation, with the total not to exceed A $10,000 aggregate; the Attorney General or the county attorney petitions the District Court to recover it. ✓
2. A civil penalty not to exceed $10,000 for each violation, with no aggregate ceiling, each day being treated as a separate violation so that a continuing breach becomes progressively more expensive for the person concerned.
3. A fine not to exceed $25,000 imposed by the commissioner under 33-1-317, the cease and desist provisions carrying no separate penalty of their own and being enforced through the general penalty section of the code.
4. A civil penalty not to exceed $1,000 for the whole of a continuing violation however long it lasts, the section deliberately declining to multiply the penalty by the number of days in order to keep it proportionate to the conduct.

Why: MCA 33-18-1005: (1) any person who VIOLATES A CEASE AND DESIST ORDER issued pursuant to 33-18-1004 IS SUBJECT TO A CIVIL PENALTY NOT TO EXCEED $1,000. EACH DAY OF VIOLATION CONSTITUTES A SEPARATE VIOLATION. THE TOTAL PENALTY MAY NOT EXCEED A $10,000 AGGREGATE. Upon the department's request, THE ATTORNEY GENERAL OR THE COUNTY ATTORNEY of the county where the violation occurred SHALL PETITION THE DISTRICT COURT to impose, assess and recover it. (2) such an action IS NOT A BAR to enforcement by injunction or other remedies. (3) MONEYS COLLECTED SHALL BE DEPOSITED IN THE STATE GENERAL FUND.

What right does 33-20-141(2) give an applicant for an individual life policy?

1. To be notified in writing at application of the right to designate a third party to receive notice of cancellation for nonpayment, the designation being available only at the time of the application itself.
2. To be notified in writing at application of the right to designate a third party to receive notice of cancellation for nonpayment, and to make that designation then or at any time the policy is in force. ✓
3. To designate a third party to receive notice of cancellation for nonpayment, who then becomes liable for the premium if the policyowner fails to pay it within the period the notice states for payment.
4. To require the insurer to send every notice under the policy to a third party of the applicant's choosing in place of the policyowner, who is relieved of receiving them thereafter.

Why: 33-20-141(2)(a) requires the insurer to notify the applicant in writing at the time of application of the right to designate a third party to receive notice of cancellation based on nonpayment, and allows the designation at application or at any time the policy is in force by written notice naming the designee. 33-20-141(2)(b) makes the copy additional to the original to the policyowner, and 33-20-141(2)(c) provides that the designation is not an acceptance of liability by the third party or the insurer.

Before recommending an annuity, a producer learns the client needs the money within a year for living expenses. The producer should:

1. Recommend the annuity with the highest surrender charges
2. Recommend it only if the client signs a liability waiver
3. Conclude the annuity is likely unsuitable and not recommend it ✓
4. Sell the annuity anyway to meet a monthly sales quota

Why: Suitability rules require matching the product to the client's situation; an annuity (with surrender charges and a long horizon) is unsuitable for funds needed immediately.

What does 33-20-301(2) take out of the standard provisions for annuities?

1. Contracts for immediate annuities purchased with the proceeds of a life insurance policy on the death of the insured.
2. Contracts for deferred annuities included in or upon the lives of beneficiaries under life insurance policies. ✓
3. Contracts for deferred annuities sold to a person who is already the owner of a life insurance policy with the insurer.
4. Nothing; every deferred annuity written in this State carries the standard provisions whatever policy it is attached to.

Why: 33-20-301(2) provides that the section does not apply to contracts for deferred annuities included in or upon the lives of beneficiaries under life insurance policies. That is a separate exclusion from the reversionary, survivorship and group annuities excluded by 33-20-301(1).

How does 33-20-1002 define employee life insurance?

1. Individual policies issued to the employees of an employer on the lives of not less than two employees at date of issue, with premiums paid wholly by the employees themselves.
2. Individual policies issued to the employees of an employer on the lives of not less than five employees at date of issue, with premiums paid by the employer wholly or partly. ✓
3. A group policy issued to an employer on the lives of not less than five employees, including salary savings life insurance and pension trust insurance and annuities.
4. Individual policies issued to the employees of an employer on the lives of not less than twenty-five employees at date of issue, with premiums paid by the employer wholly.

Why: 33-20-1002 defines employee life insurance as a plan, other than salary savings life insurance or pension trust insurance and annuities, under which individual policies are issued to the employees of an employer on the lives of not less than five employees at date of issue, with premiums paid by the employer or a trustee of its fund wholly from the employer's funds or partly from them and partly from employee contributions.

On what findings may the commissioner allow a discretionary group under 33-20-1112(1)?

1. That issuance is in the best interest of the public and that the group has at least one hundred members, the economies of acquisition or administration being irrelevant to the finding.
2. That issuance is not contrary to the public's best interest, would bring economies of acquisition or administration, and gives benefits reasonable in relation to premiums. ✓
3. That the group has been organised in good faith for purposes other than obtaining insurance and has been in active existence for at least five years at date of issue.
4. That the insurer has filed the policy form and the premium rates have been approved; no finding about the public interest or economies is required for a discretionary group.

Why: 33-20-1112(1) allows a policy issued to a group other than one the part describes if the commissioner finds that issuance is not contrary to the best interest of the public, would result in economies of acquisition or administration, and that the benefits are reasonable in relation to the premiums charged. 33-20-1112(2) allows coverage under a policy issued in another state only if this State or a state with substantially similar requirements has made that determination.

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.

Which organization may not be organized or operated as a health service corporation under 33-30-104?

1. Any organization formed by physicians practising in Montana.
2. Any organization with more than 10,000 members or beneficiaries.
3. Any organization created for or engaged in business for profit. ✓
4. Any organization affiliated with a hospital operating in the State.

Why: 33-30-104 provides that no group, association or organization created for or engaged in business or activity for profit may be organized or operated, directly or indirectly, as a health service corporation under chapter 30.

Three children are named 'per stirpes.' One child dies before the insured, leaving two children. Each surviving child gets 1/3, and the deceased child's 1/3 is:

1. Split between that child's two children ✓
2. Kept by the insurer
3. Divided among the two surviving children
4. Paid to the insured's estate

Why: Per stirpes passes a deceased beneficiary's share to that beneficiary's descendants — here, the deceased child's two children split the 1/3.

In what capacity does a Montana producer hold premiums received, and what does MCA 33-17-1102 require be done with them?

1. Premiums are the producer's own money once collected, the producer being a debtor to the insurer for the net amount under the agency contract, and the statute requires only that the producer settle the account with the insurer within the period that contract specifies.
2. All premiums or return premiums received by a producer must be held in a separate trust account. The producer shall at all times act in a fiduciary capacity and shall, in the regular course of business, account for and pay them to the insured, insurer or producer. ✓
3. Premiums received by a producer must be remitted to the insurer on the day they are received, the producer acting in no fiduciary capacity and having no authority to hold an insurer's money overnight or to maintain any account into which the money of more than one insurer or of an insured may at any time be paid by the producer.
4. Premiums must be held in the producer's general business account and identified in the producer's books as belonging to the insurer, the producer being answerable for them as a debtor rather than as a fiduciary and being free to use them in the ordinary course.

Why: MCA 33-17-1102(1): ALL INSURANCE PREMIUMS OR RETURN PREMIUMS RECEIVED BY AN INSURANCE PRODUCER MUST BE HELD IN A SEPARATE TRUST ACCOUNT. THE INSURANCE PRODUCER SHALL AT ALL TIMES ACT IN A FIDUCIARY CAPACITY and shall, IN THE APPLICABLE REGULAR COURSE OF BUSINESS, ACCOUNT FOR AND PAY THE INSURANCE PREMIUMS OR RETURN PREMIUMS THE PRODUCER RECEIVES TO THE INSURED, INSURER, OR INSURANCE PRODUCER ENTITLED TO THEM.

What does MCA 33-16-101 say the rating chapter is for, and what does it expressly NOT give the commissioner?

1. To secure adequate rates for insurers and reasonable rates for consumers by giving the commissioner power to approve or disapprove every rate before it is used, and to set the level of rates in any classification where the commissioner finds competition insufficient.
2. To ensure that rates are uniform among insurers writing the same class of business in this State, so that a consumer may compare policies on their terms rather than on price, and to give the commissioner power to prescribe the rate level for each classification annually.
3. To promote the public welfare by regulating rates so that they are not excessive, inadequate, or unfairly discriminatory, and to authorize qualified rating and advisory organizations. Nothing in the chapter gives the commissioner power to fix a rate level. ✓
4. To promote the public welfare by regulating rates under the rating chapter, and to give the commissioner power to fix a rate level where a reasonable degree of competition does not exist in the area with respect to the classification concerned, competition being the chapter's preferred regulator.

Why: MCA 33-16-101(1): the purpose is TO PROMOTE THE PUBLIC WELFARE BY REGULATING INSURANCE RATES TO THE END THAT THEY SHALL NOT BE EXCESSIVE, INADEQUATE, OR UNFAIRLY DISCRIMINATORY, TO AUTHORIZE THE EXISTENCE AND OPERATION OF QUALIFIED RATING ORGANIZATIONS AND ADVISORY ORGANIZATIONS AND REQUIRE THAT SPECIFIED RATING SERVICES OF SUCH RATING ORGANIZATIONS BE GENERALLY AVAILABLE TO ALL ADMITTED INSURERS, AND TO AUTHORIZE COOPERATION BETWEEN INSURERS IN RATEMAKING AND OTHER RELATED MATTERS. (2): IT IS THE EXPRESS INTENT OF THIS CHAPTER TO PERMIT AND ENCOURAGE COMPETITION BETWEEN INSURERS ON A SOUND FINANCIAL BASIS, AND NOTHING IN THIS CHAPTER IS INTENDED TO GIVE THE COMMISSIONER POWER TO FIX AND DETERMINE A RATE LEVEL BY CLASSIFICATION OR OTHERWISE.

A Montana producer's licence is suspended by another state. What does 33-17-1001(1)(i) provide?

1. A similar licence suspended in any other state is a ground for discipline in Montana. ✓
2. Another state's licence action is no ground here unless the conduct also took place here.
3. Montana must suspend its licence for the same period automatically, without any hearing.
4. Discipline elsewhere matters only if the other state has a reciprocity agreement with it.

Why: 33-17-1001(1)(i) makes it a ground for suspension, revocation, refusal or a civil penalty that the licensee or applicant has had a similar licence denied, suspended or revoked in any other state.

What higher policy loan rate may the commissioner authorise under 33-20-131(1)?

1. Not more than eight per cent a year, or 7.4 per cent if payable annually in advance, for policies issued on or after 1 January 1980 and on written certification that policyholders will benefit fully from the earnings. ✓
2. Not more than ten per cent a year, or eight per cent if payable annually in advance, for policies issued on or after 1 January 1980 and on written certification that policyholders will benefit fully from the increased earnings.
3. Not more than eight per cent a year for any policy whenever issued, without any certification, the commissioner's approval of the insurer's rate filing being sufficient authority for the higher rate under the section.
4. None; six per cent a year is an absolute ceiling on the interest an insurer may charge on a policy loan made under a life insurance policy delivered or issued for delivery in this State at any time.

Why: 33-20-131(1) allows the commissioner to authorise a rate in excess of six per cent but not in excess of eight per cent a year, or 7.4 per cent if payable annually in advance, for policies or certificates issued on or after 1 January 1980, if the insurer provides adequate written certification that policyholders will benefit fully from the increased earnings through higher dividends, lower premiums, or both.

What limits apply to an HMO affiliation period under 33-31-307?

1. Up to 6 months (12 for a late enrollee), applied uniformly, with full premium charged during it.
2. Up to 2 months (3 for a late enrollee), applied by health status, with premium charged during it.
3. Up to 2 months (3 for a late enrollee), applied uniformly, with no premium charged during it. ✓
4. Up to 12 months for everyone, in addition to any preexisting condition exclusion under the plan.

Why: 33-31-307(1) allows an HMO that imposes no preexisting condition exclusion on a group coverage option to impose an affiliation period applied uniformly without regard to health status and not exceeding two months, or three months for a late enrollee. Under 33-31-307(2) no premium may be charged for coverage during the affiliation period.

Which state's law governs where a policy has owners resident in different states, under 33-20-1318(1)?

1. That of the state in which the owner having the largest percentage ownership resides, or, where ownership is equal, a state the owners agree on in writing, failing which the state of the insured. ✓
2. That of the state in which the owner having the smallest percentage ownership resides, or, where ownership is equal, a state the owners agree on in writing, failing which the state of the insured.
3. That of the state in which the insured resides in every case, the residence of the owners being irrelevant to the law governing a viatical settlement contract on the policy they hold between them.
4. That of the state in which the viatical settlement provider is licensed, whatever the residence of the owners or of the insured whose life is the subject of the policy that is being viaticated.

Why: 33-20-1318(1) governs the contract by the law of the state in which the owner having the largest percentage ownership resides; where the owners hold equal ownership, by the law of the state of residence of one owner agreed on in writing by all of them; and where equal owners fail to agree in writing, by the law of the state of the insured.

In a variable annuity, the contract value is measured in accumulation units during the pay-in phase and in ___ during the payout phase.

1. Annuity units ✓
2. Guaranteed dollars
3. Surrender shares
4. Mortality credits

Why: During accumulation the value is tracked in accumulation units; at annuitization it converts to a fixed number of annuity units whose dollar value varies.

What agreements about a life, annuity or disability contract does 33-18-208(1) forbid?

1. Any agreement other than as plainly expressed in the contract issued. ✓
2. Any agreement made orally by the producer before the application is signed.
3. Any agreement to pay premium by instalments rather than in advance.
4. Any agreement that the commissioner has not approved in writing first.

Why: 33-18-208(1) forbids a person knowingly to permit, offer or make any contract of life insurance, life annuity or disability insurance, or agreement as to such a contract, other than as plainly expressed in the contract issued.

What must a long-term care issuer do after a claim is denied, under 33-22-1124?

1. Within 30 days of the denial, whether or not requested, give a written explanation of the reasons only.
2. Within 60 days of a written request, give a written explanation, other information being withheld from the insured.
3. Within 90 days of the denial, refer the claim to the commissioner for an independent review of it.
4. Within 60 days of a written request, give a written explanation and all information it holds on the denial. ✓

Why: 33-22-1124 requires the issuer, not later than 60 days after a written request by the policyholder, certificate holder or either's representative, to provide a written explanation of the reasons for the denial and all information it possesses relating to the denial.

What aggregate limit applies to any one life under 33-10-224(4)(a)?

1. $300,000 in all, or $500,000 where health coverage benefits are involved. ✓
2. $500,000 in all, or $1 million where health insurance coverage benefits are involved.
3. $250,000 in all, whatever the number and kinds of covered policies on that life.
4. No aggregate limit, each covered policy on the life carrying its own separate limit.

Why: 33-10-224(4)(a) provides that the association is in no event obligated to cover more than an aggregate of $300,000 in benefits with respect to any one life, except that for health insurance coverage benefits the aggregate may not exceed $500,000 with respect to any one individual.

An applicant is found financially irresponsible and a source of loss to the public. Under 33-17-1001(1)(f), what follows?

1. The commissioner may act only if the applicant has also committed a crime.
2. The commissioner must issue the licence and require a surety bond instead.
3. The commissioner may refuse the licence or discipline it on that finding alone. ✓
4. The commissioner may act only after a court declares the applicant bankrupt.

Why: 33-17-1001(1)(f) makes it a ground that, in the conduct of affairs under the licence, the licensee or applicant used fraudulent, coercive or dishonest practices, or is incompetent, untrustworthy, financially irresponsible or a source of injury and loss to the public.

A producer makes untrue statements in a public advertisement about a policy's benefits. This is:

1. False advertising, an unfair trade practice ✓
2. Unfair discrimination in policy benefits
3. Twisting, because the statements induce a policy exchange
4. Permissible puffery, since opinions about benefits are not statements of fact

Why: Untrue or misleading advertising about insurance is the unfair practice of false advertising/misrepresentation.

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.

A single-premium immediate annuity (SPIA) begins income payments:

1. After the contract's surrender-charge schedule has completely expired
2. Within one payment period of purchase ✓
3. Only after a mandatory deferral period of at least ten years has elapsed
4. Once the annuitant reaches the age of fifty-nine and one-half years old

Why: An immediate annuity starts paying within one payment interval (e.g., within a month) of the lump-sum purchase.

On which ground may an issuer nonrenew group health coverage under 33-22-524(2)?

1. The plan sponsor's failure to comply with a material employer contribution or participation rule. ✓
2. A deterioration in the claims experience of the group since the coverage was first issued to it.
3. The diagnosis of a serious medical condition in an employee or dependent covered under the plan.
4. An increase in the average age of the covered employees above the average age at original issue.

Why: 33-22-524(2) allows an issuer to nonrenew or discontinue group coverage only on stated grounds, including nonpayment of premiums, fraud or intentional misrepresentation by the plan sponsor, and the plan sponsor's failure to comply with a material plan provision relating to employer contribution or group participation rules. Claims experience and health status are not among them.

When are association assessments due, and what interest runs on late payment, under 33-10-227(2)?

1. Not less than 30 days after written notice; interest at 10% a year from the due date. ✓
2. Not less than 10 days after written notice; interest at 12% a year from the due date.
3. Not less than 30 days after written notice; no interest accrues on late payment.
4. Immediately on written notice being given; interest at 10% a year from the date of the notice.

Why: 33-10-227(2) provides that assessments are due not less than 30 days after prior written notice to the member insurers, and that an unpaid assessment accrues interest at 10% a year on and after the due date.

How does MCA 33-1-201 distinguish a DOMESTIC, a FOREIGN and an ALIEN insurer?

1. Domestic is incorporated under the laws of this state; alien is formed under the laws of a country other than the United States; foreign is formed under the laws of any jurisdiction other than this state and includes an alien insurer. ✓
2. Domestic is incorporated under the laws of this state; foreign is formed under the laws of another state of the United States; and alien is formed under the laws of another country - the three classes being mutually exclusive under the code as enacted in this State.
3. Domestic is an insurer whose principal place of business is in this state whatever its state of incorporation; foreign is one whose principal place of business is elsewhere in the United States; and alien is one whose principal place of business is outside it.
4. Domestic is any insurer holding a certificate of authority from the commissioner; foreign is one authorised in another state but not here; and alien is one authorised in a country other than the United States, the classes turning on authorisation.

Why: MCA 33-1-201: (3) DOMESTIC INSURER is an insurer INCORPORATED UNDER THE LAWS OF THIS STATE. (1) ALIEN INSURER is an insurer FORMED UNDER THE LAWS OF ANY COUNTRY OTHER THAN THE UNITED STATES or its states, districts, territories and commonwealths. (5) FOREIGN INSURER is an insurer FORMED UNDER THE LAWS OF ANY JURISDICTION OTHER THAN THIS STATE - and EXCEPT WHEN DISTINGUISHED BY CONTEXT, THE TERM INCLUDES AN ALIEN INSURER. Foreign and alien are not mutually exclusive.

What must the witnessed document required by 33-20-1312(1)(b) contain?

1. Consent to the contract and acknowledgment that the illness is terminal alone; the understanding of the contract and of the policy benefits is a matter for the disclosure the provider makes under the preceding section rather than for the document.
2. Consent to the contract, acknowledgment that the illness is terminal, a release of the whole of the medical records of the policyholder, and an acknowledgment that the policyholder has taken independent legal and tax advice before signing it.
3. Consent to the contract, a representation of full understanding of it, and an acknowledgment that the policyholder has been told of the alternatives to a viatical settlement, witnessed by the attending physician who made the determination.
4. Consent to the contract, acknowledgment that the illness is terminal, representations of full understanding of the contract and of the policy benefits, a release of the medical records relating to the illness, and acknowledgment that the contract was entered freely. ✓

Why: 33-20-1312(1)(b) requires a witnessed document in which the policyholder or certificate holder consents to the contract, acknowledges that the illness or condition is terminal, represents a full and complete understanding of the contract, confirms a full and complete understanding of the benefits of the life insurance policy, releases the medical records relating to the terminal illness or condition, and acknowledges that the contract was entered into freely and voluntarily.