New York Life & Health Insurance License, Practice Exams

A policy has an irrevocable beneficiary. To change that beneficiary, the owner must:

1. Obtain the irrevocable beneficiary's consent ✓
2. Wait until the next policy anniversary
3. Simply submit a change form to the insurer
4. Cancel and reissue the entire policy

Why: An irrevocable beneficiary's rights are vested; the owner cannot change it without that beneficiary's written consent.

In a fixed annuity, the investment risk is borne by:

1. The annuitant, whose sub-accounts rise and fall with the market
2. The insurer, which guarantees a minimum interest rate ✓
3. A federal guaranty fund backing annuity values
4. The selling producer, under the agency contract

Why: A fixed annuity guarantees principal and a minimum interest rate, so the insurer bears the investment risk.

What information must a Section 3211 lapse notice contain?

1. The names of all beneficiaries of record, the policy's current cash surrender value, and the servicing agent's license number
2. The amount of the payment, the date due, where and to whom payable, and a statement that the policy will lapse if not timely paid ✓
3. The insured's full medical history on file, so that the policyholder may correct any error in it
4. Only the dollar amount of the overdue premium and the insurer's toll-free service number

Why: Section 3211(b) requires the notice to state the payment amount, due date, place and person to whom payable, and that the policy will terminate or lapse if not timely paid (except as to cash surrender or nonforfeiture rights).

A health reimbursement arrangement (HRA) differs from a health savings account (HSA) in that an HRA is:

1. Owned by the employee and fully portable between jobs
2. Funded solely by the employer, who sets the terms ✓
3. Always paired with a flexible spending account by law
4. Available only to people enrolled in a high-deductible plan

Why: An HRA is employer-funded and employer-owned (not portable); an HSA is owned by the individual and requires a qualified HDHP.

A distinguishing feature of adjustable life insurance is that the owner can:

1. Only ever convert it into a fixed single-premium immediate annuity
2. Invest the cash value directly in stocks and bonds of their choosing
3. Receive guaranteed dividends regardless of the insurer's experience
4. Change the premium, face amount, or coverage period as needs change ✓

Why: Adjustable life lets the owner modify premium, face amount, and protection period, effectively shifting between term and permanent coverage.

Under Section 4305, which of the following may a corporation use as a basis for establishing eligibility rules in a group hospital, surgical or medical expense contract?

1. Bona fide employment classifications unrelated to any health status-related factor ✓
2. The applicant's claims experience under any prior hospital or medical expense contract
3. The applicant's genetic information, including the result of any genetic test of a family member
4. The applicant's medical history as disclosed on the written application or a physician's statement

Why: Section 4305(k)(1) prohibits eligibility rules based on health status-related factors including health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, and disability; classifications unrelated to those factors are not barred.

A '20-pay whole life' policy:

1. Requires premium payments every year for the insured's entire lifetime
2. Is paid up after twenty years of premiums but covers the insured for life ✓
3. Provides level coverage for exactly twenty years, then terminates
4. Builds no cash value at all because the premium period ends early

Why: Limited-pay whole life concentrates premiums into a set period (here 20 years) while coverage lasts for life.

Section 4218 addresses the case where the actual premium charged for a life policy is less than the modified net premium. The minimum reserve required is:

1. Always the reserve produced by the commissioners reserve valuation method, without adjustment for the actual premium
2. An amount fixed each year by the superintendent after reviewing the insurer's actuarial opinion and its most recent asset adequacy analysis for the block
3. The greater of the reserve actually used and the reserve under the commissioners reserve valuation method (with the actual premium substituted) ✓
4. The lesser of the two computed reserves, the smaller figure being the statutory minimum

Why: The minimum reserve is the greater of the reserve calculated by the method actually used and the reserve calculated by the commissioners reserve valuation method, replacing the modified net premium with the actual premium where it exceeds the actual premium.

Under § 2405, who may be permitted to intervene, appear, and be heard at the hearing?

1. Only licensed competitors of the charged insurer
2. Only the policyholders named in the complaint
3. Only the person charged and the attorney general
4. Anyone, upon good cause shown to the superintendent ✓

Why: Section 2405(b) provides that, upon good cause shown, the superintendent shall permit anyone to intervene, appear, and be heard at the hearing personally or by counsel.

An insured can perform some but not all job duties and returns to work part-time at reduced pay. The benefit that responds is:

1. Waiver of premium, which only suspends the premium obligation
2. Residual or partial disability benefit ✓
3. Presumptive total disability benefit
4. The accidental death benefit rider

Why: Residual/partial disability pays a reduced benefit when the insured can work partially or at reduced earnings.

Premiums an individual pays for their own personal life insurance are:

1. Deductible up to an annual IRS-set dollar limit
2. Not deductible for federal income-tax purposes ✓
3. Fully deductible as an itemized personal expense
4. Deductible only if the policy is term insurance

Why: Personal life insurance premiums are a personal expense and are not income-tax deductible.

Section 2108(o) restricts an adjuster's conduct in transacting business. What does it prohibit?

1. Charging any fee that exceeds ten percent of the claim settlement
2. Making any misrepresentation of facts or advising any person on questions of law ✓
3. Communicating directly with the insured without the insurer's consent
4. Adjusting more than one claim arising from a single catastrophe

Why: Section 2108(o) bars a licensee from making any misrepresentation of facts or advising any person on questions of law in transacting adjuster business.

An insurer incorporated in another U.S. state but doing business in this state is a(n) ____ insurer.

1. Foreign ✓
2. Alien
3. Admitted
4. Domestic

Why: Domestic = incorporated in this state; foreign = another state; alien = another country.

A tax-sheltered annuity (TSA / 403(b)) is available to employees of:

1. Only for-profit corporations listed on a stock exchange
2. Public schools and certain tax-exempt nonprofit organizations ✓
3. Any employer, with no limits on annual contribution amounts
4. Federal agencies exclusively, in place of Social Security

Why: 403(b) tax-sheltered annuities are for employees of public schools and 501(c)(3) tax-exempt organizations; contributions are pre-tax and grow tax-deferred.

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.

Under N.Y. Public Health Law § 4406, the contract between an HMO and an enrollee is subject to regulation by the superintendent of financial services as if it were a health insurance subscriber contract, and must include:

1. Only the benefits the HMO chooses to file
2. A guaranteed minimum loss ratio set by the commissioner
3. All mandated benefits required by Article 43 of the Insurance Law ✓
4. The standardized Medicare supplement core benefits

Why: Public Health Law § 4406(1) provides that the HMO-enrollee contract is subject to regulation by the superintendent as if it were a health insurance subscriber contract and shall include, but not be limited to, all mandated benefits required by Article 43 of the Insurance Law.

A return-of-premium (ROP) rider or policy provides that, if the insured survives the term, the insurer:

1. Refunds the total premiums that were paid during the term ✓
2. Converts the policy into a paid-up annuity with no further cost
3. Doubles the death benefit for the next renewal period automatically
4. Pays a dividend equal to the policy's accumulated cash value balance

Why: An ROP feature returns the premiums paid if the insured outlives the level term period; premiums are higher to fund this.

Under § 4317, once an individual or small group has been accepted for community-rated coverage, the insurer may NOT terminate that coverage based on:

1. The insurer leaving the market entirely
2. Nonpayment of premium
3. Fraud or material misrepresentation
4. Claims experience ✓

Why: Section 4317(a)(3) provides that once accepted for coverage, an individual or small group cannot be terminated by the insurer due to claims experience; termination may be based only on the limited reasons set forth in the referenced sections.

Under § 2112, when an insurer terminates a producer's certificate of appointment for cause, when must it file a statement of facts with the superintendent?

1. Within sixty days of the termination
2. Within fifteen days of the termination
3. Before the effective date of the termination
4. Within thirty days of the termination ✓

Why: Section 2112(d) requires filing the statement of the facts relative to a termination for cause within thirty days.

A policyowner stops paying premiums and elects to keep a smaller amount of fully paid-up permanent coverage. This is the ____ option.

1. extended term
2. automatic premium loan
3. reduced paid-up ✓
4. cash surrender

Why: Reduced paid-up uses the cash value to buy a smaller, fully paid-up permanent policy with no further premiums.

Social Security Disability Insurance (SSDI) benefits begin only after a waiting period of:

1. 2 full years following the date of the disabling event
2. 30 days after the worker first stops being able to work
3. 10 days after the Social Security claim form is submitted
4. 5 months from the onset of the qualifying disability ✓

Why: SSDI imposes a 5-month waiting period before benefits are payable, and uses a strict definition of disability.

An applicant for a public adjuster's license must establish eligibility to sit for the written examination. Which option satisfies that prerequisite?

1. Maintaining a principal office within this state for at least two years before applying
2. Possessing a minimum of one year experience in the insurance business, or successful completion of forty hours of approved formal training ✓
3. Holding an active insurance agent's license for at least six months before the examination date
4. Submitting three letters of recommendation from officers of authorized insurers doing business in this state, together with the examination fee

Why: Section 2108(e)(1) requires either a minimum of one year of insurance-business experience or completion of forty hours of approved formal training to take the public adjuster exam.

A producer offers a prospect free airline tickets, not part of the policy, to induce the purchase. This is:

1. A permissible marketing gift
2. Rebating ✓
3. Defamation
4. Twisting

Why: Offering an inducement not specified in the policy to persuade a purchase is rebating, prohibited in most states.

A 'bed reservation' benefit in a long-term care policy:

1. Pays a cash bonus for each claim-free year
2. Continues paying to hold the resident's bed during a hospital stay ✓
3. Reserves a hospital bed in advance of any scheduled surgery or procedure
4. Guarantees a private room in any participating facility

Why: A bed reservation benefit keeps paying the facility (for a limited number of days) to hold the insured's bed while they are temporarily hospitalized.

When a child is covered under both parents' health plans, the primary plan is usually determined by the:

1. Birthday rule, using the parent whose birthday is earlier in the year ✓
2. Alphabetical order of the two parents' last names on their policies
3. Age of the child at the time the particular medical expense was incurred
4. Plan that happens to charge the lower of the two monthly premiums

Why: The birthday rule makes primary the plan of the parent whose birthday falls earlier in the calendar year.

Under § 3224-a(b), once the insurer receives the additional information it requested and determines additional payment is due, within how many days of that determination must payment be made?

1. Forty-five days
2. Thirty days
3. Fifteen days ✓
4. Sixty days

Why: Section 3224-a(b) provides that if the insurer determines payment or additional payment is due after receiving requested information, the payment must be made within fifteen days of the determination.

A surgeon can no longer operate but can still teach medicine. Under an 'own-occupation' definition, the insured:

1. Receives no benefits because they can still earn a living
2. Must accept the teaching job before any benefit is paid
3. Gets only half benefits for the first two years
4. Is considered totally disabled and collects benefits ✓

Why: Own-occupation pays if the insured cannot perform their own occupation, even if able to work in another; an any-occupation definition would deny the claim.

In the application process, the producer often acts as the 'field underwriter,' meaning they:

1. Approve and pay death claims for the insurer
2. Audit the insurer's annual financial statement and certify the adequacy of its policy reserves to the state
3. Gather information and make an initial assessment of the risk ✓
4. Set the final rate class, approve the application for issue, and calculate the reserve the insurer must hold

Why: As field underwriter the producer collects accurate information and screens obvious risks before formal underwriting.

Under the group A&H standard provisions, no action may be brought to recover on the policy until how many days after proof of loss has been filed?

1. Ninety days after proof is filed
2. Sixty days after proof is filed ✓
3. Thirty days after proof is filed
4. Twenty days after proof is filed

Why: Section 3221(a)(14) prohibits any action prior to the expiration of sixty days after proof of loss has been filed in accordance with the policy's requirements.

Under a Section 162 executive bonus plan, the employer:

1. Owns the policy and keeps all of the cash value for corporate purposes
2. Pays a bonus equal to the premium, which the employee owns and is taxed on ✓
3. Borrows against the executive's personal policy to fund operations
4. Defers the executive's salary into a nonqualified retirement account

Why: The employer pays a deductible bonus equal to the premium; the employee owns the policy and reports the bonus as taxable income.

A Buyer's Guide and policy summary must generally be delivered to a life applicant:

1. At or before policy delivery ✓
2. Exclusively to applicants who are purchasing variable or indexed products
3. Within one full year after the policy has already been issued and paid for
4. Only if the applicant specifically asks the agent for written disclosure materials

Why: They must be provided no later than policy delivery so the buyer can evaluate the purchase.

In which policy does the owner bear the investment risk, with cash value fluctuating based on separate-account performance?

1. Whole life
2. Term life
3. Variable life ✓
4. Universal life

Why: Variable life invests cash value in separate accounts; the owner bears investment risk, so cash value (and sometimes death benefit) can rise or fall. It requires a securities license to sell.

A Section 1035 exchange permits a tax-free exchange of:

1. An annuity for stocks
2. A life insurance policy for an annuity ✓
3. A life policy for a mutual fund
4. An annuity for a life insurance policy

Why: 1035 allows tax-free life-to-life, life-to-annuity, and annuity-to-annuity exchanges, but NOT annuity-to-life.

'Defamation' in insurance regulation refers to:

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

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

Key person life insurance is purchased to protect a business against:

1. A decline in the market value of the firm's real-estate holdings
2. The cost of replacing equipment damaged in a covered accident
3. The financial loss from the death of an essential employee ✓
4. The personal estate-tax liability owed by the company's owners

Why: The business owns, pays for, and is beneficiary of a policy on a key employee, offsetting the loss if that person dies.

Withdrawals of earnings from a nonqualified deferred annuity are taxed:

1. At favorable long-term capital-gains rates in every case
2. On a first-in, first-out basis, returning principal first
3. On a last-in, first-out basis, so gains are taxed first ✓
4. Only after the entire account value has been withdrawn

Why: Nonqualified annuity withdrawals are taxed LIFO — earnings (gains) are considered withdrawn first and taxed as ordinary income.

Group life insurance is most commonly written as:

1. A single-premium endowment that is paid up at issue
2. Annually renewable term that renews each year ✓
3. Decreasing term tied to a mortgage balance
4. A paid-up whole life policy with no premiums

Why: Employer group life is typically annually renewable term; individual evidence of insurability is usually not required up to a guaranteed-issue limit.

Under § 3231, before issuing or delivering a community-rated policy form, an insurer must file with the superintendent a schedule of premiums not exceeding what duration and obtain approval?

1. Twenty-four months in duration
2. Twelve months in duration ✓
3. Eighteen months in duration
4. Six months in duration

Why: Section 3231(d)(1) requires the insurer to file a schedule of premiums not to exceed twelve months in duration and obtain the superintendent's approval; approval may be refused if premiums are excessive, inadequate, or unfairly discriminatory.

Under the 'one-year term' (fifth) dividend option, the dividend is used to:

1. Permanently convert the policy into an extended-term form
2. Purchase one year of term insurance, often equal to the cash value ✓
3. Reduce the policy's death benefit for the following policy year
4. Surrender the policy and take its full cash value in cash

Why: The one-year term option buys a year of term coverage (commonly equal to the cash value), increasing the total death benefit for that year.

Under the Insurance Law, what does the term 'insurance producer' encompass?

1. Only the salaried employees of an authorized insurer who advise members of the insuring public, because agents, brokers and excess lines brokers are each separately defined elsewhere in the article
2. Any person who advertises insurance in mass media distributed in this state without intent to solicit insurance in this state, together with every person who merely refers a prospect to a licensed agent
3. An insurance agent, title insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or other person required to be licensed to sell, solicit or negotiate insurance ✓
4. Only insurance agents and insurance brokers who hold a life line of authority and sell individual life insurance to residents

Why: Section 2101(k) defines 'insurance producer' to include agents, title agents, brokers, reinsurance intermediaries, excess lines brokers, and others required to be licensed.

A licensee fails to satisfy the continuing education requirements of § 2132 by the renewal date. What is the consequence?

1. A grace period of one hundred eighty days is granted to complete the hours
2. The person shall not be eligible to renew the license ✓
3. The license is automatically downgraded to a limited license
4. The superintendent imposes a fifty-dollar-per-missing-hour penalty

Why: Section 2132(h)(1) provides that any person failing to meet the CE requirements shall not be eligible to renew the license.

A subscriber delivers a baby by caesarean section. What is the minimum inpatient hospital coverage Article 43 requires for the mother and newborn following the caesarean?

1. At least ninety-six hours ✓
2. At least one hundred twenty hours
3. At least forty-eight hours
4. At least seventy-two hours

Why: Section 4303(c)(1)(A) requires inpatient coverage for at least ninety-six hours following a caesarean section (and at least forty-eight hours for other deliveries).

An accident-only policy provides benefits for:

1. Long-term custodial nursing-home care after an accident
2. Losses resulting from accidents, but not from sickness ✓
3. Routine preventive care and annual wellness checkups only
4. Both accidental injuries and any illness the insured develops

Why: Accident-only coverage is limited to losses caused by accidental injury; sickness is excluded, making it a limited (supplemental) policy.

Physician services and outpatient care are covered under Medicare Part:

1. C
2. A
3. D
4. B ✓

Why: Part B is medical insurance covering physician and outpatient services; Part D covers drugs; Part C is Medicare Advantage.

Under a blanket A&H policy where the insured person is a minor, benefits may be made payable to:

1. The insurer's claims department, which holds the funds until the minor reaches majority
2. The superintendent as custodian, to be released when the minor attains age eighteen
3. The minor's parent, guardian, or other person actually supporting the minor ✓
4. The policyholder alone, regardless of who actually supports the minor

Why: Section 4237(b) provides that if the person insured is a minor, benefits may be made payable to his parent, guardian, or other person actually supporting him.

Which producer may lawfully be represented to the public as an 'independent insurance agent'?

1. A salaried employee of an authorized insurer who advises the public about coverage and receives no commission on any sale, since taking no commission removes the financial tie to the insurer that Section 2101(b) treats as control of the agency
2. An agent not owned or controlled by any insurer whose agency agreement permits representing other insurers and leaves records and control of expirations with the agent on termination ✓
3. Any agent who places business with more than one authorized insurer during a calendar year, because Section 2101(b) measures independence by the number of insurers actually written rather than by who owns the agency or keeps the records of expirations
4. An agent wholly owned by a single insurer that markets several of that insurer's affiliated brands under an agreement leaving the records of expirations with the agent

Why: Section 2101(b) limits the 'independent insurance agent' label to an agent not owned or controlled by an insurer whose agreement permits representing others and leaves expirations with the agent.

Under Section 4238, a policy whereby annuities are payable dependent upon the continuance of the lives of more than one person is deemed a group annuity contract, EXCEPT a:

1. Joint, reversionary or survivorship annuity contract ✓
2. Contract issued to an employer
3. Contract issued to a labor union
4. Contract issued to an employers' association

Why: Section 4238(a) deems such a multi-life contract a group annuity contract except a joint, reversionary or survivorship annuity contract.

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

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

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

Under the group A&H standard provisions, for a claim for any loss OTHER than loss of time, written proof of loss must be furnished to the insurer within how many days after the date of loss?

1. One hundred twenty days after the date of loss ✓
2. Thirty days after the date of loss
3. Sixty days after the date of loss
4. Ninety days after the date of loss

Why: Section 3221(a)(9) requires proof of loss for non-time losses within one hundred twenty days after the date of loss; for loss-of-time claims, proof is due within thirty days after the period of liability commences.

Under § 3234, a pre-existing condition provision in a group or blanket DISABILITY policy must credit prior coverage that was continuous to a date not more than how many days prior to the effective date of the new coverage?

1. Sixty days ✓
2. Thirty days
3. Ninety days
4. Sixty-three days

Why: Section 3234(a)(1) requires crediting prior disability coverage that was continuous to a date not more than sixty days before the effective date of the new coverage, to the extent the prior coverage was substantially similar.

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.

Under N.Y. Public Health Law § 4401, "comprehensive health services" must include, but is not limited to, physician services, hospital services, diagnostic laboratory and radiologic services, and:

1. Emergency and preventive health services ✓
2. Long-term custodial nursing home care
3. Cosmetic and elective surgical procedures
4. Disability income replacement benefits

Why: Public Health Law § 4401(3) defines comprehensive health services as all those health services an enrolled population might require to be maintained in good health, and shall include but not be limited to physician services, inpatient and outpatient hospital services, diagnostic laboratory and therapeutic and diagnostic radiologic services, and emergency and preventive health services.

A convertible term policyholder converts to whole life before the conversion deadline. They:

1. Can only convert to another term policy
2. Need not provide new evidence of insurability ✓
3. Forfeit all prior premiums paid
4. Must pass a new medical exam

Why: A conversion privilege lets the insured switch term to permanent coverage without new evidence of insurability.

Under § 3208, no insurer may knowingly issue a life insurance policy purporting to have taken effect more than how long before the application date, if doing so reduces the premium?

1. Two years
2. Six months ✓
3. One year
4. Three months

Why: Section 3208(a) prohibits an insurer from knowingly delivering or issuing for delivery any life policy that purports to have taken effect more than six months before the date the application was made, if thereby the premium is reduced below what would be payable as determined by the insured's nearest birthday.

A 'warranty' differs from a 'representation' in that a warranty is:

1. Guaranteed to be true, and its breach can void the policy ✓
2. Only relevant after a claim is filed
3. Merely believed to be true to the best of one's knowledge
4. Always made orally rather than in writing

Why: A warranty is guaranteed absolutely true; a representation is believed true, and only a material misrepresentation affects the contract.

Modified whole life insurance is characterized by:

1. A lower premium for an initial period, then a higher level premium for life ✓
2. A premium that is higher in the first years and then drops sharply
3. Premiums that fluctuate yearly based on the insurer's investment returns
4. Coverage that decreases steadily until it reaches zero at age 65

Why: Modified whole life charges a reduced premium for the first few years, then a higher level premium for the remainder of life.

Under Section 4324(a), when a subscriber asks about emergency services, the corporation's disclosure must include a notice that emergency services are subject to what?

1. No prior approval requirement ✓
2. Prior approval only outside the service area
3. A separate annual deductible
4. A higher coinsurance than in-network care

Why: Section 4324(a)(8) requires a description of the procedure for obtaining emergency services including notice that emergency services are not subject to prior approval.

The portion of each annuity income payment that is a tax-free return of the owner's principal is determined by the:

1. Exclusion ratio ✓
2. Cost-of-living adjustment
3. Surrender charge
4. Participation rate

Why: The exclusion ratio sets how much of each payment is nontaxable return of basis versus taxable gain.

A worker contributes to an HSA, then uses the funds for a non-qualified expense before age 65. The withdrawal is:

1. Deductible as a medical expense
2. Taxable and subject to an additional penalty ✓
3. Completely tax-free in all cases
4. Exempt because it is the worker's own money

Why: Non-qualified HSA withdrawals before 65 are taxable and subject to an additional 20% penalty; qualified medical withdrawals are tax-free.

A worker dies, leaving a spouse caring for their 10-year-old child. Social Security survivor benefits are:

1. Payable only after the spouse turns 65
2. Payable to the surviving spouse and child ✓
3. Limited to a one-time lump sum only
4. Not available for dependent children

Why: Survivor benefits are payable to a surviving spouse caring for the deceased's young child and to the dependent child, if the worker was insured.

Under § 2409, an order of the superintendent under Article 24 (or a court order enforcing it) has what effect on a person's liability under other laws?

1. It doubles any other statutory liability the person has incurred under the Insurance Law or any other law of this state
2. It discharges the person from all other liability
3. It does not relieve the person from any liability under any other law ✓
4. It stays other liability until the order becomes final

Why: Section 2409(b) provides that no order under the article or court order enforcing it shall in any way relieve any person affected from any liability under any other law.

Under § 2114, an activity is NOT a compensable 'service' that triggers the licensing requirement when it is:

1. Completing the insurance application on behalf of the applicant and submitting it to the insurer for underwriting
2. A referral of a person to a licensed agent that does not discuss specific policy terms and where compensation is not based on the purchase of insurance ✓
3. Comparing the substantive benefits of competing policies for a prospect and recommending that the prospect purchase one of them, for compensation paid on the sale
4. Delivering the issued policy to the buyer and collecting the initial premium payment for the insurer

Why: Section 2114(a)(4) excludes from 'services' a referral that does not include a discussion of specific policy terms and where compensation is not based on the purchase of insurance.

An insurer holding a certificate of authority to transact business in a state is said to be:

1. Reciprocal
2. Admitted (authorized) ✓
3. Alien
4. Nonadmitted (unauthorized)

Why: An admitted/authorized insurer holds a certificate of authority; a nonadmitted insurer does not.

A 'mutual' insurance company is:

1. A producer-owned brokerage firm
2. A government agency that pays claims of insolvent insurers
3. Owned by outside stockholders seeking profit
4. Owned by its policyholders, who may receive policy dividends ✓

Why: A mutual insurer is owned by its policyowners; dividends paid to them are treated as a nontaxable return of premium.

A bank issues group credit life insurance covering its installment borrowers. For how long may the insurance be continued on an installment debt?

1. For seven years from the loan's inception, or until the debt is refinanced, whichever comes first
2. For the duration of the debt with no outside limit, because the creditor's insurable interest continues until the final installment is paid
3. For the duration of the debt over a period of not more than thirty-five years from the date the debt is first incurred ✓
4. For a maximum of eighteen months, after which the debtor must apply for an individual policy

Why: For installment repayment, credit life insurance may be continued for the duration of the debt over a period of not more than thirty-five years from the date the debt is first incurred.

The key distinction between an agent and a broker is that an agent:

1. May write only one line of insurance, while a broker may write several
2. Represents the applicant's interests, while a broker is the insurer's appointed representative
3. Is paid a salary only, while a broker earns commission on placed coverage
4. Legally represents the insurer, while a broker represents the client ✓

Why: An agent is the insurer's legal representative (acting under an agency contract); a broker represents the insurance buyer in seeking coverage.

Under the wellness-program exception in Section 4224(f), a licensed agent or broker may administer wellness programs without a full service fee only if the programs are:

1. Approved in advance by a national rating organization and filed with the superintendent
2. Limited to individual life policies the same agent sold within the prior year
3. Offered only to the group policyholder's executives and other highly compensated staff
4. Provided in a fair and nondiscriminatory manner and incidental to a group or blanket policy ✓

Why: Section 4224(f)(2) permits wellness programs under section 3239 where provided in a fair and nondiscriminatory manner and incidental to a group or blanket policy or contract sold by the agent or broker.

A cash refund annuity guarantees that, if the annuitant dies early, the beneficiary receives:

1. Double the original premium as an accidental-death style bonus payment
2. Any premium not yet paid out, in a lump sum ✓
3. Nothing, because all annuity payments stop at the annuitant's death
4. Continued lifetime payments for the rest of the beneficiary's own life

Why: A cash refund pays the beneficiary, in a lump sum, the difference between premiums paid and payments already received; an installment refund pays it out in continued installments.

Under § 2601, the good-faith duty to effectuate prompt, fair, and equitable settlements applies to claims in which liability has become reasonably clear, except where there is a reasonable basis supported by specific information that the claimant caused the loss by:

1. Negligence
2. Failure to mitigate damages
3. Fraudulent misstatement on the application
4. Arson ✓

Why: Section 2601(a)(4) carves out an exception where there is a reasonable basis supported by specific information available to the department that the claimant caused the loss to occur by arson.

Under Section 3219, what is the free-look (surrender for cancellation) window required in an individual annuity contract, and what is the special rule for mail-order sales?

1. Exactly fifteen days from delivery, with the same fifteen-day period applying to a contract sold by mail order or by telephone
2. Not less than ten nor more than thirty days from delivery, with a thirty-day period required for mail-order contracts ✓
3. Not less than twenty nor more than sixty days from delivery
4. Sixty days from delivery for every annuity contract sold in this state

Why: Section 3219(a)(9) requires a surrender/free-look right of not less than ten nor more than thirty days from delivery and a thirty-day period for mail-order contracts.

When an employee elects continuation of group coverage under Article 43, the premium the corporation may charge is capped at what amount?

1. The individual direct payment rate
2. One hundred percent of the group rate
3. One hundred fifty percent of the group rate
4. Not more than one hundred two percent of the group rate ✓

Why: Sections 4305(e)(3) and 4304(k)(3) cap the continuation premium at not more than one hundred two percent of the group rate for the benefits being continued.

Under § 3221, the insurer must issue to the employer or named policyholder, for delivery to each member of the insured group, what document setting forth the essential features of coverage?

1. A certificate ✓
2. A master policy duplicate
3. A schedule of premium rates
4. An explanation of benefits form

Why: Section 3221(a)(6) requires the insurer to issue a certificate, for delivery to each group member, setting forth in summary form the essential features of the insurance coverage and certain required provisions.

The uniform 'time of payment of claims' provision requires the insurer to pay claims:

1. Only after a mandatory 90-day internal review of every claim
2. At the end of the calendar year in which the loss happened
3. Immediately (or promptly) upon receipt of written proof of loss ✓
4. Within five years of the date the loss originally occurred

Why: Claims must be paid immediately upon receipt of proof; disability income benefits are paid at least monthly.

Under Section 3204, how are statements made by an applicant for a New York life or health policy treated?

1. As binding promises of future conduct
2. As representations and not warranties ✓
3. As conditions precedent to the insurer's liability
4. As warranties that, if breached, automatically void the contract

Why: Section 3204(c) provides that all statements made by or by the authority of the applicant shall be deemed representations and not warranties.

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.

A health policy with monthly premiums has a grace period of 10 days. A premium is 8 days late when the insured incurs a covered loss. The insurer:

1. Pays half of the benefit and bills the insured for the two months of overdue premium
2. Rescinds coverage back to the paid-to date and refunds the unearned premium to the insured
3. Denies the claim, since coverage lapsed on the due date
4. Covers the loss, since the policy is still in force during the grace period ✓

Why: Coverage continues during the grace period; the claim is paid (the overdue premium may be deducted).

Under the group conversion provisions of § 3221, an eligible employee must apply to the insurer for a converted individual policy without evidence of insurability within how many days after termination of group coverage?

1. Forty-five days
2. Ninety days
3. Thirty days
4. Sixty days ✓

Why: Section 3221(e)(1) entitles an eligible employee or member to a converted individual policy without evidence of insurability upon application within sixty days after termination of the group coverage.