Free Alabama Life practice questions

Answer: C. With the policy, or at any time before the policy is delivered

The rule requires the insurer to give a Buyer's Guide to all prospective purchasers before accepting the applicant's initial premium or premium deposit. It then makes an exception: where the policy applied for contains an unconditional refund provision of at least 10 days, the Buyer's Guide may be delivered with the policy or before the policy is delivered. A 10-day unconditional refund provision meets that condition, so the before-premium timing is not the only option. The rule sets no 30-day post-delivery window, and it requires the guide for all prospective purchasers rather than only those who ask in writing.

Answer: C. Treat it as a cause to suspend, revoke, refuse to renew, or place the license on probation

Among the listed causes for which the Commissioner may act against a licensee is not complying with an administrative or court order that imposes child support. For any listed cause, the Commissioner may place the license on probation, refuse to issue or renew it, suspend it, revoke it, levy a civil penalty, or combine these actions. The cause stands on its own: it does not have to involve insurance business, and it does not depend on a felony conviction, which is a separate listed cause. The statute gives the Commissioner this license authority directly, rather than limiting the response to a court referral.

Answer: A. Examine the adjuster's accounts, records, and transactions relating to insurance

Under Ala. Code Sec. 27-2-20(a), the Commissioner may examine the accounts, records, documents, and transactions pertaining to the insurance affairs of an agent, broker, adjuster, or similar person when the Commissioner has reason to believe a violation has occurred or when a complaint from a resident indicates one may exist. A single resident's complaint is enough to support that power. The subsection does not condition the examination on a court order, on the adjuster's consent, or on a second complaint.

Answer: B. It is deemed deceptive and misleading under the rule, and the insurer may not use it

Under the rule's premium disclosure standards, an advertisement describing a policy whose premium the insurer reserves the right to change during the policy term, without prominently describing that feature, is deemed deceptive and misleading and is prohibited. The standard applies to the advertisement, and the rule makes no exception because the policy itself states the right. It turns on the reserved right to change the premium, not on whether the policy's premium is level, and it does not wait for an actual premium increase.

Answer: A. The name, age and sex of the person proposed to be insured

Alabama's illustration rule requires an illustration used in selling a life insurance policy to be clearly labeled as a life insurance illustration and to contain listed basic information, including the proposed insured's name, age and sex; that item may be left out only where a composite illustration is permitted. The other listed items are the insurer's name, the producer's or authorized representative's name and business address, the underwriting or rating class, the generic name, product name and form number, the initial death benefit, and the dividend option or use of non-guaranteed elements where applicable. The list does not include a Social Security number or home address, the applicant's income or net worth, or the beneficiaries.

Answer: A. The lines of authority applied for, what a producer's duties and responsibilities are, and Alabama's insurance laws and regulations

A resident individual seeking an Alabama producer license must pass a written examination unless an exemption applies. The statute defines its subject matter as three things: the lines of authority the individual is applying for, what a producer's duties and responsibilities are, and Alabama's insurance laws and regulations. Securities rules, insurer financial statements, actuarial pricing, county law, and one insurer's forms and procedures are not among the subjects the statute names.

Answer: D. An individual ordinary whole life policy sold to a consumer

The requirement reaches policies of life insurance other than industrial, group and pure endowment policies, and the section states that it does not apply to annuity contracts or to burial insurance. An individual ordinary whole life policy fits none of those carve-outs, so it must contain the required provisions in substance. A group life policy and an industrial life policy are both excluded by the opening words of the section, and an annuity contract is expressly placed outside it.

Answer: B. A subsisting certificate of authority issued by the Commissioner

Ala. Code Sec. 27-3-1(a) bars any person from acting as an insurer, and any insurer from transacting insurance in Alabama, unless it holds a subsisting certificate of authority issued by the Commissioner, apart from transactions the Insurance Code expressly provides for otherwise. The credential the subsection names is the Commissioner's certificate of authority. A corporate charter, NAIC membership, or a surety bond is not what it requires.

Answer: A. By March 18, 15 days after the agency contract was signed

An insurer appointing a producer in Alabama must file the notice of appointment with the Commissioner within 15 days of the earlier of two events: execution of the agency contract or submission of the first insurance application. The statute uses the phrase "whichever occurs first." Here the contract was signed March 3, a week before the March 10 application, so the 15 days run from March 3 and end March 18. Counting from the later application date ignores the earlier-event rule, and the 30-day choices use a period the statute does not give for this filing.

Answer: D. Ordinary policy, premiums paid for three full years, surrendered 45 days after the default

A life policy must provide that, if the owner surrenders it within 60 days after the due date of a premium in default, and premiums have been paid for at least three full years on ordinary insurance or five full years on industrial insurance, the insurer pays a cash surrender value instead of a paid-up benefit. The ordinary policy with three full years paid, surrendered 45 days after the default, meets both conditions. Two full years falls short of the three-year minimum for ordinary insurance, and four full years falls short of the five years required for industrial insurance. A surrender 70 days after the default is outside the 60-day window this provision sets.