Free Delaware Life practice questions

Answer: B. The member insurer that issued the policy is domiciled in Delaware

For a policy owner who is not a resident, the law extends coverage only when all of its listed conditions are met: the issuing member insurer is domiciled in Delaware, the owner's state of residence has a similar association, and the owner is ineligible for coverage from any other state's association because the insurer was not licensed in that state at the time that state's law specifies. Domicile of the insurer is the only choice that is one of those conditions.

Answer: B. Within 30 days after the final disposition of the matter, with a copy of the consent order

A Delaware producer must report to the Insurance Commissioner any administrative action taken against her in another jurisdiction, or by another governmental agency in Delaware, within 30 days after the final disposition of the matter, and the report must include a copy of the order or consent order or other relevant legal documents. The trigger is the end of the matter, not the date the action was first brought. The event that starts the clock for a criminal matter, the initial pretrial hearing date, belongs to a separate duty. The deadline runs from the matter, not from the producer's renewal cycle.

Answer: D. Debtors of one or more subsidiary corporations of the bank

Under Sec. 3103(1), a debtor-group policy covers all debtors of the creditor or any class of them, and the policy may extend the term to borrowers, to purchasers or lessees paying through a credit transaction, to debtors of subsidiary corporations, and to debtors of affiliated businesses under common control. Depositors who have never borrowed and applicants who were refused credit owe the bank nothing, so they are not debtors. The bank's employees are a subject for an employee-group policy under Sec. 3102, not for the debtor definition.

Answer: B. Deposit securities of a kind lawful for investing life insurance funds with the Commissioner, held in trust for all holders in common

Delaware requires a domestic life insurer to place with the Commissioner securities of the type the law requires and authorizes for investing life insurance funds. The Commissioner, and each successor in office, holds that deposit in trust for the common benefit of the holders of the insurer's previously issued registered policies and bonds. The bank option fails because the statute names the Commissioner as the depositary and makes the benefit common to all holders rather than split into separate accounts. The State Treasurer option fails because the statute calls for securities held in trust, not cash credited to the General Fund. The Attorney General option fails because the Attorney General is not the depositary and the benefit is not limited to holders with claims already payable.

Answer: C. The Insurance Commissioner of the State

The general-powers section directs the Commissioner to enforce and execute the duties the title imposes, and gives the Commissioner the powers the title expressly grants or reasonably implies. The duty is placed on the Commissioner, not on the Attorney General, the Governor or the State Treasurer. The Treasurer appears in the same section only because, for collecting fees, charges and taxes, the laws giving powers to the Treasurer also apply to the Commissioner.

Answer: A. The amount of coverage the premiums paid would have bought at age 45

Sec. 2909 requires a provision that, where the insured's age has been misstated, any amount payable is what the premium would have purchased at the correct age. The benefit is therefore recalculated at age 45 using the premium actually paid. Nothing in Sec. 2909 makes that adjustment depend on whether the contestable period has run, so the full face amount is not owed. The misstatement does not void the policy, and the statute adjusts the benefit to what the premium buys rather than deducting a premium shortfall from the face amount.

Answer: D. April 20, the date the insurer determined the evidence was satisfactory

For coverage elected before or at the time of the credit transaction, the term generally starts, subject to the insurer's acceptance, on the day the debtor becomes obligated to the creditor. When evidence of individual insurability is required and is furnished more than 30 days after that day, the term may instead start on the date the insurer determines the evidence to be satisfactory. Here the evidence came 45 days after March 1, so the permitted later start is April 20. The date the evidence was furnished, a date 30 days after the loan, and a date 30 days after the insurer's determination are not the date the statute names.

Answer: A. Passing a written exam and having enough first-party property claim experience

Delaware's public adjuster licensing section directs the Commissioner to issue the license to an applicant who passes a written examination and has sufficient experience, training and instruction in adjusting first-party claims under policies insuring the insured's real or personal property, as the Commissioner determines. The statute's list of qualifications does not include an insurer appointment, a prior producer license, or sponsorship by an insurer.

Answer: C. The annuitant's age, sex and identity

Delaware's annuity incontestability rule is triggered only when the insurer requires statements beyond those about age, sex and identity. When it is triggered, the contract must become incontestable after it has been in force for 2 years from its date of issue during the lifetime of each person whose statements were required, except for nonpayment of stipulated payments. Health, habits, residence, employment, assets and beneficiaries are not among the three excluded subjects, so requiring statements about them brings the incontestability provision into play.

Answer: A. Within 60 days after the due date of the defaulted premium

Delaware's standard nonforfeiture law requires a life policy to promise that, after a default in any premium payment, the insurer will grant the paid-up nonforfeiture benefit stipulated in the policy on a proper request made no later than 60 days after the due date of the defaulted premium, with the benefit effective as of that due date. The period runs from the premium's due date, not from the end of a grace period, a lapse notice or a later policy anniversary, and the statute sets 60 days rather than 31 days, 90 days or 6 months.