Free Idaho Life practice questions

Answer: D. Within five working days of March 2, the date the application arrived at the regional office

An insurer that uses agents must send each existing insurer a written communication about the replacement within five working days, counted from either the date its home or regional office received the application or the date the proposed policy was issued, whichever comes first. Here the application arrived on March 2 and the policy was issued on March 20, so March 2 is the earlier date and controls. Counting from March 20 uses the later date, which the rule does not allow. The rule sets five working days for this communication, not 14 days. The 20-day period after delivery is the applicant's unconditional refund right, not a deadline for notifying the existing insurer.

Answer: B. $5,000

The general penalty applies when no greater penalty is set by another provision of the code or by other Idaho law. It caps the administrative penalty the director may impose at $1,000 for an individual or natural person and at $5,000 for any other person, and a corporation falls in the second group. The $1,000 cap is the one for individuals, so it does not fit a corporation. Neither $10,000 nor $15,000 is a cap under the general penalty provision. The section also allows each instance of a violation to be treated as a separate offense.

Answer: B. Up to six months after the application

Idaho requires a life policy to reserve to the insurer the right to defer granting a loan for six months after the application, except a loan made to pay a premium to the insurer. Because this owner is asking for a cash loan rather than a premium loan, the insurer may delay it for up to six months. The provision sets six months for this deferral, not 30 days, two months or one year.

Answer: A. As often as the Director considers it advisable

Idaho Code Sec. 41-220 allows the Director, to ascertain compliance with law, to examine the accounts, records, documents and transactions of insurance agents, brokers, consultants, general agents, adjusters and others as often as the Director deems advisable. That power is in addition to any other examination right the Director holds. The section sets no periodic cap, and it does not make the examination depend on a complaint or on the licensee's consent.

Answer: A. No, the 90-day window and the good-standing certification exempt Lee

Idaho Code Sec. 41-1012(1) excuses the prelicensing examination for an applicant previously licensed in another state for the same lines of authority in either of two cases: the applicant is currently licensed in that state, or the application arrives within 90 days after the prior license was canceled and the prior state certifies good standing (at cancellation, or through its NAIC producer database records for the lines requested). Lee applied at 60 days with a good-standing certification, so no examination is required. Current licensure is one route rather than the only one, the window is 90 days rather than 30, and subsection (1) does not make the exemption depend on Idaho residence.

Answer: C. At least 14 days before the hearing

Idaho Code Sec. 41-235(1) requires the director to give notice of a hearing's time and place, stating the matters to be considered, no less than 14 days in advance, except where another provision of the code sets a longer notice period for a particular matter. Seven days and ten days fall short of that minimum, and 30 days overstates it.

Answer: B. Issue and serve on the insurer a statement of the charges along with notice of a hearing on them

Idaho's trade practices chapter does not limit the Director to the practices it lists. Where the Director has reason to believe a person in the insurance business is using a method of competition or an act that the chapter does not expressly prohibit or define, finds it unfair or deceptive, and believes a proceeding would be in the public interest, the Director may serve a statement of the charges and a notice of hearing, or seek other relief that Title 41 authorizes. The choice saying only named practices can be pursued is wrong because this section exists precisely for practices the chapter does not name. The section does not require a policyholder complaint; the trigger is the Director's own reason to believe. It also reaches a person who is engaging in the practice now, so the Director need not wait for a completed injury.

Answer: A. When the copy, properly addressed and prepaid, is deposited in the mail

Idaho Code Sec. 41-212(3)(b) allows the director to give an order by mailing it, by regular or certified mail, to the person's residence or principal place of business as last recorded with the department. Under Sec. 41-212(4), service by mail is complete once a properly addressed, postage-prepaid copy is deposited in the United States mail. Completion does not wait for a signed return receipt, for actual receipt by the licensee, or for any set number of days after mailing.

Answer: D. The member insurer that issued the policy is domiciled in Idaho

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 Idaho, 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: A. Read the law so as to carry out the purpose stated in its purpose section

The construction section is one sentence: the law is to be construed to effect the purpose set out in its purpose section, which is protecting covered persons when a member insurer is impaired or insolvent. That sentence names no other rule of interpretation, so it does not direct a court to favor member insurers, to read the law against owners, or to apply the law of the failed insurer's home state.