Free Illinois Life practice questions

Answer: B. An applicant-signed statement on whether it will replace existing coverage

Section 917.60(a)(1) requires the producer to send the replacing insurer, along with every life insurance or annuity application, a statement the applicant has signed saying whether the new insurance will replace existing life insurance or annuity. The duty attaches to each application, not only to those where the producer suspects replacement, and it calls for a signed statement rather than an oral confirmation. The provision asks whether replacement will occur; it does not call for a list of cash values.

Answer: A. The insurer, which answers for compliance even when its producer's inaction caused the violation

Under 50 Ill. Adm. Code 3120.70(a), the insurer is responsible for compliance with Part 3120, and the rule expressly reaches a violation arising from the action or inaction of either the insurer or its insurance producer. So the producer is not the only party responsible. The Director may also order a general agency, an independent agency or the producer to take corrective action for a harmed consumer, but that sits alongside the insurer's responsibility rather than replacing it. The Director is the official who issues orders after a violation, not the party charged with compliance, and 3120.70(a) assigns the consumer no compliance responsibility.

Answer: C. He must testify, and he cannot be prosecuted for acts he is compelled to testify about

Section 153 says no person is excused from testifying or producing documents at the trial or hearing of someone charged under Section 151 on the ground that the evidence may incriminate him. In exchange, the witness may not be prosecuted for any act about which he is compelled to testify or produce evidence, and the compelled testimony may not be used against him in a criminal proceeding, except a prosecution for perjury in giving it. The protection comes from the statute itself, and the section calls for no separate grant or order from the Director.

Answer: C. Credit life insurance coverage

Section 917.50 lists the coverages and transactions to which Part 917 does not apply unless otherwise specifically included, and credit life insurance is the first entry on that list. Individual whole life, individual universal life and individual deferred annuities are not named as exempt categories in Section 917.50, so none of them is outside the Part simply because of the type of coverage.

Answer: D. Yes, because a knowing violation qualifies without any showing of frequency

Section 154.5 makes a Section 154.6 act an improper claims practice if it is committed knowingly in violation of the Code or its rules, or if it is committed with such frequency as to indicate a persistent tendency. The two tests are joined by 'or', so a single knowing violation is enough and frequency need not be shown. A disproportionate number of complaints and a policyholder being compelled to sue are separate listed acts in Section 154.6, not preconditions for the knowing-violation test.

Answer: B. At least 10 days before the hearing date

Section 402(2) provides that, unless the Code specially provides otherwise, a hearing is held on written notice from the Director to the affected person or company given at least 10 days before the designated date, and the notice states the subject of inquiry and any specific charges. Fourteen days is the time Section 500-110(e) allows a producer to request a hearing on an examination report, not a notice period. Neither 5 nor 30 days is the general notice period Section 402(2) sets.

Answer: C. Tell the consumer the basis or bases on which she is recommending that contract

50 Ill. Adm. Code 3120.50(a)(1)(A) lists four things a producer must use reasonable diligence, care, and skill to do: know the consumer's financial situation, insurance needs and financial objectives; understand the options available to the producer after a reasonable inquiry; have a reasonable basis for believing the recommended option effectively addresses the consumer's situation, needs and objectives; and communicate the basis or bases of the recommendation to the consumer. The producer in the stem has done the first three, so communicating the basis is what remains. The inquiry the subsection describes is into options available to the producer, not every product in the market, and annual reviews and a lowest-commission choice are not among the duties the subsection lists.

Answer: C. The nonresident license is unavailable, since the same-basis reciprocity condition fails

Section 500-40(a) lists the conditions on which a nonresident receives an Illinois nonresident producer license, and paragraph (4) requires that the home state award nonresident licenses to Illinois residents on the same basis. Good standing at home is a separate condition and does not substitute for reciprocity. The section offers no route around paragraph (4) by passing the Illinois examination, and nothing in it converts a failed reciprocity condition into a license restricted to certain lines.

Answer: B. He must reapply for the examination and resubmit all required materials before he can be rescheduled.

Section 500-25(d) treats a candidate who fails to appear the same way as one who fails the test: before a new date is set, he has to apply again and resubmit everything the examination application requires. So a missed sitting does not earn a free reschedule. The 90-day figure in Section 500-25(a) is the window within which both parts of the examination must be passed, not a waiting period, and subsection (d) provides for no automatic reactivation. Subsection (d) gives a sponsoring insurer no role in rescheduling; the obligation to reapply rests on the individual.

Answer: A. The circuit court of the county where the testimony is sought

Section 403(3) allows the Director to petition the circuit court for the county where the testimony is wanted, or where it was taken or an attempt to take it was made, attaching a copy of the subpoena and its return of service. That court may order the person to attend, testify or produce the books. If the court finds that a refusal to obey its order is willful and without lawful excuse, the section directs the court to punish the person by fine, county jail time, or both. The forum the section names is that county circuit court, not a federal court, the Supreme Court or a Department hearing officer.