Free Iowa Life practice questions

Answer: B. Either uniformly to all accounts or, on an approved equitable basis, to just those two

When an Iowa credit insurer files rates above the prima facie rates, the filing must specify the account the rates apply to. The higher rates may then be applied either uniformly to all of the insurer's accounts or, on an equitable basis the commissioner approves, to only one or more accounts whose experience has been less favorable than expected. That permits either uniform application or targeting the two poorer accounts. Restricting the higher rates to better-performing accounts fits neither option, a filing that leaves the accounts unidentified fails the specification requirement, and account-specific application is expressly allowed rather than barred.

Answer: A. It may make no charge for that loan month

On termination, Iowa's refund rules allow no credit insurance charge for the first 15 days of a loan month, and allow a full month's charge once 16 or more days of the loan month have run. Coverage that ends on the 12th day falls within the first 15 days, so no charge may be made for that month. A full-month charge would require at least 16 days, and the rule provides neither a daily proration nor a half-month charge.

Answer: B. At least 65 percent of the association's members

For a policy issued to a teachers' association or a lawyers' association, Iowa Code Sec. 509.1(2)(b) allows coverage of not less than 65 percent of the members. The 75 percent figure appears elsewhere in the same section, as the participation threshold for an employer group accident and health policy funded partly by employee contributions, so it is not the figure for these associations. A 50 percent level falls below the 65 percent floor, and the section does not require that every member of a teachers' or lawyers' association be covered.

Answer: D. Rates may not be excessive, inadequate, or unfairly discriminatory

Iowa Code Sec. 509.17(1) states that rates shall not be excessive, inadequate or unfairly discriminatory. The next subsection directs that due consideration be given to loss experience both within and outside the state and to a reasonable margin for underwriting profit and contingencies, so an Iowa-only experience base or a rule excluding any profit margin misstates the guidelines. A rate set at whatever level the insurer prefers could be excessive or inadequate, which subsection 1 prohibits.

Answer: B. Any form the insurer then customarily issues at that age and amount, except term insurance

Iowa Code Sec. 509.2(8) requires a group life policy to give a person whose coverage ends with termination of employment the right to an individual policy without evidence of insurability, if application is made and the first premium paid within 31 days after the termination. At that person's option, the individual policy may be on any form the insurer then customarily issues for that age and amount, except term insurance, so a term-only conversion is wrong. The converted policy is issued without disability or other supplementary benefits, so the group plan's disability features do not carry over. Its premium is the insurer's then customary rate for the form, amount, the person's class of risk and attained age, not the group rate.

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

Under the rule, the insurer is responsible for compliance, 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 commissioner 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, and the rule assigns the consumer no compliance duty.

Answer: A. At least five years or until its next regular domiciliary examination ends, whichever is later

Rule 191-16.27(1) makes the existing insurer keep every replacement notification it receives, indexed by replacing insurer, and be able to produce it for at least five years or until the insurance department of its state of domicile concludes its next regular examination, whichever comes later. Choosing the sooner of the two would cut the period short, the rule contains no three-year period, and the duty does not end when the replacing insurer issues the new coverage.

Answer: D. At least five years after the new policy terminates or expires

Under r. 191-16.25(5), when the applicant has existing policies or contracts, a replacing insurer that uses producers must keep completed, signed copies of the replacement notice available for at least five years after the proposed policy or contract terminates or expires. The period runs from the end of the new coverage, so five years counted from the surrender of the old policy runs from the wrong event, and three years is shorter than the rule requires. Tying retention to the next regular examination borrows from the separate duty of the existing insurer in r. 191-16.27(1), which governs the notifications that insurer receives.

Answer: D. Make a written record of the recommendation and the basis on which it was made

At the time of the recommendation or sale, the agent must create a written record of any recommendation and of its basis. The law's list of the agent's documentation duties at that point has three parts: that written record, a consumer-signed statement when the consumer refuses to provide profile information, and a consumer-signed statement when the consumer buys an annuity not based on a recommendation. Filing recommendations with the regulator, a client statement agreeing to a fiduciary role, and senior-manager sign-off on each sale are none of those three duties.

Answer: A. No later than the time the application is taken

When a replacement is involved, the agent must give the applicant the replacement notice no later than the moment the application is taken. The notice is signed by both the applicant and the agent, and it is left with the applicant. Because taking the application is the latest permitted point, a deadline that falls after the application, such as a few working days later, at policy delivery, or after issue, is too late.