Free Kansas Accident & Health practice questions

Answer: D. The department is the policyholder, and the group is defined by hazards of its activities

Kansas lists a volunteer fire department, first aid, civil defense or similar volunteer organization as an eligible blanket policyholder. The organization itself is deemed the policyholder, and the group is all members, identified by reference to specified hazards arising from activities or operations the organization sponsors or supervises. Blanket coverage under this paragraph does not depend on naming each member. The ten-person minimum applies to policies issued to a sports team, camp or sponsor, not to a volunteer organization, and the policyholder is the department rather than a local government.

Answer: A. It qualifies, because the deposit may be held by the department of Kansas or any other state

K.S.A. 40-209(a)(1) lets a foreign company qualify for Kansas authority when it has made the deposit the code requires with the department of insurance of Kansas or of any other state in the United States, so a deposit held by the Nebraska department meets that condition. Nothing in that paragraph requires the deposit to sit with the Kansas department, and it sets no reciprocity condition tied to how Nebraska treats Kansas insurers. The Commissioner's power under subsection (f)(1) to waive requirements arises upon renewal of a certificate of authority, not at first admission, and no waiver is needed here because the condition is already met.

Answer: B. At least once every five years

Kan. Stat. Ann. Sec. 40-222(a) lets the Commissioner make, or direct, a financial examination of an insurance company that is organizing, applying for admission or doing business in Kansas whenever the Commissioner considers it necessary, but at least once every five years. The three-year and one-year intervals do not appear in this subsection, and the examination power is not conditioned on a consumer complaint. Market regulation examinations are separate and are left to the Commissioner's discretion.

Answer: B. 180 days

Within its medical service enrollment area, an insurer may deny coverage to a small employer only after showing the Commissioner that it cannot adequately serve additional small employers because of its obligations to existing groups, and that it will apply the denial uniformly without regard to claims experience or health status. An insurer that denies coverage on that basis may not offer such policies to small employers within that enrollment area for 180 days after the denial, so 90 days, one year and five years are all wrong for this situation.

Answer: B. $2,000 for each act or violation

Kan. Stat. Ann. Sec. 40-2,125(a)(1) caps the monetary penalty at $1,000 per act or violation. The cap rises to $2,000 per act or violation when the person knew or reasonably should have known of the violation. Because this company reasonably should have known, the $2,000 cap applies. The $1,000 figure is the cap only where that knowledge is absent. The $500 figure appears in subsection (b) as an added weekly penalty for a required report that is not provided, not as a per-violation cap for this finding. No $10,000 per-violation cap appears in this section.

Answer: C. 180 days from the date the order became final, so the association can take proper legal action

K.S.A. 40-3018 stays every proceeding in a Kansas court to which the impaired or insolvent insurer is a party for 180 days from the date the order of liquidation, rehabilitation or conservation becomes final. The stated purpose is to allow the association to take proper legal action on matters germane to its powers or duties. The same section lets the association ask the court that entered a default judgment to set it aside and defend the suit on the merits. The 30 day, 90 day and one year periods, and the purposes paired with them, are not what this section provides.

Answer: B. Assessments levied on the insurers that are members of the association

K.S.A. 40-3002(b) says the association is made up of member insurers and that those members are subject to assessment to supply the funds needed to carry out the Act's purpose. The purpose section does not draw on the state general fund, does not charge covered policyholders directly, and does not rely on any federal program; the funding source it names is assessment of the member insurers.

Answer: D. It must stay a member as a condition of keeping its authority

K.S.A. 40-3006(a) requires every member insurer to be and remain a member of the association, and makes that membership a condition of the insurer's license or authority to transact insurance or health maintenance organization business in Kansas. The section names no exit for an insurer that keeps its Kansas authority, so a notice to the board, payment of outstanding assessments or a finding of financial soundness does not end membership.

Answer: B. It is prohibited, because it misstates policy provisions on coverages at issue

The statute lists misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue as an unfair claim settlement practice when committed with such frequency as to indicate a general business practice. Telling claimants that a covered procedure is excluded misstates the policy's provisions on the very coverage at issue, and the stem establishes the frequency. Each listed practice stands on its own, so no second failing, such as missing investigation standards, is needed. The statute is not confined to payment timing, and nothing in this provision waits on a proof of loss.

Answer: D. Unfair discrimination between individuals of the same class and hazard

Kansas defines as unfair discrimination any unfair difference, between people of the same class and of essentially the same hazard, in the premium, policy fees or rates charged for an accident or health policy, in the benefits it pays, or in its terms and conditions. Paying one applicant smaller benefits under the same form, with nothing in the risk to justify it, fits that definition. Rebating concerns giving an inducement, such as a premium rebate, that the contract does not specify, and nothing is being given to either applicant here. Twisting is a misleading statement or comparison made to induce a policyholder to terminate or exchange a policy, and defamation concerns false or malicious statements about another.