Free Maine Life practice questions

Answer: B. Any individual producer, whether resident or nonresident

Maine's license authorities section provides that an individual resident or nonresident producer may receive any of the full license authorities set out in the lines-of-authority provision of the Maine Producer Licensing Act, and surplus lines authority under the surplus lines chapter. Residency is not a condition, so the resident-only answers are wrong, and the section attaches no prior-licensure period and no business entity license requirement.

Answer: C. 30 days after the insured's death

For industrial life policies, Maine permits a clause letting the insurer pay the executor or administrator, a relative, or someone who bore maintenance, medical or burial expense for the insured when the designated beneficiary has not made a claim within the stated period. That period may be no less than 30 days after the insured's death. Periods of 10 or 15 days are shorter than the statute allows. A 60-day period would be permitted, but it is not the shortest the policy may state.

Answer: A. The insurer, within 15 days after the contract is executed or the first application is submitted

Maine places the filing duty on the appointing insurer, not on the producer. The insurer files its notice of appointment in a format the superintendent approves, no later than 15 days after the agency contract is signed or the first application comes in. The two choices naming the producer put the duty on the wrong party. The 30-day choices use the wrong period; 30 days is the window for a licensee to report changes such as a new address under section 1419, a different obligation from the appointment filing.

Answer: C. It is a prohibited use of knowledge gained through the insurance relationship

Maine prohibits a licensed producer from using knowledge gained through the insurance relationship with a consumer to invest the consumer's money in property in which the producer or the producer's relatives have or will have an ownership interest, unless insurance, banking or securities law otherwise authorizes it. The stem rules out any such authorization. The prohibition reaches a relative's interest as well as the producer's own, so the sister's ownership does not rescue the conduct. The provision turns on how the knowledge is used, and it sets no condition about commissions earned or whether the client later loses money.

Answer: B. As representations of the applicant, and not as warranties

Section 2506 requires a provision that the policy and the application, if a copy of the application is endorsed on or attached to the policy when issued, make up the entire contract between the parties, and that the application's statements are deemed representations and not warranties, in the absence of fraud. The choices describing warranties, conditions precedent or exam verification each give the statements a different status from the one Section 2506 assigns them, which is representation.

Answer: C. The duties and responsibilities of a producer, adjuster or consultant, plus Maine insurance laws and rules

Maine permits the licensing examination to be split into two parts. When it is, one part tests knowledge of the kinds of insurance in the application, and the other tests the duties and responsibilities of a producer, adjuster or consultant together with the insurance laws and rules of this State. Sales technique, business mathematics and federal securities regulation are not what the statute assigns to the second part.

Answer: C. The amount the insurer will actually spend on the applicant's medical examination

Maine bars willfully collecting, as premium or charge for insurance, more than the premium or charge the policy specifies under the filed and approved rates, or, where filing is not required, more than the policy specifies and the insurer fixes. The same subsection lets a life insurer charge and collect the sums it will actually spend on a medical examination of a life insurance applicant, or for reinstating a life policy. A general overhead charge and a charge matched to the agent's commission are extra sums outside that carve-out. Disclosure on the application is not the test the subsection applies; the test is whether the sum goes beyond what the policy specifies.

Answer: D. Damages, costs, reasonable attorney's fees and 1 1/2% monthly interest

Maine gives a person injured by listed conduct of that person's own insurer, including failing without just cause to settle promptly, fairly and equitably a claim where liability has become reasonably clear, a civil action to recover damages plus costs and disbursements, reasonable attorney's fees, and interest on damages at 1 1/2% per month. A recovery limited to policy benefits leaves out the costs, fees and interest the statute expressly adds. Tripled damages are not the remedy the statute names, and it expressly allows reasonable attorney's fees. Interest at 6% per year with each side bearing its own costs conflicts with both the monthly 1 1/2% rate and the award of costs.

Answer: A. The insurer may subtract the overdue payment, plus any interest on it, from the settlement amount.

Maine requires a grace period of one month, and never less than 30 days, for each stipulated annuity payment after the first, and the contract stays in full force while it runs, so this contract had not lapsed. When a death claim arises before the overdue payment is made, the insurer may take that payment, with interest on it, out of what it pays in settlement, so paying the full amount without any deduction is not what the statute contemplates. Any interest charge is capped at 6% per year and is figured only for the days of grace that have passed, so a full year of interest is not allowed.

Answer: A. An emergency cease and desist order issued under section 12-A, subsection 2-A

Section 2165-A(1) states that emergency cease and desist orders under section 12-A, subsection 2-A may not be imposed for violations under the section. Subsections 2 and 3 authorize the superintendent, after a hearing, to issue a cease and desist order under section 12-A, subsection 2 against a person in Maine who has engaged in a practice the chapter defines or prohibits, or in an unfair or deceptive practice it does not define, and against a Maine resident who has done either in another state.