Free Maryland Life practice questions

Answer: A. She is exempt, because her work is administrative and indirectly related to sales and earns no commission

An officer, director or employee of either an insurer or an insurance producer is outside the licensing requirements if that person receives no commission on policies covering Maryland risks and the work is executive, administrative, managerial or clerical in nature and only indirectly connected to selling, soliciting or negotiating insurance. Because the exemption covers employees of producers as well as insurers, working for an agency does not by itself require a license. The exemption depends on the absence of commission, so it would not survive her being paid commissions on policies sold.

Answer: A. No, because payment of the premium to the producer bars that cancellation

Maryland bars an insurer from canceling a policy for nonpayment of premiums when the premium due has been paid to the insurance producer. The insured here paid the producer in full, so the insurer may not cancel for nonpayment, whatever the producer later did with the money. The answer saying payment counts only when the insurer receives it contradicts that rule. The provision gives the insurer no route around it, whether by demanding a second payment within some period or by first terminating the producer's appointment.

Answer: D. The Commissioner requires it as a condition of renewing the producer's license

Subject to the listed exemptions and the nonresident rule, the Commissioner shall require a producer to receive continuing education as a condition of renewing the license. The requirement is tied to renewal rather than to first issuance, and the statute places it with the Commissioner rather than leaving it to insurers. It attaches to renewal for a covered producer, whether or not any violation has been found.

Answer: B. March 13

An applicant for a life, health or annuity license who fails an examination may not retest until at least 4 days after the last examination failed. The clock runs from the March 9 failure, the most recent one, so the earliest date is March 13. March 10 is only 1 day after that failure. The 30-day period in the same section governs how quickly an examination must be graded, so neither April 2 nor April 8 reflects the retake rule.

Answer: B. Written documentation confirming the producer's appointment

Section 10-118(b)(3) requires the insurer to send the producer written documentation of the appointment. The producer register is the insurer's own record, which the section makes available to the Commissioner; the insurer is not told to hand a copy of it to each producer. The producer's license number is assigned by the Commissioner, and the section does not make the insurer responsible for supplying the license. The section says nothing about sending the producer the insurer's financial statement.

Answer: D. It is an unfair claim settlement practice, because the duplicate paperwork is used to delay the claim.

Sec. 27-304(12) makes it an unfair claim settlement practice, when done with the frequency to indicate a general business practice, to delay an investigation or payment by requiring a claimant or the claimant's licensed health care provider to file a preliminary claim report and then formal proof of loss forms holding substantially the same information. The provision names the provider expressly, so a provider claim is covered. What it targets is the duplication: asking twice for substantially the same information, which is the reverse of a violation limited to new information. The insurer's general ability to request proof of loss does not excuse this listed practice.

Answer: C. A first-party claim made under a policy of property and casualty insurance

Sec. 27-303(9) reaches the failure to act in good faith, as Sec. 27-1001 defines it, in settling a first-party claim under a property and casualty policy. A life insurance death claim and an HMO services claim are not property and casualty claims, and a third-party liability claim is not a first-party claim, so this particular listing does not reach them. Other listings in Sec. 27-303, such as refusing to pay a claim for an arbitrary or capricious reason, apply to insurers, nonprofit health service plans and HMOs generally.

Answer: B. It is an unfair claim settlement practice, since the brochure came with the application and the conduct is routine.

Sec. 27-304(8) treats as an unfair claim settlement practice, when committed with the frequency to indicate a general business practice, an attempt to settle a claim for less than a reasonable person would expect to be entitled to after studying written or printed advertising material that accompanied or was made part of an application. A brochure attached to the application is enough; the provision does not require that it be made part of the policy. Because the insurer does this as a regular practice, the frequency condition in Sec. 27-304 is met, and the conduct falls within the claim settlement subtitle whatever else it may also violate.

Answer: B. The management company that serves an authorized insurer

Sec. 2-205(b)(1) names five kinds of entities the Commissioner is to analyze or examine when the Commissioner considers it advisable: an authorized insurer, a management company of an authorized insurer, a subsidiary owned or controlled by an authorized insurer, a rating organization, and an authorized health maintenance organization. A management company of an authorized insurer is on that list. An appointed producer, an individual policyholder and a lender to an insurer do not appear among the five.

Answer: B. In the manner provided by Sec. 2-215 of the Maryland Insurance Article

Sec. 27-306 provides that an appeal from an order the Commissioner issues under the unfair claim settlement subtitle is taken in accordance with Sec. 2-215 of the Insurance Article. The order is therefore appealable, and the subtitle routes the appeal through Sec. 2-215 rather than to another state's regulator or through a certification by the Attorney General.