Free Michigan Accident & Health practice questions

Answer: A. 30 days

Mich. Comp. Laws Sec. 500.1242(1) requires the commissioner to refuse a solicitor, insurance counselor, or adjuster license to an applicant who fails to meet the chapter's requirements, and to give written notice setting out the basis. If the applicant submits a written request within 30 days after the notice is mailed, the commissioner must promptly hold a hearing at which the applicant can show compliance. Ten, 20 and 60 days are not the request period this subsection sets.

Answer: C. $1,000

Mich. Comp. Laws Sec. 500.1244(1)(a) lets the director order a civil fine of up to $1,000 for each violation of the chapter. The ceiling rises to $5,000 per violation only where the person knew or reasonably should have known of the violation, which the director's finding rules out here, and an order under this subsection cannot require more than $50,000 in total. The $20,000 figure belongs to Sec. 1244(3), which applies to a person who knowingly violates a cease and desist order. A $500 cap does not appear in this subsection.

Answer: B. 90 days

Mich. Comp. Laws Sec. 500.1206b(1) relieves an applicant who was previously licensed for the same qualifications in another state from completing prelicensing education or the examination. When the earlier license is no longer current, the exemption remains available only if Michigan receives the application within 90 days of the cancellation and good standing at the time of cancellation is shown, either by the prior state's certification or by the producer database the NAIC maintains. Thirty and 60 days are shorter than the window this section allows, and 180 days is longer than it.

Answer: A. It must pay 12% interest on the late benefits, and failing to do so is an unfair trade practice

Section 2006(1) gives the payer two choices: pay policy benefits to its insured on a timely basis, or pay 12% interest on late claims as subsection (4) provides. Failing to do either is an unfair trade practice unless the claim is reasonably in dispute, and this claim is not. The rate is 12%, not 6%, and subsection (1) attaches no knowledge requirement. The interest duty arises from the late payment itself, so it does not wait for a lawsuit or judgment, and paying the benefit late without interest does not satisfy either choice.

Answer: D. No, because he had to be licensed for the work and was not

Mich. Comp. Laws Sec. 500.1240(2) bars a person who must be licensed and is not from accepting any commission, service fee, or other valuable consideration in exchange for selling, soliciting, or negotiating insurance in Michigan. Calling the payment a service fee changes nothing, because service fees are named in the prohibition. The bar turns on Tom's own license status for the work he did, and the subsection makes no exception for another producer's signature. Getting licensed afterward does not help either: Sec. 1240(3) allows renewal or deferred commissions only to a person who was licensed at the time of the sale.

Answer: C. An insurer's salaried claims examiner who investigates and settles claims and earns no commission

The exemption has two conditions. The person must receive no commission on policies covering Michigan risks, and the person's work must fall within a listed function: executive, administrative, managerial, or clerical work only indirectly related to selling; underwriting, loss control, inspection, or claims work; or special agent work limited to technical help for licensed producers. A salaried claims examiner with no commission meets both conditions. The clerical employee fails the first condition because a commission is paid on Michigan policies. The special agent loses the exemption because the activity is no longer limited to technical assistance once the agent closes sales. The salaried caller is urging prospects to apply for a particular policy, which is solicitation tied directly to selling, so no listed function covers it.

Answer: A. Her home state gives producers from Michigan the same recognition

A nonresident producer who meets the home state's continuing education requirements is treated as meeting Michigan's, but only if the home state recognizes, on the same basis, continuing education compliance by producers from Michigan. The condition is reciprocity. The provision sets no minimum period of Michigan licensure, no test comparing the home state's hours with Michigan's total, and no requirement that the Michigan director approve each home-state course.

Answer: A. The written agreement between the producer and that insurer

Mich. Comp. Laws Sec. 500.1209(1) provides that a producer's authority in the period after notice of termination is governed by the written agreement between the producer and the insurer. Only if that agreement is silent does the statute fill the gap: the producer may keep servicing existing policies but may not bind a new risk, renew a policy, or increase the insurer's obligation without the insurer's approval. The subsection assigns this role to the agreement, not to an order of the director, it sets no fixed 90-day period, and the policyholders are not the parties whose agreement controls.

Answer: D. Every 2 years, on a schedule the director may stagger across the calendar year

Michigan reviews a producer's accrued continuing education hours for license continuance every 2 years, under a schedule the director establishes. The director may stagger continuation dates so they are spread through the calendar year, and if staggering is adopted, the director may extend the licensure period for some licensees. An annual review and a 4-year review both misstate the 2-year cycle. Requiring every producer to share one statewide date conflicts with the director's authority to stagger, and the schedule is set by the director rather than by appointing insurers.

Answer: D. 18 years old

The director may approve a resident producer application only after finding that the applicant meets each listed condition, and the first of those conditions is that the applicant is at least 18 years of age. The other conditions address the applicant's conduct, completion of the prelicensing course, and passing the required examination; none of them changes the age floor. Ages 16, 19 and 21 do not match the 18-year minimum.