Free Michigan Life practice questions

Answer: B. Refusal, suspension, or revocation of the license

Section 1205(1) requires a resident producer applicant to file the director's uniform application and to declare, under penalty of refusal, suspension, or revocation of the license, that its statements are true, correct, and complete to the best of the applicant's knowledge and belief. The penalty named is a license consequence. The subsection does not name perjury prosecution, loss of prelicensing course credit, or a fixed waiting period.

Answer: D. Either accident and health, or life

Section 1204f(1)(a) permits an individual to sell, solicit, or negotiate long-term care insurance only if the individual is licensed as an insurance producer for accident and health or for life. Property, casualty, personal lines, and limited line credit are not among the qualifications the subdivision names, so none of them satisfies it.

Answer: C. She may service the existing policies but may not renew them without the insurer's approval.

When a producer's authority ends, a producer who holds property rights in the renewals remains responsible for the existing policies until they are canceled, replaced, or expire. If the written agreement does not address the period after notice of termination, the producer may continue representing the insurer in servicing those policies, but needs the insurer's approval to bind a new risk, renew a policy, or increase the insurer's obligation. That rules out both cutting off the policyholders entirely and continuing to bind new business. The insurer is also forbidden to cancel or refuse to renew an insured's policy because the producer's contract ended. This subsection does not apply to a life insurer or a producer of a life insurer, which is why the scenario involves property and casualty business.

Answer: B. It must be calculated to injure a person engaged in the business of insurance

Michigan treats as an unfair practice a false, maliciously critical or derogatory statement, oral or written, about the financial condition of a person engaged in the business of insurance, when the statement is calculated to injure that person. The added element is the aim of the statement: it must be calculated to injure, and the provision does not require proof that a loss actually followed. Spoken remarks are covered because the provision names oral as well as written statements. Nothing in this provision requires that the statement be filed with an official.

Answer: A. Yes, because inducing a client to retain a policy is a listed purpose

Section 2005a(a) makes it an unfair or deceptive practice to knowingly make a misleading representation or an incomplete or fraudulent comparison of policies to induce a person to take any of a list of actions. The list includes lapsing, surrendering, converting or replacing coverage, and it also includes retaining a policy, so a slanted comparison meant to keep a client in place is covered. The section is not limited to replacement, does not excuse the conduct because the client keeps existing coverage, and does not require that the agent earn a commission.

Answer: C. Waive all of them other than the requirements in section 1206a

Section 1204e(1) directs the commissioner to waive any requirements for a nonresident applicant who holds a valid home-state license, other than the section 1206a requirements, when the home state licenses Michigan residents on the same basis. Sam meets both conditions, so the waiver is mandatory. It does not extend to section 1206a, it leaves no room to apply the full Michigan requirements such as the examination, and it carries no continuing education condition.

Answer: B. $5,000

Under Section 1244(1), a director who finds a Chapter 12 violation after a hearing opportunity must put the findings in writing and serve a cease and desist order, and may also order a civil fine. The ceiling is $1,000 per violation, rising to $5,000 per violation where the person knew or reasonably should have known the conduct violated the chapter, so the higher figure applies here. $1,000 is the ceiling only where that knowledge is absent. $50,000 is not a per-violation figure: it caps the total fines a single order under the subsection may require. $20,000 does not appear in subsection (1) at all.

Answer: D. He must pass a written examination as a condition of licensure

Section 1204(1) requires a resident individual who applies for a producer license to pass a written examination unless exempt under section 1206b, which concerns applicants previously licensed in another state. Jordan is a resident who has never held a license anywhere, so that exemption is unavailable to him. Subsection (1) offers no program of study or interview in place of the examination, and it is aimed at resident applicants, which defeats the claim that only nonresidents are examined.

Answer: C. She must first hold a license for the life qualification

Section 1201a(1) bars any person from selling, soliciting, or negotiating insurance in Michigan for any line unless licensed for that qualification. Rosa's property qualification does not reach life insurance, so she needs the life qualification before soliciting. The section measures the license by line, so a license in one line does not cover every line, and it offers neither an insurer appointment nor a countersignature by another producer as a substitute for the required qualification.

Answer: D. Notify the commissioner before she starts doing business under that name.

A producer who does business under any name other than her legal name must notify the commissioner "prior to using the assumed name." The notice therefore comes first, not within 30 days afterward, and it goes to the commissioner directly rather than through an appointing insurer. The duty applies to any name other than the legal name, so showing the legal name on the license does not excuse it.