Free Missouri Life & Health practice questions

Answer: D. It goes to a non-creditor beneficiary the debtor named, or to the estate

Each Missouri credit life policy or group certificate must state that benefits are paid to the creditor to reduce or extinguish the unpaid debt, and that any amount by which the insurance exceeds the unpaid debt is payable to a beneficiary other than the creditor whom the debtor names, or to the debtor's estate. Here $15,000 retires the loan and the remaining $5,000 goes to the debtor's beneficiary or estate. Keeping the excess as a servicing allowance, retaining it as premium, or applying it to the debtor's other debts with the creditor would each contradict that required statement.

Answer: A. A company granted a Missouri certificate of authority for that business

Missouri allows credit life and credit accident and health insurance to be written or issued in the state only when it is placed directly in companies that have been granted a certificate of authority to do that business in Missouri. A license in the creditor's home state, affiliation with the creditor, and low rates do not substitute for a Missouri certificate of authority.

Answer: C. That the borrower may use existing policies or any authorized insurer

When life or accident and sickness insurance is required or requested as additional security for a debt, Missouri requires that the debtor be informed of the option to furnish the required amount, or any part of it, through existing policies the debtor owns or controls, or to obtain the coverage through any insurer authorized to write it in Missouri. Requiring purchase through the lender's own plan, or accepting only policies from the lender's insurer, would take away that option. The option reaches the full required amount, not just part of it.

Answer: B. No, because it has not been actively in existence for five years

To be a bona fide association under the Missouri Health Insurance Portability and Accountability Act, an association must, among other things, have been actively in existence for at least five years. Four years falls short, so the association does not qualify even though it was formed in good faith for a purpose other than obtaining insurance; that is a separate requirement and cannot make up for the missing year. No three-year period appears in the definition. The definition also contemplates associations making health coverage available to their members, so associations are not barred from offering coverage.

Answer: C. It must cover them on the same basis as the enrollee's other dependents

Mo. Rev. Stat. Sec. 376.816(1) bars a health carrier or health benefit plan from delivering, issuing, continuing or renewing a plan, other than a Medicaid plan, for a Missouri resident on or after January 1, 2011, unless it covers the enrollee's adopted children on the same basis as other dependents. Reduced benefits in the first year would not be the same basis. The subsection imposes a coverage requirement rather than an offer the enrollee can decline, and it draws no line between group and individual plans.

Answer: C. No more than once a year from now on

When a policy ends a dependent child's coverage at a limiting age, Missouri treats that age as not ending the hospital and medical coverage of a child who is both incapable of self-sustaining employment because of a mental or physical handicap and chiefly dependent on the policyholder. During the two years after the child reaches the limiting age, the insurer may require proof at reasonable intervals. After that two-year period, it may require proof no more than once each year. Because three years have passed, a reasonable-interval or six-month schedule is no longer permitted, and the statute does not cut off the insurer's right to further proof altogether.

Answer: D. Coverage on human lives, including endowment and annuity benefits

Section 375.018(1)(1) describes the life line as coverage on human lives, including endowment and annuity benefits, and says it may also include accidental death or dismemberment benefits and disability income benefits. Coverage against legal liability is the casualty line under subdivision (4), loss or damage to property is the property line under subdivision (3), and personal lines property and casualty coverage for individuals and families is a separate line under subdivision (6).

Answer: A. 18 years of age

Mo. Rev. Stat. Sec. 375.015(1)(1) lists, among the findings the director must make before approving a resident individual producer application, that the individual is at least eighteen years of age. Sixteen, nineteen and twenty-one are not the age the statute sets.

Answer: A. The Insurance Producers Act

Mo. Rev. Stat. Sec. 375.012(1) states that sections 375.012 to 375.146 may be cited as the "Insurance Producers Act". The other names are not the short title the statute gives these sections, even though each sounds like a plausible label for a licensing law.

Answer: B. The insurer needs no producer license, but for this rule the term insurer excludes its directors

Mo. Rev. Stat. Sec. 375.014(2) states that the chapter does not require an insurer to obtain an insurance producer license, and it then provides that, in that section, the term insurer does not include the insurer's officers, directors, employees, subsidiaries or affiliates. So the insurer's own exemption does not carry over to its director. The statute imposes no per-line producer license on the insurer and attaches no condition about selling through business entities.