A producer licensed as a resident in another state applies for a Pennsylvania nonresident producer license for the same lines she holds at home, and she submits the application and proof of her current home state license. Her home state does not grant nonresident licenses to Pennsylvania residents on the same basis. What may the Insurance Department do?

It may deny the application, because her home state lacks reciprocity on the same basis

A Pennsylvania producer is found to have violated the long-term care marketing requirements on a single policy, on which he was paid a $5,000 commission. Under the Insurance Company Law, what is the largest civil penalty that may be imposed for that policy, on top of any other penalty Commonwealth law provides?

$15,000, since three times the commission exceeds the $10,000 alternative measure

An insurer files a Pennsylvania long-term care policy form that pays benefits only when the insured is unable to perform four of the six activities of daily living. How does the Pennsylvania regulation on benefit triggers treat that form?

It is too restrictive: eligibility may not require a deficiency in more than three activities

A Pennsylvania employer's group health plan ends a child's coverage at the limiting age. An employee asks whether his unmarried 26-year-old son, who is childless, lives in Pennsylvania and holds only this coverage, can stay on the plan. What does the Insurance Company Law provide?

The insurer must provide coverage up through age 29 at the employee's expense, at the option of the policyholder.

A Pennsylvania resident producer who ran a one-person life insurance agency has died. His widow asks the department to let her keep the agency running while she arranges its sale. What does the act allow?

The department may issue her a temporary producer license to operate the business until it is sold or transferred.

A producer licensed as a resident in Ohio moves to Pittsburgh on June 1 and makes it her principal place of residence. She wants a Pennsylvania resident license for the same lines she held in Ohio. By when must she apply?

Within 90 days of establishing the new principal place of residence in this Commonwealth.

A Pennsylvania producer gives a client a side-by-side summary of the client's current whole life policy, issued by another insurer, and a new policy from the producer's own insurer. Every figure shown is accurate, but the summary leaves out the surrender charges, and the producer prepared it to persuade the client to surrender the old policy. Under the Insurance Department Act, how is this treated?

It is prohibited as an incomplete comparison made to induce a surrender, graded as a misdemeanor of the third degree

A Pennsylvania producer negotiates a contract of insurance covering a manufacturing company's commercial business and plans to charge the company a service fee on top of the commission the insurer pays. What does the Insurance Department Act require for that fee?

The fee must be disclosed to the company in writing in advance and be reasonable for the services

A Pennsylvania life insurer terminates a producer's appointment for conduct the act prohibits, and tells the department why in its notification. What does the act then require the insurer to do about the producer, and what may the producer do in response?

Mail the producer a copy within 15 days; the producer has 30 days to file written comments with the department.

A Pennsylvania group health policy covers the alcohol and drug benefits required by Article VI-A of The Insurance Company Law. An insured in treatment would rather use some of the additional outpatient and partial hospitalization sessions the article requires each year as residential treatment days. How does the article allow that exchange to work?

Two sessions may be exchanged for one non-hospital residential treatment day, up to fifteen additional residential days a year

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1.A producer licensed as a resident in another state applies for a Pennsylvania nonresident producer license for the same lines she holds at home, and she submits the application and proof of her current home state license. Her home state does not grant nonresident licenses to Pennsylvania residents on the same basis. What may the Insurance Department do?
Answer: D. It may deny the application, because her home state lacks reciprocity on the same basis
Under Section 610-A(a)(2), after reviewing the application and proof of the home state license, the department issues a nonresident license for the equivalent lines, but it may deny the application when the applicant's home state does not award nonresident licenses to Pennsylvania residents on the same basis. So issuance is not automatic once a home state license is shown. Nor is a Pennsylvania examination a precondition for these lines: Section 610-A(a)(2) ties issuance to the items it lists, the application and the home state license proof among them, and Section 610-A(a)(1) sends an applicant back to the act's other requirements only for a line she does not hold at home, while these are the same lines. A letter of clearance from the former home state's commissioner is part of the change of home state process in Section 606.1-A, which applies to someone becoming a Pennsylvania resident, not to a nonresident applicant.
Source
40 P.S. Sec. 310.10(a)(2), Section 610-A(a)(2) of The Insurance Department Act of 1921; 40 P.S. Sec. 310.10(a)(1), Section 610-A(a)(1) of The Insurance Department Act of 1921; 40 P.S. Sec. 310.6a(a), Section 606.1-A(a) of The Insurance Department Act of 1921
Choose an answer to see the explanation.
2.A Pennsylvania producer is found to have violated the long-term care marketing requirements on a single policy, on which he was paid a $5,000 commission. Under the Insurance Company Law, what is the largest civil penalty that may be imposed for that policy, on top of any other penalty Commonwealth law provides?
Answer: D. $15,000, since three times the commission exceeds the $10,000 alternative measure
Section 1114 of the Insurance Company Law subjects an insurer or producer that violates the long-term care regulations or marketing requirements to a civil penalty of up to three times the commissions paid for each policy involved or $10,000, whichever is greater, in addition to other penalties. Three times a $5,000 commission is $15,000, which is greater than $10,000, so $15,000 is the maximum. The $10,000 figure is one side of a whichever-is-greater comparison, not a cap. A penalty limited to the commission itself does not appear in the section. The statute picks the greater of the two measures rather than adding them. 31 Pa. Code Sec. 89a.128 applies this same section to violations of the long-term care regulations.
Source
40 P.S. Sec. 991.1114 (Section 1114 of The Insurance Company Law of 1921, amended July 17, 2007, P.L.134, No.40); 31 Pa. Code Sec. 89a.128
Choose an answer to see the explanation.
3.An insurer files a Pennsylvania long-term care policy form that pays benefits only when the insured is unable to perform four of the six activities of daily living. How does the Pennsylvania regulation on benefit triggers treat that form?
Answer: A. It is too restrictive: eligibility may not require a deficiency in more than three activities
31 Pa. Code Sec. 89a.124(a) requires a long-term care policy to condition benefits on the insured's ability to perform activities of daily living and on cognitive impairment, and it forbids an eligibility test stricter than a deficiency in three of those activities or the presence of cognitive impairment. A four-activity requirement exceeds that ceiling. Defining all six activities listed in Sec. 89a.124(b) (bathing, continence, dressing, eating, toileting and transferring) does not cure a threshold set above three. Adding a cognitive impairment trigger leaves the activity threshold too strict, so the form still fails. The ceiling in this section is three activities, not two.
Source
31 Pa. Code Sec. 89a.124(a); 31 Pa. Code Sec. 89a.124(b) (Standards for benefit triggers; effective March 17, 2003, per Sec. 89a.124(g))
Choose an answer to see the explanation.
4.A Pennsylvania employer's group health plan ends a child's coverage at the limiting age. An employee asks whether his unmarried 26-year-old son, who is childless, lives in Pennsylvania and holds only this coverage, can stay on the plan. What does the Insurance Company Law provide?
Answer: C. The insurer must provide coverage up through age 29 at the employee's expense, at the option of the policyholder.
Section 617.1 of the Insurance Company Law reaches group health care insurance under which a child's coverage would otherwise end at a specified age. At the option of the policyholder, the insurer must provide coverage to a child of an insured employee beyond that age, up through and including age 29, at the insured employee's expense, provided the child is unmarried, has no dependents, is a Pennsylvania resident or a full-time student at an institution of higher education, and is not covered as a named subscriber under other coverage or entitled to benefits under a government health care benefits program. The son meets each of those. Two details are easy to get the wrong way round. The election belongs to the policyholder while the cost falls on the employee, and Section 617.1(B) lets insurers determine the premium increase for continuing the adult dependent past the limiting age of 19. The section also does not reach individual health insurance policies or several limited kinds of coverage, including long-term care and Medicare supplement.
Source
40 P.S. Sec. 361 et seq., Section 617.1(A) of The Insurance Company Law of 1921, added June 10, 2009, P.L.42, No.4
Choose an answer to see the explanation.
5.A Pennsylvania resident producer who ran a one-person life insurance agency has died. His widow asks the department to let her keep the agency running while she arranges its sale. What does the act allow?
Answer: B. The department may issue her a temporary producer license to operate the business until it is sold or transferred.
Section 609-A(a)(1) lets the department issue a temporary producer license where a resident individual licensee dies, or becomes disabled mentally or physically, and it issues that license to the licensee's surviving spouse or to a personal representative the court has appointed, on finding the issuance in the public interest and the person worthy of it. The same paragraph says what the temporary license is for. It runs the insurance business the licensee owned, and it runs out when the business is sold or transferred, when the licensee recovers and comes back, or when new personnel have been trained and licensed to run it. It is a new license issued to her rather than a continuation of her husband's, and the act does not extend a dead licensee's own license to anybody. Nor is there an unlicensed-operation route: Section 603-A(a) forbids selling, soliciting or negotiating without a license, and the Section 603-A(b) exceptions do not describe someone running an agency.
Source
40 P.S. Sec. 310.9(a)(1), Section 609-A(a)(1) of The Insurance Department Act of 1921
Choose an answer to see the explanation.
6.A producer licensed as a resident in Ohio moves to Pittsburgh on June 1 and makes it her principal place of residence. She wants a Pennsylvania resident license for the same lines she held in Ohio. By when must she apply?
Answer: B. Within 90 days of establishing the new principal place of residence in this Commonwealth.
Section 606.1-A(a) governs a change of home state. An individual licensed as a resident producer in another state who establishes a principal place of residence or business in this Commonwealth may apply for a Pennsylvania resident license for the equivalent lines, and the section gives a window: within 90 days of establishing that residence or place of business, the individual shall submit a completed application, proof of the former home state license or a letter of clearance, and the license fee. The window matters again at the review stage, because Section 606.1-A(b)(1) lets the department issue only where the individual still holds the former license or applied within 90 days of its cancellation. No advance approval is contemplated, and a line she did not hold in her former home state is not carried across; for that she must satisfy Pennsylvania's own requirements first.
Source
40 P.S. Sec. 310.6a(a), Section 606.1-A(a) of The Insurance Department Act of 1921
Choose an answer to see the explanation.
7.A Pennsylvania producer gives a client a side-by-side summary of the client's current whole life policy, issued by another insurer, and a new policy from the producer's own insurer. Every figure shown is accurate, but the summary leaves out the surrender charges, and the producer prepared it to persuade the client to surrender the old policy. Under the Insurance Department Act, how is this treated?
Answer: C. It is prohibited as an incomplete comparison made to induce a surrender, graded as a misdemeanor of the third degree
Section 648-A(a) of The Insurance Department Act, 40 P.S. Sec. 310.48(a), forbids a producer, directly or indirectly, either to misrepresent or to make an incomplete comparison of policies in order to induce an insured of another insurer to lapse, forfeit or surrender a policy and buy similar coverage from the producer's insurer. Because the section names an incomplete comparison alongside a misrepresentation, a summary can violate it even when every figure shown is accurate. Under Section 648-A(b), a violation is a misdemeanor of the third degree; the felony of the third degree belongs to unlicensed activity under Section 641-A. The prohibition is written about a policy held with another insurer, so a version of the rule that applies only when both policies come from the producer's own insurer has the section backward.
Source
40 P.S. Sec. 310.48, Section 648-A of The Insurance Department Act of 1921 (added Dec. 6, 2002, P.L.1183, No.147); 40 P.S. Sec. 310.41, Section 641-A of The Insurance Department Act of 1921
Choose an answer to see the explanation.
8.A Pennsylvania producer negotiates a contract of insurance covering a manufacturing company's commercial business and plans to charge the company a service fee on top of the commission the insurer pays. What does the Insurance Department Act require for that fee?
Answer: C. The fee must be disclosed to the company in writing in advance and be reasonable for the services
Section 674-A(a) permits a licensee to charge a fee in addition to commission for the sale, solicitation or negotiation of insurance for commercial business, provided the fee is disclosed to the person in writing ahead of time and is reasonable in relation to the services provided. The section contains no requirement that the department approve the fee, and disclosure after delivery fails the advance written disclosure the section demands. Section 674-A(b) separately bars any insurance producer from charging a fee for completing an application, and the section contains no exception for a customer who agrees to it.
Source
40 P.S. Sec. 310.74(a); 40 P.S. Sec. 310.74(b), Section 674-A of The Insurance Department Act of 1921 (added Dec. 6, 2002, P.L.1183, No.147)
Choose an answer to see the explanation.
9.A Pennsylvania life insurer terminates a producer's appointment for conduct the act prohibits, and tells the department why in its notification. What does the act then require the insurer to do about the producer, and what may the producer do in response?
Answer: D. Mail the producer a copy within 15 days; the producer has 30 days to file written comments with the department.
Section 671.1-A(d) pairs a duty on the insurer with a right in the producer. Within 15 days of making a notification required by subsection (b) or (c), the insurer shall mail a copy to the licensee's last known home address by certified mail, return receipt requested, or by overnight delivery using a nationally recognized carrier. Within 30 days of receiving it, the licensee may file written comments on the substance of the notification with the department, mailing a copy to the insurer the same way. So the producer answers the department directly rather than through the insurer. The copy duty is also not displaced by confidentiality: Section 671.1-A(f) protects the insurer from civil liability for the statement in the absence of actual malice, which is a different kind of protection from secrecy.
Source
40 P.S. Sec. 310.71a(d), Section 671.1-A(d) of The Insurance Department Act of 1921
Choose an answer to see the explanation.
10.A Pennsylvania group health policy covers the alcohol and drug benefits required by Article VI-A of The Insurance Company Law. An insured in treatment would rather use some of the additional outpatient and partial hospitalization sessions the article requires each year as residential treatment days. How does the article allow that exchange to work?
Answer: B. Two sessions may be exchanged for one non-hospital residential treatment day, up to fifteen additional residential days a year
Section 605-A(c) requires at least 30 full-session outpatient visits a year. Subsection (d) then adds a further 30 sessions of outpatient or partial hospitalization each year, and those may be traded two for one to obtain as many as fifteen extra non-hospital residential alcohol treatment days. A one-for-one trade into hospital days is not in the section. Detoxification admissions are a separate benefit under Section 603-A, and subsection (d) names only residential days as what an exchange secures. Saying no exchange is allowed contradicts the express trade that subsection (d) creates.
Source
40 P.S. Sec. 361 et seq., Section 605-A(d) of The Insurance Company Law of 1921 (amended Dec. 22, 1989, P.L.755, No.106)
Choose an answer to see the explanation.

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3.An insurer files a Pennsylvania long-term care policy form that pays benefits only when the insured is unable to perform four of the six activities of daily living. How does the Pennsylvania regulation on benefit triggers treat that form?

4.A Pennsylvania employer's group health plan ends a child's coverage at the limiting age. An employee asks whether his unmarried 26-year-old son, who is childless, lives in Pennsylvania and holds only this coverage, can stay on the plan. What does the Insurance Company Law provide?

5.A Pennsylvania resident producer who ran a one-person life insurance agency has died. His widow asks the department to let her keep the agency running while she arranges its sale. What does the act allow?

6.A producer licensed as a resident in Ohio moves to Pittsburgh on June 1 and makes it her principal place of residence. She wants a Pennsylvania resident license for the same lines she held in Ohio. By when must she apply?

8.A Pennsylvania producer negotiates a contract of insurance covering a manufacturing company's commercial business and plans to charge the company a service fee on top of the commission the insurer pays. What does the Insurance Department Act require for that fee?

9.A Pennsylvania life insurer terminates a producer's appointment for conduct the act prohibits, and tells the department why in its notification. What does the act then require the insurer to do about the producer, and what may the producer do in response?

The other 491 questions are $29.