Free Pennsylvania Life practice questions

Answer: A. All 10, because a licensee may carry forward excess credit hours up to a maximum of 24 from one licensing period to the next.

Section 608-A(b)(1) does two things in one paragraph. It fixes the renewal requirement at 24 approved continuing education credit hours per two-year license period, and it lets a licensee carry excess hours forward into the next licensing period up to a ceiling of 24. Twenty four of this producer's 34 hours satisfy the period just ending, and the 10 that remain sit well under that ceiling, so every one of them moves across. Nothing in the paragraph confines hours to the period in which they were earned, which is the point of having an allowance at all. The ethics figure is a floor inside the 24 under paragraph (2), set at three hours, and it says nothing about how many hours may be banked. The waiver in subsection (e) is relief for a licensee who could not comply, not a precondition to carrying forward hours the licensee has already earned.

Answer: D. It becomes a final order and is enforceable by a court of competent jurisdiction.

Section 613-A closes the appeal route in a single sentence covering two situations. Where a departmental decision draws no timely appeal to the administrative hearings office, and where a commissioner's order draws none to a court, each becomes a final order that a court of competent jurisdiction can enforce. Finality attaches because the appeal time ran out, so nothing further is asked of the department and there is no matter for it to begin again. The section also provides for no adopting order from the commissioner, so the decision does not sit as a recommendation in the meantime. And timeliness is the whole condition the section imposes, which is why an unappealed decision becomes enforceable rather than staying open.

Answer: D. A written notice that the annuity is not a deposit, is not insured by the Federal Deposit Insurance Corporation and is not guaranteed by the bank.

Section 677-A(a) applies to a licensee employed by or affiliated with a financial institution who solicits annuities or life insurance, credit life aside, on or from the institution's physical premises. It requires a written disclosure handed to the applicant at or before the time of application, carrying four points: the product is not a deposit; it has no Federal Deposit Insurance Corporation coverage and none from any other federal agency or instrumentality; the financial institution and any affiliated insured depository institution guarantee nothing; and, where it applies, the product carries investment risk and the principal may be lost. The notice about using loan information to market insurance is a separate requirement in Section 677.1-A, it is addressed to the institution rather than the producer, and it is a mailed form the customer signs and returns rather than an oral statement. Neither the source of the producer's commission nor any cancellation period appears in Section 677-A at all.

Answer: C. It must disclose the reduction in the face amount and how long the reduction lasts

Section 5(a)(13) of the Unfair Insurance Practices Act makes it an unfair or deceptive practice to advertise permanent life insurance to people aged 50 or older without disclosing any applicable reduction in the face amount payable and the period it lasts. A reduced death benefit during the first two years is that kind of reduction, so the advertisement must disclose both the reduction and its period. The filing rule in 31 Pa. Code Sec. 51.2(a) reaches mail-order solicitations of individual or franchise accident and health contracts, not a life policy advertised in a newspaper. Paragraph (13) requires neither a premium table by age nor department approval of the advertisement.

Answer: B. Within 30 days following March 1, on a department-approved form or electronic process

Section 671.1-A(a) requires an insurer that terminates an appointment to notify the department in writing, on an approved form or through an approved electronic process, within 30 days after the termination takes effect. The 15-day period in Section 671.1-A(d)(1) is the time an insurer has to mail the licensee a copy of a notification reporting a violation, which this termination does not involve. Certifying appointed licensees on request is a separate duty under Section 671-A(f) and does not replace the termination notice. The 90-day advance notice comes from the 1978 Termination of Agency Contracts Act, which defines an insurer as one transacting property or casualty insurance, so it does not govern a life insurer's termination.

Answer: D. Permitted, since each insurer's funds are reasonably ascertainable from the books

Section 696-A of The Insurance Department Act makes a producer responsible in a fiduciary capacity for all funds received as a producer, and bars mixing those funds with the producer's own money unless the insurer expressly consents. The same section states that a separate bank deposit for each insurer is unnecessary as long as each insurer's funds are reasonably ascertainable from the producer's books and records. One premium account, kept apart from personal money and traceable by insurer, meets that test. Section 696-A imposes no bond and requires no department approval of the account.

Answer: D. A nonresident license, because a business entity without a Pennsylvania office applies as a nonresident

Section 605-A(b) sorts business entities by office location: an entity with an office in Pennsylvania applies for a resident license, and one without an office here applies for a nonresident license. This agency has offices only in Delaware, so it applies as a nonresident. Where the designated licensee lives does not set the entity's status, and designating a licensee is the precondition for applying at all, not a route to resident status. Section 605-A(b) provides for the business entity itself to apply for a producer license, so the entity is licensed rather than exempt.

Answer: C. Issue her a policy most nearly matching her prior coverage, without evidence of insurability

31 Pa. Code Sec. 145.4(c) provides that under an individual policy with a conversion privilege, a person may not lose coverage because of a change in marital status. The insurer must issue that person a policy that most nearly approximates the coverage in effect before the change, without evidence of insurability, effective on the date the prior coverage ended. Benefits may be reduced only where the insured elects that in writing and the reduced benefits are available.

Answer: B. Immediate revocation of the temporary license, without notice.

Temporary licensing is its own scheme and it runs on the public interest from beginning to end. Section 609-A(a) lets the department issue a temporary license where it determines that doing so serves the public interest and that the person asking is worthy of one, and subsection (d) lets the department revoke that license immediately and without notice if revocation is deemed in the public interest. No finding of a violation is needed, because the same standard that opened the license closes it. That is what separates a temporary license from an ordinary one. The ordinary enforcement route, Section 691-A, does require notice specifying the alleged violation, a hearing fixed at least ten days later and a finding of a violation before any penalty, but it governs violations of the act and the department need not take it to end a temporary license. Waiting for the 180 day limit in subsection (b) would leave the license in force for the whole period subsection (d) exists to cut short.

Answer: A. It fails, because a producer license is nontransferable and the buyer needs a license of his own

Section 607-A(3) makes a producer license nontransferable, so the seller cannot pass her license to the buyer. The only advance written notice to the commissioner that Section 607-A mentions, in paragraph (1), concerns a licensee doing business under a fictitious name; it does not make a license usable by someone else. Temporary licensing under Section 609-A gives a separate license, which the department itself issues to a person it finds worthy, for up to 180 days; it is not permission to use another producer's license. A designated licensee is, by the Section 601-A definition, an individual already licensed as a producer whom a business entity names as responsible for compliance, so the unlicensed buyer cannot fill that role.