A South Carolina producer promotes a policy under a title suggesting it provides far broader protection than the contract actually does. The policy's own provisions state the true, narrower coverage. Under South Carolina law, which statement is correct?

The practice is prohibited, because no person may use a policy name or title that misrepresents its true nature.

An applicant for an individual health policy in South Carolina makes an honest mistake on the application about a past doctor visit. The mistake had no effect on the insurer's acceptance of the risk or on the hazard it assumed. When a claim is later filed, how does the mistake affect recovery?

It does not bar recovery, since it was neither meant to deceive nor material to the risk.

South Carolina's statute listing the director's duties makes it the director's duty to supervise and regulate the rates and service of every insurer. What does that same item of the statute say about the director's authority over insurance rates?

It adds no rate authority beyond what other provisions of the title grant.

A licensed South Carolina producer, intending to deceive an insurer, knowingly submits an application containing false information about a fact material to underwriting. Upon conviction under South Carolina's fraudulent application statute, what penalty applies?

A felony, with up to five years in prison, a fine of up to $5,000, or both

After a hearing, the South Carolina director determines that a person has engaged in an unfair or deceptive act or practice in violation of the insurance title. What does the findings-and-order statute require the director to do?

Put the finding in writing and issue and serve the person an order to cease and desist

A finance company operating in South Carolina uses several credit insurance producers in one geographic area, all of whom were licensed without taking the written examination. What does South Carolina law require of the company?

Keep at least one credit producer available to answer customers' questions

A South Carolina producer sells a policy issued by an insurer not licensed to do business in the State and fails to comply with the title's provisions governing policies from such insurers. The insured then has a covered claim. For how much is the producer personally liable?

The limits of the coverage the policy provides

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1.Unless it is revoked or suspended, on what cycle does a South Carolina producer's license continue?
Answer: A. Biennially, every two years
A South Carolina producer's license continues on a biennial basis, meaning every two years, unless it is revoked or suspended. An individual license is renewed by the last day of the licensee's birth month, and renewal also depends on meeting the continuing education requirements of Section 38-43-106. An annual cycle and a three-year cycle both misstate the two-year term, and a license does not simply continue forever once issued, because the statute ties its continuation to that biennial renewal.
Source
S.C. Code Ann. Sec. 38-43-110(A)
Choose an answer to see the explanation.
2.A South Carolina producer promotes a policy under a title suggesting it provides far broader protection than the contract actually does. The policy's own provisions state the true, narrower coverage. Under South Carolina law, which statement is correct?
Answer: B. The practice is prohibited, because no person may use a policy name or title that misrepresents its true nature.
Sec. 38-57-40 bars any person from using a name or title of a policy or class of policies that misrepresents the policy's true nature. The provision states no exception for a contract whose text discloses the real coverage, so accurate policy wording does not cure a misleading title. It applies to any person, so a producer is covered as well as an insurer, and its text does not require that anyone suffer a loss before the conduct is prohibited.
Source
S.C. Code Ann. Sec. 38-57-40
Choose an answer to see the explanation.
3.An applicant for an individual health policy in South Carolina makes an honest mistake on the application about a past doctor visit. The mistake had no effect on the insurer's acceptance of the risk or on the hazard it assumed. When a claim is later filed, how does the mistake affect recovery?
Answer: C. It does not bar recovery, since it was neither meant to deceive nor material to the risk.
Under Section 38-71-40, a false statement in an application for a policy covered by Chapter 71 defeats recovery only when it was made with actual intent to deceive or when it materially affected the insurer's acceptance of the risk or the hazard it assumed. An honest error that affected neither meets neither test, so recovery is preserved. The section does not make every false statement fatal, does not turn on when the insurer finds the error, and provides no proportional reduction of benefits.
Source
S.C. Code Ann. Sec. 38-71-40
Choose an answer to see the explanation.
4.South Carolina's statute listing the director's duties makes it the director's duty to supervise and regulate the rates and service of every insurer. What does that same item of the statute say about the director's authority over insurance rates?
Answer: C. It adds no rate authority beyond what other provisions of the title grant.
Item (1) makes supervising and regulating insurers' rates and service a duty of the director, but it states that it grants no additional authority over rates beyond the ratemaking authority specifically granted for certain kinds of insurance in other provisions of Title 38. So it does not confer rate-setting power over every kind of insurance, and it does not remove rates from the director's supervision. The same item also states that nothing in the title authorizes or requires a department or director review, under the Administrative Procedures Act, of an order of the director's designee or deputy director.
Source
S.C. Code Ann. Sec. 38-3-110(1)
Choose an answer to see the explanation.
5.A licensed producer receives an information request from the South Carolina Department of Insurance during an investigation. If the director or designee has granted the producer more time, that timeframe applies; otherwise, within what period must the producer respond?
Answer: B. Seven calendar days
Under Section 38-13-70(A), an insurer, HMO, or other person licensed or authorized to transact business in South Carolina, together with its representatives, must answer the department's questions, information requests, or investigations within seven calendar days, or within a longer timeframe the director or designee grants. The section counts calendar days, not business days, and ten, fifteen, and thirty days are not the period it sets.
Source
S.C. Code Ann. Sec. 38-13-70(A)
Choose an answer to see the explanation.
6.A licensed South Carolina producer, intending to deceive an insurer, knowingly submits an application containing false information about a fact material to underwriting. Upon conviction under South Carolina's fraudulent application statute, what penalty applies?
Answer: B. A felony, with up to five years in prison, a fine of up to $5,000, or both
South Carolina treats a producer's knowing submission of a materially false application, made with intent to injure, defraud, or deceive an insurer or applicant, as a felony. On conviction the producer may be imprisoned for up to five years, fined up to $5,000, or both. The misdemeanor choices describe the wrong grade of offense for this conduct. The ten-year choice overstates both limits and makes the fine mandatory, while the statute sets only a ceiling.
Source
S.C. Code Ann. Sec. 38-43-245
Choose an answer to see the explanation.
7.Under South Carolina's Medicare Supplement regulation, a group Medicare Supplement policy form must be expected to return to certificateholders, as aggregate benefits, at least what percentage of the aggregate premiums earned?
Answer: A. 75 percent
Regulation 69-46, Section 14(A)(1)(a)(i) sets the expected loss ratio for group Medicare Supplement policies at no less than 75 percent of aggregate earned premium, estimated over the entire period for which rates are computed and excluding anticipated refunds or credits. Sixty-five percent is the separate standard the same section sets for individual policies, so it does not apply to a group form. Neither 85 percent nor 60 percent is the standard for either kind of policy.
Source
S.C. Code Ann. Regs. 69-46, Section 14(A)(1)(a)(i) (Loss Ratio Standards; amended eff. January 26, 2018)
Choose an answer to see the explanation.
8.After a hearing, the South Carolina director determines that a person has engaged in an unfair or deceptive act or practice in violation of the insurance title. What does the findings-and-order statute require the director to do?
Answer: B. Put the finding in writing and issue and serve the person an order to cease and desist
When a hearing establishes that the person engaged in an unfair or deceptive method of competition, act or practice, the director or designee must reduce the finding to writing and issue and serve on the person charged an order to cease and desist from it, along with an order imposing penalties under the administrative penalty statute. The statute has the director issue the order directly; it does not route the matter to the General Assembly or a circuit court, and it does not call for an oral warning or a second hearing before the order.
Source
S.C. Code Ann. Sec. 38-57-200(1)
Choose an answer to see the explanation.
9.A finance company operating in South Carolina uses several credit insurance producers in one geographic area, all of whom were licensed without taking the written examination. What does South Carolina law require of the company?
Answer: B. Keep at least one credit producer available to answer customers' questions
Sec. 38-43-100(A) addresses a bank, finance company or other company handling credit transactions that uses credit life, credit accident and health or credit property producers in a given area who were licensed without the written examination. Such a company must have at least one of those credit producers readily available to answer customers' questions about the credit coverage. The subsection imposes no later examination deadline, no written disclosure to customers, and no referral to the insurer's home office.
Source
S.C. Code Ann. Sec. 38-43-100(A)
Choose an answer to see the explanation.
10.A South Carolina producer sells a policy issued by an insurer not licensed to do business in the State and fails to comply with the title's provisions governing policies from such insurers. The insured then has a covered claim. For how much is the producer personally liable?
Answer: B. The limits of the coverage the policy provides
When a South Carolina producer sells a policy written or issued by an insurer not licensed to do business in the State and fails to follow the title's provisions on such policies, the producer becomes personally liable for the limits of the coverage the policy provides. The measure is the policy limits, not the premium paid or the commission earned, and the statute does not leave the liability with the insurer alone.
Source
S.C. Code Ann. Sec. 38-43-180
Choose an answer to see the explanation.

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1.Unless it is revoked or suspended, on what cycle does a South Carolina producer's license continue?

2.A South Carolina producer promotes a policy under a title suggesting it provides far broader protection than the contract actually does. The policy's own provisions state the true, narrower coverage. Under South Carolina law, which statement is correct?

3.An applicant for an individual health policy in South Carolina makes an honest mistake on the application about a past doctor visit. The mistake had no effect on the insurer's acceptance of the risk or on the hazard it assumed. When a claim is later filed, how does the mistake affect recovery?

4.South Carolina's statute listing the director's duties makes it the director's duty to supervise and regulate the rates and service of every insurer. What does that same item of the statute say about the director's authority over insurance rates?

5.A licensed producer receives an information request from the South Carolina Department of Insurance during an investigation. If the director or designee has granted the producer more time, that timeframe applies; otherwise, within what period must the producer respond?

6.A licensed South Carolina producer, intending to deceive an insurer, knowingly submits an application containing false information about a fact material to underwriting. Upon conviction under South Carolina's fraudulent application statute, what penalty applies?

7.Under South Carolina's Medicare Supplement regulation, a group Medicare Supplement policy form must be expected to return to certificateholders, as aggregate benefits, at least what percentage of the aggregate premiums earned?

8.After a hearing, the South Carolina director determines that a person has engaged in an unfair or deceptive act or practice in violation of the insurance title. What does the findings-and-order statute require the director to do?

9.A finance company operating in South Carolina uses several credit insurance producers in one geographic area, all of whom were licensed without taking the written examination. What does South Carolina law require of the company?

10.A South Carolina producer sells a policy issued by an insurer not licensed to do business in the State and fails to comply with the title's provisions governing policies from such insurers. The insured then has a covered claim. For how much is the producer personally liable?

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