Free South Carolina Life practice questions

Answer: D. In the lower left corner of the policy's first page

South Carolina law has each individual life policy show a short, accurate summary of its benefits near the bottom of page one. The policy's identifying form number must be printed in the "lower left hand corner" of that same page. Each other location pairs the wrong corner, the wrong page, or both, so none matches what the statute specifies.

Answer: C. Within thirty days after the final disposition of the matter

A producer must report an administrative action taken against them in another jurisdiction, or by another governmental agency in South Carolina, within thirty days of the matter's final disposition. The report must include a copy of the order or other relevant legal documents. The period runs from final disposition, so the date the action was first filed is the wrong starting point. Ten days is shorter than the period the section sets, and the section ties the report to the disposition rather than to a license renewal.

Answer: C. Two years, with at least the premiums paid returned

In South Carolina, a suicide provision in an individual life policy may limit benefits for no more than two years from the policy's date of issue, and it must provide at least a return of the premiums paid. One year falls short of the longest period the statute permits, and three years exceeds it. A two-year clause that pays nothing fails the requirement to return at least the premiums paid.

Answer: C. Any number of producers, with no statutory limit stated

Sec. 38-43-40 provides that the license an insurer obtains under Chapter 5 gives it the right to appoint any number of producers to do business in the State. The section sets no county quota, no annual cap approved by the director, and no tie to the number of agencies. When the insurer notifies the director of an appointment, the notice must give the producer's business and residence addresses.

Answer: D. prohibited, because an advance cannot be conditioned on buying anything else

South Carolina confines premium advances made by a producer, agency, or producer of record, and any lien arising from them, to premiums for the policies the insured or applicant wants. The producer may not make buying any other policy, commodity, product, or service a condition of advancing the premium. That bar applies whatever the price of the other product and whether or not it is insurance, and it does not depend on whether interest is charged on the advance.

Answer: A. The director may examine as often as considered appropriate, but at least once every five years.

The examinations chapter lets the director or the director's examiners conduct a financial examination of a licensee as often as the director or designee considers appropriate, and it sets a floor: every insurer licensed in the state must receive a financial examination at least once every five years. A three-year cycle is not the statutory minimum, and the statute does not forbid an earlier examination. The duty is not triggered by a citizen complaint or a renewal application; it applies to every licensed insurer.

Answer: D. Suspend for a period it deems proper, or revoke at once if warranted

For a violation of Section 38-43-210 or 38-43-220, South Carolina leaves the sanction to the discretion of the director, his designee or the Securities Commissioner, depending on the license involved. The official may suspend the person as an insurance producer or stockbroker for whatever length of time the official thinks proper, and may revoke the license immediately where the official judges that the violation calls for it. The statute sets no fixed thirty-day term and does not require a court to order revocation, it permits license action rather than limiting the official to a reprimand, and it imposes no mandatory probation before revocation.

Answer: C. The producer through whom the contract was made

South Carolina makes an insurance producer personally liable on every contract of insurance unlawfully made by or through that producer for an unauthorized insurer, and the rule reaches placements made indirectly as well as directly. Routing part of the deal through someone else therefore does not shield the producer. The statute puts this liability on the producer, not on the insured who applied, not on a department official, and not solely on an agency's compliance officer.

Answer: C. Five years

Section 38-43-250 requires every producer to make and keep a full and correct record of business done, showing for each policy or renewal certificate its number, date, term, amount insured, premium, and the person it was issued to. The director or designee may demand the information and inspect the original books on demand, and the records must be kept for at least five years. Three years falls short of that minimum, and seven or ten years is not the minimum the section sets.

Answer: D. An examination warrant

The examinations chapter requires the director or designee, upon determining that an examination must be conducted, to issue an examination warrant that appoints one or more examiners and tells them the scope of the examination. In conducting it, the examiners must observe South Carolina laws and regulations and the procedures in the Examiners' Handbook adopted by the NAIC. A notice of hearing, a cease and desist order and a subpoena serve other purposes and are not the instrument this subsection names for appointing examiners.