Free Texas Life & Health practice questions

Answer: C. Only if that portion is guaranteed to be returned in full on demand

The Texas life and annuity advertising rule bars describing any part of a premium as a deposit unless that part is guaranteed to come back in full whenever the insured asks for it. Crediting money to a cash value account does not by itself create that guarantee. Neither an oral explanation at the sale nor a display of the guaranteed interest rate supplies the full-return guarantee the rule requires.

Answer: A. Individuals of the same class and equal life expectancy

Chapter 1702 forbids a life insurer, except as its listed exemptions allow, to make or allow a distinction or unfair discrimination in the rate, the dividend or other benefit, or any other policy term between people who are in the same class and have equal life expectancy. People in different underwriting classes, or with unequal life expectancy, are not the pairs the section protects. The statute's test is class and life expectancy, so narrowing it to holders of a single policy form misstates the rule.

Answer: B. He may start acting as an agent; no exam is required and the waiting period has run

Sec. 4001.152 states that a written examination is not needed for a temporary license, so Luis's lack of an exam does not hold him back. Under Sec. 4001.154, if the temporary license has not arrived before the eighth day after the application materials and certificate were delivered or mailed, and the appointing insurer has received no denial notice, the insurer may assume the license will issue and the applicant may begin acting as an agent. Ten days have passed with no denial, so he may proceed and need not wait for the license itself. The 90-day term is wrong: Sec. 4001.155 makes a temporary license valid for 180 days after it is issued.

Answer: B. A group hospital and medical expense policy an insurer issues to an employer for its staff

Texas places the chemical dependency mandate on group health benefit plans offering hospital and medical coverage in this state, including a group insurance policy from an insurer, and such a plan must cover necessary care and treatment of chemical dependency. An insured group policy issued to an employer is therefore the plan that owes the coverage. The chapter expressly carves out individual insurance policies, so the major medical policy sold to a self-employed person is outside it. Blanket insurance policies are also excluded, which removes the sports camp policy. A self-funded employer plan falls outside the chapter when it has 250 or fewer employees or members, so a self-funded plan for 200 employees is exempt. Where the mandate does apply, the coverage generally may not be less favorable than the plan's coverage for physical illness.

Answer: A. A network physician's provider contract

The Texas rule names the forms that are always part of an HMO evidence of coverage. They include the group agreement, each certificate given to a subscriber who enrolls through a group, conversion and individual agreements, the applications for group, conversion and individual coverage, the group subscriber enrollment form, riders, endorsements, amendments and letters of agreement, matrix filings, the schedule of benefits, and any other form attached to or made part of it. The schedule of benefits, riders and letters of agreement, and an individual application are all on that list. A contract between the HMO and a network physician is not, and it is not issued to an enrollee, which the Code's definition of an evidence of coverage requires. Each listed form also needs its own form number and individual approval by the commissioner before it is issued, delivered or used in Texas.

Answer: B. On March 17, the day the existing insurer had all of the information needed for the exchange

Sec. 1114.0541(f) provides that when an exchange request notice lacks required information, the period for transferring the contract value starts only once the existing insurer has received all of that information, whether it comes from the replacing insurer or from the contract owner. The last of the information arrived on March 17, so the 30-business-day period under Sec. 1114.0541(e)(2) starts that day. Counting from March 3 ignores Sec. 1114.0541(f). The issue date of the new contract plays no part, because the statute ties the period to the existing insurer's receipt of the notice and its required information. Waiting for a corrected notice from the replacing insurer is wrong because Sec. 1114.0541(f) expressly allows the contract owner to be the one who supplies the missing information.

Answer: B. On the license holder's birthday in each odd-numbered year

For an individual, Sec. 4003.001(a)(2) ties expiration to the holder's birthday, and the year follows the parity of the year of issuance or renewal. A license issued or renewed in an odd-numbered year expires on the birthday each odd-numbered year. The even-numbered-year birthday applies to a license issued or renewed in an even-numbered year. The second-anniversary rule in Sec. 4003.001(a)(1) is for a license holder that is not an individual, such as a corporation or partnership. The section sets no December 31 expiration date.

Answer: D. It reasonably suspects a fraudulent insurance act that it must report

For a complete surrender request, Texas requires the insurer to pay the owner the current cash surrender value no later than the 30th business day after it receives the request. The statute permits a different period only where the contract itself gives the insurer a right to defer payment, the insurer and owner agree to another period or date, state or federal law requires a different period, or the insurer determines or reasonably suspects that the request involves a fraudulent insurance act it must report under Sec. 701.051. A suspected reportable fraud is therefore the listed circumstance among these choices. A processing backlog and a request from the selling agent to hold the money appear nowhere among the exceptions, and a surrender charge under the contract is not one of them either.

Answer: B. April 10 of the same year

Texas forbids a life policy provision that dates the policy, or makes it take effect, more than six months ahead of the original application when doing so lets the insured rate at a younger age. For that rule, age on the application date is the age at the birthday nearest that date. Six months before October 10 is April 10, so April 10 is the earliest date that can be used to secure the younger rating. July 10 is permitted but is not the earliest available date. October 10 of the prior year reaches back twelve months, well past the limit. Texas does not ban backdating outright; it caps how far back a younger-age date can go.

Answer: C. A refund of all premiums paid, including any contract fees

Texas requires every fixed annuity contract to give the buyer at least 20 days after delivery to cancel and get back all premiums, with no deduction for contract fees or charges. May 20 is 16 days after delivery, so she is inside that window. The separate 15-day free look in the department's rule applies when the buyer's guide and disclosure document were not given at or before application, and it runs alongside any other free look period, so it never shortens the 20-day statutory right. A cash surrender value measure is what the statute uses for variable or modified guaranteed annuities, not fixed ones. The refund is unconditional, so she does not have to prove any misconduct.