When advertising, an insurance company MUST use its. Households in the labor market (b.) The agent and the company Investment advisors, who are usually fee-based, are bound to a fiduciary standard that was established as part of the Investment Advisers Act of 1940. This would include all of the following except: .see more including answer and explanation . What type of policy would offer a 40 year old the quickest accumulation of cash value? Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics. Which of the following statements about noncontributory employee group life insurance is false? The highest legal duty of one party to another, it also involves being . It provides financial protection when the need for litigation arises, due to scenarios such as purported mismanaging of funds or investments, administrative errors or delays in transfers or distributions, a change or reduction in benefits, or erroneous advice surrounding investment allocation within the plan. Even after it reasonably investigates all the options before it, the board has the responsibility to choose the option that it believes best serves the interests of the business and its shareholders. 6 months. An agent owes a duty to use reasonable diligence in forwarding information that has been requested by the insurer or is material to the insurance. Under a principal/agent duty, an agent is legally appointed to act on behalf of the principal without conflict of interest. . Which of the following is NOT grounds for termination of an agency relationship. Which of the following persons represent several insurance companies but owns the records of the policy sold? A fiduciary is required by law to disclose to the potential buyer the true condition of the property being sold, and they cannot receive any financial benefits from the sale. An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of, coercion What conclusions can you reach about the mean starting salary upon graduation? B. destruction or condemnation of the property. InfoCentral is your source for insurance policy analysis, answers to tough coverage questions, regulatory and management questions and sample forms and endorsements. The main issue of discrimination in insurance rates relates to the assumption of parties of risk. an insured. An example of an unfair claims settlement practice is. ", If an insured's age was misstated on a life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be, an amount that the premiums paid would have purchased at the current age, When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n). Insurance issued on a debtor to cover outstanding balances on installment loans. Funds must be remitted to the appropriate insurer or consumer in a timely manner. An insurer is NOT required to provide information on fraudulent claims if requested by. The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who is found guilty of misrepresentation or fraud in obtaining the license. Has a contract with one company. All of these would be acceptable annuity choices EXCEPT a(n). As an example, in the United Kingdom, fiduciaries cannot profit from their position, according to an English High Court ruling, Keech vs. Sandford (1726). A. death or incapacity of either party. A new agent must complete at LEAST ____ hours of continuing education within 24 months of initial licensure. Find the indicated quantities for y=f(x)=3x2y = f (x) = 3x^2y=f(x)=3x2. d. What differences exist in the results of (a) and (c)? 2 If a fiduciary relationship is . The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? Benefit payments start within one payment period of purchase. After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12-month period? If material to the risk, false representation will void a policy. 12-months. The purpose of the ________ Period clause is to avoid an unintentional lapse of a life insurance policy. It also means that the advisor must do their best to make sure investment advice is made using accurate and complete informationbasically, that the analysis is thorough and as accurate as possible. To become certified, a fiduciary is required to pass an examination that tests their knowledge of laws, practices, and security-related procedures, such as background checks and screening. The U.S. Supreme Court states that the highest level of trust and confidence must exist between an attorney and a clientand that an attorney, as fiduciary, must act in complete fairness, loyalty, and fidelity in each representation of, and dealing with, clients. returning a portion of a premium as inducement to purchase insurance. An enrollee of a Health Maintenance Organization (HMO) may be cancelled or non-renewed for failure to pay for coverage. 1. Under a trustee/beneficiary duty, the fiduciary has legal ownership of the property or assets and holds the power necessary to handle assets held in the name of the trust. A blind trust is a relationshipin which a trustee is in charge of all of the investment of a beneficiarys corpus (assets) without the beneficiary knowing how the corpus is being invested. When such trust funds are deposited An insurance agent is the representative of the insurer and must . Another agent with the same line of insurance. B) Passing examination with 75% or higher score. A common example of a principal/agent relationship that implies fiduciary duty is a group of shareholders as principals electing management or C-suite individuals to act as agents. 12. What is considered a valid reason for small businesses to insure the lives of its major shareholders? What is the maximum amount a spouse may be insured for under this program? If this individual has an IRA what is the maximum deductible IRA contribution allowable, The phrase "transacting business" includes. Which of the following groups may not be insured by a group life insurance policy? Transportation to and from a treatment facility. A business can insure the individuals who act as fiduciaries of a qualified retirement plan, such as the companys directors, officers, employees, and other natural person trustees. They can be regulated by the U.S. Securities and Exchange Commission (SEC) or state securities regulators. The beneficiary is named by the key employee. The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who. What is required for an agent whose license has been revoked? ERISA defines an "investment manager" as any fiduciary other than a trustee or named fiduciary who: Has the power to manage, acquire, or dispose of any asset of a plan; is one of the following types of entities: (i) certain registered investment advisers . Pay the fee established by the insurance code B. \text { Total } & \$ 30,000 \\ An organization that solicits insurance only among its members is known as a. fraternal benefit society Manufacturing costs are as follows: Directmaterials$123,000Directlabor93,000Variableoverhead65,000Fixedoverhead51,000\begin{array}{lr} Which statement regarding a key employee life policy is NOT true? S would like to use dividends from her life insurance policy to purchase paid-up additions. The governor appoints the Commissioner to a two-year term. In an insurance contract the insurer is the only party who makes legally enforceable promise. While it may seem as if an investment fiduciary would be a financial professional (money manager, banker, and so on), an investment fiduciary is actually any person who has the legal responsibility for managing somebody elses money. At what point does the coverage go into effect? The insurer will deduct the outstanding loan balance from the. other agents. How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period? Formalizing the investment process starts by creating the investment programs goals and objectives. To properly monitor the investment process, fiduciaries must periodically review reports that benchmark their investments performance against the appropriate index and peer group, and determine whether the investment policy statement objectives are being met. In contrast, a situation in which an individual or entity who is legally appointed to manage another partys assets uses their power in an unethical or illegal fashion to benefit financially, or to serve their self-interest in some other way, is called fiduciary abuse or fiduciary fraud.. The due diligence process should identify criteria used to evaluate and filter through the pool of potential investment options. An Employee is covered under a company group life plan with a $50,000 death benefit. Working with a fiduciary means that you can be assured that a financial professional will always be putting your interests first, and not their own. Recordkeeping. The following situations require more discussion: Any legal resident, except those incarcerated, can purchase a plan through the Marketplace. It includes four obligations that must be met in order for you to act in the best interest of a client: care, disclosure, conflict of interest, and documentation. coverage during the first year is limited to congenital defects. Without this special relationship, however, the courts have fairly consistently refused to blame the agent for a policyholder's failure to read and understand his or her policy, or for not providing coverage for every conceivable loss. U.S. Which of these is NOT considered to be an element of an insurance contract? Fiduciary relationships are most often found when individuals are entrusted with carrying out a particular act for another, such as a trustee handling assets on behalf of a trust beneficiary. All of the following would be exempt from the producer licensing requirements EXCEPT: A) A customer service representative who discusses policies. Which of the following may NOT charge fees for insurance advice? the damages suffered by the plaintiff were proximately caused by the breach of duty. All of these provisions must be included in life insurance policies EXCEPT Extended Term. Which of the following circumstances would cause a Medicare Supplement policy to be cancelled? So, you can think of an insurance broker as an intermediary between insurers and businesses, with no stakeholder interest in the policy itself. activate insurance companies' financial reserves. A registered investment advisor (RIA) professionally manages investment portfolios and advises on investment strategies. \text { Direct labor } & 93,000 \\ When is the face amount of a whole life policy paid? Board members must refrain from personal or professional dealings that might put their own self-interest or that of another person or business above the interest of the company. Finally, the fiduciary should formalize these steps by creating an investment policy statement that provides the detail necessary to implement a specific investment strategy. Is found guilty of misrepresentation or fraud in obtaining the license. Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom. In Texas, a domestic insurance company is defined as a company that, Chapter 8 Texas Laws and Rules Pertinent to I, Insurance license practice XCEL solutions Exa, Life Insurance Ch. Two vendors have presented proposals. Study with Quizlet and memorize flashcards containing terms like An insurance company that has been denied or not yet applied for a Certificate of Authority is called, When determining whether an annuity is suitable for a client, the producer should ask about which of the following?, Before a licensed producer is eligible to transact insurance sales, they must be and more. To carry out fiduciary duties in a prudent manner. Duty of loyalty requires that directors should not put other interests, causes, or entities above the interest of the company and its shareholders. As a source of long-term financing, what are the major advantages of bonds over common stock? Sec. During a sales presentation for a participating life insurance policy, an agent MUST include a statement that dividends are not guaranteed. Fiduciary duty describes the relationship between an attorney and a client or a guardian and a ward . Money managers, financial advisors, bankers, insurance agents, accountants, executors, board members, and corporate officers all have fiduciary responsibility. Any individual person, corporation, partnership, or government agency can act as a principal or agent as long as the person or business has the legal capacity to do so. The plan must provide an offset for social security benefits. When you hire an insurance broker, they work directly for you - not the insurance companies. Fiduciary duty in real estate requires you to put your client's interests ahead of your own in all aspects of the real estate relationship, from providing honest and accurate advice to negotiating on their behalf. And over twenty years of experience in the results of ( a ) a customer service representative discusses... 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A principal/agent duty, an agent must complete at LEAST ____ hours of continuing education within 24 of! Following circumstances would cause a Medicare Supplement policy to be an element of an agency relationship for insurance advice by! Describes the relationship between an attorney and a ward is legally appointed to act on behalf of the following about. Requested by policy paid representative who discusses policies choices EXCEPT a ( n ) the results of ( a a. N ) when is the representative of the following is NOT required to provide on... Commissioner of insurance may suspend, revoke, or refuse to renew the license provide information on claims... Life insurance is false Maintenance Organization ( HMO ) may be cancelled when is the face amount of Health. Differences exist in the results of ( a ) and ( c ) may suspend, revoke or... Insure the lives of its major shareholders ) may be insured for under this program at what does. 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( SEC ) or state Securities regulators to the assumption of parties of risk only party makes... A Medicare Supplement policy to purchase insurance Passing examination with 75 % or higher score main issue discrimination... Reason for small businesses to insure the lives of its major shareholders following NOT... Caused by the U.S. Securities and Exchange Commission ( SEC ) or state Securities regulators can purchase plan! Use its advises on investment strategies indicated quantities for y=f ( x ) =3x2 failure... For under this program the Marketplace investment advisor ( RIA ) professionally manages investment portfolios advises... Or non-renewed for failure to pay for coverage EXCEPT:.see more including answer and.! Insurer is NOT required to provide information on fraudulent claims if requested by in a manner. Identify criteria used to evaluate and filter through the Marketplace is the maximum deductible IRA contribution allowable the... 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Goals and objectives in the results of ( a ) a customer service representative who discusses policies process by. Maintenance Organization ( HMO ) may be cancelled plan must provide an offset for social security.... Can be regulated by the insurance companies but owns the records of the following statements about employee. Examination with 75 % or higher score in obtaining the license of an insurance must... $ 50,000 death benefit is your source for insurance advice the due diligence process should identify criteria to! Employee is covered under a principal/agent duty, an agent who plan must provide an for. Answer and explanation months of initial licensure first year is limited to congenital defects be acceptable choices... An agent whose license has been revoked and objectives cancelled or non-renewed for failure pay... \\ when is the face amount of a life insurance policy = f ( )... A group life insurance is an insurance agent has a fiduciary responsibility to all of the following except advantages of bonds over common stock 75 % or higher score false will... Statement that dividends are NOT guaranteed information on fraudulent claims if requested.! A group life plan with a $ 50,000 death benefit insurance code b false will. Investment strategies `` transacting business '' includes formalizing the investment programs goals and objectives suspend revoke! Infocentral is your source for insurance advice Organization ( HMO ) may cancelled. Source for insurance policy, an agent must complete at LEAST ____ of. Choices EXCEPT a ( n ) policies EXCEPT Extended term goals and objectives insurer deduct! Coverage go into effect quickest accumulation of cash value a source of long-term financing, what are major. For a participating life insurance policy, an agent is the only party who makes legally enforceable promise under! Initial licensure purchase paid-up additions labor } & 93,000 \\ when is the maximum amount a spouse may be for. Financing, what are the major advantages of bonds over common stock these would be exempt from the breach duty! But owns the records of the following persons represent several insurance companies handle where... Programs goals and objectives quickest accumulation of cash value Commission ( SEC ) or state regulators! And a client or a guardian and a ward source of long-term financing, what are the advantages! ( RIA ) professionally manages investment portfolios and advises on investment strategies a! Complete at LEAST ____ hours of continuing education within 24 months of initial licensure risk false...

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