Question 1

What happens if an insurer violates the Medical Loss Ratio rule and spends too much money on administrative costs?

Options :

A :

Insurers that do not meet the Medical Loss Ratio standard will be required to provide rebates to their customers and reduce spending on their administrative costs.

B :

Insurers that do not meet the Medical Loss Ratio standard will pay a tax penalty to the Federal government, n

C :

Insurers that do not meet the Medical Loss Ratio standard will pay a tax penalty to the Health Benefits Exchange.

D :

Insurers that do not meet the Medical Loss Ratio standard will only be required to reduce their spending on administrative costs.

Answer: A

Question 2

To help keep premiums more affordable, which provision is included in a disability income policy?

Options :

A : Residual benefits.

B : Elimination period.

C : Cost of living rider.

D : Automatic increase provision.

Answer: B

Question 3

Which of the following statements regarding risk is TRUE?

Options :

A : Only pure risks are insurable.

B : Only speculative risks are insurable.

C : Both pure and speculative risks are insurable.

D : Neither pure nor speculative risks are insurable.

Answer: A

Question 4

Every individual annuity policy that is sold to a senior in the State of California MUST include which of the following free look information?

Options :

A : The insured forfeits any premiums paid if cancelled.

B : The policy has a 30-day return for cancellation feature.

C : The insurer has the right to cancel if less than 30 days.

D :

Answer: B

Question 5

A Hospital Confinement Indemnity insurance policy pays

Options :

A : the amount of the actual hospital expenses.

B : 100% of the covered medical expenses less the deductible and coinsurance percentage.

C : an indemnity to the insured for all expenses incurred when the insured is confined in a hospital.

D : the daily benefit dollar amount stated in the policy for each day the insured is confined ina hospital.

Answer: D

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