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Life and Health Insurance Producer Exam

Regulation and licensing: practice questions

Our Life & Health Insurance bank has 15 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

What is a nonresident producer license?

  1. A license that allows selling only to non-citizens
  2. A license for producers who don't have a permanent home address in any state
  3. A temporary license given while waiting for exam results
  4. A license to sell in a state where the producer doesn't live
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D. A license to sell in a state where the producer doesn't live — Reciprocity often eases nonresident licensing.

Question 2

What must a producer usually do after changing their address?

  1. Notify the insurance department within the time set by state law
  2. Retake the licensing exam in the new county
  3. Nothing; the department finds out automatically from the post office or the insurer
  4. Ask each client to update the address for them
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A. Notify the insurance department within the time set by state law — Many states require notice within 30 days.

Question 3

What does the Fair Credit Reporting Act require when an insurer declines coverage based on a consumer report?

  1. The insurer must keep the reason for the decision confidential
  2. The insurer must issue the policy at a higher premium instead
  3. The insurer must pay the applicant's credit card bills for a full year as compensation for the decision
  4. The insurer must tell the applicant and give the reporting agency's name and address
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D. The insurer must tell the applicant and give the reporting agency's name and address — The consumer may request a copy of the report.

Question 4

What is commingling?

  1. Combining two policies into one for a client
  2. Selling both life and health insurance policies to the same client at once
  3. Mixing premium funds with the producer's personal funds
  4. Sharing a commission with another licensed producer
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C. Mixing premium funds with the producer's personal funds — It is grounds for discipline.

Question 5

What is the purpose of the USA PATRIOT Act's anti-money laundering rules for insurers?

  1. To prevent agents from selling policies abroad
  2. To require insurers to invest in government bonds
  3. To detect and report suspicious transactions in covered products, such as annuities and permanent life
  4. To ensure every policyholder is a U.S. citizen by birth
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C. To detect and report suspicious transactions in covered products, such as annuities and permanent life — Covered insurers must have AML programs and train producers.

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