Missouri Life & Health Insurance License, Practice Exams

Under § 375.141, RSMo, a business entity's producer license may be disciplined when a violation by an individual producer was:

1. Known and not reported by managers ✓
2. Committed by a former employee
3. Reported promptly to the director
4. Corrected before any complaint

Why: Section 375.141, RSMo allows discipline of a business entity when the violation was known or should have been known by its managers and was neither reported nor corrected.

Medicare Part A is premium-free for a beneficiary who:

1. Enrolled in a private Medicare Advantage plan during the annual open enrollment window
2. Has about 40 quarters of Medicare-covered employment ✓
3. Bought a Medicare Supplement policy within six months of turning age sixty-five
4. Has reached full Social Security retirement age but is still working full time

Why: Most people qualify for premium-free Part A by having about 40 quarters (10 years) of Medicare-covered employment (their own or a spouse's).

Under § 374.049, RSMo, in an administrative proceeding a level two violation carries a civil penalty of up to:

1. one thousand dollars per violation ✓
2. five thousand dollars per violation
3. ten thousand dollars per violation
4. fifty thousand dollars per violation

Why: Section 374.049, RSMo caps administrative penalties for a level two violation at one thousand dollars per violation (aggregate fifty thousand per annum) — therefore one thousand dollars.

The reinstatement provision of a lapsed life policy generally allows the owner to restore coverage by:

1. Surrendering a different policy they own with the insurer
2. Waiting until the original contestable period has expired
3. Paying back premiums with interest and proving insurability ✓
4. Simply notifying the insurer that they wish to continue it

Why: Reinstatement typically requires payment of overdue premiums with interest, repayment or reinstatement of any loan, and evidence of insurability, usually within a set period after lapse.

Under § 375.030, RSMo, an insurance-related course approved for another profession's CE is measured against which requirement?

1. The continuing education requirements under section 375.020 ✓
2. The prelicensing education hours under section 375.014
3. The nonresident licensing standards under section 375.017
4. The examination requirements under section 375.016

Why: Section 375.030, RSMo states such a course shall meet the continuing education requirements pursuant to section 375.020 — therefore the CE requirements of section 375.020.

A contributory group life plan, in which employees pay part of the premium, generally requires:

1. 100% of all eligible employees to enroll in the plan
2. Only the highly compensated employees to participate
3. No minimum level of employee participation at all
4. At least 75% of eligible employees to participate ✓

Why: Contributory plans typically require at least 75% participation, while noncontributory (employer-paid) plans require 100%.

'Rebating' generally refers to:

1. Refunding the unearned premium when a policy is properly cancelled
2. Charging a higher premium to a substandard, higher-risk applicant
3. Returning a claim overpayment to the insurer after a billing error
4. Offering something of value not in the contract to induce a sale ✓

Why: Rebating is giving a prospect any inducement (such as part of the commission or a gift) not specified in the policy to persuade them to buy; it is illegal in most states.

Under § 374.049, RSMo, a violation committed knowingly may be enhanced by:

1. a one-classification step increase ✓
2. a two-classification step increase
3. a three-classification step increase
4. a doubling of the aggregate cap

Why: Section 374.049, RSMo permits a one-classification step increase for a knowing violation (two levels for conscious disregard of the law) — therefore a one-classification step increase.

Under § 376.1109, RSMo, a long-term care policy that conditions noninstitutional benefits on prior receipt of institutional care may not require a prior institutional stay of more than how many days?

1. Twenty days
2. Sixty days
3. Thirty days ✓
4. Ninety days

Why: Section 376.1109, RSMo prohibits requiring a prior institutional stay of more than thirty days as a condition of noninstitutional benefits; therefore thirty days.

Under federal law, group health plans that cover dependent children must generally allow coverage to continue until the child reaches age:

1. 18 in every state without any exception
2. 21 unless the child is a full-time student
3. 26 ✓
4. 30 if the child remains unmarried

Why: The Affordable Care Act requires plans offering dependent coverage to extend it to adult children up to age 26.

The 'unpaid premium' provision in a health policy allows the insurer to:

1. Charge double the missed premium as a late penalty fee
2. Refuse to process the claim until a new application is filed
3. Deduct any premium due and unpaid from a claim payment ✓
4. Cancel the policy retroactively to its original issue date

Why: If a premium is due and unpaid when a claim is payable, the insurer may deduct the amount owed from the claim proceeds.

A family maintenance policy combines whole life with level term to:

1. Provide temporary coverage only, expiring with no cash value at the end of a stated 10- or 20-year term
2. Invest part of each premium in the mutual fund subaccounts the policyowner selects and may switch at will
3. Decrease the death benefit gradually as the children grow up and the family's income need falls away
4. Pay an income for a set period beginning at the insured's death, then the face amount ✓

Why: Family maintenance adds level term to whole life; if the insured dies during the term, it pays income for a stated period from the date of death, then the face amount.

Distributions from a qualified annuity (funded with pre-tax dollars) are:

1. Entirely income-tax-free in all circumstances
2. Taxed only on the portion above the cost basis
3. Fully taxable as ordinary income when received ✓
4. Subject to capital-gains rates on the whole amount

Why: Because a qualified annuity has no after-tax cost basis, the entire distribution is taxable as ordinary income; required minimum distributions also apply.

Under § 376.406, RSMo, health benefits for a newly born child of an enrollee must be payable beginning at what point?

1. From the thirty-first day of life
2. From discharge from the hospital
3. From the date the child is named
4. From the moment of birth ✓

Why: Section 376.406, RSMo requires that benefits for a newly born child be payable from the moment of birth; therefore from the moment of birth.

COBRA generally allows a qualified employee who loses group coverage due to a reduction in hours or termination to continue that coverage for:

1. Only 30 days while they search for replacement coverage
2. The rest of their life, at the original employee contribution rate
3. Up to 10 years, fully subsidized by the former employer
4. Up to 18 months, by paying the premium themselves ✓

Why: COBRA continuation is typically 18 months (29 or 36 in some cases); the individual pays up to 102% of the full premium.

Under Missouri's Medicare supplement standards, the basic core benefit includes the Part A hospital coinsurance plus coverage for how many additional lifetime hospital days after Medicare benefits are exhausted?

1. One hundred twenty days
2. Ninety days
3. One hundred eighty days
4. Three hundred sixty-five days ✓

Why: 20 CSR 400-3.650 core benefits include an additional three hundred sixty-five lifetime hospital days after Medicare is exhausted; therefore three hundred sixty-five days.

An employee elects COBRA after termination. The employee generally must pay:

1. Nothing, because the employer continues to pay
2. Only the share they paid as an active employee
3. Triple the active-employee premium
4. Up to 102% of the full group premium ✓

Why: COBRA lets the individual continue coverage by paying up to 102% of the full premium (the group cost plus a 2% administration charge).

The director issues a temporary license effective April 1 for the maximum allowed term. Under § 375.025, RSMo, the latest it may remain in effect is approximately:

1. Late April
2. Late May
3. Mid-July
4. Late June ✓

Why: Section 375.025, RSMo caps a temporary license at ninety days; ninety days from April 1 runs to about the end of June.

The McCarran-Ferguson Act established that the insurance business is primarily regulated by:

1. A single federal insurance agency in Washington
2. International treaty organizations and trade bodies
3. The individual states ✓
4. The Internal Revenue Service and the U.S. Treasury

Why: McCarran-Ferguson (1945) affirmed that regulation of insurance is left to the states, except where federal law specifically applies.

An alien insurer is one that is:

1. Incorporated in this state
2. Incorporated outside the United States ✓
3. Incorporated in another U.S. state
4. Not licensed in any state

Why: Alien = incorporated in another country; domestic = this state; foreign = another U.S. state.

Under § 376.735, RSMo, assessments are due not less than 30 days after written notice and accrue interest on and after the due date at:

1. six percent per annum
2. eight percent per annum
3. ten percent per annum ✓
4. twelve percent per annum

Why: Section 376.735, RSMo states assessments are due not less than 30 days after notice and accrue interest at ten percent per annum on and after the due date.

An insured with a $5,000 monthly benefit has a residual disability causing a 60% loss of income. The residual benefit is:

1. $3,000 ✓
2. $5,000
3. $2,000
4. $1,500

Why: Residual benefits are proportional to lost income: 60% × $5,000 = $3,000.

Under § 374.205, RSMo, how long must all policy records for each policy issued be maintained?

1. For three calendar years after the policy is first issued
2. For the current policy term plus two calendar years ✓
3. For the life of the insured plus five additional years
4. Permanently, for as long as the insurer holds a license

Why: Section 374.205, RSMo requires all policy records for each policy issued to be maintained for the duration of the current policy term plus two calendar years — therefore the current term plus two years.

A Medicare Special Enrollment Period (SEP) without penalty is available to a person who:

1. Simply forgot to sign up during their initial enrollment window
2. Has decided to drop Medicare entirely and rely on Medicaid
3. Delayed Part B because of active employer group coverage past age 65 ✓
4. Wishes to switch from one Medigap letter plan to a different one

Why: Those who kept employer group coverage (their own or a spouse's) past 65 may enroll later during a SEP without a late penalty.

Part 2 of a life insurance application generally collects:

1. The premium payment and the policy's effective date information
2. The proposed insured's medical history ✓
3. The agent's personal observations about the applicant's apparent lifestyle
4. The names and addresses of the applicant's professional references

Why: Part 1 covers general information (name, age, occupation, beneficiary); Part 2 covers medical history. The agent's report is separate and not part of the contract.

The director revokes a producer's license under § 375.141. Under § 375.022, RSMo, the director shall:

1. Provide public notice ✓
2. Keep the action sealed
3. Notify only the insurer
4. Wait for an appeal first

Why: Section 375.022, RSMo requires the director to provide public notice when a license is suspended, revoked, or refused under § 375.141.

The 'cash surrender' nonforfeiture option provides that the policyowner:

1. Receives the accumulated cash value in a lump sum and ends coverage ✓
2. Buys a smaller paid-up permanent policy with the cash value
3. Keeps the full face amount as term insurance for a limited time
4. Borrows against the cash value while keeping the policy in force

Why: Cash surrender pays the net cash value in a lump sum and terminates the policy; reduced paid-up and extended term keep some insurance in force.

An applicant who regularly scuba dives in caves is most likely to be:

1. Declined outright, as no insurer covers a hazardous hobby
2. Charged a higher (rated) premium or have the avocation excluded ✓
3. Required to buy an annuity rather than life insurance
4. Offered the preferred rate class, since diving is a sport

Why: Hazardous avocations increase risk; insurers respond with a rating, an exclusion rider, or a higher premium.

In an indexed universal life policy, the interest credited to cash value is:

1. Determined each year solely by the policyowner's own elections
2. Based entirely on separate-account mutual fund performance and risk
3. Guaranteed at a fixed rate set for the life of the contract
4. Tied to a stated market index, subject to a cap and a guaranteed floor ✓

Why: Indexed UL credits interest linked to an external index (e.g., S&P 500) with a cap/participation rate and a guaranteed minimum floor.

Workers' compensation insurance covers:

1. Job-related injuries and occupational illnesses ✓
2. Any injury an employee suffers, whether on or off the job
3. Only injuries that occur during an employee's commute home
4. Medical costs of an employee's dependents and family members

Why: Workers' compensation is a no-fault, state-mandated coverage for work-related injuries and occupational diseases; off-the-job losses are not covered.

Under a Section 162 executive bonus plan, the employer pays the premium as a bonus. The employer:

1. Owns the policy and its cash value, with the employee named only as insured
2. Deducts the bonus, and the employee reports it as income ✓
3. Takes no deduction, and the employee owes no tax
4. Cannot deduct the bonus, because it funds life insurance

Why: The employer deducts the bonus as compensation; the employee owns the policy and includes the bonus in taxable income.

A policyowner stops paying premiums and elects to keep a smaller amount of fully paid-up permanent coverage. This is the ____ option.

1. extended term
2. automatic premium loan
3. reduced paid-up ✓
4. cash surrender

Why: Reduced paid-up uses the cash value to buy a smaller, fully paid-up permanent policy with no further premiums.

'Coercion' as an unfair trade practice occurs when someone:

1. Uses physical or economic pressure to force the purchase of insurance ✓
2. Charges two identical risks two different premium amounts
3. Replaces a policy at another insurer through misrepresentation
4. Offers a small gift not specified in the policy to close a sale

Why: Coercion uses force or intimidation (for example, a lender requiring a borrower to buy insurance from a particular insurer) to induce an insurance transaction.

Pledging a life insurance policy to a bank as security for a loan is a:

1. Change of ownership
2. Viatical settlement
3. Collateral assignment ✓
4. Absolute assignment

Why: A collateral assignment transfers limited rights to a lender as security; an absolute assignment transfers all ownership rights.

An equity-indexed annuity with a 0% floor credits no negative interest. In a year the index drops 12%, the contract is credited:

1. 0% (principal is protected by the floor) ✓
2. -12% (the account value drops by the full index decline)
3. -6% (half the index loss, after a 50% participation rate)
4. +12% (the floor credits the inverse of the index decline)

Why: The floor (commonly 0%) prevents negative crediting, so a down year credits the floor rather than a loss.

Under § 376.717, RSMo, for insurers first placed under order on or after August 28, 2013, the limit on the present value of annuity benefits per life is:

1. $100,000
2. $300,000
3. $500,000
4. $250,000 ✓

Why: Section 376.717, RSMo sets the present value of annuity benefits limit at $250,000 (including net cash surrender and withdrawal values) for orders on or after August 28, 2013.

To be eligible to contribute to a Health Savings Account (HSA), an individual must be covered by a:

1. An employer-sponsored group HMO with $20 office copays
2. A Medicare Advantage Part C plan
3. A qualified high-deductible health plan (HDHP) ✓
4. State Medicaid coverage of any kind

Why: HSA contributions require enrollment in a qualified HDHP (and no disqualifying coverage).

Under § 375.144, RSMo, which act is unlawful in connection with the sale of insurance?

1. Quoting the filed premium
2. Disclosing all commissions
3. Material misrepresentation or concealment ✓
4. Recommending broadly suitable client coverage

Why: Section 375.144, RSMo makes it unlawful, as to any material fact, to make or use any misrepresentation, concealment, or suppression.

Under 20 CSR 400-5.900, before selling annuities a producer must complete an NAIC-approved annuity training course of at least:

1. four hours ✓
2. two hours
3. eight hours
4. one hour

Why: 20 CSR 400-5.900 requires completion of a four-hour NAIC-approved annuity training course before soliciting or selling an annuity in Missouri.

In which policy does the owner bear the investment risk, with cash value fluctuating based on separate-account performance?

1. Whole life
2. Term life
3. Variable life ✓
4. Universal life

Why: Variable life invests cash value in separate accounts; the owner bears investment risk, so cash value (and sometimes death benefit) can rise or fall. It requires a securities license to sell.

A major medical plan has a $500 deductible and 80/20 coinsurance. On a $5,500 covered bill, how much does the insured pay?

1. $1,500 ✓
2. $1,100
3. $1,000
4. $500

Why: Insured pays the $500 deductible, then 20% of the remaining $5,000 = $1,000, for a total of $1,500.

A settlement option that continues income to two people until the second one dies is the:

1. Life income option
2. Interest-only option
3. Joint and survivor option ✓
4. Fixed-period option

Why: The joint and survivor option pays as long as either of two people is alive.

A nonresident producer license allows a producer to:

1. Waive the resident state's prelicensing and examination requirements
2. Sell only inside the producer's home state
3. Solicit business anywhere without holding a resident license
4. Transact insurance in a state other than their home state ✓

Why: A nonresident license lets an already-licensed producer do business in another state, typically via reciprocity with their resident license.

A hospital indemnity (fixed indemnity) policy pays:

1. Benefits only if the insured has no other health coverage at all
2. A lump sum equal to the insured's annual salary upon admission
3. The full billed cost of the hospital stay after a deductible
4. A set dollar amount per day or event, regardless of actual charges ✓

Why: A hospital indemnity policy pays a predetermined fixed amount (e.g., per day of confinement) independent of the actual expenses incurred; it is supplemental.

An annuitant has a $40,000 cost basis and a $160,000 expected return. Of each $8,000 payment, the taxable portion is:

1. $6,000 ✓
2. $2,000
3. $4,000
4. $8,000

Why: Exclusion ratio = 40,000/160,000 = 25%; $2,000 of each $8,000 payment is excluded and $6,000 is taxable.

Under Missouri's Medicare supplement rules, a policyholder who terminates coverage within 30 days of the annual policy anniversary is entitled to what protection?

1. A full refund of all premiums paid
2. Automatic upgrade to a richer plan
3. A waiver of all future premiums
4. Guaranteed issue of a new policy ✓

Why: 20 CSR 400-3.650 places someone who terminates within thirty days of the annual policy anniversary in a guaranteed-issue category; therefore guaranteed issue of a new policy.

Under the uniform individual health policy provisions, written proof of loss must generally be furnished within:

1. 10 days after the loss occurs in every situation
2. The same period allowed for the notice of claim
3. One full year regardless of the circumstances
4. 90 days after the date of the loss ✓

Why: The standard provision requires proof of loss within 90 days of the loss (or as soon as reasonably possible).

To contribute to a Health Savings Account, a person must be covered by a qualified high-deductible health plan and:

1. Have modified adjusted gross income below the federal poverty line for the household
2. Have reached age 65, the age at which HSA contributions first become available
3. Not be enrolled in Medicare or other disqualifying coverage ✓
4. Work for an employer with fewer than 50 employees, since large groups are excluded

Why: HSA eligibility requires HDHP coverage and no disqualifying coverage (including Medicare enrollment).

Under § 379.402, RSMo, a producer or insurer may give policyholders or the public:

1. Cash premium rebates
2. Undisclosed commission splits
3. Secret dividend bonuses
4. Gifts bearing its advertising ✓

Why: Section 379.402, RSMo allows offering gifts, goods, or merchandise that contain advertising or promotion of the producer or insurer.

Under § 376.717, RSMo, the association's maximum liability for health benefit plan coverage per individual is:

1. $300,000
2. $100,000
3. $250,000
4. $500,000 ✓

Why: Section 376.717, RSMo sets a $500,000 limit for health benefit plans, and the aggregate liability may reach $500,000 with respect to any one individual for such plans.

A policy loan taken against a life policy's cash value:

1. Is treated as taxable income in the year the loan is taken
2. Must be repaid in full within thirty days or it lapses
3. Requires the owner to submit new evidence of insurability
4. Reduces the death benefit by any unpaid loan and interest ✓

Why: Unpaid loan balance and interest are subtracted from the death benefit; loans are not taxable while the policy stays in force.

Medicare Part A would help pay for which of the following?

1. A routine outpatient physician office visit
2. A covered inpatient hospital stay ✓
3. Long-term custodial care in a nursing home
4. A self-administered prescription filled at a pharmacy

Why: Part A covers inpatient hospital, skilled nursing, hospice, and some home health; physician visits are Part B and drugs are Part D.

Key person life insurance is purchased to protect a business against:

1. A decline in the market value of the firm's real-estate holdings
2. The cost of replacing equipment damaged in a covered accident
3. The financial loss from the death of an essential employee ✓
4. The personal estate-tax liability owed by the company's owners

Why: The business owns, pays for, and is beneficiary of a policy on a key employee, offsetting the loss if that person dies.

Under § 376.735, RSMo, which class of guaranty association assessment is used to meet administrative and legal costs and other expenses?

1. Class B assessments in every instance
2. Class A assessments ✓
3. Class C administrative levies on policyholders
4. Class D emergency solvency assessments only

Why: Section 376.735, RSMo provides Class A assessments may be made for the purpose of meeting administrative and legal costs and other expenses — therefore Class A assessments.

Under § 376.715, RSMo, the purpose of the guaranty association act is to protect persons against what?

1. Ordinary market losses from a decline in the policy's investment values
2. The denial of a claim that the insurer contends is not covered
3. Premium increases imposed by a solvent insurer at renewal time
4. Failure to perform obligations due to a member insurer's impairment or insolvency ✓

Why: Section 376.715, RSMo states the purpose is to protect, subject to limitations, specified persons against failure in the performance of contractual obligations because of the impairment or insolvency of the member insurer — therefore protection against insurer impairment or insolvency.

Under § 376.406, RSMo, newborn coverage must include the necessary care and treatment of which of the following?

1. Routine well-child dental services
2. Medically diagnosed congenital defects ✓
3. Elective cosmetic procedures only
4. Custodial nursery care charges

Why: Section 376.406, RSMo requires coverage of injury or sickness including medically diagnosed congenital defects and birth abnormalities; therefore medically diagnosed congenital defects.

Industrial (home service / 'debit') life insurance is characterized by:

1. Mandatory medical exams for every single applicant
2. Small face amounts and frequent premium collection ✓
3. Coverage available only through a group employer plan
4. Large face amounts with cash value invested in the insurer's separate investment accounts

Why: Industrial (debit) policies carry small face amounts with premiums historically collected weekly or monthly by an agent at the insured's home.

A disability policy has a 90-day elimination period and a $3,000 monthly benefit. If the insured is totally disabled for 8 months, the approximate total paid is:

1. $15,000 ✓
2. $24,000
3. $9,000
4. $21,000

Why: The first ~3 months (90-day elimination) pay nothing; benefits are paid for the remaining 5 months × $3,000 = $15,000.

Under § 376.306, RSMo, a life insurer may lend to a policyholder on the security of the cash surrender value a sum not exceeding:

1. the policy's face amount
2. the legal reserve required on the policy ✓
3. one-half of the annual premium
4. the total premiums paid to date

Why: Section 376.306, RSMo authorizes a policy loan on the cash surrender value not to exceed the legal reserve the insurer is required to maintain on the policy.

To be 'fully insured' for Social Security retirement benefits, a worker generally needs:

1. A minimum of 30 years of continuous full-time employment
2. Only a single quarter of covered earnings at any point in life
3. 20 quarters earned within the most recent five-year period
4. 40 quarters (about 10 years) of covered earnings ✓

Why: Fully insured status requires 40 quarters of coverage (roughly 10 years of work in covered employment).

An enrollee orally notifies the carrier of her baby's birth, and the carrier then sends enrollment forms. Under § 376.406, RSMo, the carrier must allow her at least how many additional days from delivery of the forms to enroll the child?

1. Ten days ✓
2. Five days
3. Thirty days
4. Twenty days

Why: Section 376.406, RSMo requires the carrier, after notice, to allow an additional ten days from delivery of the forms to enroll the newborn; therefore ten days.

The portion of each annuity income payment that is a tax-free return of the owner's principal is determined by the:

1. Exclusion ratio ✓
2. Cost-of-living adjustment
3. Surrender charge
4. Participation rate

Why: The exclusion ratio sets how much of each payment is nontaxable return of basis versus taxable gain.

Under § 375.016, RSMo, a resident individual applying for a producer license generally must:

1. complete a two-year apprenticeship
2. obtain a college insurance degree
3. pass a written examination ✓
4. secure a surety company sponsor

Why: Section 375.016, RSMo requires a resident individual to pass a written examination unless exempt under subsection 5, 6 or 7 — therefore pass a written examination.

Under § 375.041, RSMo, an authorized insurer must file its annual statement convention blank with the NAIC on or before:

1. March first of each year ✓
2. January first of each year
3. June thirtieth of each year
4. December thirty-first each year

Why: Section 375.041, RSMo requires each authorized insurer to file its annual statement convention blank with the NAIC on or before March first each year — therefore March first.

Under § 376.450, RSMo, an HMO that uses an affiliation period in lieu of a preexisting condition exclusion may impose a period not exceeding how long for a timely enrollee?

1. Two months ✓
2. Three months
3. One month
4. Six months

Why: Section 376.450, RSMo limits an HMO affiliation period to two months (three for a late enrollee); for a timely enrollee, therefore two months.

Under § 376.1550, RSMo, the director shall grant a policyholder a waiver upon a demonstration, over any consecutive twenty-four-month period, that compliance raised the policy's premium costs by what percentage?

1. Five percent
2. Ten percent
3. One percent
4. Two percent ✓

Why: Section 376.1550, RSMo requires a waiver where the policyholder shows, by actual experience over any consecutive twenty-four-month period, that compliance increased cost by an amount resulting in a two percent increase in premium costs; therefore two percent.

Under § 375.141, RSMo, appeal of a license denial or nonrenewal is made pursuant to:

1. Chapter 354
2. Chapter 621 ✓
3. Chapter 375
4. Chapter 536

Why: Section 375.141, RSMo directs that appeal of a nonrenewal or denial be made pursuant to chapter 621.

Under § 375.011, RSMo, the option to use a higher class of mail applies to notices concerning which actions?

1. Premium billing statements and commission accounting only
2. Only the initial delivery of a newly issued policy contract
3. Cancellation, nonrenewal, renewal, or refusal to write or insure ✓
4. Solely the annual privacy disclosure required of the insurer

Why: Section 375.011, RSMo applies to any notice required regarding cancellation, nonrenewal, renewal, or refusal to write, insure or renew any person or property; therefore those actions.

A producer makes untrue statements in a public advertisement about a policy's benefits. This is:

1. False advertising, an unfair trade practice ✓
2. Unfair discrimination in policy benefits
3. Twisting, because the statements induce a policy exchange
4. Permissible puffery, since opinions about benefits are not statements of fact

Why: Untrue or misleading advertising about insurance is the unfair practice of false advertising/misrepresentation.

The optional 'relation of earnings to insurance' (average earnings) provision allows a disability insurer to:

1. Pay benefits only when the insured was working full time, at least 30 hours a week, at the onset of disability
2. Reduce benefits proportionally if total coverage exceeds the insured's earnings ✓
3. Cancel the policy mid-term whenever the insured moves into a more hazardous occupation class
4. Raise the monthly benefit automatically as the insured's salary grows

Why: If disability benefits from all coverage exceed the insured's earnings, this provision lets the insurer reduce benefits proportionally to prevent over-insurance.

Under § 379.404, RSMo, the commercial-lines exclusion does not apply to producer commission reductions that are:

1. Filed with the rate filing
2. Approved by the client
3. Disclosed in writing
4. Not in the company rate filings ✓

Why: Section 379.404, RSMo states the exclusion does not apply to producer commission reductions not included in insurance company rate filings.

Under § 376.1109, RSMo, a long-term care insurance applicant has the right to return the policy and receive a premium refund within how many days of its delivery?

1. Ten days
2. Twenty days
3. Thirty days ✓
4. Fifteen days

Why: Section 376.1109, RSMo grants a thirty-day right to return the policy for a full premium refund; therefore thirty days.

The Social Security 'blackout period' refers to the time when a surviving spouse's benefits:

1. Rise by a cost-of-living adjustment in each month the youngest child is under 16
2. Are redirected to the deceased worker's surviving parents until the children reach 18
3. Are doubled while the surviving spouse is caring for a child under age 16
4. Stop until the surviving spouse reaches age 60 (age 50 if disabled) ✓

Why: The blackout period is the gap when a surviving spouse receives no Social Security survivor benefit (after the youngest child turns 16, until the spouse reaches age 60).

A producer wants to charge an insured a service fee beyond the filed premium. Under § 375.116, RSMo, this is allowed only if based on:

1. An oral fee agreement
2. A written agreement with the insured ✓
3. The insurer's approval
4. A posted office fee schedule and list

Why: Section 375.116, RSMo permits compensation beyond commission only when based on a written agreement between the producer and the insured defining the amount.

Three children are named beneficiaries 'per stirpes.' One child predeceases the insured, leaving two children of their own. At the insured's death, the deceased child's share passes to:

1. That deceased child's own two children ✓
2. The policyowner's estate for probate
3. The two surviving named children equally, the deceased child's line taking nothing
4. The insurer as an unclaimed amount

Why: Per stirpes directs a deceased beneficiary's share down to that person's descendants — here, the deceased child's two children.

A producer convinces a client to drop a policy at Company A and buy one at Company B using misleading comparisons. This is:

1. Coercion
2. Churning
3. Twisting ✓
4. Rebating

Why: Inducing a replacement between different insurers through misrepresentation is twisting; doing it within the same insurer is churning.

A client exchanges an existing cash-value life insurance policy directly for an annuity contract. Under IRC Section 1035, this is:

1. Taxed only on the cash value
2. A tax-free exchange ✓
3. An illegal transaction
4. A fully taxable surrender

Why: A life-to-annuity exchange qualifies for tax-free treatment under Section 1035 (an annuity-to-life exchange would not).