Montana Life & Disability (Accident & Health) Insurance License, Practice Exams

Modified whole life insurance is characterized by:

1. A lower premium for an initial period, then a higher level premium for life ✓
2. A premium that is higher in the first years and then drops sharply
3. Premiums that fluctuate yearly based on the insurer's investment returns
4. Coverage that decreases steadily until it reaches zero at age 65

Why: Modified whole life charges a reduced premium for the first few years, then a higher level premium for the remainder of life.

Which of the following is one of the first six unfair claim settlement practices listed in MCA 33-18-201?

1. Failing to pay or deny a claim within thirty days of receiving a proof of loss, or within sixty days where the insurer has made a reasonable request for additional information or documents, that being the duty the chapter imposes on the timing of a claim decision.
2. Failing to pay interest at ten per cent a year on a claim that is paid later than the statute allows, the obligation to pay such interest being one of the practices the section lists and the commissioner being able to fine an insurer that makes a practice of withholding it.
3. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed. ✓
4. Requiring an insured to obtain more than three competitive bids before the insurer will authorize a repair, the section treating an excessive demand for bids as a device for delaying the settlement of a claim which liability has already become reasonably clear.

Why: MCA 33-18-201, paragraphs (1) to (6): (1) MISREPRESENT PERTINENT FACTS OR INSURANCE POLICY PROVISIONS RELATING TO COVERAGES AT ISSUE; (2) FAIL TO ACKNOWLEDGE AND ACT REASONABLY PROMPTLY UPON COMMUNICATIONS with respect to claims; (3) FAIL TO ADOPT AND IMPLEMENT REASONABLE STANDARDS FOR THE PROMPT INVESTIGATION OF CLAIMS; (4) REFUSE TO PAY CLAIMS WITHOUT CONDUCTING A REASONABLE INVESTIGATION BASED ON ALL AVAILABLE INFORMATION; (5) FAIL TO AFFIRM OR DENY COVERAGE OF CLAIMS WITHIN A REASONABLE TIME AFTER PROOF OF LOSS STATEMENTS HAVE BEEN COMPLETED; (6) NEGLECT TO ATTEMPT IN GOOD FAITH TO EFFECTUATE PROMPT, FAIR, AND EQUITABLE SETTLEMENTS OF CLAIMS IN WHICH LIABILITY HAS BECOME REASONABLY CLEAR. The 30/60-day rule is 33-18-232, a different section, and 33-18-232(3) keeps it out of a private action.

The same producer instead lets the policyholder run 90 days past the due date, again with nothing signed. What does MCA 33-18-213(2) allow?

1. Interest may be charged at not more than one and one-half per cent a month on the unpaid balance from the date the premium originally fell due, the whole of the 90 days bearing interest once the arrangement has run past the 30-day mark the subsection fixes for it.
2. Interest may be charged for credit extended after 30 days at a rate not more than 1 1/2% A month on the unpaid balance - so the first 30 days carry no interest and the charge runs only on what is extended beyond them. ✓
3. Interest may be charged at the legal rate authorized in 31-1-107 on the unpaid balance from the thirty-first day, the one and one-half per cent ceiling applying only where the extension of credit has been reduced to a written instrument signed by the policyholder.
4. No interest may be charged at all, because credit extended for more than 30 days must be evidenced by a written instrument signed by the policyholder, and a producer who extends credit beyond 30 days without one forfeits any right to interest on the unpaid balance.

Why: MCA 33-18-213(2): IF CREDIT IS EXTENDED TO A POLICYHOLDER FOR MORE THAN 30 DAYS FROM THE DATE THE PREMIUM IS DUE AND THE CREDIT IS NOT EVIDENCED BY A WRITTEN INSTRUMENT, INTEREST MAY BE CHARGED FOR CREDIT EXTENDED AFTER 30 DAYS AT A RATE NOT MORE THAN 1 1/2% A MONTH ON THE UNPAID BALANCE. The words AFTER 30 DAYS matter: the interest-free first month survives.

What may the commissioner require of an applicant who failed a previous licensing examination, under 33-17-213(3)?

1. A further prelicensing course of at least 40 hours before any reexamination.
2. Payment of double the examination fee for each attempt after the first failure.
3. A reasonable waiting period before reexamination on the same kinds of insurance. ✓
4. Nothing; the applicant may sit the examination again on any day it is offered.

Why: 33-17-213(3) allows the commissioner to require a reasonable waiting period before reexamination of an applicant who has failed a previous examination covering the same kind or kinds of insurance. Under 33-17-213(1) and (2) examinations must be offered with reasonable frequency at accessible places and conducted fairly and impartially.

Nonforfeiture provisions in an annuity guarantee the owner:

1. A doubling of the account value after ten years
2. Free withdrawals of the entire balance in the first year
3. A minimum surrender value if the contract is cashed in ✓
4. The full original premium back with no charges at any time

Why: Annuity nonforfeiture laws guarantee a minimum cash surrender value, protecting the owner's accumulated funds.

What happens under 33-20-302 where the annuitant dies during the grace period with a payment overdue?

1. The amount of the overdue payment, with interest, must be paid by the estate before the insurer is obliged to make any settlement under the contract on the death of the annuitant.
2. The contract lapses on the date the payment fell due, the grace period protecting the annuitant against lapse only where the annuitant survives to the end of that period.
3. The overdue payment is waived and the full settlement is payable, the grace period answering any claim by the insurer.
4. The amount of the overdue payment, with interest, and any deferred payments of the current contract year may be deducted from the amount payable under the contract in settlement. ✓

Why: 33-20-302 provides that where a claim arises on account of death before the expiration of the grace period and before the overdue payment or the deferred payments of the current contract year are made, the amount of those payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.

What must a policy containing a permitted exclusion also provide, under 33-20-121(2)?

1. That on a death within the exclusion the insurer will return the premiums paid, with interest at the rate stated in the policy for the calculation of nonforfeiture benefits, adjusted for indebtedness or dividend credit.
2. That on a death within the exclusion the insurer will pay at least a reserve on the commissioner's reserve valuation method, using the policy's mortality table and interest rate, adjusted for indebtedness. ✓
3. That on a death within the exclusion the insurer will pay the full face amount of the policy, the exclusion going only to the additional benefits payable in the event of death by accident or accidental means.
4. Nothing further; a policy containing a permitted exclusion may deny liability altogether for a death occurring in the excluded manner or while the insured had the excluded status under the terms of the policy.

Why: 33-20-121(2) requires a policy containing an exclusion or restriction under 33-20-121(1) to provide that on a death in the excluded circumstances the insurer will pay an amount not less than a reserve determined by the commissioner's reserve valuation method on the mortality table and interest rate specified in the policy for nonforfeiture benefits (or, where there are none, a table and rate the insurer determines and specifies) or by any method more favourable to the policyholder, adjusted for indebtedness or dividend credit.

Who issues the evidence of coverage where an enrollee obtains HMO coverage through an insurance policy, under 33-31-301(1)?

1. The health maintenance organization always, whoever issued the coverage the enrollee obtains.
2. The insurer, or the health service corporation where coverage is through its contract. ✓
3. The employer, as group policyholder, for delivery to each of its enrolled employees.
4. The commissioner, once the evidence of coverage has been filed and approved for use.

Why: 33-31-301(1) entitles each enrollee residing in this State to an evidence of coverage, issued by the health maintenance organization, except that where the enrollee obtains coverage through an insurance policy or a health service corporation contract the insurer or the health service corporation issues it.

A state insurance guaranty association exists to:

1. Guarantee that every applicant will be approved for coverage
2. Pay covered claims of insurers that become insolvent, up to set limits ✓
3. Provide free legal representation to policyholders in disputes
4. Set the premium rates that all insurers in the state must charge

Why: Guaranty associations protect policyholders by covering claims (within statutory limits) when a member insurer becomes insolvent; their existence may not be used in advertising or sales.

When may a long-term care insurer rescind a policy for a material misrepresentation alone, under 33-22-1127(1)?

1. When the policy has been in force for less than 2 years.
2. When the policy has been in force for less than 6 months. ✓
3. When the policy has been in force for less than 1 year.
4. At any time, whatever the period the policy has been in force.

Why: 33-22-1127(1) allows rescission, or denial of an otherwise valid claim, on a showing of misrepresentation material to the acceptance for coverage where the policy has been in force for less than six months. From six months to two years, 33-22-1127(2) also requires that the misrepresentation pertain to the condition for which benefits are sought.

Under the endorsement method of a split-dollar plan, the policy is:

1. Held in an irrevocable trust outside the reach of both parties
2. Required to lapse automatically when the employee retires
3. Owned by the employee personally, who then assigns the entire policy back to the employer as collateral security for a loan
4. Owned by the employer, which endorses part of the death benefit to the employee's beneficiary ✓

Why: In endorsement split-dollar the employer owns and controls the policy and endorses a portion of the death benefit to the employee's named beneficiary.

What must a creditor do under 33-21-206(3) if it took a payment for credit insurance but no policy or certificate is issued?

1. Hold the payment in trust for sixty days pending issue, then refund it if no policy is issued.
2. Notify the commissioner within thirty days, the debtor's account being adjusted at the next statement.
3. Nothing, the payment being retained as a fee for arranging the coverage with the insurer.
4. Immediately give the debtor written notice and promptly make an appropriate credit to the account. ✓

Why: 33-21-206(3) provides that if a creditor requires a debtor to make a payment in connection with credit life or credit disability insurance and an individual policy or group certificate is not issued, the creditor shall immediately give written notice to the debtor and shall promptly make an appropriate credit to the account.

Which accounts must the association maintain under 33-10-203(2)?

1. One combined account for all lines, assessments being made on total premiums of every member insurer in the State.
2. A health account, and a life insurance and annuity account having life, annuity and unallocated annuity subaccounts. ✓
3. A life insurance account and an annuity account only, health insurance being protected by the property and casualty association.
4. A separate account for each member insurer, funded in advance by an annual contribution set by the commissioner.

Why: 33-10-203(2) requires the association, for administration and assessment, to maintain two accounts: the health insurance account, and the life insurance and annuity account with its life insurance, annuity and unallocated annuity subaccounts.

The policyholder signs a written instrument for the credit instead. What does MCA 33-18-213(3) then require?

1. The instrument must be filed with the commissioner within 30 days of execution and the interest may not exceed one and one-half per cent a month on the unpaid balance, that being the ceiling the section fixes for every extension of credit by a producer in this State.
2. The interest must be stated in the written instrument and the instrument must also state the producer's licence number and the policy to which the credit relates, the rate being left to the parties because they have reduced the arrangement to a signed writing between them.
3. Any interest charged must be clearly stated in the instrument and may not exceed the legal rate of interest authorized in 31-1-107, whatever the length of the credit extended. ✓
4. No interest may be charged for the first 30 days whatever the instrument says, and interest on the balance is capped at the legal rate in 31-1-107, so that a signed instrument improves the producer's position only as to the period beyond the first 30 days of the credit.

Why: MCA 33-18-213(3): IF THE EXTENSION OF CREDIT TO A POLICYHOLDER IS EVIDENCED BY A WRITTEN INSTRUMENT SIGNED BY THE POLICYHOLDER, ANY INTEREST CHARGED FOR SUCH CREDIT SHALL BE CLEARLY STATED IN THE INSTRUMENT AND MAY NOT EXCEED THE LEGAL RATE OF INTEREST AUTHORIZED IN 31-1-107. The 30-day carve-out and the 1 1/2% ceiling belong to the two UNWRITTEN cases in subsections (1) and (2); the written case is governed by 31-1-107 alone.

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.

What does 33-20-105(2) provide about an exchange or conversion with the same insurer?

1. The new coverage is incontestable, except for nonpayment of premiums, where the covered person is alive and the policy exchanged or converted has been in effect two years, including as to any amount exceeding the coverage exchanged.
2. The new coverage is incontestable, except for nonpayment of premiums, where the covered person is alive and the policy exchanged or converted has been in effect two years; but not as to any amount exceeding the coverage exchanged. ✓
3. The new coverage starts a fresh two-year contestable period from its own date of issue, the history of the policy that has been exchanged or converted being irrelevant to the contestability of the new one.
4. The new coverage is incontestable from the date of the exchange or conversion in every case, whether or not the covered person is alive and whatever period the earlier policy had been in effect before it.

Why: 33-20-105(2)(a) makes life coverage issued as the result of an exchange or conversion of existing coverage with the same insurer or its subsidiaries incontestable, except for nonpayment of premiums, where the covered person is alive and the policy being exchanged or converted has been in effect for two years from its date of issue. 33-20-105(2)(b) excludes any amount of insurance under the new policy exceeding the coverage amount exchanged or converted.

The federal Genetic Information Nondiscrimination Act (GINA) generally restricts the use of genetic information in:

1. Health insurance and employment decisions ✓
2. Setting state automobile insurance premium rates
3. Property and casualty insurance underwriting only
4. Determining eligibility for federal student loans

Why: GINA limits how genetic information may be used in health coverage and employment, prohibiting discrimination based on genetic test results.

An agent binding an insurer to a risk the company did not intend to cover is an example of which type of authority?

1. Express authority granted explicitly in the agency contract
2. Fiduciary authority arising from handling client premium funds
3. Apparent authority ✓
4. Implied authority needed to carry out expressly granted duties

Why: Apparent authority is the appearance of authority a reasonable client perceives; express and implied are actually granted, so the distractors describe legitimate authority.

To which claims do the settlement period and interest provisions of 33-20-114(2) apply?

1. Only those claims arising under a policy that includes the provisions, the section operating through the policy alone.
2. Only claims under an individual life policy; a claim under an annuity contract falls outside the section entirely.
3. All claims upon deaths filed with an insurer after the policy has been in force for two years from its date of issue.
4. All claims upon deaths filed with an insurer, whether or not those provisions are included in the policy. ✓

Why: 33-20-114(2) provides expressly that the settlement period and interest provisions apply to ALL claims upon deaths filed with an insurer, regardless of whether those provisions are included in the policy. 33-20-103(2) separately applies 33-20-114 to annuity contracts even though the rest of the standard provisions do not reach them.

What bar does 33-20-1313(1) place on a newly issued policy?

1. No viatical settlement contract within five years of the issuance of the policy unless the person certifies that one of the listed conditions has been met within that period.
2. No viatical settlement contract within two years of the issuance of the policy unless the person certifies that one of the listed conditions has been met within that period. ✓
3. No viatical settlement contract within two years of the issuance of the policy in any circumstances at all, whatever has happened to the person in the meantime.
4. No viatical settlement contract within two years of the date on which the person became terminally ill, whenever the policy itself happened to be issued.

Why: 33-20-1313(1) forbids a person to enter into a viatical settlement contract within a two-year period from the date of issuance of the policy or certificate unless the person certifies to the provider that one or more of the listed conditions has been met WITHIN that two-year period. Copies of the certification and of the independent evidence must go to the insurer with the request for verification of coverage, under a letter of attestation from the provider.

Under the capitation method of provider payment used by many HMOs, a provider receives:

1. A percentage of the total premiums the HMO collects annually
2. A fixed amount per enrolled member per month, regardless of services used ✓
3. A separate fee for each individual service actually performed
4. Reimbursement calculated from the usual, customary, and reasonable charges in the local area

Why: Capitation pays the provider a set amount per member per month (PMPM) regardless of how much care that member uses.

A salaried employee in a producer's office takes applications and receives premiums. When is that person exempt under MCA 33-17-103(2)?

1. Where the individual is paid a salary rather than a commission, the subsection being concerned with the method of payment alone and permitting an office employee to take any number of applications and to receive premiums in any amount so long as no commission is paid for doing so in this State.
2. Where the employer's licence names the individual as an authorised office employee and the commissioner has endorsed the licence accordingly, the exemption depending on that endorsement rather than on the character of the work the individual actually does in the producer's office during the licence period.
3. Where the individual takes applications only for lines of insurance for which the employer holds a line of authority, the exemption turning on the scope of the employer's licence and not on whether the individual receives any commission or has compensation that varies with the volume of business taken.
4. Where the individual devotes full time to clerical and administrative services, the taking of applications and receipt of premiums being incidental and in the employer's office, the individual receives no commissions on them, and compensation is not varied by the volume of applications or premiums. ✓

Why: MCA 33-17-103(2): the definition does not include AN INDIVIDUAL WHO IS A SALARIED EMPLOYEE IN THE OFFICE OF AN INSURANCE PRODUCER AND WHO DEVOTES THE INDIVIDUAL'S FULL TIME TO CLERICAL AND ADMINISTRATIVE SERVICES, INCLUDING THE INCIDENTAL TAKING OF INSURANCE APPLICATIONS AND RECEIPT OF PREMIUMS IN THE OFFICE OF THE INDIVIDUAL'S EMPLOYER, IF THE INDIVIDUAL DOES NOT RECEIVE ANY COMMISSIONS ON THE APPLICATIONS AND THE INDIVIDUAL'S COMPENSATION IS NOT VARIED BY THE VOLUME OF APPLICATIONS OR PREMIUMS taken or received. Three conditions, all of them.

How long does a consultant licence remain in force under 33-17-503(3)?

1. For 2 years from issue, then a new application is needed.
2. Until it lapses or is suspended, revoked or terminated. ✓
3. For as long as the consultant stays resident in Montana.
4. For 1 year from issue, renewable on payment of the annual fee.

Why: 33-17-503(3) provides that a consultant license continues in force until lapsed, suspended, revoked or terminated.

What is a RESIDENT DOMESTIC INSURER under MCA 33-1-201(10)?

1. An insurer incorporated under the laws of this state, the term being a synonym for a domestic insurer used in those parts of the code that deal with the residence of policyholders rather than with the place of incorporation of the company.
2. An insurer incorporated under the laws of this state and, if a mutual, not less than one-half of whose policyholders are residents; or, if a stock insurer, not less than one-half resident-owned and all officers resident. ✓
3. An insurer incorporated in any state that maintains its principal place of business in Montana and employs Montana residents, the definition turning on where the company actually operates rather than on where it was incorporated.
4. An insurer incorporated under the laws of this state, all of whose policyholders and all of whose shareholders are residents of Montana, the definition admitting no non-resident participation in a company of that description at all.

Why: MCA 33-1-201(10): a RESIDENT DOMESTIC INSURER is an insurer INCORPORATED UNDER THE LAWS OF THIS STATE AND (a) IF A MUTUAL COMPANY, NOT LESS THAN ONE-HALF OF THE POLICYHOLDERS ARE INDIVIDUALS WHO ARE RESIDENTS OF THIS STATE; or (b) IF A STOCK INSURER, NOT LESS THAN ONE-HALF OF THE SHARES ARE OWNED BY INDIVIDUALS WHO ARE RESIDENTS OF THIS STATE AND ALL OF THE DIRECTORS AND OFFICERS OF THE INSURER ARE RESIDENTS OF THIS STATE. The stock test has two limbs; the mutual test has one.

Long-term care policy benefits are commonly triggered when the insured is unable to perform a specified number of:

1. Prescription drug refills scheduled in a calendar month
2. Hours of paid work in a normal 40-hour work week
3. Activities of daily living (ADLs) ✓
4. Routine physician office visits in a calendar year

Why: Benefits typically trigger on inability to perform 2 of 6 ADLs (or severe cognitive impairment).

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.

What does 33-10-210(1) make a prohibited unfair trade practice?

1. Failing to tell an applicant, before the application is signed, that guaranty protection exists at all.
2. Selling a policy of an insurer that is not a member of the guaranty association in this State.
3. Using in any manner the protection the guaranty association part affords when selling insurance. ✓
4. Delivering the association's summary document to a policyowner without the commissioner's consent.

Why: 33-10-210(1) provides that it is a prohibited unfair trade practice for any person to make use in any manner of the protection afforded by the part in the sale of insurance.

A Montana individual asks in writing for access to recorded personal information about herself. What must the institution do, and by when, under MCA 33-19-301(1)?

1. Within 30 calendar days it must send her a complete copy of the file, free of charge, together with the identity of every person to whom any part of it has ever been disclosed and a statement of the reasons for which each disclosure was made by the institution.
2. Within 21 business days it must inform her of the nature and substance of the information and permit her to inspect it at the institution's offices during business hours; a copy need not be supplied, and coded information may be produced in the form in which it is held.
3. Within 30 business days: state its nature and substance, let her see and copy it or have a copy mailed, translate any codes, name recipients in the past 2 years and summarise correction steps. ✓
4. Within 30 business days it must inform her of the substance of the information, but it need not disclose to whom the information has been given, the identity of recipients being commercially confidential and available only on an order of the commissioner.

Why: MCA 33-19-301(1): on a written request from an individual, AFTER PROPER IDENTIFICATION, for access to recorded personal information REASONABLY DESCRIBED and REASONABLY LOCATABLE AND RETRIEVABLE, the institution, producer or insurance-support organization shall WITHIN 30 BUSINESS DAYS (a) INFORM THE INDIVIDUAL OF THE NATURE AND SUBSTANCE in writing, by telephone or other oral communication, whichever IT prefers; (b) PERMIT THE INDIVIDUAL TO SEE AND COPY IT IN PERSON OR TO OBTAIN A COPY BY MAIL, WHICHEVER THE INDIVIDUAL PREFERS - IF IN CODED FORM, AN ACCURATE TRANSLATION IN PLAIN LANGUAGE MUST BE PROVIDED IN WRITING; (c) DISCLOSE THE IDENTITY, IF RECORDED, OF THOSE TO WHOM IT HAS DISCLOSED THE INFORMATION WITHIN 2 YEARS PRIOR TO THE REQUEST, and if not recorded, THE NAMES OF THOSE TO WHOM IT IS NORMALLY DISCLOSED; and (d) PROVIDE A SUMMARY OF THE PROCEDURES for requesting correction, amendment or deletion. Subsection (5) permits A REASONABLE FEE to cover the cost of a copy, EXCEPT for information provided under 33-19-303.

What is the ceiling on the initial amount of credit life insurance under 33-21-202(1)?

1. Double the total amount repayable under the contract of indebtedness.
2. The total amount repayable under the contract of indebtedness. ✓
3. The original principal of the loan, excluding all interest.
4. Any amount the debtor and the insurer agree, with no ceiling.

Why: 33-21-202(1) provides that the initial amount of credit life insurance may not exceed the total amount repayable under the contract of indebtedness, and that where the debt is repayable in substantially equal instalments the amount may not exceed the greater of the scheduled or actual unpaid indebtedness on the date of death.

What limits does 33-22-246(1) place on a preexisting condition exclusion in individual coverage?

1. Advice or treatment within the 3 years before coverage, and an exclusion of not more than 12 months. ✓
2. Advice or treatment within the 5 years before coverage, and an exclusion of not more than 24 months.
3. Advice or treatment within the 6 months before coverage, and an exclusion of not more than 12 months.
4. Advice or treatment at any time before coverage, and an exclusion for the whole policy term.

Why: 33-22-246(1) forbids an issuer of individual health coverage to exclude a preexisting condition unless medical advice, diagnosis, care or treatment was recommended or received within the three years preceding the effective date of coverage and coverage for the condition is excluded for not more than twelve months.

What do 'policy' and 'premium' mean under MCA 33-15-102?

1. Policy means the written contract of or agreement for insurance, by whatever name called, and includes all clauses, riders, endorsements and papers attached to it. Premium is the consideration for insurance, and any service or inspection fee is deemed part of it. ✓
2. Policy means the printed jacket issued by the insurer, riders and endorsements being separate contracts; and premium means the sum stated in the declarations, any fee charged in addition to it being a charge for services rather than a part of the consideration for the insurance.
3. Policy means any contract of insurance approved by the commissioner under 33-1-501, an unapproved contract not being a policy for the purposes of the code; and premium means the amount calculated from the insurer's filed rates for the classification of the risk.
4. Policy means the written contract of insurance and everything attached to it; and premium means the consideration for the insurance, exclusive of any inspection or service fee, such fees being separately regulated and not forming part of the rate the insurer has filed.

Why: MCA 33-15-102(1): POLICY MEANS THE WRITTEN CONTRACT OF OR WRITTEN AGREEMENT FOR OR EFFECTING INSURANCE, BY WHATEVER NAME CALLED, AND INCLUDES ALL CLAUSES, RIDERS, ENDORSEMENTS, AND PAPERS ATTACHED THERETO AND A PART THEREOF. (2): PREMIUM IS THE CONSIDERATION FOR INSURANCE, BY WHATEVER NAME CALLED. ANY ASSESSMENT OR MEMBERSHIP, POLICY, SURVEY, INSPECTION, SERVICE, OR SIMILAR FEE OR CHARGE IN CONSIDERATION FOR AN INSURANCE CONTRACT IS DEEMED PART OF THE PREMIUM. That last sentence is what makes an unfiled "policy fee" an excess premium charge under 33-18-212(2).

What does the entire contract provision required by 33-20-304 say?

1. The contract constitutes the entire contract between the parties in every case, the application never forming part of it whether or not a copy is endorsed on or attached to the contract when it is issued.
2. The contract, the application and any statement made by the applicant to the producer together constitute the entire contract between the parties to it, whether or not a copy of the application is attached.
3. The contract constitutes the entire contract between the parties, or, where a copy of the application is endorsed on or attached to it when issued, the contract and the application together do so. ✓
4. The contract constitutes the entire contract, and no change in it is valid unless an executive officer approves it.

Why: 33-20-304 requires a provision that the contract constitutes the entire contract between the parties, or, if a copy of the application is endorsed upon or attached to the contract when issued, that the contract and the application constitute the entire contract.

To whom is indemnity for loss of life payable where no beneficiary designation is effective, under 33-22-212(1)?

1. To the estate of the insured. ✓
2. To the insured's spouse, if living.
3. To the policyholder's employer.
4. To the insured's nearest relative.

Why: 33-22-212(1) requires the provision that indemnity for loss of life is payable in accordance with the beneficiary designation effective at the time of payment and, if none is then effective, to the estate of the insured. All other indemnities are payable to the insured.

A producer offers to give a prospect part of the first-year commission if they buy the policy. This is:

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

Why: Offering an inducement not stated in the policy (such as sharing commission) to persuade a purchase is rebating, illegal in most states.

What must a licensing background examination confirm under MCA 33-17-220(1)?

1. The applicant's identity, address and criminal convictions alone, a pending investigation that has not resulted in a conviction being outside the scope of the report because it establishes nothing against the applicant and may not be considered by the commissioner in deciding on the application.
2. The applicant's credit history, employment history and educational qualifications, the report being directed at the applicant's competence and financial responsibility rather than at any question of character, which the commissioner assesses instead from the references filed with the application form.
3. The applicant's identity and fingerprints only, the remaining matters being obtained by the commissioner directly from the Montana department of justice and the federal bureau of investigation rather than being included in the background examination report the applicant is required to obtain.
4. The applicant's identity, current address, professional license certification and military service; and existing or ongoing criminal investigations and court records relating to the applicant together with regulatory agencies' disciplinary actions concerning the applicant. ✓

Why: MCA 33-17-220(1)(a): the background examination report MUST PROVIDE INFORMATION TO CONFIRM (i) THE APPLICANT'S (A) IDENTITY; (B) CURRENT ADDRESS; (C) PROFESSIONAL LICENSE CERTIFICATION; AND (D) MILITARY SERVICE; AND (ii) (A) EXISTING OR ONGOING CRIMINAL INVESTIGATIONS AND COURT RECORDS RELATING TO THE APPLICANT; AND (B) REGULATORY AGENCIES' DISCIPLINARY ACTIONS CONCERNING THE APPLICANT. EACH APPLICANT for a producer's licence or NAVIGATOR CERTIFICATION obtains one, and THE APPLICANT OR INSURER PAYS THE COST.

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.

Mental health parity requirements generally provide that a group plan's mental health benefits must be:

1. Excluded entirely unless the employer chooses to add them
2. Paid only after the insured exhausts all other available coverage
3. No more restrictive than its medical and surgical benefits ✓
4. Limited to a maximum of three covered visits each calendar year

Why: Parity rules require that financial requirements and treatment limits on mental health/substance use benefits be no more restrictive than those on medical/surgical benefits.

A $1,000 covered expense is submitted to two health plans. The primary plan pays $800. Under coordination of benefits, the secondary plan typically pays:

1. $200 ✓
2. $800
3. $1,000
4. $0

Why: COB limits total payment to 100% of the expense; the secondary plan pays the remaining $200, not a duplicate benefit.

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).

Telemedicine benefits in a health plan allow members to:

1. Receive only in-person care at a designated network hospital
2. Purchase prescription medications at a government-set price
3. Consult a provider remotely using phone or video technology ✓
4. Bypass all deductibles and copayments for every service

Why: Telemedicine lets members access care remotely via phone or video, often at lower cost and with greater convenience for routine issues.

What must a continuing education PROVIDER file under MCA 33-17-1205(4), and what follows a failure?

1. Quarterly, a return of the fees collected from licensees attending its courses, and on failure the commissioner may suspend the provider's registration until the outstanding returns have been filed and any fee due to the department has been paid in full in this State.
2. Annually, a list of the courses it offered during the preceding year, the names of individuals attending being confidential and not reportable, and on failure the provider commits a misdemeanour punishable on conviction in the district court of the county concerned in this State.
3. Annually, an alphabetical list of the names and addresses of everyone who completed an approved activity in the preceding calendar year; on failure, approval of all its activities may be withdrawn and a fine imposed. ✓
4. Nothing - the obligation to record completion rests on the licensee alone through the biennial certification, and a provider's approval may be withdrawn only where the content of a course is found on review to fall below the standards the commissioner has established for approval here.

Why: MCA 33-17-1205(4): EACH PERSON PROVIDING APPROVED COURSES, LECTURES, SEMINARS, AND INSTRUCTIONAL PROGRAMS, INCLUDING INSURANCE COMPANY EDUCATION PROGRAMS, SHALL FILE ANNUALLY WITH THE COMMISSIONER AN ALPHABETICAL LIST OF THE NAMES AND ADDRESSES OF ALL INDIVIDUALS WHO HAVE SUCCESSFULLY COMPLETED AN APPROVED CONTINUING EDUCATION ACTIVITY DURING THE PRECEDING CALENDAR YEAR. (5) THE COMMISSIONER MAY, FOLLOWING THE PROCESS PROVIDED FOR IN 33-1-314, WITHDRAW APPROVAL OF ALL COURSES of any person that fails to comply, AND MAY, AFTER A HEARING PURSUANT TO 33-1-701, IMPOSE A FINE not exceeding the penalty permitted by 33-1-317.

A 401(k) plan is a qualified plan that primarily allows employees to:

1. Withdraw funds before age 59 1/2 with no tax or penalty
2. Contribute after-tax dollars only, with no employer match
3. Defer part of their salary on a pre-tax basis, often with an employer match ✓
4. Receive a guaranteed monthly pension based on years of service, not contributions

Why: A 401(k) is a defined-contribution plan funded by pre-tax salary deferrals (Roth option aside), commonly with an employer match.

How many employees must a public employee group policy cover under 33-20-1104(4)?

1. At least ten employees at date of issue. ✓
2. At least two employees at date of issue.
3. At least twenty-five employees at date of issue.
4. At least one hundred employees at date of issue.

Why: 33-20-1104(4) requires a public employee group policy to cover at least ten employees at date of issue. 33-20-1104(3) requires at least seventy-five per cent of eligible employees to elect to contribute and become insured, and 33-20-1104(1) allows the term employees to include retired employees and, for a public body, elected or appointed officials.

An ambulatory surgical center benefit covers:

1. Inpatient psychiatric admission for a mental disorder lasting more than 72 hours
2. Ambulance transportation to the nearest emergency room equipped to treat the injury
3. Outpatient surgery that does not require an overnight hospital stay ✓
4. Long-term custodial care in a skilled nursing facility following a three-day hospital stay

Why: Ambulatory surgical centers perform same-day outpatient procedures; the benefit covers surgery without inpatient admission.

Social Security disability benefits use a strict 'any occupation' definition and require a waiting period of:

1. 1 month
2. 3 months
3. 5 months ✓
4. 12 months

Why: SSDI uses a strict any-occupation definition and has a 5-month elimination period before benefits begin.

Under a 'guaranteed renewable' health policy, the insurer must renew the coverage but:

1. May refuse renewal on any individual policy anniversary date
2. Can cancel mid-term whenever the insured files a large claim
3. Must keep the premium the same for the life of the contract
4. May increase the premium for an entire class of insureds ✓

Why: Guaranteed renewable guarantees renewal to a stated age but permits premium increases applied to a whole class, not to one insured.

Which settlement option pays the beneficiary an income that cannot be outlived?

1. Fixed period
2. Interest only
3. Fixed amount
4. Life income ✓

Why: A life income settlement option pays for the beneficiary's lifetime, regardless of how long they live.

An insurer discovers material fraud on an application after the contestable period has ended. For most fraudulent misstatements, the insurer:

1. Is barred from contesting once two years have elapsed
2. May reduce the death benefit by half as a penalty
3. Must pay the claim and then sue the beneficiary
4. May still contest the claim, because fraud is an exception ✓

Why: While most misstatements become incontestable after two years, material fraud generally remains contestable under the law.

An owner surrenders a policy with a $22,000 cash value after paying $15,000 in premiums. The taxable gain is:

1. $7,000 ✓
2. $22,000
3. $15,000
4. $0

Why: Gain over basis is taxable: $22,000 − $15,000 = $7,000 of ordinary income.

What rules govern elimination riders under 33-22-109?

1. Only for conditions treated within 5 years before coverage; the insurer must answer a removal request within 30 days and may add one retroactively on notice.
2. For any condition at all; the insurer need not answer a request for removal and may add a rider retroactively at any renewal of the policy.
3. Only for conditions treated within 3 years before coverage; the rider is permanent and may not be removed or modified at the insured's request.
4. Only for conditions treated within 3 years before coverage; the insurer must answer a removal request within 60 days and add none retroactively without consent. ✓

Why: 33-22-109(1) allows an elimination rider excluding specific conditions treated or advised within three years preceding coverage (33-22-110 not applying to such riders), lets the insured apply for removal or modification, the insurer responding within 60 days, and 33-22-109(2) forbids retroactively imposing a rider on an existing policy except on the insured's agreement.

What limits apply to newborn coverage under 33-22-301(2)?

1. It may carry a waiting period of up to 31 days, the coverage otherwise matching that of the other covered persons.
2. It must match the coverage for other covered persons, with no waiting or elimination periods for the newborn. ✓
3. It may be limited to congenital defects for the first 31 days, full coverage following once the premium is paid.
4. It may carry a separate deductible for the newborn, whatever the deductible that applies to the other covered persons.

Why: 33-22-301(2) requires coverage for newborn infants to be the same as provided for the other covered persons, with no waiting or elimination periods for newborns, and permits a deductible or reduction in benefits only if consistent with that applicable to all other covered persons.

A deferred income (longevity) annuity is designed to:

1. Begin income at an advanced age to guard against outliving assets ✓
2. Return every premium dollar to an owner who remains in good health
3. Start income payments one month after the single premium is deposited
4. Provide only a lump-sum death benefit, with no income option at all

Why: A longevity/deferred income annuity starts payments at an advanced age (e.g., 80+), hedging the risk of outliving one's savings.

What does 33-20-1111 permit, and how must the premium be paid?

1. Extension of employee, labor union and trustee group policies to insure against the death of spouses and minor children, the premium coming from the employer or union alone and never from the employees or members themselves.
2. Extension of any group policy, including debtor and credit union groups, to insure against the death of spouses, minor children and parents, the premium coming from the employer, the employees, or both of them together.
3. Extension of employee group policies alone to insure against the death of spouses, the premium coming from the employees; minor children may be insured only under a separate individual policy issued to the employee concerned.
4. Extension of employee, labor union and trustee group policies to insure against the death of spouses and minor children, the premium coming from the employer or union, the employees or members, or both. ✓

Why: 33-20-1111 allows any group life policy issued under 33-20-1101, 1102 or 1103 to be extended to insure employees or members against loss due to the death of their spouses and minor children. Under 33-20-1111(1)(a) the premium may be paid from the employer's or union's funds, from the employees' or members' contributions, or a combination. Where no part comes from employees or members, all eligible employees or members must be insured for their dependants, excepting unsatisfactory evidence of insurability.

Within what time must an HMO acknowledge a complaint, and how long must it keep complaint records, under 33-31-303(1)?

1. Acknowledge within 30 days of receipt, and retain the records for 5 years.
2. Acknowledge within 10 days of receipt, and retain the records for 1 year.
3. Acknowledge within 5 days of receipt, and retain the records for 7 years.
4. Acknowledge within 10 days of receipt, and retain the records for 3 years. ✓

Why: 33-31-303(1)(c) requires each HMO to acknowledge a complaint within 10 days of receiving it, and 33-31-303(1)(d) to retain records of all complaints for three years and develop an annual summary of them.

Which of these is NOT a viatical settlement provider under 33-20-1302(6)(b)?

1. An individual who enters into several agreements in a calendar year to transfer life policies for less than the expected death benefit.
2. An individual entering into a single agreement in a calendar year to transfer life policies for less than the expected death benefit. ✓
3. A lending institution that takes an absolute assignment of a life policy as the price of buying it, rather than only as collateral for a loan.
4. A person who offers to negotiate viatical settlement contracts with policyholders but has not yet entered into any of them in this State.

Why: 33-20-1302(6)(b) excludes from the definition of viatical settlement provider a bank or other licensed lending institution taking an assignment of a life policy only as collateral for a loan, an insurer paying accelerated benefits under 33-20-127, an individual who enters into a single agreement in a calendar year for the transfer of life policies for less than the expected death benefit, and an employer or partnership purchasing the policy of an employee, retiree or partner. Under 33-20-1302(6)(a) a person who offers to negotiate such contracts is a provider.

A producer's biennial continuing education affidavit overstates the hours completed. How does 33-17-1001(1)(b) treat this?

1. It is a ground for discipline, as materially untrue information in the CE affidavit. ✓
2. It is no ground for discipline, the affidavit not being part of the licence application.
3. It is a ground only if the missing hours are not made up within the following biennium.
4. It is a matter for the CE provider alone, which must report the shortfall to the insurer.

Why: 33-17-1001(1)(b) makes it a ground for suspension, revocation, refusal or a civil penalty that the licensee obtained or attempted to obtain a licence through misrepresentation or fraud, including providing incorrect, misleading, incomplete or materially untrue information in the licence application or in the continuing education affidavit.

Which forms may not be delivered in Montana without filing and approval under MCA 33-1-501(1), and what is expressly outside that requirement?

1. Every document an insurer uses in this State, including its advertising and its claim forms, the section admitting no exception at all because the legislature intended the commissioner to see everything an insurer puts before a Montana consumer before it is put there.
2. Policy forms and endorsements only. An application form, an enrollment form and a renewal certificate are not policy language and are outside the section, which is directed at the terms on which the risk is carried rather than at the paperwork surrounding the sale.
3. Policy forms, riders and endorsements, with an exception for surety bonds and for any form which a rating organization has filed on behalf of its members, a rating organization filing being made for the industry generally rather than for any particular insurer.
4. Policy, annuity, certificate, enrollment, application, rider, endorsement and renewal certificate forms; surety bonds and unique forms used at the individual policyholder's request are outside it. ✓

Why: MCA 33-1-501(1)(a): AN INSURANCE POLICY OR ANNUITY CONTRACT FORM, CERTIFICATE, ENROLLMENT FORM, APPLICATION FORM, PRINTED RIDER OR ENDORSEMENT FORM, OR FORM OF RENEWAL CERTIFICATE MAY NOT BE DELIVERED OR ISSUED FOR DELIVERY IN MONTANA UNLESS THE FORM has BEEN FILED WITH AND APPROVED BY THE COMMISSIONER and, if required, the REGULATORY OFFICIAL OF THE STATE OF DOMICILE or the INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION under 33-39-101. The provision DOES NOT APPLY TO SURETY BONDS OR POLICIES, RIDERS, ENDORSEMENTS, OR FORMS OF UNIQUE CHARACTER DESIGNED FOR AND USED WITH RELATION TO INSURANCE UPON A PARTICULAR SUBJECT, or that relate to the manner of distribution of benefits or the reservation of rights under life or disability policies, AND ARE USED AT THE REQUEST OF THE INDIVIDUAL POLICYHOLDER, CONTRACT HOLDER, OR CERTIFICATE HOLDER. FORMS FOR PROPERTY, MARINE (other than ocean marine and foreign trade), CASUALTY AND SURETY coverages MAY BE FILED BY A RATING ORGANIZATION on behalf of its members and subscribers, or by a member or subscriber on its own behalf.

If an insured dies by suicide within the policy's stated suicide period, the insurer will generally:

1. Pay half the face amount
2. Pay the full death benefit
3. Deny liability and keep the premiums
4. Refund the premiums paid ✓

Why: During the suicide period (commonly 2 years), the insurer refunds premiums rather than paying the face amount.

A SEP (Simplified Employee Pension) plan is funded by:

1. Premiums paid into a variable life insurance policy
2. Mandatory after-tax contributions from every employee's paycheck
3. Employer contributions made into each eligible employee's IRA ✓
4. A single lump sum the government deposits for low-income workers

Why: Under a SEP, the employer contributes to a traditional IRA established for each eligible employee; contributions are discretionary and tax-deductible to the employer.

Under the transfer-for-value rule, when a life policy is transferred for valuable consideration, the death benefit may:

1. Become partly taxable as income to the policy's new owner ✓
2. Be doubled to offset the buyer's purchase price
3. Lose its cash value but keep its income-tax exemption
4. Always remain fully income-tax-free to the new owner

Why: Transferring a policy for value can make part of the death benefit taxable income to the transferee, unless an exception applies.

A distinguishing feature of adjustable life insurance is that the owner can:

1. Only ever convert it into a fixed single-premium immediate annuity
2. Invest the cash value directly in stocks and bonds of their choosing
3. Receive guaranteed dividends regardless of the insurer's experience
4. Change the premium, face amount, or coverage period as needs change ✓

Why: Adjustable life lets the owner modify premium, face amount, and protection period, effectively shifting between term and permanent coverage.

What does MCA 33-1-301 provide about the insurance department?

1. It is under the control and supervision of the commissioner, and funds adequate for its maintenance and operation must be expressly appropriated by the Legislature and used solely for the purposes for which appropriated. ✓
2. It is an independent agency governed by a board whose members the Governor appoints, the commissioner acting as its executive officer and the department being funded from fees it collects rather than from any legislative appropriation.
3. It is under the control of the commissioner and is funded entirely from the premium taxes and licence fees it collects, which it may retain and spend without appropriation so far as they are needed for the administration of the code.
4. It is a division of the Department of Justice under the general supervision of the attorney general, the commissioner exercising the powers the code confers subject to the attorney general's direction on matters of enforcement policy.

Why: MCA 33-1-301: (1) THE INSURANCE DEPARTMENT SHALL BE UNDER THE CONTROL AND SUPERVISION OF THE COMMISSIONER. (2) FUNDS ADEQUATE FOR THE MAINTENANCE AND OPERATION of the department SHALL BE EXPRESSLY APPROPRIATED BY THE LEGISLATURE AND SHALL BE USED SOLELY FOR THE PURPOSES FOR WHICH SO APPROPRIATED.

In a variable annuity, accumulation units measure the contract's value:

1. During the pay-in phase before income payments begin ✓
2. Only after the contract has been fully annuitized into a stream of income
3. While the annuitant is receiving level, guaranteed monthly income payments
4. According to a fixed interest rate the insurer declares anew each year

Why: Accumulation units track value during the accumulation phase; annuity units are used during the payout phase.

A group plan's 'probationary period' (waiting period) is the time a new employee must:

1. Wait after filing a claim before the insurer must pay it
2. Remain disabled before any disability benefit becomes payable
3. Hold the coverage before pre-existing conditions are covered
4. Wait after being hired before becoming eligible to enroll ✓

Why: The probationary/waiting period is the length of employment required before a new hire becomes eligible to enroll in the group plan.

A primary tax advantage of a deferred annuity during accumulation is that earnings:

1. Are taxed each year but at a reduced capital-gains rate
2. Are completely exempt from income tax even when withdrawn
3. Generate an annual deduction equal to the interest credited
4. Grow tax-deferred until they are withdrawn ✓

Why: Annuity earnings accumulate tax-deferred; taxes apply only when distributions are taken.

If an insured dies during the grace period with a premium still unpaid, the insurer:

1. Pays the death benefit minus the premium that was owed ✓
2. Refunds only the prior premiums and pays no benefit
3. Denies the claim entirely because the premium was late
4. Pays double the face amount as a good-faith gesture

Why: Coverage stays in force during the grace period; a death claim is paid, with the overdue premium deducted from the proceeds.

Medicare Part D provides coverage for:

1. Inpatient hospital, skilled nursing facility, and hospice care
2. Routine dental, vision, and hearing-aid services for enrollees
3. Long-term custodial care provided in a nursing facility
4. Outpatient prescription drugs ✓

Why: Part D covers outpatient prescription drugs, offered through private plans.

What does 33-20-309 prohibit?

1. A surrender penalty on an annuity contract after five years from the date of issuance, or from the date of each separate voluntary premium deposit.
2. A surrender penalty on an annuity contract at any time, whatever the date of issuance and whatever separate premium deposits have been made.
3. A surrender penalty on an annuity contract after ten years from the date of issuance, whatever separate premium deposits the annuitant has made.
4. A surrender penalty on an annuity contract after ten years from the date of issuance, or from the date of each separate voluntary premium deposit. ✓

Why: 33-20-309(1) forbids a surrender penalty after ten years from the date of issuance, or, for a contract under which the annuitant voluntarily deposits a separate premium not required by the contract, from the date of each separate deposit; within ten years after such a deposit the insurer may charge a penalty for that deposit.

Under the uniform individual health provisions, written notice of a claim must generally be given within:

1. 6 months after the insured has fully recovered from the loss
2. One year, but only if the insurer specifically requests it
3. 48 hours of the event, regardless of the circumstances
4. 20 days after the loss (or as soon as reasonably possible) ✓

Why: Notice of claim is required within 20 days (or as soon as reasonably possible); the insurer must then supply claim forms, with proof of loss due within 90 days.

Who bears the cost of an additional examination under MCA 33-1-311(4)?

1. The state. The commissioner may conduct examinations and investigations in addition to those expressly authorised, as the commissioner considers proper, and the cost of those additional examinations must be borne by the state. ✓
2. The person examined, in every case, the code placing the cost of any examination on the insurer or other person whose affairs are examined as part of the cost of doing insurance business in this State under the commissioner's supervision.
3. The person examined, unless the examination finds no violation, in which case the state bears the cost, the subsection making the outcome of the examination determine who pays for it under the insurance code of this State.
4. The state, but only where the commissioner has first obtained the approval of the legislative audit committee for the additional examination, the subsection requiring that approval before any cost may be charged to the general fund.

Why: MCA 33-1-311(4): the commissioner MAY CONDUCT EXAMINATIONS AND INVESTIGATIONS OF INSURANCE MATTERS, IN ADDITION TO EXAMINATIONS AND INVESTIGATIONS EXPRESSLY AUTHORIZED, AS THE COMMISSIONER CONSIDERS PROPER, to determine whether any person has violated any provision or to secure information useful in the lawful administration of any provision. THE COST OF ADDITIONAL EXAMINATIONS AND INVESTIGATIONS MUST BE BORNE BY THE STATE. Contrast 33-1-315(4), where witness costs fall on a person FOUND TO HAVE BEEN IN VIOLATION.

An employee gets married, a HIPAA 'special enrollment' event. The employee may:

1. Never add a new spouse to an existing plan
2. Only enroll at the next annual open enrollment period
3. Enroll only after a 12-month waiting period
4. Enroll in the group plan outside the normal open enrollment ✓

Why: HIPAA special enrollment lets employees enroll after qualifying life events (marriage, birth, loss of other coverage) without waiting for open enrollment.

Whom may a group disability policy insuring the employees of a public body treat as employees, under 33-22-501(1)?

1. Its elected or appointed officials. ✓
2. Any resident of the public body's area.
3. Its contractors and their employees.
4. Only employees paid from its budget.

Why: 33-22-501(1) provides that a policy issued to insure employees of a public body may provide that the term 'employees' includes elected or appointed officials. The same subsection allows retired employees and, where the business is under common control, the employees of affiliated firms to be included.

An 'open enrollment' period in health insurance is a time when individuals can:

1. File claims that were missed earlier in the year
2. Only switch from one network doctor to another
3. Enroll without medical underwriting ✓
4. Cancel coverage and receive a full premium refund

Why: During open enrollment, eligible individuals may enroll or change plans without health underwriting; a special enrollment period follows qualifying life events.

What happens under 33-20-202(1)(c) if the person entitled to elect a nonforfeiture option makes no election?

1. The policy lapses without value unless another available option is elected within sixty days of the due date of the premium in default under the policy.
2. The insurer pays the cash surrender value to the policyholder, no paid-up benefit being available unless one is expressly elected within the sixty days.
3. A specified paid-up benefit becomes effective as the policy specifies unless another available option is elected within sixty days of the due date. ✓
4. A specified paid-up nonforfeiture benefit becomes effective only if the commissioner approves it on the insurer's application after the sixty days expire.

Why: 33-20-202(1)(c) requires a provision that a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make the election elects another available option not later than sixty days after the due date of the premium in default. The policy itself names the automatic option.

A key feature of convertible term insurance is that it can be changed to a permanent policy:

1. Only if the insured becomes totally disabled first
2. Only after a new medical exam confirms insurability
3. Only during the first policy year
4. Without providing evidence of insurability ✓

Why: Convertible term can be converted to permanent coverage without evidence of insurability.

To whom is the conversion privilege available on the death of the employee or member, under 33-22-510(1)?

1. The surviving spouse, for the spouse and children losing cover, otherwise each surviving child losing it. ✓
2. The estate of the employee only, which may convert the cover for the benefit of any heir it chooses.
3. The surviving spouse only, children whose cover ends on the death having no conversion right of any kind.
4. Each surviving child only, the spouse's cover continuing under the group policy without any limit of time.

Why: 33-22-510(1) makes the conversion privilege available to the surviving spouse at the death of the employee or member, for the spouse and children whose group coverage terminates by reason of the death, otherwise to each surviving child whose coverage terminates, or at the end of any continuation of dependent coverage the group policy provides.

What funeral benefit payment may a society provide for under 33-7-521(2)?

1. Up to $500 to a person equitably entitled to payment for the burial of the member. ✓
2. Up to $5,000 to a person equitably entitled to payment for the member's burial.
3. Up to $500 to the funeral home only, whoever arranged the burial of the member.
4. Up to the full face amount, to whoever pays for the funeral of the member.

Why: 33-7-521(2) allows a society to provide for payment of funeral benefits of up to $500 under a certificate to a person equitably entitled to payment for the burial of a member.