PSI Practice Test 75 Questions with Complete Solution

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PSI Practice Test 75 Questions with Complete Solution When does a license become inactive for a broker? 1. upon the termination of his or her employment 2. upon the termination of all appointment ... s, or all endorsements 3. upon the 365th calendar day that a policy has not been written 4. upon the termination of all existing policies for which he or she is the writing broker - Answer- upon the termination of all appointments, or all endorsements How is the insurance commissioner chosen? 1. Elected by the people. 2. Appointed by the Governor 3. Selected by a vote in the House and the Senate. 4. Randomly selected from a list of qualified candidates. -Answer- Elected by the people. When is it allowable for a written application for any disability policy to be altered? 1. by the insurer, for administrative purposes only, when it is clear that the applicant has not made the insertions 2. by the agent who notices an error that is in disagreement with written information on file for that applicant 3. by an agent who verbally notifies the insured, for commission adjustments, of the reasons for the suggested alterations 4. by the insurer, to record such changes as to modify the application to meet all requirements of the California Insurance Code -Answer- by the insurer, for administrative purposes only, when it is clear that the applicant has not made the insertions After what time period is the policy considered to have been delivered in an acceptable way if premiums have been paid? 1. after 6 months if the premiums have been paid 2. after 1 year if the premiums have been paid by the insured 3.30 days after the first premium has been received by the insurer 4. only if a written receipt is obtained at the time of delivery, regardless of paid premiums - Answer- after 6 months if the premiums have been paid What type of licensee can receive a fee from any person or source other than an insurer? 1. Life and Disability Insurance Analyst 2. Life and Disability Insurance Agent 3. Life Insurance Broker 4. Insurance Solicitor -Answer- Life and Disability Insurance Analyst What is the purpose of creating minimum underwriting standards for those testing positive for Acquired Immune Deficiency Syndrome, Human Immunodeficiency Virus or Aids Related Complex? 1. to ensure the premiums are comparable to those paid by individuals without those conditions 2. to allow underwriting to administer the tests to determine if the proposed insured has a condition without the consent of the individual 3. to avoid discrimination between individuals in the same rating class who have been diagnosed with the condition of AIDS, ARC or HIV 4. to allow the insurers to provide state of the art treatment for proposed insured individuals who have tested positive for AIDS, ARC or HIV -Answer- to avoid discrimination between individuals in the same rating class who have been diagnosed with the condition of AIDS, ARC or HIV If fiduciary funds are received by any licensee, the funds shall be maintained in any of the following EXCEPT 1. bonds issued in all 50 states of the United States. 2. United States government bonds and treasury certificates. 3. certificates of deposit of banks or savings and loan associations licensed by any state. 4. repurchase agreements collateralized by securities issued by the United States government. -Answer- bonds issued in all 50 states of the United States.When may a licensee surrender for cancellation any license under which they are permitted to act? 1. upon renewal of the license 2. within 60 days of renewal of their license 3. at any time 4. when they no longer have any clients with policies in force -Answer- at any time All of the following define insolvency EXCEPT 1. revocation of certificate of authority by the commissioner. 2. inability of the insurer to fully reinsure all outstanding risks. 3. impairment of minimum paid-in capital required in the aggregate. 4. inability of the insurer to meet its financial obligations when they are due. -Answerrevocation of certificate of authority by the commissioner. How long does an employee in a group insurance policy have to exercise the conversion privilege after employment is terminated? 1. 0 days with no eligible coverage once the employment is terminated 2. 31 days to use the conversion privilege and begin an individual life insurance policy. 3. 90 days to convert to an individual policy equal to the coverage under the group policy 4. 6 months to exercise the conversion privilege after termination if the employee was illtreated -Answer- 31 days to use the conversion privilege and begin an individual life insurance policy Which is TRUE regarding a life and health agent who has not been specifically appointed by the insurer? 1. The insurer is obliged to accept the application for underwriting from the life agent. 2. If a policy is issued, the agent is required to forfeit any commission unless appointed. 3. The insurer is required to report the agent appointment within 21 days of the policy issue. 4.If a policy is issued, the insurer is considered to have authorized the agent to act on its behalf. -Answer- If a policy is issued, the insurer is considered to have authorized the agent to act on its behalf. Which of the following can the insurer do if the insured intentionally conceals or misrepresents a material fact concerning any coverage part? 1. Rescind the contract. 2. Charge a penalty fee. 3. Modify coverage. 4. Sue the insured. -Answer- Rescind the contract When is a representation false? 1. when the statement is made under duress 2. when new information is provided to the insurer 3. when the facts are modified by the applicant or insured 4. when the facts fail to correspond with its assertions or stipulations -Answer- when the facts fail to correspond with its assertions or stipulations [Show More]

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