The Oklahoma Insurance Commissioner is elected to office and has all of the following powers and duties EXCEPT
A. authority to conduct hearings.
B. enact legislation dealing with insurance.
C. responsibilities to adopt reasonable rules and regulations.
D. jurisdiction over complaints against anyone engaged in the insurance business in Oklahoma.
Explanation:
The Oklahoma Insurance Commissioner is a publicly elected official responsible for enforcing the state’s insurance laws — not for creating or enacting them. Only the Oklahoma Legislature has the authority to enact legislation.
While the Commissioner does have broad regulatory powers, those powers are executive and administrative, not legislative.
Option Analysis:
A. Authority to conduct hearings
Correct responsibility.
The Commissioner has the power to conduct administrative hearings for violations, license issues, and disciplinary matters.
(Reference: Oklahoma Title 36 § 307.1)
B. Enact legislation dealing with insurance
Incorrect — and this is the correct answer to the question.
Only the state legislature can enact new laws. The Commissioner can propose or recommend legislation but cannot pass laws.
C. Responsibilities to adopt reasonable rules and regulations
Correct responsibility.
The Commissioner can issue regulations and rules to enforce existing laws (also called “administrative rules”).
D. Jurisdiction over complaints against anyone engaged in the insurance business in
Oklahoma
Correct responsibility.
The Commissioner investigates consumer complaints, fraud, and unethical conduct in the insurance industry.
Jim purchased a $200,000 level term-to-age-65 life insurance policy when he was 35 years old. If Jim dies at age 50, what death benefit would be paid by this policy?
A. $50,000
B. $100,000
C. $150,000
D. $200,000
Explanation:
Jim purchased a $200,000 level term-to-age-65 life insurance policy at age 35. This means:
The death benefit remains level (unchanged) at $200,000 throughout the term.
The policy is active until Jim reaches age 65, provided premiums are paid.
If Jim dies at age 50, which is within the term, the full death benefit of $200,000 will be paid to his beneficiary.
Why the Other Options Are Incorrect
A. $50,000
No basis for reduction; the policy is level term.
B. $100,000
Again, the face amount does not decrease over time.
C. $150,000
No provision in level term policies for partial payouts based on age.
Under a Long-Term Care policy, all of the following are Activities of Daily Living EXCEPT
A. dressing.
B. talking
C. eating
D. toileting.
Explanation:
Activities of Daily Living (ADLs) are fundamental self-care tasks used to assess eligibility for Long-Term Care (LTC) benefits. Standard ADLs include:
Dressing (Option A)
Eating (Option C)
Toileting (Option D)
Bathing
Continence
Transferring (e.g., moving in/out of bed)
Talking (Option B) is not an ADL. While communication is important, it falls under Instrumental Activities of Daily Living (IADLs), which include more complex tasks like managing finances or using a phone.
Why This Matters for LTC Policies:
Most LTC policies require inability to perform 2+ ADLs (or cognitive impairment) to trigger benefits.
Talking alone wouldn’t qualify someone for LTC payouts.
A common disaster provision states that if the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if the
A. insured individual outlived the beneficiary.
B. beneficiary outlived the insured individual.
C. beneficiary and the insured individual died simultaneously.
D. beneficiary was never named on the policy.
Explanation:
The Common Disaster Provision in a life insurance policy addresses situations where both the insured and the primary beneficiary die in the same accident or within a short time of each other. Its purpose is to ensure that the death benefit is distributed fairly, typically to a contingent beneficiary or the insured’s estate.
What the Provision Does
It presumes that the insured outlived the beneficiary, even if the actual order of death is unclear or simultaneous.
This legal presumption allows the death benefit to bypass the primary beneficiary’s estate and go to a contingent beneficiary or as otherwise directed in the policy.
Why the Other Options Are Incorrect
B. Beneficiary outlived the insured individual
This would direct proceeds to the beneficiary’s estate, which the provision aims to avoid.
C. Beneficiary and insured died simultaneously
This creates ambiguity; the provision is designed to resolve that.
D. Beneficiary was never named on the policy
Irrelevant; the provision applies when a beneficiary is named but dies in the same incident.
What is the term used when exchanging a new policy for one already in force?
A. Replacement
B. Enhancement
C. Conversion.
D. Renewal
Explanation:
In insurance, replacement refers to the process of exchanging a new policy for an existing one that is already in force. This often involves:
Cancelling or surrendering the old policy
Buying a new policy from the same or a different insurer
Key Aspects of Replacement:
Disclosure is required: Most states, including Oklahoma, have laws requiring disclosure forms to be signed by both the agent and the applicant when replacement occurs.
Why it matters: Replacing a policy can lead to loss of benefits, new contestability periods, or surrender charges.
Why the other options are incorrect:
B. Enhancement –
Not an insurance term. Misleading distractor.
C. Conversion –
Refers to changing a term policy into a permanent one (like whole life), often within the same insurer and contract, without evidence of insurability. It’s not the same as replacing a policy.
D. Renewal –
Refers to continuing an existing policy for another term. It does not involve a new policy or canceling the old one.
What is the correct term for an individual who is required to be licensed under the laws of this state to negotiate the sale of insurance?
A. Insurance adjuster.
B. Insurance producer.
C. Insurance appraiser.
D. Insurance underwriter.
Explanation:
An insurance producer is the legally defined term (under state laws and NAIC models) for an individual or entity licensed to sell, solicit, or negotiate insurance contracts. This includes:
Agents (representing insurers).
Brokers (representing clients).
Why the Other Options Are Incorrect:
A. Insurance adjuster → Licensed to investigate claims, not sell policies.
C. Insurance appraiser → Evaluates property/casualty losses (e.g., auto damage), not sales.
D. Insurance underwriter → Works for insurers to assess risk/pricing, not negotiate sales.
Key Takeaway:
Producer = Sales/licensing term.
Adjuster/Appraiser = Claims-related roles.
Underwriter = Risk evaluation (typically unlicensed).
Which of the following describes the gatekeeper strategy used by HMOs?
A. The refusal of coverage for patients with preexisting conditions.
B. The process of obtaining referrals to specialists from primary care physicians.
C. The emphasis on preventing enrollees from using patient services.
D. The use of supplemental services on an additional cost basis.
Explanation:
The gatekeeper strategy is a hallmark feature of Health Maintenance Organizations (HMOs). It is designed to control costs and coordinate care by requiring that patients first consult their Primary Care Physician (PCP) for most health issues. If specialized care is needed, the PCP will provide a referral to a specialist.
This strategy ensures:
Fewer unnecessary specialist visits
Better management of care
Lower overall costs for the plan
A license is NOT required when you are
A. providing referrals.
B. selling insurance.
C. negotiating insurance.
D. soliciting insurance.
Explanation:
The gatekeeper strategy in HMOs (Health Maintenance Organizations) specifically refers to the role of the Primary Care Physician (PCP) in providing referrals to specialists. This system ensures coordinated and cost-effective care by requiring patients to consult their PCP before accessing specialized services.
Why the Other Options Are Incorrect:
B. Selling insurance / C. Negotiating insurance / D. Soliciting insurance → These describe the roles of insurance producers (agents/brokers), not the gatekeeper function in HMOs.
Key Takeaway:
Gatekeeper = PCP referral authority (controls access to specialists).
Insurance producers = Sales/licensing roles (unrelated to HMO care coordination).
A policy that provides coverage for persons with chronic diseases or disabilities, and often covers nursing home care, home-based care, and respite care is known as
A. Medicare insurance.
B. Medicaid insurance.
C. Long-Term Care insurance.
D. Group Health insurance.
Explanation:
Long-Term Care insurance (LTC) is specifically designed to cover expenses related to chronic illnesses, disabilities, or age-related conditions that require extended care services, including:
Nursing home care
Home health care (e.g., aides, therapists)
Respite care (temporary relief for caregivers)
Assisted living facilities
Why the Other Options Are Incorrect:
A. Medicare → Covers limited skilled nursing care (up to 100 days) but not custodial long-term care.
B. Medicaid → Covers long-term care only for low-income individuals (after asset depletion).
D. Group Health → Covers medical expenses (e.g., doctor visits, hospital stays) but excludes extended custodial care.
Key Features of LTC Insurance:
Triggers: Benefits activate when the insured cannot perform 2+ Activities of Daily Living (ADLs) or has cognitive impairment.
Flexibility: Policies often allow customization (e.g., benefit periods, inflation protection).
What type of policy pays an amount per day for hospitalization directly to the insured regardless of the insured’s other health insurance?
A. Limited-amount per diem
B. Blanket
C. Medigap
D. Hospital indemnity
Explanation:
A hospital indemnity insurance policy pays a fixed amount per day (or per event) directly to the insured when they are hospitalized, regardless of other health insurance coverage. This type of policy is designed to help cover out-of-pocket expenses such as:
Deductibles
Coinsurance
Transportation
Lodging
Childcare
Lost income
The benefit is not coordinated with other insurance, meaning the insured receives the full per diem amount even if other policies also pay for the hospitalization.
Why the Other Options Are Incorrect
A. Limited-amount per diem
Not a formal insurance policy type; describes a feature, not a product
B. Blanket
Covers groups for specific events (e.g., school trips), not daily hospitalization
C. Medigap
Supplements Medicare, but does not pay fixed daily amounts directly to the insured
Which rider would allow additional insurance to be purchased at specified dates or events, without additional underwriting?
A. Guaranteed renewability
B. Guaranteed insurability
C. Cost of living
D. Disability income
Explanation:
The Guaranteed Insurability Rider (also known as Guaranteed Purchase Option or Guaranteed Issue Option) allows the policyholder to purchase additional insurance at specific times or life events — without providing evidence of insurability or undergoing medical underwriting.
Common trigger events include:
Marriage
Birth or adoption of a child
Policy anniversary dates (e.g., every 3 years)
The main purpose is to lock in the right to increase coverage in the future, even if the insured's health declines.
Why the other options are incorrect:
A. Guaranteed renewability
Applies to health insurance — guarantees the policy can be renewed, not that more insurance can be bought
C. Cost of living
Increases death benefit to keep up with inflation, but doesn’t allow new purchases
D. Disability income
Pays benefits for disability — not related to buying more insurance
According to the IRS, which premiums may be tax deductible as a medical expense if the taxpayer’s medical expenses exceed 10% of their adjusted gross income?
A. Long-Term Care Insurance premiums
B. Group Disability Insurance premiums
C. Personal Disability Income Insurance premiums
D. Accidental Death and Dismemberment Insurance premiums
Explanation:
Under IRS rules (Publication 502), Long-Term Care (LTC) insurance premiums qualify as tax-deductible medical expenses, subject to:
Threshold: Total medical expenses must exceed 10% of Adjusted Gross Income (AGI) (7.5% for taxpayers 65+ through 2026).
Age-Based Limits: Deductible LTC premium amounts are capped annually (e.g., $5,880 for ages 71+ in 2024).
Why the Other Options Are Incorrect:
B. Group Disability / C. Personal Disability Income → Premiums are not deductible (benefits are tax-free if paid with after-tax dollars).
D. AD&D Insurance → Premiums are never deductible (benefits are also tax-free).
Key IRS Rules:
LTC benefits: Tax-free if used for qualified care.
Disability benefits: Tax-free only if premiums were paid with after-tax income.
| Page 2 out of 9 Pages |
| Previous |