Pass the Insurance Licensing Virginia Insurance License Virginia-Life-Annuities-and-Health-Insurance Questions and answers with CertsForce

Reinsurance is a legitimate risk management tool used between insurers. Misrepresentation, fraudulent advertising, and illegal inducements are specifically prohibited as unfair trade practices in Virginia.

Exact Extract (Virginia Unfair Trade Practices Act): “Unfair practices include misrepresentation, false advertising, and offering unlawful inducements. Reinsurance is not an unfair practice.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-500 et seq. (Unfair Trade Practices Act)

The elimination of a hazard is an example of risk avoidance. This involves removing or eliminating the risk entirely by preventing hazardous activities or conditions. This is different from other risk management strategies such as transfer (shifting risk to another party), pooling (combining risks to spread the impact), or retention (accepting the risk).

Detailed Answer in Step-by-Step Solution:

The Medicare Supplement open enrollment period (6 months starting the first month a person is 65 and enrolled in Medicare Part B) guarantees issuance of a policy without regard to health status (D).

Premiums (A), benefits (B), and exclusions (C) are standardized and not altered during this period due to health.

The Virginia study guide states that during the Medicare Supplement open enrollment, insurers must issue policies without medical underwriting, ensuring access regardless of health. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Medicare Supplement Insurance."

Detailed Answer in Step-by-Step Solution:

The Virginia Bureau of Insurance has authority to request and review an agent’s business records (C) to ensure compliance with state laws, without requiring a court order (A) or NAIC approval (B).

Option D (no access) is false; regulatory oversight overrides privacy in this context.

The Virginia study guide confirms that the Bureau of Insurance can demand records as part of its regulatory powers under Virginia insurance law, ensuring market conduct compliance. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Regulation."

Medicare eligibility begins at age 65 for most individuals. Earlier eligibility is available only for certain disabilities or end-stage renal disease, but the standard eligibility age is 65.

Exact Extract (Virginia Health Insurance Study Guide): “Medicare is a federal program providing health insurance to individuals age 65 or older and certain disabled individuals under age 65.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, Medicare Overview

The coordination of benefits provision in group health insurance is designed to reduce duplication of coverage when an individual is covered by multiple insurance plans. It ensures that the total benefits paid by all insurers do not exceed the total amount of the claim. This provision helps coordinate the payment of benefits between primary and secondary insurers.

A mortality table displays the statistical probability of death at each age for a defined population. Insurers use mortality tables as a foundational tool in underwriting, premium calculation, and reserve determination for life insurance and annuity products.

Morbidity tables measure the likelihood of illness or disability, not death. Premium rate tables show pricing information derived from actuarial data, while dividend tables reflect non-guaranteed policy dividends.

Virginia licensing materials emphasize mortality tables as essential actuarial tools that help insurers predict life expectancy and properly price life insurance policies. Therefore, option A is correct.

“Conditionally renewable” policies guarantee renewal as long as certain conditions listed in the contract are met. These conditions may include factors such as reaching a certain age or maintaining occupation class, but not health status or claims history. Exact extract: “A conditionally renewable policy may be nonrenewed only on grounds stated in the policy; health deterioration or claims experience may not be a reason for nonrenewal.” This gives insurers some flexibility while protecting consumers from arbitrary termination.

Agents are fiduciaries, meaning they must handle clients’ premiums with the highest standard of care. Misuse or misappropriation of funds constitutes a violation of fiduciary duty.

Exact Extract (Virginia Agent Regulations): “Insurance producers act in a fiduciary capacity regarding premiums received from insureds and must promptly remit them to insurers.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-1834 (Fiduciary responsibility of agents)

Virginia’s long-term care (LTC) rules allow certain exclusions (e.g., war, alcoholism/drug addiction, intentionally self-inflicted injury) but prohibit disease-specific exclusions for conditions like Alzheimer’s or senile dementia. Exact extract: “No long-term care insurance policy or certificate may exclude or limit coverage for Alzheimer’s disease, senile dementia, organic brain disorder, or other demonstrable organic disease.” Permitted exclusions include: “loss resulting from war or act of war,” “alcoholism and drug addiction,” and “intentionally self-inflicted injury.”