Accident-and-Health-or-Sickness-Producer MarylandAccident and Health or Sickness Producer Series 20-24 Exam Questions and Answers

Comprehensive and Detailed Step by Step Explanation:Maryland law mandates that life insurance policies include aclear and concise description of the policyon the first page to ensure transparency and understanding for policyholders.

Legible and brief description (A):Correct. This ensures the buyer can quickly identify key terms and benefits of the policy.

Notary seal (B):Not required for delivering life insurance policies.

Premium coupon book (C):Optional, often replaced with digital billing methods.

Financial statement of the insurer (D):Not required in the policy itself, although insurers must provide financial stability information upon request.

References:Maryland Insurance Article §16-206, COMAR 31.09.04, and Policy Form Filing Standards.

A waiting period (Insurance Article, § 15-109) delays coverage for pre-existing conditions (e.g., 6-12 months), not permanently excluding them, starting at inception, or holding payments in escrow.

References:Maryland Insurance Article, § 15-109; MIA pre-existing condition rules.

Federal law (18 U.S.C. § 1033) criminalizes embezzlement by a producer, a felony punishable by prison if interstate commerce is affected. Nonresident licensing is a state issue, inducing applications is legal, and suing is a civil action, not criminal.

References:18 U.S.C. § 1033; MIA producer conduct alignment.

Preferred risk applicants (Insurance Article, § 15-201) have low disability risk due to non-smoking, safe jobs, and physical activity. High income affects benefit amounts, not risk classification, making it the exception.

References:Maryland Insurance Article, § 15-201; MIA underwriting standards.

Long-term care insurance (Insurance Article, § 18-101) triggers benefits based on inability to perform ADLs (e.g., bathing), unlike Medigap, major medical, or disability, which focus on medical or work criteria.

References:Maryland Insurance Article, § 18-101; MIA long-term care rules.

Advertisements (Insurance Article, § 27-503) can highlight advantages or ratings if true, but misrepresenting coverage via a title is illegal, deceiving consumers about policy benefits.

References:Maryland Insurance Article, § 27-503; MIA advertising standards.

Errors and omissions liability arises from professional negligence (Insurance Article, § 10-126). Misleading a client about policy replacement (twisting, § 27-203) directly harms them, unlike accounting errors, overpayments, or tax issues, which are internal or personal.

References:Maryland Insurance Article, § 10-126, § 27-203; MIA producer liability rules.

Comprehensive and Detailed Step by Step Explanation:Accidental death riders provide additional benefits if the insured dies due to an unforeseen accident.

Automobile accidents resulting from the insured’s negligence (D):Covered because negligence in driving does not disqualify the event from being an accident. The death must be directly and solely caused by the accident.

Intentionally self-inflicted injuries (A):Excluded as they are not accidental but intentional.

Illness or disease (B):Excluded as accidental death benefits do not apply to natural causes.

War or acts of war (C):Generally excluded under most policies as a specific clause addresses wartime risks.

References:Maryland Insurance Guidelines for Accidental Death Riders and Policy Exclusions, COMAR 31.09.04.

The waiver of premium provision (Insurance Article, § 15-201) waives premiums during the disability benefit period—when benefits are paid—easing financial strain. The elimination period requires premium payment, the grace period is for late payments, and the time limit on defenses relates to incontestability, not waivers.

References:Maryland Insurance Article, § 15-201; MIA disability insurance standards.

Medical expense insurance covers necessary treatments like chronic pain, eating disorders (under parity laws, § 15-802), and undiagnosed conditions if treated, but excludes intentionally self-inflicted injuries (e.g., suicide attempts) as non-accidental losses (Insurance Article, § 15-201).

References:Maryland Insurance Article, § 15-201, § 15-802; MIA health insurance exclusions.

Statements on applications (Insurance Article, § 12-206) are representations—factual assertions to the best of the insured’s knowledge—where only material misrepresentations void a policy. Warranties are stricter and less common, while categorical and general provisions don’t apply.

References:Maryland Insurance Article, § 12-206; MIA application rules.

The MIA (Insurance Article, § 10-126) disciplines producers for misrepresentation (§ 27-202, § 27-503), but filing a consumer complaint with the MIA is a legitimate advocacy action, not a disciplinary offense. It supports consumer protection, unlike the other deceptive practices.

References:Maryland Insurance Article, § 10-126, § 27-202, § 27-503; MIA producer regulations.

Rebating (Insurance Article, § 27-212) involves offering part of a commission to entice a purchase, an illegal practice in Maryland unless part of an approved plan. Twisting misrepresentspolicies, replacement swaps coverage, and retention isn’t a trade practice term. This protects fair competition.

References:Maryland Insurance Article, § 27-212; MIA trade practice rules.

Major medical plans (Insurance Article, § 15-201) cover hospice, drugs, and therapy, but excluderoutine dental care, which requires separate dental insurance.

References:Maryland Insurance Article, § 15-201; MIA major medical standards.

MCHIP enrollment (Insurance Article, § 31-113) occurs through the Individual Exchange (Maryland Health Connection), where certified Navigators or Producers assist, not SHOP (business-focused) or the Commissioner (regulatory).

References:Maryland Insurance Article, § 31-113; MIA MCHIP guidelines.

Maryland law (Insurance Article, § 15-401) requires coverage for handicapped dependent children beyond standard age limits if they’re incapable of self-sustaining employment and dependent on the insured. This extends for life, or as long as the policy is active, not limited to ages 19 or 25, nor tied to self-sustainability.

References:Maryland Insurance Article, § 15-401; MIA dependent coverage regulations.

The certificate (Insurance Article, § 15-1207) provides employees with evidence of coverage under the group plan, not a binding contract (master policy) or employer-specific by location. It summarizes benefits for clarity.

References:Maryland Insurance Article, § 15-1207; MIA group insurance rules.

Comprehensive and Detailed Step by Step Explanation:The Maryland Insurance Administration (MIA) is authorized to inspect the records of insurers and agencies to ensure compliance with laws:

Yes, because of the powers defined by state laws (B):Correct. The MIA has broad authority under Maryland law to audit, inspect, and investigate insurance business practices.

No, because of privacy considerations (A):Incorrect. Regulatory inspections are exempt from privacy concerns when conducted lawfully.

Only an officer of the court (C):Not required; the MIA operates independently within its legal mandate.

Public domain records (D):Incorrect; insurance records are not publicly accessible unless required by law.

References:Maryland Insurance Article §2-209, COMAR 31.03.01, and Regulatory Oversight Guidelines.

Disability income insurance (Insurance Article, § 15-201) replaces income during disability, not life indemnity, hospital costs (health insurance), or physician fees (medical insurance). It supports financial stability when work is impossible.

References:Maryland Insurance Article, § 15-201; MIA disability insurance standards.

Reasonable and customary charges (Insurance Article, § 15-1005) reflect average fees for procedures in a specific geographic area (e.g., 80th percentile), ensuring fair reimbursement. Actuarial tables, studies, and national surveys aren’t the primary basis.

References:Maryland Insurance Article, § 15-1005; MIA health insurance guidelines.

Policy statements (Insurance Article, § 15-201) must clarify benefits with the maximum daily benefit (e.g., $200/day) and maximum time limit (e.g., 9 days) to define the $1,800 total. Minimums are irrelevant, and a mix of maximum and minimum limits lacks clarity.

References:Maryland Insurance Article, § 15-201; MIA policy disclosure rules.

Certificates (Insurance Article, § 15-1207) summarize policy features and benefits for group members, not the full contract, physician lists, or financial statements, which are separate or irrelevant. This ensures employees understand their coverage.

References:Maryland Insurance Article, § 15-1207; MIA group insurance rules.

Trade associations (Insurance Article, § 15-1209) group members in the same industry for medical benefits, not solely for insurance, and include small employers with contributions typically required.

References:Maryland Insurance Article, § 15-1209; MIA group insurance rules.

Fraud involves intentional deception for gain (Insurance Article, § 27-401). Overcharging, undercharging deceptively, or charging for nonexistent coverage are fraudulent. Collecting the proper premium for provided insurance is a legitimate transaction and not fraud, making it the exception.

References:Maryland Insurance Article, § 27-401, § 27-212; MIA fraud regulations.