Chapter 2 Review Questions



Agents should be aware of which of the following warning signs of a phony insurance plan?

a.  premium rates are relatively inexpensive compared to other comparable policies
b.  premium quotes do not vary between applicants
c.  applicants must join an association or union to obtain coverage
d.  all of the above



All ERISA-covered plans are:

a.  illegal
b.  fraudulent
c.  exempt from state regulation
d.  none of the above



All ERISA-covered plans are:

a.  subject to federal jurisdiction
b.  subject to state jurisdiction
c.  subject to joint state and federal jurisdiction
d.  not subject to state jurisdiction but possibly subject to federal jurisdiction



Which of the following are exempt from state insurance regulation:

a.  a single-employer ERISA benefits plan
b.  multiple-employer ERISA benefits plans
c.  "association" ERISA benefits plans
d.  none of the above are exemption from state regulation


VEBAs (voluntary employment benefit arrangements) provide:

a. health insurance benefits exempt from state regulation
b. health insurance benefits exempt from federal regulation
c. tax deductible health insurance benefits
d. federally regulated health insurance benefits


Concerning the health benefits offered under an employee leasing arrangement, a PEO:

a. is exempt from state insurance laws regarding health benefits
b. is considered a multiple employer welfare arrangement
c. is subject to the minimum participation standards under ERISA
d. is classified as a self-insured health plan



All of the following are benefits available under an employee leasing arrangement EXCEPT:

a.  lower cost employee benefits for smaller employers
b.  availability of employee benefits not generally obtainable by smaller employers
c.  exemption from state licensing requirements
d.  all of the above are benefits of an employee leasing arrangement


Under current Florida law, an agent convicted of selling coverage issued by an unauthorized insurer is guilty of:

a.  a third degree misdemeanor
b.  a second degree misdemeanor
c.  a first degree misdemeanor
d.  a third degree felony




Possible fines for an agent convicted of selling coverage issued by an unauthorized insurer is:

a.  $500 per violation
b.  $1,000 per violation
c.  $5,000 per violation
d.  $50,000 per violation




Possible incarceration for an agent convicted of selling coverage issued by an unauthorized insurer is:

a.  up to one year in county jail
b.  up to one year in prison
c.  up to three years in prison
d.  up to five years in prison



In addition to possible fines and possible incarceration, agents who solicit, negotiate or sell coverage issued by an unauthorized insurer face:

a.  civil liability for all unpaid claims
b.  revocation of all insurance licenses
c.  suspension of all insurance licenses
d.  all of the above