New York life insurance practice test

Answer: B. Regulation 169 requires the initial notice of privacy policies and practices not later than when the licensee establishes a customer relationship, with narrow exceptions permitting a reasonable time afterwards. A thirty day rule, the first anniversary and a request-driven notice are not the standard.Source: New York Reg. 169, 11 NYCRR 420.4 — 11 NYCRR 420.4(a)(1)

Answer: B. Section 2103(g)(11) reaches an applicant who is currently licensed in the other state or who applies within ninety days of the prior licence's cancellation, provided good standing is certified. Two months falls inside that window, so the thirty-day and one-year figures and the currently-in-force reading are wrong.Source: N.Y. Ins. Law § 2103 — § 2103(g)(11)

Answer: A. Section 2109 issues the licence without a written examination and holds the temporary licensee to servicing, with new solicitation, negotiation and sales withheld except for the title insurance agent case. Passing an examination and limiting new sales to existing customers are not the distinctions the section draws.Source: N.Y. Ins. Law § 2109 — § 2109

Answer: B. Section 2108 forbids a public adjuster to misrepresent facts or to advise any person on questions of law. Whether an exclusion is enforceable is a legal question, so representing the insured, writing the opinion down, and the state of the claim do not change the answer.Source: N.Y. Ins. Law § 2108 — § 2108

Answer: C. Admitted, or authorized, means the state has issued a certificate of authority, which also brings the insurer within the guaranty association. Where the insurer was incorporated is the separate domestic, foreign and alien classification.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, admitted and nonadmitted insurers

Answer: D. Rescission unwinds the contract from the beginning, with premiums returned, and it is available for material misrepresentation or concealment during the contestable period. Adjusting the benefit or the premium instead applies to misstatement of age or sex, not to concealment.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, rescission

Answer: A. An insurable risk is accidental, definite as to time, place and amount, and measurable, and the loss must not be catastrophic to the insurer's whole book. A loss within the insured's control or certain to happen is not fortuitous and cannot be priced.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, elements of insurable risks

Answer: A. Admitted and nonadmitted describe whether an insurer has been granted authority to transact business in the state. Domestic, foreign, and alien describe where the insurer was formed, and reciprocal describes a form of organization, so those answer different questions.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, admitted versus nonadmitted insurers

Answer: A. Business continuation planning addresses what happens to the enterprise when an owner dies, using agreements and insurance so the business can carry on and the family be paid. Growth, retention, and valuation are business concerns addressed by other means.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, business continuation

Answer: B. Key person coverage protects the business against the economic loss caused by the death of someone important to it, so the business applies, owns, pays, and receives the proceeds. Family protection is personal coverage, and a trustee arrangement describes a buy-sell structure.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, key person

Answer: D. Unfair discrimination is charging different rates or offering different terms to individuals of the same class and equal expectation of life, or refusing on a basis unrelated to the risk. A higher premium justified by a genuine difference in risk is ordinary underwriting.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, unfair discrimination

Answer: A. Section 2611 forbids an insurer or its designee to request or require an HIV related test without first receiving the individual's written informed consent. Departmental approval, medical justification and family consent are not part of the requirement.Source: N.Y. Ins. Law § 2611 — § 2611

Answer: D. Paying more often means the insurer holds the money for less time and processes more transactions, so the total paid over a year is higher. Underwriting, taxation, and benefit levels do not vary with the mode.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, mode of premium

Answer: B. The producer records what the applicant says, fully and truthfully, and has the applicant review and sign it, since inaccuracies can support rescission within the contestable period. Verification is the underwriter's task, and supplying or omitting answers would be misconduct.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, application procedures

Answer: D. A participating policy shares in the insurer's divisible surplus through dividends, which are a return of overcharge rather than a guaranteed return. Underwriting, insurer type, and settlement elections are separate matters.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, participating versus nonparticipating

Answer: B. Regulation 74 forbids vanish, vanishing premium and similar language implying the policy becomes paid up, because nonguaranteed elements may not perform as illustrated. Current scale and nonguaranteed element are the accurate terms the rule expects to see.Source: New York Reg. 74, 11 NYCRR 53-3.2 — 11 NYCRR 53-3.2

Answer: D. Paying the whole cost at issue produces an immediate and large cash value, close to the premium paid. Reaching the face amount is what happens at the maturity age, not at issue.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, single premium cash value

Answer: B. Variable universal life combines flexible premiums and adjustable death benefits (universal life features) with investment choices in separate accounts (variable features).Source: SEC Investor Bulletin: Variable Life Insurance — Variable Universal Life Overview

Answer: D. Joint life (first-to-die) pays the face amount upon the death of the first covered person, after which policy coverage terminates.Source: NAIC Life Insurance Guide — PDF page 6, Joint Life

Answer: C. Premiums are compressed into a stated number of years or to a stated age, after which the policy is paid up and remains in force for the whole of life. The protection itself is not limited in duration or in the values it builds.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, limited payment whole life