Final Examination
Ethics
Compliance
both of the above are correct
none of the above are correct
Increased liability
Continuation of the agency distribution system
both of the above are correct
none of the above are correct
I. Licensing
II. Regulating continuing education requirements
III. Overseeing market conduct
I and II only
I and III only
II and III only
I, II and III
state
federal
both state and federal government
neither state nor federal government regulate ethics
That only approved policies may be sold
That misrepresentation is prohibited
That insurance coverage may not be replaced
That agents perform their duties in a timely way
common law
the Insurance Code
securities law
judicial review
Express
Implied
Apparent
Statutory
I. It is not contractually provided
II. It generally relates to business customs
III. The insurer intends to provide the authority
I and II only
I and III only
II and III only
I, II and III
express
apparent
statutory
implied
Waiver
Estoppel
Election
Course of conduct and custom
The information below should be used to answer the following three questions.
Shirley Whitley is a life insurance agent for MultiMutual and does business as the Olde English Financial Group. Olde English Financial Group, along with her name and telephone number, is the only information on Shirley's business card. Shirley met Dave Winslow, president of a local hardware chain, at a Chamber of Commerce luncheon. She gave Dave her card and said that she offered unique tax-free products that were available only to business owners and suggested they meet to discuss how these products could benefit him. When Shirley and Dave met, she discussed a private pension arrangement that would permit him to withdraw substantial gains without ever having to pay taxes.
A. Nothing, her business card is fine.
B. Shirley's failure to identify herself as an agent for MultiMutual is misleading and unethical
C. The failure of a business card to list the products sold is unethical
D. Trade names are inherently unethical
Products may only be described as unique if they are truly unique
The use of the words "tax-free" to describe financial products must advise the prospect to check with his or her tax advisor
both of the above are correct
none of the above are correct
The term "private pension" is permitted when referring to a life insurance policy only if the policy is a modified endowment contract
Use of "private pension" is unethical since it misleads
Use of "private pension" is illegal
"Private pension" may be used at any time to refer to a life insurance policy
Risks and guarantees
Insurance benefits
Tax features
all of the above
examines the advantages and disadvantages of both products
lists the same number of advantages for both products
lists the same number of disadvantages for both products
is substantiated
substantiated
referenced
both of the above are correct
none of the above are correct
I. Premiums must be submitted to the insurer on a timely basis
II. Premiums must not be commingled with personal funds
III. Premiums must not be used for personal expenses
I and II only
I and III only
II and III only
I, II and III
Termination of the agent's contract
Loss of insurer assistance in the event of a lawsuit
both of the above are correct
none of the above are correct
a life insurance policy
premiums
separate accounts
cash values
a life insurance policy
premiums
dividends
cash values
a life insurance policy
premiums paid by the use of dividends
separate accounts
cash values
Identifying sales tools and practices used
Evaluating the sales tools and practices used
Changing unethical or non-compliant tools or practices
Review of the agent's bookkeeping
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The Golden Rule
The legal system
Force
Compliance requirements
A limited supply of goods
Because individuals exist in society
Its fairness
It is the only method to adjudicate disputes
Reason
Force
both of the above are correct
none of the above are correct
The practices were illegal
They misled the customer
They led to the customer’s monetary loss
They were forbidden by all insurers
Specialized knowledge
“Service before income” outlook
Opportunity for substantial income
A code of professional ethics
Licensing agents
Supervising company sales practices
Licensing insurers
Promulgating pension regulations
Through income taxation of cash values
Through the licensing of insurers
Through health insurance legislation
Through its regulation of insurance products considered securities
ERISA
HIPAA
the McCarran-Ferguson Act
the Financial Services Modernization Act
Express authority
Suggested authority
Implied authority
Apparent authority
disintermediation
ratification
brokering
pyramiding
create interest in purchasing a product
create interest in keeping a purchased product
both of the above are correct
none of the above are correct
If Shirley was a CFP
If Shirley and all of her associates were CFPs
either a or b
none of the above are correct
The agent must have a Series 63 registration
The agent must be a CLU
The agent must be a registered investment adviser
The agent must be Series 6 registered
Claiming expertise or education not possessed
Misstating personal or professional accomplishments
Failure to include material information
all of the above
The agent’s discussion of a product over the telephone
The agent’s stating or implying that he or she has skills, experience or credentials that are not possessed
The agent’s failure to provide a complete comparison
The agent’s failure to provide full disclosure
If the agent is a registered investment adviser
If the agent has a Series 6 or Series 7 registration
Upon application to the SEC
Never
The term used obscures the true identity and nature of the product
The product would need to be governed by ERISA legislation
Private pensions refer only to modified endowment contracts
There is no ethical concern in referring to a life insurance policy as a private pension
The approach
The fact-finding interview
The closing interview
The delivery interview
Selection of the appropriate product
Communication about the recommended product
both of the above are correct
none of the above are correct
Churning
Rebating
Misrepresentation
Replacement
churning
rebating
misrepresentation
boiler-rooming
Jim is guilty of rebating, which is both unethical and illegal
Jim is guilty of rebating only if he actually paid the golf fees
Since the partner needed life insurance anyway, no ethical or legal issue is involved
Jim would be guilty of rebating only if the golf fees exceeded $100
oral
written
either oral or written
none of the above are correct
Suicide and incontestable provisions begin anew
Original policy’s cost basis could be lost
Death benefit proceeds would become income taxable
Any gain might need to be immediately recognized
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
a. illegal
b. fraudulent
c. exempt from state regulation
d. none of the above
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
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
a. civil liability for all unpaid claims
b. revocation of all insurance licenses
c. suspension of all insurance licenses
d. all of the above
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