Insurance Licensing Updated Accident-and-Health-or-Sickness-Producer Exam Questions and Answers by ava-rose

Nonprofit health service plans (Insurance Article, § 14-102), like HMOs, provide medical, vision, and dental benefits, but disability income—replacing lost wages—is outside their scope and belongs to separate insurance types.

References:Maryland Insurance Article, § 14-102; MIA nonprofit plan rules.

Comprehensive and Detailed Step by Step Explanation:Premium determination in life insurance depends on factors that measure risk, butrace (D)is not and cannot be used due to anti-discrimination laws.

Age (A):A primary factor; younger applicants are charged lower premiums due to lower mortality risk.

Health (B):Significant; poor health or pre-existing conditions increase premiums.

Occupation (C):Risky professions (e.g., construction or aviation) may result in higher premiums.

Race (D):Prohibited by Maryland law, which ensures fairness and prohibits underwriting based on race, ethnicity, or similar discriminatory criteria.

References:Maryland Insurance Article §27-501, COMAR 31.09.03, and Anti-Discrimination Standards in Insurance.

A loss on May 30, while covered (Insurance Article, § 15-201), obligates the insurer to pay upon proof, despite termination on June 1. Termination or pre-existing exclusions don’t negate prior coverage, and no one-year rule applies.

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

Producers hold premiums in a fiduciary capacity (Insurance Article, § 10-126) and must remit them to the insurer or a trust account. Depositing them into a personal account is fraud—specifically misappropriation—violating state law. Twisting, rebating, and replacement involve different unethical acts, not fund misuse.

References:Maryland Insurance Article, § 10-126; MIA producer conduct regulations.