Practice Free Ok-Life-Accident-and-Health-or-Sickness-Producer Oklahoma Life, Accident, and Health or Sickness Producer Exam Exam Questions Answers With Explanation

Term life insuranceprovides coverage for a specific period (e.g., 10, 20 years) and does not accumulate cash value, unlikepermanent life insurance(e.g., whole life), which provides lifelong coverage with cash value. Term policies may be renewable, but this is not automatic unless specified, and premium payment periods are shorter than permanent policies (Title 36 O.S. § 4002).

Option A: Incorrect. Term life accumulates no cash value, not a smaller amount.

Option B: Incorrect. Term life has a shorter premium payment period than permanent life.

Option C: Correct. Term life remains in force for a specific period, unlike lifelong permanent coverage.

Option D: Incorrect. Renewal is not automatic; it depends on the policy’s terms.

Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs) are two common types of managed care plans in health insurance. According to standard insurance study materials for the Oklahoma Life, Accident, and Health or Sickness Producer exam, a key distinction between PPOs and HMOs lies in the flexibility of provider choice. PPOs allow members to choose from a broader network of doctors and medical service providers, both in-network and out-of-network, without requiring a referral from a primary care physician. HMOs, in contrast, typically restrict members to in-network providers and require a designated primary care physician to coordinate care.

Option A: Incorrect. PPO plans often provide coverage for out-of-state medical services, especially within their network or through out-of-network benefits, though at potentially higher costs. This is not a defining characteristic compared to HMOs.

Option B: Correct. PPOs are known for offering more choices of doctors and medical service providers, as they do not mandate a primary care physician or referrals for specialists, unlike HMOs.

Option C: Incorrect. HMOs require members to designate a primary care physician, while PPOs do not.

Option D: Incorrect. While PPOs offer flexibility, the ability to see a physician on a walk-in basis is not a standard feature distinguishing them from HMOs, as both may vary in appointment requirements.

This aligns with the Prometric exam content outline under “Health Providers and Products,” which emphasizes understanding differences between health insurance plans like HMOs and PPOs.

The primary purpose of life insurance is to provide adeath benefit, which is a financial payout to beneficiaries upon the insured’s death, ensuring financial protection for dependents or obligations (Title 36 O.S. § 4002). While some policies offer cash value or tax advantages, these are secondary to the death benefit.

Option A: Incorrect. Tax deductions are not the primary reason; they may apply to specific scenarios but are secondary.

Option B: Correct. Death benefits are the primary reason for purchasing life insurance.

Option C: Incorrect. Retirement income is a goal of annuities or cash value policies, not the primary purpose.

Option D: Incorrect. Safety of principal relates to investments, not the core purpose of life insurance.

Thefree-look provision, required in Oklahoma for life and health insurance policies (Title 36 O.S. § 4007 for life, § 4405 for health), allows the policyowner to return the policy within a specified period (typically 10 days for life, 30 days for Medigap) from receipt for afull refundof premiums paid, no questions asked. This protects consumers by allowing time to review the policy.

Option A: Incorrect. The insurer cannot rescind during the free-look period; that right applies to contestability.

Option B: Incorrect. The refund is full, not partial, during the free-look period.

Option C: Correct. The policyowner can return the policy for a full refund within the specified period.

Option D: Incorrect. The insurer cannot unilaterally alter the policy during the free-look period.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers free-look provisions.

Under Oklahoma insurance regulations (Title 36 O.S. § 1204 and O.A.C. 365:10-3-10), insurers are responsible for ensuring that all advertising materials comply with state laws, including maintaining control over thecontent and formto prevent misleading or deceptive practices. This includes ensuring advertisements are truthful, not disparaging, and compliant with regulatory standards.

Option A: Correct. Insurers must control the content and form of advertising to ensure compliance.

Option B: Incorrect. The cost of delivery is not a regulatory responsibility of insurers.

Option C: Incorrect. The cost of production is an internal business matter, not a regulatory requirement.

Option D: Incorrect. Communications between agents are not directly related to advertising content control.

This question is part of the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers advertising regulations.

Afraternal benefit society, as defined in Oklahoma’s Insurance Code (Title 36 O.S. § 2711), is an incorporated organization without capital stock, operating on a lodge system with a representative form of government, and providing insurance benefits solely for its members and their beneficiaries. Unlike commercial insurers, fraternal benefit societies arenot-for-profitentities, making “for profit” an incorrect characteristic.

Option A: Incorrect (is a characteristic). Fraternal benefit societies are incorporated entities.

Option B: Incorrect (is a characteristic). They operate without capital stock, distinguishing them from stock insurers.

Option C: Correct (is not a characteristic). Fraternal benefit societies are not-for-profit, not for-profit organizations.

Option D: Incorrect (is a characteristic). They exist solely for the benefit of their members.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers types of insurers, including fraternal benefit societies.

Accidental death insurance(or accidental death and dismemberment, AD&D) covers death resulting from accidental bodily injury, independent of illness or intentional acts.Drowningis an example of an accidental cause of death typically covered under such policies. Exclusions often include death from illness, infections, or self-inflicted injuries, as outlined in standard policy provisions.

Option A: Incorrect. Terminal illness is a natural cause, not covered by accidental death insurance.

Option B: Correct. Drowning is an accidental cause of death, covered by AD&D policies.

Option C: Incorrect. Infections are typically excluded as they are not accidental injuries.

Option D: Incorrect. Self-inflicted wounds are intentional and excluded from coverage.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers accidental death coverage.

Oklahoma requires insurance producers and adjusters to complete24 hours of continuing education (CE)every 2 years for license renewal, including 3 hours of ethics and 2 hours of legislative updates, as specified in Title 36 O.S. § 1435.29 and O.A.C. 365:25-3-1.

Option A: Incorrect. 12 hours annually is not the requirement.

Option B: Incorrect. 18 hours every 2 years is insufficient.

Option C: Correct. 24 hours every 2 years is the CE requirement.

Option D: Incorrect. 26 hours every 3 years is not the standard.

Arideris an endorsement or amendment to an insurance policy that modifies its clauses, provisions, or coverage. Riders can add, remove, or alter benefits, such as adding coverage for a specific condition or family members in life or health insurance policies. The term is standard in Oklahoma insurance law and practice.

Option A: Incorrect. An attachment is not a specific insurance term for policy modifications.

Option B: Incorrect. A supplement may refer to additional coverage but is not the standard term for policy endorsements.

Option C: Correct. A rider is an endorsement that modifies policy provisions.

Option D: Incorrect. “Add-on” is not a formal insurance term for policy modifications.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers policy endorsements.

An insurance agent, acting as afield underwriter, is responsible forcompleting applications accuratelyandcollecting initial premiums, ensuring the information provided is truthful and complete for the insurer’s underwriting process, as per Oklahoma’s regulations (Title 36 O.S. § 1435.2). Setting premiums, accepting/declining applications, and issuing policies are duties of the insurer’s underwriting department, not the agent.

Option A: Incorrect. Setting premiums is the insurer’s responsibility, not the agent’s.

Option B: Correct. Agents complete applications and collect initial premiums as part of field underwriting.

Option C: Incorrect. Declining or accepting applications is done by the insurer’s underwriters.

Option D: Incorrect. Issuing policies is the insurer’s role, not the agent’s.

In a group medical plan with an80% coinsurance provisionand no deductible, the insurer pays 80% of covered medical expenses, and the insured pays the remaining 20%. For Laura’s $1,000 medical bill, the insurer covers 80% ($1,000 × 0.80 = $800), and Laura pays 20% ($1,000 × 0.20 = $200). This calculation aligns with standard health insurance cost-sharing provisions in Oklahoma (Title 36 O.S. § 6060.3).

Option A: Incorrect. Laura must pay her coinsurance share, not $0.

Option B: Correct. Laura pays $200 (20% of $1,000).

Option C: Incorrect. $800 is the insurer’s share, not Laura’s.

Option D: Incorrect. Laura does not pay the full $1,000; she pays only her coinsurance portion.

Term life insuranceprovides coverage for a specific period (e.g., 10, 20 years) at a lower premium cost than whole life insurance, making it ideal for individuals needing maximum death benefit protection but unable to afford the higher premiums of permanent insurance. Unlike whole life, term life does not accumulate cash value or allow policy loans.

Option A: Incorrect. Borrowing against policy values requires cash value, available in whole life, not term life.

Option B: Incorrect. Cash value accumulation is a feature of whole life, not term life.

Option C: Correct. Term life is appropriate for maximum protection at a lower cost when permanent insurance premiums are unaffordable.

Option D: Incorrect. Term life is not permanent insurance; whole life provides permanent coverage.

This question falls under the Prometric content outline section on “Life Products,” which covers the suitability of term versus whole life insurance.

The clerical error provision in group health insurance policies is designed to protect employees from losing coverage due to administrative mistakes made by the employer or insurer. According to Oklahoma insurance regulations and standard group health insurance practices, if a clerical error results in an employee not being enrolled, the provision allows the error to be corrected by retroactively enrolling the employee, provided any past due premiums are paid. This ensures the employee is insured as if the error had not occurred, covering any claims that would have been eligible during the period of the error.

The Oklahoma Life, Accident, and Health or Sickness Producer Study Guide specifies that under the clerical error provision, "an employee who was eligible for coverage but was not enrolled due to an administrative error can be retroactively enrolled upon correction of the error, with coverage effective from the original eligibility date, provided all required premiums are paid." This aligns with option C, which states the employee will be allowed to submit an enrollment form and all past due premiums, and will be retroactively insured.

In Health Maintenance Organizations (HMOs), thegatekeeper strategyinvolves a primary care physician (PCP) who coordinates patient care and provides referrals to specialists. This ensures that care is managed efficiently and only necessary specialist visits are authorized, aligning with the HMO’s cost-containment model.

Option A: Incorrect. Refusing coverage for preexisting conditions is unrelated to the gatekeeper role and is regulated by HIPAA, not HMO strategy.

Option B: Correct. The gatekeeper strategy requires referrals from a PCP to see specialists, a hallmark of HMO plans.

Option C: Incorrect. HMOs encourage preventive care, not preventing service use, to manage costs.

Option D: Incorrect. Supplemental services at additional cost are not part of the gatekeeper strategy.

This question falls under the Prometric content outline section on “Health Providers and Products,” which covers HMO structures and strategies.

Selling fake insurance policies and misappropriating premiums is a fraudulent act under Oklahoma’s Insurance Code (Title 36 O.S. § 1204, § 1435.13), classified as a felony. TheOklahoma Insurance Department Anti-Fraud Unitinvestigates insurance fraud, theOklahoma State Bureau of Investigationhandles criminal investigations, and theOklahoma Attorney Generalmay prosecute or oversee legal actions. TheSecurities Exchange Commission (SEC)regulates securities markets, not insurance fraud, unless securities are involved (which is not indicated here).

Option A: Incorrect. The Attorney General may be involved in prosecution.

Option B: Incorrect. The State Bureau of Investigation handles criminal fraud cases.

Option C: Incorrect. The Anti-Fraud Unit directly investigates insurance fraud.

Option D: Correct. The SEC is not typically involved in insurance fraud investigations.

Theincontestable clause, mandated in Oklahoma (Title 36 O.S. § 4004), states that a life insurance policy cannot be contested by the insurer after it has been in force for2 yearsduring the insured’s lifetime, except for non-payment of premiums. This limits the insurer’s ability to deny claims based on application misstatements after this period.

Option A: Correct. The contestable period is 2 years.

Option B: Incorrect. 3 years exceeds the standard period.

Option C: Incorrect. 4 years is not the required timeframe.

Option D: Incorrect. 5 years is too long for the contestable period.

A deliberate lie by an insured to obtain a lower premium constitutesfraud, defined in Oklahoma’s Insurance Code (Title 36 O.S. § 1204) as an intentional misrepresentation of material facts to deceive the insurer. Fraud can lead to policy rescission or legal penalties.

Option A: Incorrect. Omission is failing to disclose information, not actively lying.

Option B: Correct. A deliberate lie to lower premiums is fraud.

Option C: Incorrect. Concealment is withholding material information, not providing false information.

Option D: Incorrect. Aleatory refers to the uncertain nature of insurance contracts, not misrepresentation.

Awhole life insurance policyprovidespermanent coveragefor the insured’s entire life, as long as premiums are paid, along with a guaranteed death benefit and cash value accumulation. This is a key advantage over term life, which is temporary. Whole life premiums are typically higher than term life, and underwriting guidelines or premium flexibility depend on the insurer, not the product itself.

Option A: Incorrect. Underwriting guidelines vary by insurer, not by policy type.

Option B: Incorrect. Whole life has higher initial premiums compared to term life.

Option C: Incorrect. Whole life typically has fixed premiums, unlike universal life, which offers variable premiums.

Option D: Correct. Permanent coverage is a primary advantage of whole life insurance.

This question falls under the Prometric content outline section on “Life Products,” which covers the benefits of whole life insurance.

Whole life insurance policies accumulate cash value over time, which policyowners can borrow against. Typically, cash value begins to accrue immediately, but sufficient value for a loan is often available after1 year, depending on the policy’s terms and premium payments. Oklahoma law (Title 36 O.S. § 4029) requires nonforfeiture benefits, including access to cash value, but does not specify a minimum time; insurer practices generally allow loans after 1 year when cash value is meaningful.

Option A: Incorrect. Policyowners can borrow against cash value once it accumulates.

Option B: Correct. Loans are typically available after 1 year, as cash value is sufficient.

Option C: Incorrect. 2 years is not a standard requirement; loans are often available sooner.

Option D: Incorrect. 3 years is excessive; most policies allow loans earlier.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers cash value loans.

Aviatical settlementallows a terminally ill insured to sell their life insurance policy to a third party for a lump sum, typically less than the death benefit, to access funds during their lifetime. The primary and most attractive feature for the insured is receiving areduced prepayment of the death benefit, providing immediate cash for medical or personal needs, as regulated in Oklahoma (Title 36 O.S. § 4055.1 et seq.).

Option A: Incorrect. Viatical settlements do not involve discounted premiums; the policy is sold.

Option B: Correct. The reduced prepayment of the death benefit is the main benefit for the insured.

Option C: Incorrect. Policy assignment is a mechanism, not the primary feature.

Option D: Incorrect. Guaranteed renewability is unrelated to viatical settlements.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers viatical settlements.

Analien insurer, as defined in Oklahoma’s Insurance Code (Title 36 O.S. § 105), is an insurance company formed under the laws of a country other than the United States. This distinguishes it from domestic insurers (formed in Oklahoma) and foreign insurers (formed in another U.S. state).

Option A: Incorrect. An insurer formed in Oklahoma is a domestic insurer.

Option B: Incorrect. An insurer formed in another U.S. state is a foreign insurer.

Option C: Correct. An alien insurer is formed under the laws of a foreign country.

Option D: Incorrect. Geographic proximity is irrelevant; the distinction is based on legal formation.

This question is part of the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers insurer classifications.

In Oklahoma, asmall group health insurance planis defined under Title 36 O.S. § 6512 as coverage for employers with2 to 50 employees, aligning with federal standards under the Affordable Care Act (ACA). Companies with more than 50 employees are considered large groups and subject to different regulations.

Option A: Incorrect. 2 employees is the minimum for a small group plan, not the maximum.

Option B: Incorrect. 10 employees is below the maximum limit.

Option C: Incorrect. 40 employees is within the small group range.

Option D: Correct. A company with more than 50 employees is not eligible for a small group plan.

TheHealth Insurance Portability and Accountability Act (HIPAA)includes provisions from the Newborns’ and Mothers’ Health Protection Act (NMHPA) of 1996, which mandates that group health plans cannot restrict hospital stays for childbirth to less than 48 hours for a vaginal delivery or 96 hours for a cesarean section. This federal law applies to group health insurance plans in Oklahoma and ensures minimum coverage for maternity care.

Option A: Incorrect. COBRA allows continuation of group health coverage after certain events but does not mandate maternity stay durations.

Option B: Incorrect. Medicaid is a state-federal program for low-income individuals, not a law mandating hospital stays for childbirth.

Option C: Correct. HIPAA, via the NMHPA, guarantees the 48-hour hospital stay for regular deliveries.

Option D: Incorrect. ERISA governs employee benefit plans but does not specifically address maternity hospital stays.

This question is part of the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers federal and state laws affecting health insurance.

Long-Term Care (LTC) insuranceis designed to cover services for individuals with chronic diseases or disabilities who need assistance with activities of daily living (ADLs) or have cognitive impairments. It often includes coverage for nursing home care, home-based care, assisted living, and respite care, as regulated in Oklahoma under Title 36 O.S. § 4426.1.

Option A: Incorrect. Medicare provides limited coverage for skilled nursing or home health care but not comprehensive LTC services.

Option B: Incorrect. Medicaid covers LTC for low-income individuals but is a government program, not a private insurance policy.

Option C: Correct. LTC insurance covers nursing home, home-based, and respite care for chronic conditions.

Option D: Incorrect. Group health insurance covers medical expenses but typically does not include LTC services.

This question falls under the Prometric content outline section on “Long-Term Care (LTC) Policies,” which covers LTC coverage and services.

Anaccelerated death benefit (ADB)provision, regulated in Oklahoma (Title 36 O.S. § 4051), allows an insured with aterminal illness(typically with a life expectancy of 12–24 months) to receive a portion of the life insurance death benefit before death. This provides funds for medical or personal expenses during the insured’s lifetime.

Option A: Incorrect. Disability may trigger other riders (e.g., waiver of premium), not ADB.

Option B: Correct. A terminal illness qualifies for accelerated death benefits.

Option C: Incorrect. Reaching retirement age does not trigger ADB.

Option D: Incorrect. A dependent’s illness is not a qualifying condition for ADB.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers accelerated death benefits.

Medicare Advantage (Part C)plans are private health plans approved by Medicare, includingPPOs,HMOs, andPFFSplans, which provide an alternative to Original Medicare.Social Security Disability Income (SSDI)is a federal program providing income support for disabled individuals, not a Medicare Advantage plan.

Option A: Incorrect. PPO plans are a type of Medicare Advantage plan.

Option B: Incorrect. HMO plans are a type of Medicare Advantage plan.

Option C: Incorrect. PFFS plans are a type of Medicare Advantage plan.

Option D: Correct. SSDI is not a Medicare Advantage plan; it is a disability income program.

This question aligns with the Prometric content outline under “Medicare,” which covers Medicare Advantage plans.

TheOklahoma Life and Health Insurance Guaranty Association, established under Title 36 O.S. § 2025 et seq., protects policyowners of admitted insurers in Oklahoma if the insurer becomesfinancially insolvent. The association provides coverage up to statutory limits (e.g., $300,000 for life insurance death benefits, $100,000 for cash value) to ensure policyholders receive benefits despite the insurer’s insolvency.

Option A: Incorrect. A merger with a foreign insurer does not trigger Guaranty Association protection unless it leads to insolvency.

Option B: Correct. The Guaranty Association protects policyowners when an admitted insurer becomes financially insolvent.

Option C: Incorrect. Failure to meet capital surplus requirements may lead to regulatory action but does not directly trigger Guaranty Association coverage.

Option D: Incorrect. Depleting loss reserves is a financial issue but not the specific condition for Guaranty Association intervention, which requires insolvency.

This question falls under the Prometric content outline section on “State Insurance Statutes, Rules, and Regulations,” which includes knowledge of the Guaranty Association.

Theownership provisionin a life insurance policy specifies that the policyowner (who may or may not be the insured) holds all rights and privileges during the insured’s lifetime, including changing beneficiaries, borrowing against cash value, or surrendering the policy. This is standard in Oklahoma’s Insurance Code (Title 36 O.S. § 4001 et seq.). Beneficiaries have no rights until the insured’s death, and the insured’s family has no automatic rights unless designated as owners.

Option A: Incorrect. The insured has no ownership rights unless they are also the policyowner.

Option B: Correct. The policyowner holds all rights and privileges.

Option C: Incorrect. The insured’s family has no inherent rights unless they are the policyowner.

Option D: Incorrect. Beneficiaries have rights only after the insured’s death.

An individual insurance application typically requires signatures from theapplicant(the person applying for the policy), theinsured(if different from the applicant, e.g., a parent applying for a child), and theproducer(to certify the information provided). Theinsurerdoes not sign the application, as their acceptance is indicated by issuing the policy, per Oklahoma’s insurance application processes (Title 36 O.S. § 1435.2).

Option A: Incorrect. The applicant’s signature is required to confirm the application details.

Option B: Incorrect. The insured’s signature is required if they are not the applicant.

Option C: Incorrect. The producer’s signature is required to verify the application process.

Option D: Correct. The insurer’s signature is not required on the application.

This question falls under the Prometric content outline section on “Underwriting,” which covers application requirements.

In insurance underwriting, individuals are classified based on their risk profile. Asubstandard riskis an applicant who, due to health issues, hazardous habits (e.g., smoking), or high-risk occupations (e.g., stunt performer), cannot be insured at standard rates. These individuals may be offered coverage at higher premiums or with exclusions, as outlined in standard underwriting practices and Oklahoma’s regulations (Title 36 O.S. § 1204).

Option A: Incorrect. “Rating risk” is not a standard underwriting term.

Option B: Incorrect. A standard risk qualifies for standard rates with average risk.

Option C: Incorrect. A preferred risk qualifies for lower-than-standard rates due to low risk.

Option D: Correct. A substandard risk is not acceptable at standard rates due to higher risk factors.

This question aligns with the Prometric content outline under “Underwriting,” which covers risk classification.

Ajoint life policy(first-to-die) covers both spouses under a single contract and pays the death benefit upon thefirst spouse’s death, as defined in Oklahoma’s life insurance regulations (Title 36 O.S. § 4002). This is often used for financial protection needs like mortgages.

Option A: Incorrect. “Dual capacity” is not a standard life insurance term.

Option B: Incorrect. Family term covers dependents but is not specific to first-to-die spousal coverage.

Option C: Incorrect. Whole life is a permanent policy type, not inherently joint.

Option D: Correct. A joint life policy pays on the first spouse’s death.

In life and health insurance policies with family or dependent coverage riders, Oklahoma insurance regulations typically allow a 31-day period for the insured to notify the insurer of a newly-born child to add them to the policy for continued coverage. This aligns with standard provisions for automatic coverage of newborns, which often provide temporary coverage from birth (e.g., for 31 days) before requiring formal notification and premium adjustment to maintain coverage.

Option A: Correct. The insured has 31 days to notify the insurer to add a newly-born child, consistent with standard policy provisions and Oklahoma regulations.

Option B: Incorrect. 30 days is not the standard timeframe in Oklahoma for this purpose.

Option C: Incorrect. 21 days is too short and not aligned with typical insurance provisions.

Option D: Incorrect. 14 days is insufficient for the notification period in most policies.

This question is part of the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers dependent coverage and policy provisions.

Thecoordination of benefits (COB)provision, regulated in Oklahoma (O.A.C. 365:10-5-4), prevents overinsurance by establishing which group health plan isprimary(pays first) and which issecondary(pays remaining covered expenses) when an insured is covered by multiple plans. This ensures claims are paid efficiently without exceeding the total expense. While COB includes rules for dependent children (e.g., the “birthday rule”), its primary purpose is broader, covering all dual-coverage scenarios.

Option A: Incorrect. COB focuses on payment allocation, not ensuring treatment.

Option B: Correct. COB determines payment responsibilities between primary and secondary insurers.

Option C: Incorrect. Determining dependent coverage is a subset of COB, not its primary purpose.

Option D: Incorrect. COB does not protect secondary insurers from paying; it defines their payment role.

The Oklahoma Unfair Claims Settlement Practices Act, under Title 36 O.S. § 1250.5, defines practices that constitute unfair or deceptive acts in the settlement of insurance claims. Knowingly misrepresenting pertinent facts or policy provisions related to coverage to a claimant is explicitly listed as an unfair practice, as it misleads policyholders and undermines fair claim handling.

Option A: Correct. Misrepresenting facts or policy provisions is an unfair claims settlement practice under Oklahoma law.

Option B: Incorrect. There is no specific 45-day requirement to interview parties in the Act; timelines relate to acknowledging or settling claims.

Option C: Incorrect. Maintaining an audit trail is a best practice but not explicitly an unfair claims settlement practice.

Option D: Incorrect. Incomplete policy notes are not specifically cited as an unfair practice under the Act.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers unfair claims practices.

TheConsolidated Omnibus Budget Reconciliation Act (COBRA), as regulated under federal law (29 U.S.C. § 1161 et seq.), requires employers with20 or more employeesto offer continuation of group health insurance coverage to employees and their dependents after certain qualifying events (e.g., termination of employment). This applies to private-sector employers and is enforced in Oklahoma.

Option A: Correct. COBRA applies to employers with 20 or more employees.

Option B: Incorrect. 30 employees is not the threshold.

Option C: Incorrect. 31 employees is not the specific requirement.

Option D: Incorrect. 50 employees is unrelated to COBRA’s threshold.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers federal laws like COBRA.

According to IRS guidelines (Publication 525), disability benefits from a group policy paid for by the employer are consideredtaxable incometo the employee because the premiums were not included in the employee’s taxable income. If the employee paid the premiums with after-tax dollars, the benefits would be tax-free.

Option A: Incorrect. Benefits are taxable if the employer paid the premiums.

Option B: Incorrect. Disability benefits are not deductible from gross income.

Option C: Correct. The benefits are taxable income.

Option D: Incorrect. Benefits are subject to income tax, not just Social Security or FUTA taxes.

Long-Term Care (LTC) policies cover services for individuals with chronic conditions or disabilities, such as assistance with activities of daily living. Oklahoma regulations (Title 36 O.S. § 4426.1) allow LTC policies to exclude coverage for conditions like alcoholism or drug addiction, acts of war (especially military service), and self-inflicted injuries, as these are considered high-risk or intentional. However,Alzheimer’s diseaseis a core condition typically covered by LTC policies, as it is a common cause of long-term care needs.

Option A: Incorrect (excluded). Alcoholism or drug addiction is often excluded unless treatment is completed.

Option B: Incorrect (excluded). Acts of war, especially in military service, are standard exclusions.

Option C: Incorrect (excluded). Self-inflicted injuries are excluded as intentional acts.

Option D: Correct (not excluded). Alzheimer’s disease is typically covered by LTC policies.

Health Maintenance Organizations (HMOs) focus on preventive and essential medical care within a network.Adult routine eye examinationsare often excluded from HMO coverage, as they are considered non-essential or covered under separate vision plans. Other services like emergency care, physical exams, and surgeries are typically covered, as per Oklahoma’s managed care regulations (Title 36 O.S. § 652 et seq.).

Option A: Incorrect. Out-of-area emergency services are generally covered by HMOs.

Option B: Correct. Adult routine eye examinations are often excluded or require separate coverage.

Option C: Incorrect. Physical examinations are typically covered as preventive care.

Option D: Incorrect. In-patient surgeries are covered as essential medical services.

Under Oklahoma’s Insurance Code (Title 36 O.S. § 1435.2),transacting insuranceincludes activities such as soliciting or selling insurance, engaging in preliminary negotiations for insurance contracts, and delivering insurance contracts or collecting premiums.Gathering prospective buyer information(e.g., lead generation) is not considered transacting insurance unless it involves direct solicitation or negotiation.

Option A: Incorrect (is transacting). Selling insurance is a core part of transacting insurance.

Option B: Incorrect (is transacting). Preliminary negotiations are included in transacting insurance.

Option C: Incorrect (is transacting). Delivering insurance contracts is part of transacting insurance.

Option D: Correct (is not transacting). Gathering prospective buyer information alone does not constitute transacting insurance.

This question falls under the Prometric content outline section on “State Insurance Statutes, Rules, and Regulations,” which covers the definition of transacting insurance.

Under Oklahoma law (Title 36 O.S. § 4107), individuals covered by a group life insurance policy have the right to designate a beneficiary and, upon termination of employment or group membership, the right toconvertthe group coverage to an individual life insurance policy without evidence of insurability, typically within 31 days. This conversion right ensures continued coverage.

Option A: Incorrect. Group life policies typically do not have cash surrender value for individual insureds.

Option B: Incorrect. Converting premiums to a different policy is not a standard right.

Option C: Incorrect. Remaining insured after termination requires COBRA (for health) or conversion, not automatic continuation.

Option D: Correct. The insured has the right to convert to an individual policy upon termination.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers group life insurance rights.

Under Oklahoma’s Insurance Code (Title 36 O.S. § 1435.13), transacting insurance without a valid license, such as after revocation, is afelonypunishable by a fine of up to $5,000, imprisonment for up to 7 years, or both, depending on the severity and intent. This reflects the serious nature of unlicensed insurance activity.

Option A: Incorrect. The fine limit is $5,000 for a felony, not $10,000.

Option B: Correct. The violation is a felony with a fine up to $5,000.

Option C: Incorrect. The violation is a felony, not a misdemeanor, with higher penalties.

Option D: Incorrect. Imprisonment is up to 7 years, not 10 years.