Free Insurance Licensing Ok-Life-Accident-and-Health-or-Sickness-Producer Practice Exam with Questions & Answers

TheUniform Electronic Transactions Act (UETA)is a model law adopted by Oklahoma (codified in Title 12A O.S. § 15-101 et seq.) that governs the use of electronic records and signatures in transactions, including insurance. It allows insurance documents to be stored, delivered, or presented electronically, provided they meet UETA’s requirements for consent, accessibility, and record retention. Oklahoma’s Insurance Code incorporates these standards for electronic transactions in insurance.

Option A: Incorrect. The Uniform Commercial Code (UCC) governs commercial transactions, such as sales of goods, not electronic insurance documents.

Option B: Correct. The Uniform Electronic Transactions Act provides the legal framework for electronic insurance documents in Oklahoma.

Option C: Incorrect. The Oklahoma Insurance Commissioner enforces regulations but does not set the legal standard for electronic transactions.

Option D: Incorrect. The National Association of Insurance Commissioners (NAIC) develops model laws but does not directly govern Oklahoma’s electronic transaction requirements.

This question is part of the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers Oklahoma’s laws on insurance transactions.

Underwriting is the process by which an insurer evaluates an applicant’s risk profile to determine whether to issue a policy, what coverage to offer, and at what premium rate. This involves assessing factors such as medical history, lifestyle, and financial information to ensure the applicant meets the insurer’s standards.

Option A: Incorrect. Classification refers to grouping applicants into risk categories (e.g., standard, substandard) during underwriting, not the entire process.

Option B: Incorrect. Risk pooling is the practice of spreading risk across a group of policyholders, not the decision to issue a policy.

Option C: Correct. Underwriting is the process of evaluating and deciding whether to issue a policy.

Option D: Incorrect. Selection is a component of underwriting but not the term for the entire process.

This question aligns with the Prometric content outline under “Underwriting,” which covers the principles and processes of risk assessment.

Asurvivorship life policy(also called second-to-die insurance) covers two or more individuals and pays the death benefit upon the death of the last insured person. It is often used for estate planning, as opposed to ajoint life policy, which pays on the first death (Title 36 O.S. § 4002).

Option A: Incorrect. Universal life is a flexible single-life policy, not a multiple-person policy.

Option B: Correct. A survivorship life policy pays on the last insured’s death.

Option C: Incorrect. A joint life policy pays on the first insured’s death.

Option D: Incorrect. An annuity life policy is not a standard term; annuities are separate products.

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.

Theentire contract provision, mandated in Oklahoma for life and health insurance (Title 36 O.S. § 4001 for life, § 4405 for health), specifies that theentire contractconsists of the policy, any attached endorsements or riders, and a copy of theapplicationif endorsed upon or attached to the policy at issuance. This ensures no external documents can alter the agreement unless included. Clauses and provisions are part of the policy itself, while credit reports are used in underwriting but not part of the contract.

Option A: Incorrect. Clauses are components of the policy, not a separate item added to the entire contract.

Option B: Incorrect. Credit reports are underwriting tools, not part of the contract.

Option C: Incorrect. Provisions are part of the policy, not a distinct addition.

Option D: Correct. The application, when attached, is part of the entire contract.

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.

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.

Under Oklahoma law (Title 36 O.S. § 4105), for group life insurance, the insurer issues amaster policyto the group policyowner (e.g., employer). Each insured individual receives acertificate of insurance, which summarizes the coverage provided under the master policy but is not a separate policy itself.

Option A: Incorrect. An individual policy is not issued; the master policy covers the group.

Option B: Correct. A certificate is issued to each insured person under a group life policy.

Option C: Incorrect. An application is part of the enrollment process, not issued to insureds.

Option D: Incorrect. A rider modifies a policy, not issued to insured individuals.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers group life insurance provisions.

Amutual insurance company, as defined in Oklahoma’s Insurance Code (Title 36 O.S. § 105), is owned by its policyholders, not shareholders. Ownership is evidenced byownership of a policy, as policyholders share in the company’s profits through dividends (in participating policies) and have voting rights in the company’s governance.

Option A: Incorrect. Mutual insurers do not issue stock; stock ownership applies to stock insurers.

Option B: Incorrect. Bonds represent debt, not ownership, in any company.

Option C: Correct. Ownership in a mutual insurer is evidenced by holding a policy.

Option D: Incorrect. A certificate of deposit is a banking product, not related to insurer ownership.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers types of insurers and their ownership structures.

Afield underwriter, typically an insurance producer, gathers initial information from applicants to assess their insurability and ensure the application is accurate and complete. A main task is ensuring the accuracy and completeness of an individual’s medical information, as this is critical for the insurer’s underwriting decision. Field underwriters do not approve policies or edit reports to guarantee approval; they facilitate the process by providing reliable data.

Option A: Incorrect. Editing reports to ensure approval is unethical and not a field underwriter’s role.

Option B: Incorrect. Approving policies is the role of the insurer’s underwriting department, not the field underwriter.

Option C: Correct. Ensuring accuracy and completeness of medical information is a key task of a field underwriter.

Option D: Incorrect. Obtaining an MIB report is typically done by the insurer, not the field underwriter.

This question aligns with the Prometric content outline under “Underwriting,” which covers the role of field underwriters.