Free FL Life & Health Exam Flashcards

The department, led by the Chief Financial Officer (CFO), that licenses and disciplines insurance agents in Florida and handles consumer assistance. Distinguish it from the Office of Insurance Regulation, which regulates the companies.

Regulates insurance companies in Florida — rate filings, solvency, market conduct, and licensing of viatical/life-settlement providers. OIR operates under the Financial Services Commission.

Composed of the Governor and the full Cabinet (Attorney General, Chief Financial Officer, and Commissioner of Agriculture). It oversees the Office of Insurance Regulation.

The broadest FL life and health line of authority: sell life insurance, health insurance, AND variable annuity contracts. 2-14 = life and variable annuity (no health); 2-40 = health only.

A variable annuity is both an insurance and a securities product. To sell it in Florida the agent must hold a 2-15 (or 2-14) insurance license AND a FINRA securities registration (Series 6 or 7).

60 hours of approved pre-licensing education are required for the 2-15 license, completed within 4 years of application, with a passing end-of-course exam of at least 70%. The completion certificate is valid four years.

A Florida agent's inactive license is automatically terminated if not reactivated within 48 months (4 years). During inactivity the agent may not transact insurance business.

14 days for new life insurance policies — longer than the 10-day standard in many states. During this period the owner can return the policy for a full refund of premiums paid.

Free-look is 30 days for Medicare supplement and long-term care policies, and is extended to 21 days for annuity contracts purchased by individuals age 65 or older — an enhanced senior consumer protection.

At least 31 days for a premium due after the first premium. The policy stays in full force during the grace period; a death during grace is paid less the premium owed.

After a life policy has been in force for 2 years during the insured's lifetime, the insurer cannot contest it for material misrepresentation on the application (fraud exceptions are narrow).

Governs life/annuity replacement. The agent must give a signed comparison summary of the existing vs. proposed policy, and the replacing insurer must notify the existing insurer within 5 business days.

Protects the consumer from losing benefits when switching policies (new contestability/suicide periods, surrender charges) and gives the existing insurer a chance to conserve the policy.

The agent must have reasonable grounds to believe an annuity recommendation is suitable based on the consumer's financial situation, needs, and objectives, with heightened protections for senior consumers.

Viatical and life settlement providers and brokers must be licensed by the OIR. A policy generally must be in force at least 2 years before it can be viaticated, unless the insured is terminally or chronically ill.

Pure death-benefit protection for a set term with no cash value. Lowest initial premium; level term keeps the premium and face level for the term. Coverage ends if the term expires without conversion or renewal.

Permanent coverage with a level premium, guaranteed cash value, and a guaranteed death benefit to age 100/121. Cash value grows tax-deferred and can be borrowed against.

Flexible-premium permanent insurance separating the cost of insurance, expenses, and an interest-crediting cash account. The owner can adjust premium and death benefit (Option A level vs. Option B increasing).

Permanent life insurance whose cash value is invested in separate-account subaccounts chosen by the owner. Cash value and (potentially) death benefit vary with investment performance; requires a securities license to sell.

Cash surrender value, reduced paid-up insurance, and extended term insurance. Reduced paid-up gives lifetime coverage at a lower face; extended term keeps the full face for a limited time.

Under Florida's Standard Nonforfeiture Law, if the owner stops paying premiums and elected no option, the default is extended term insurance — original face amount for a limited period using the cash value.

Cash, reduce premium, accumulate at interest, paid-up additions, and one-year term. Dividends are a return of overcharged premium and are generally not taxable income.

How death proceeds are paid: lump sum, interest only, fixed period, fixed amount, and life income (with or without period certain). Life income guarantees payments for the payee's lifetime.

Accelerated death benefit advances part of the face amount for a terminal/chronic illness. Waiver of premium keeps the policy in force without premiums if the insured becomes totally disabled (after a waiting period).

Fixed: guaranteed minimum rate, insurer bears investment risk. Variable: separate-account subaccounts, owner bears market risk (securities product). Indexed: credited interest tied to a market index with a floor/cap.

Accumulation: premiums paid in and earnings grow tax-deferred. Payout/annuitization: the contract is converted to a stream of income — life, life with period certain, joint and survivor, or fixed period/amount.

Growth is tax-deferred. Withdrawals before annuitization are taxed LIFO (earnings out first, ordinary income), plus a 10% IRS penalty before age 59½. Annuitized payments use the exclusion ratio.

A declining penalty for withdrawing more than the contract's free-withdrawal amount during the surrender period. Suitability concerns arise when replacing an annuity still subject to surrender charges.

Replaces a portion of earned income when the insured cannot work due to sickness or injury. Key terms: elimination period (deductible in time), benefit period, and own-occupation vs. any-occupation definition of disability.

The waiting period after a disability begins before benefits are payable (e.g., 30/60/90 days). A longer elimination period lowers the premium; it functions like a time deductible.

Florida requires individual health policies to be guaranteed renewable: the insurer must renew as long as premiums are paid, though it may change premiums by class — not by the individual's claims.

Under the Affordable Care Act, which supersedes state law, pre-existing condition exclusions are prohibited for ACA-compliant health plans, including individual policies sold in Florida.

Florida follows the NAIC LTC Model Act: insurers must offer inflation protection, policies must be guaranteed renewable, and a 30-day free-look applies. Covers nursing home, assisted living, and home care.

Every Medigap insurer must offer Plan A (core benefits). A 6-month open enrollment begins when the person is 65+ and enrolled in Medicare Part B; during it the insurer must accept applicants guaranteed-issue with no underwriting.

Medigap supplements Original Medicare by paying its gaps (deductibles/coinsurance). Medicare Advantage (Part C) replaces Original Medicare with a private plan; you cannot use a Medigap policy with Medicare Advantage.

Applies to small employers with 1 to 50 eligible employees, providing small-group protections such as guaranteed availability. COBRA (federal) applies at 20+ employees for up to 18 months of continuation.

A terminating group-plan member can usually convert to an individual policy without evidence of insurability if applied for within a set period (often 31 days) after group coverage ends.

Pays covered obligations when a member insurer is insolvent: generally $300,000 life death benefit, $300,000 annuity, and $500,000 health. Funded by assessments on member insurers, not state taxes.

Florida prohibits agents and insurers from using the existence of the guaranty association in advertising or as a sales inducement. Solvency, not the guaranty fund, should drive carrier selection.

Prohibits misrepresentation, false advertising, defamation of insurers, boycott/coercion, unfair claims practices, twisting, churning, sliding, and unlawful rebating.

Inducing a policyholder to drop or replace an existing policy through misrepresentation or an incomplete/misleading comparison. A serious violation of the Unfair Insurance Trade Practices Act.

Using the cash value, dividends, or other values of an in-force policy to buy additional coverage from the SAME insurer when doing so is not in the policyholder's best interest. Prohibited in Florida.

Charging a consumer for coverage they did not request, or representing that an additional product is required by law when it is not, in connection with an insurance sale. A prohibited Florida unfair practice.

An agent who accepts premium but fails to remit it to the insurer commits misappropriation/conversion — a mandatory ground for license denial, suspension, or revocation in Florida.

Premiums collected belong to the insurer or insured. The agent must hold and remit them in trust; commingling premium funds with personal funds breaches the agent's fiduciary responsibility.

Must exist at the time of application (not at the time of death, unlike property insurance). A person has unlimited insurable interest in their own life; others need a financial or close-family relationship.

A representation is believed-true to the applicant's best knowledge; a warranty is guaranteed true. Concealment is intentionally withholding a material fact. Material misstatements can void coverage within contestability.

Adhesion: insurer drafts it; ambiguity favors the insured. Aleatory: unequal value depending on chance. Unilateral: only the insurer makes an enforceable promise. Conditional: payment depends on conditions being met.

Avoidance, retention, sharing, reduction (loss control), and transfer. Insurance is a risk-transfer mechanism handling pure (loss-or-no-loss) risk, not speculative risk.

Underwriting is selecting and classifying risks (preferred, standard, substandard, declined). The agent performs field underwriting by gathering accurate application information and observing the applicant.