Free VA L&H Exam Flashcards

Virginia's insurance regulator; a constitutional body holding combined legislative, executive, and judicial power. Three Commissioners are elected by the Virginia General Assembly (not by voters or the Governor) to staggered 6-year terms.

The Commissioner of Insurance heads the Bureau of Insurance (BOI), the SCC's operating arm for licensing, rate/form review, market conduct exams, and consumer services. The Commissioner is appointed by the SCC's three Commissioners, not elected or appointed by the Governor.

The primary source of Virginia insurance statute ("Insurance"). Companion administrative regulations sit in Title 14 of the Virginia Administrative Code (14 VAC). Title 8 covers unrelated civil remedies and is a common exam distractor.

Domestic = chartered in Virginia (primary BOI solvency oversight). Foreign = chartered in another U.S. state (needs a Certificate of Authority to operate in VA). Alien = chartered outside the U.S. Any insurer transacting Virginia business needs a Certificate of Authority or is an unauthorized insurer.

Delivered by Prometric (testing center or ProProctor remote proctoring): 150 questions (140 scored + 10 unscored pretest), 150 minutes, 70% combined passing score, $35 fee per attempt. Virginia requires NO mandatory pre-licensing education.

New resident applicants must complete electronic fingerprinting through Fieldprint (about $34.95, transmitted to the Virginia State Police and FBI, valid 90 days). After passing the exam, apply electronically via NIPR or Sircon ($15 BOI application fee) within 12 months, or you must retest.

16 CE hours per 2-year biennium for a single license type (at least 3 hours must be ethics); 24 hours for two or more license types (at least 8 hours tied to each type). No more than 75% of required credits may come from insurer/agency-sponsored courses, and excess hours do not carry over.

Twisting: misrepresentation induces a policyholder to replace coverage with a DIFFERENT insurer. Churning: the same pattern within the SAME insurer to generate new commissions. Rebating: offering an inducement not stated in the contract. Coercion: using a threat to force a purchase. All are prohibited unfair trade practices under Title 38.2.

10 days for a standard individual life policy; extended to 30 days for any policy that replaces existing coverage. The clock starts at policy delivery, and a timely return gets a full, unconditional premium refund.

Virginia requires a maximum 2-year incontestability period running from the issue date. After 2 years in force during the insured's lifetime, the insurer can no longer contest the policy for misrepresentation — except for nonpayment of premium or impersonation/fraud.

May not exceed 2 years from issue. If the insured dies by suicide within that window, the insurer's liability is limited to a refund of premiums paid; after 2 years, suicide is covered like any other cause of death.

Virginia mandates a 31-day grace period regardless of premium mode. The policy stays fully in force, so a death claim during grace is paid — but the insurer deducts the unpaid premium from the death benefit.

If age or sex is misstated on the application, Virginia law requires the death benefit to be ADJUSTED to what the premium paid would have purchased at the correct age — the contract is never voided for this error alone.

Pure death-benefit protection for a set period at level premiums; builds no cash value. The least expensive way to buy a large death benefit; coverage ends unless renewed or converted before the term expires.

Permanent coverage with level premiums for life and guaranteed, steadily growing cash value. Typically endows at age 100 (or per contract); cash value can be borrowed against or surrendered.

Permanent coverage with flexible premiums and an adjustable death benefit. Cash value grows at a credited interest rate (often with a guaranteed minimum); the owner can skip or vary payments as long as cash value covers the policy's cost of insurance.

Permanent coverage where cash value is invested in separate-account sub-accounts chosen by the owner, so cash value (and sometimes the death benefit) fluctuates with investment performance. It is BOTH insurance and a security — selling it requires a FINRA Series 6 or 7 plus the Virginia variable life and annuity line of authority.

Waiver of Premium: waives premiums if the insured becomes disabled. Payor Rider: waives premiums if the premium-paying adult dies or is disabled (juvenile policies). Accelerated Death Benefit: pays part of the death benefit early for a qualifying terminal illness. Guaranteed Insurability: lets the owner buy additional coverage at set future dates with no new medical exam.

Cash Surrender: take the cash value as a lump sum. Reduced Paid-Up: convert to a smaller, fully paid permanent policy. Extended Term: cash value buys term coverage at the original face amount for as long as it lasts — this is the automatic DEFAULT option if the owner makes no election.

Interest Only: insurer holds proceeds and pays interest. Fixed Period: equal payments over a chosen number of years. Fixed Amount: set payments continue until proceeds plus interest are exhausted. Life Income: payments continue for the beneficiary's lifetime, optionally with a period-certain or refund guarantee.

A lapsed Virginia life policy may be reinstated within 3 years if the owner proves continued insurability and pays all overdue premiums plus interest. Reinstatement starts a new 2-year contestable period for statements made on the reinstatement application.

Fixed Annuity: insurer guarantees a minimum interest rate; it is an insurance product only, sold under the regular life/annuity line of authority. Variable Annuity: premiums go into sub-accounts that carry investment risk; it is ALSO a security, requiring a FINRA Series 6 or 7 plus the Virginia variable life/annuity line of authority.

Virginia adopted the NAIC best-interest model with four producer obligations: Care (reasonable basis the recommendation fits the consumer), Disclosure (role, products offered, compensation), Conflict of Interest (identify, avoid, or manage), and Documentation (written record of the recommendation's basis).

Before recommending an annuity, a producer must gather the consumer's age, income, financial situation, liquidity needs, objectives, risk tolerance, and existing holdings. Virginia also requires a one-time 4-credit annuity training course plus product-specific training from each issuing insurer before soliciting annuities.

When replacement is involved (14VAC5-30), the producer must ask about existing coverage, give the applicant a signed "Important Notice: Replacement of Life Insurance or Annuities," list the policies being replaced, and leave copies of sales materials. The replacing insurer must notify each existing insurer within 5 business days of receiving the application.

A replacement policy carries an enhanced 30-day free look (vs. the standard 10 days). It also starts a brand-new 2-year incontestability period and a new 2-year suicide exclusion — the consumer loses any already-elapsed protection on the surrendered policy.

Lump-sum life death benefits are income-tax-free to the beneficiary; only the interest portion of installment/interest-only settlement payments is taxable. Non-qualified annuity withdrawals are taxed LIFO (gains out first, ordinary income), with a 10% federal penalty before age 59½. Annuitization uses an exclusion ratio to return basis tax-free; a 1035 exchange moves funds between annuity/life contracts tax-free.

Requires care within a defined network and a primary care physician (PCP) referral to see specialists. Lowest premiums among managed-care plans but least flexibility; out-of-network care generally isn't covered except emergencies.

Allows in-network and out-of-network care with no PCP referral required. Higher premiums than an HMO in exchange for greater provider flexibility; out-of-network care costs more in coinsurance.

POS (Point of Service): a hybrid of HMO and PPO — needs a PCP/referral like an HMO but allows out-of-network care at higher cost like a PPO. EPO (Exclusive Provider Organization): network-only care like an HMO, but typically no referral is required.

Deductible: amount the insured pays out-of-pocket before the plan starts paying. Coinsurance: a percentage of costs shared between insured and insurer after the deductible (e.g., 80/20). Copay: a flat dollar fee due at each visit or service, regardless of the deductible.

The annual cap on what an insured pays in deductibles, coinsurance, and copays for covered, in-network services. Once reached, the plan pays 100% of covered costs for the rest of the plan year.

10 days for an individual accident-and-sickness (health) policy — the insured may return the policy within 10 days of delivery for a full premium refund. Contrast with the 30-day free look on long-term care policies.

Every individual and small-group plan must cover 10 categories: ambulatory services, emergency services, hospitalization, maternity/newborn care, mental health/substance use, prescription drugs, rehabilitative services, lab services, preventive/wellness care, and pediatric services (incl. oral/vision).

Guaranteed Issue: the insurer must ACCEPT all applicants in the individual/small-group market regardless of health status — about GETTING a policy. Guaranteed Renewable: the insurer must RENEW the policy (premiums may rise by class) — about KEEPING a policy already in force.

Notice of claim: within 20 days of loss. Claim forms: insurer furnishes within 15 days of notice. Proof of loss: within 90 days of the loss. Legal action: no suit sooner than 60 days, and none after 3 years from proof of loss.

Own-Occupation: benefits pay if the insured cannot perform the duties of their OWN specific occupation, even if able to work elsewhere. Any-Occupation: benefits pay only if the insured cannot perform ANY occupation reasonably suited to their training and experience — a stricter, harder-to-trigger standard.

Elimination Period: the waiting period between disability onset and when benefit payments begin (like a deductible measured in days). Benefit Period: the maximum length of time benefits will be paid once they start (e.g., 2 years, 5 years, or to age 65).

Noncancelable: premium and benefits locked for the policy term; insurer cannot change either or refuse renewal — strongest protection. Guaranteed Renewable: insurer must renew but may raise premiums by class (never singling out one insured). Conditionally/Optionally Renewable: renewal only on stated conditions or at the insurer's option.

If the INSURED pays DI premiums with after-tax dollars, benefits are received income-tax-free. If the EMPLOYER pays the premium and does not include it in the employee's income, benefits received are TAXABLE. 'Who paid the premium' determines the tax treatment.

Federal COBRA: applies to employers with 20+ employees; continuation coverage runs 18-36 months. Virginia Mini-COBRA: applies to small employers with 2-19 employees; continuation runs up to 12 months. Employer size determines which track applies.

The employer/insurer must send the mini-COBRA notice within 14 days of the qualifying event; the employee then has 31 days from that notice to elect continuation. Under COBRA continuation (federal or VA mini-COBRA), the premium charged can be up to 102% of the group cost.

When group life coverage ends (e.g., employment termination), the member has 31 days to convert the group coverage to an individual permanent policy WITHOUT evidence of insurability, though at individual rates.

Plans are categorized by actuarial value — the average share of costs the plan pays: Bronze (~60%), Silver (~70%), Gold (~80%), Platinum (~90%). Lower actuarial value means lower premiums but higher out-of-pocket cost-sharing at the point of care.

Virginia operates its own State-Based Marketplace at vainsurancemarketplace.gov (launched for plan year 2024) rather than using HealthCare.gov. Premium tax credits scale with income to lower monthly premiums; cost-sharing reductions are available only on Silver-tier plans.

Part A: hospital/inpatient coverage. Part B: medical/outpatient coverage. Part C (Medicare Advantage): private-plan alternative bundling A+B (often D). Part D: prescription drug coverage. Medigap supplements Original Medicare (A+B) only — it cannot be paired with Medicare Advantage.

A 6-month, ONE-TIME window beginning the first day of the month the person is both age 65+ AND enrolled in Medicare Part B. During OEP, Medigap is guaranteed issue with no health-based rate-up and no pre-existing condition exclusion, for any plan A-N offered.

Virginia's Birthday Rule (effective July 1, 2025): within 60 days after the enrollee's birthday, they may switch, guaranteed issue, to a Medigap plan with EQUAL OR LESSER benefits (not an upgrade). Separately, federal guaranteed-issue rights (e.g., losing group coverage) generally give 63 days to buy a new Medigap policy.

LTC policies get a 30-day free look (vs. 10 days for life/health) and must be guaranteed renewable. Benefits trigger when the insured cannot perform 2 of 6 Activities of Daily Living (ADLs) or has severe cognitive impairment. Virginia's Partnership Program gives dollar-for-dollar Medicaid asset protection equal to benefits the policy pays out.

If a member insurer becomes insolvent, VALIFEGA caps benefits at: $300,000 life death benefit, $100,000 cash value, $250,000 annuity, $500,000 health insurance benefits, and a $350,000 aggregate limit per individual life for combined life/annuity benefits. Guaranty Association coverage may NEVER be used as a sales inducement or advertising point.