Accident-and-Health-or-Sickness-Producer MarylandAccident and Health or Sickness Producer Series 20-24 Exam Question and Answers

Dental insurance (Insurance Article, § 15-201) covers preventive care, X-rays, and root canals, but excludes treatment started before the eligibility date to avoid claims for pre-existing work. This ensures coverage applies only to services initiated under the policy.

References:Maryland Insurance Article, § 15-201; MIA dental insurance standards.

The Maryland Insurance Administration (MIA) is a state agency under Insurance Article, § 2-101, regulating insurance within Maryland. The federal government oversees broader laws, the NAIC is a voluntary group, and the General Assembly legislates, but the MIA operates as an executive state entity.

References:Maryland Insurance Article, § 2-101; MIA official structure.

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.

Comprehensive and Detailed Step by Step Explanation:Thefree-look periodis a consumer protection mechanism allowing policyholders to cancel a policy within a specific period for a full refund.

10 days (A):Maryland law requires a minimum free-look period of 10 days for life insurance policies, allowing buyers to review the policy without financial obligation.

31 days (B), 45 days (C), and 60 days (D):These exceed Maryland’s statutory minimum and are not standard requirements unless specifically offered by the insurer.

References:Maryland Free-Look Provisions, COMAR 31.09.09, and Maryland Consumer Protection Act.

The Maryland Health Insurance Plan (MHIP, Insurance Article, § 15-1301) historically provided coverage for medically uninsurable residents rejected by private insurers, until phased out in 2014 by the ACA. It didn’t target low-income (Medicaid), seniors (Medicare), or children (CHIP) specifically.

References:Maryland Insurance Article, § 15-1301 (historical); MIA MHIP documentation.

Producers (Insurance Article, § 10-126) typically collect the initial premium with the application and forward it to the insurer, streamlining the process, unlike direct payment, billing, or bank drafts, which are less common initially.

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

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:Misrepresentation involves providing false, misleading, or incomplete information about a policy:

Failed to disclose exclusions of the policy (A):Correct. Not informing the insured about policy exclusions misrepresents the coverage and violates Maryland law.

Denied a claim for failure to prove damages (B):This relates to claims handling and is not misrepresentation.

Required written notice of loss (C):This is a legitimate policy requirement, not misrepresentation.

Issued a full settlement check (D):Standard claims settlement practice when agreed upon; not related to misrepresentation.

References:Maryland Insurance Article §27-303, Misrepresentation and False Advertising Standards, COMAR 31.15.03.

Reasonable and customary charges are the typical fees for a procedure in a geographic area, used to set reimbursement levels (Insurance Article, § 15-1005). Preapproved charges require prior authorization, utilization charges relate to service reviews, and scheduled charges are fixed fees, none of which define this standard.

References:Maryland Insurance Article, § 15-1005; MIA health insurance guidelines.

Maryland law (Insurance Article, § 15-401) requires coverage for handicapped dependent children beyond standard age limits if they’re incapable of self-sustaining employment and dependent on the insured. This extends for life, or as long as the policy is active, not limited to ages 19 or 25, nor tied to self-sustainability.

References:Maryland Insurance Article, § 15-401; MIA dependent coverage regulations.

SHOP Exchange (Insurance Article, § 31-101) serves employers with 1-50 employees; a 200-employee firm exceeds this, so the navigator should refer them to a producer for large group plans, not assist via SHOP, refer personally, or send to the MIA.

References:Maryland Insurance Article, § 31-101; MIA SHOP Exchange guidelines.

Disability income policies (Insurance Article, § 15-201) cover accidents, cancer, and diseases, but exclude intentionally self-inflicted injuries as non-accidental, aligning with standard exclusions to prevent abuse.

References:Maryland Insurance Article, § 15-201; MIA disability insurance standards.

Commissions (Insurance Article, § 10-103) require a license, but a producer earning a commission while licensed can be paid post-termination. Unlicensed individuals or brokers can’t legally receive commissions.

References:Maryland Insurance Article, § 10-103, § 10-130, § 3-306; MIA commission rules.

Medigap marketing materials (Insurance Article, § 15-912) require MIA approval, except for government publications (e.g., CMS’s “Medicare & You”), which are exempt as official federal resources. Insurer-approved ads still need state review.

References:Maryland Insurance Article, § 15-912; MIA Medigap advertising rules.

Federal tax rules (IRC § 105, § 106) make employer-paid medical benefits (major medical, dental, HMO) tax-free, but disability income benefits are taxable if employer-funded, as they replace income.

References:IRC § 105, § 106; Maryland Insurance Article, § 15-1201; MIA tax guidelines.

Medical expense insurance covers necessary treatments like chronic pain, eating disorders (under parity laws, § 15-802), and undiagnosed conditions if treated, but excludes intentionally self-inflicted injuries (e.g., suicide attempts) as non-accidental losses (Insurance Article, § 15-201).

References:Maryland Insurance Article, § 15-201, § 15-802; MIA health insurance exclusions.

For non-guaranteed issue long-term care policies (Insurance Article, § 18-107), a physical exam report is required for applicants 80+ to assess risk, not family consent, living wills, or power of attorney.

References:Maryland Insurance Article, § 18-107; MIA LTC underwriting rules.

The MIA (Insurance Article, § 2-207) can request and access producer records for audits or investigations, overriding privacy for regulatory purposes. Court orders or NAIC approval aren’t required, and access is a standard power.

References:Maryland Insurance Article, § 2-207; MIA regulatory authority.

The Maryland Benchmark Plan (Insurance Article, § 31-115) defines EHBs for individual and small group plans sold via the Maryland Health Connection Exchange, not Medicaid, Medigap, or pre-2014 off-Exchange plans.

References:Maryland Insurance Article, § 31-115; MIA ACA guidelines.

A producer (Insurance Article, § 1-101(aa)) solicits and sells insurance primarily for commissions,distinguishing them from clerical staff, enrollment facilitators, or salaried insurer employees. This reflects their independent role.

References:Maryland Insurance Article, § 1-101(aa), § 10-101; MIA producer definitions.

Comprehensive and Detailed Step by Step Explanation:The Maryland Insurance Administration (MIA) is authorized to inspect the records of insurers and agencies to ensure compliance with laws:

Yes, because of the powers defined by state laws (B):Correct. The MIA has broad authority under Maryland law to audit, inspect, and investigate insurance business practices.

No, because of privacy considerations (A):Incorrect. Regulatory inspections are exempt from privacy concerns when conducted lawfully.

Only an officer of the court (C):Not required; the MIA operates independently within its legal mandate.

Public domain records (D):Incorrect; insurance records are not publicly accessible unless required by law.

References:Maryland Insurance Article §2-209, COMAR 31.03.01, and Regulatory Oversight Guidelines.

The entire contract provision (Insurance Article, § 15-207) defines the policy and application as the full agreement, barring producers from altering or waiving terms. Only the insurer has such authority.

References:Maryland Insurance Article, § 15-207; MIA policy standards.

Reasonable and customary charges (Insurance Article, § 15-1005) reflect average fees for procedures in a specific geographic area (e.g., 80th percentile), ensuring fair reimbursement. Actuarial tables, studies, and national surveys aren’t the primary basis.

References:Maryland Insurance Article, § 15-1005; MIA health insurance guidelines.

Federal law (18 U.S.C. § 1033) criminalizes embezzlement by a producer, a felony punishable by prison if interstate commerce is affected. Nonresident licensing is a state issue, inducing applications is legal, and suing is a civil action, not criminal.

References:18 U.S.C. § 1033; MIA producer conduct alignment.