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Virginia Life, Annuities, and Health Insurance ExaminationSeries 11-01140 scored (10 pretest) questions – 2.5-hour time limit1.0 Insurance Regulation10% (14 items)1.1 LicensingGeneral Provisions and Definitions (38.2-1800)Process (38.2-1819)Types of licenseesAgents (38.2-1800.1(A), 1801, 1814–1815.1, 1817–1820, 1822(A), (B), 1824)Consultants (38.2-1837–1840)Nonresidents (38.2-1836, 1845)Business entities (38.2-1800.1(B), 1820, 1822(C), (D))Viatical Settlements (38.2-1865.1; 6000; 14VAC5-71-20)Exceptions (38.2-1821.1, 1822 (G))MaintenanceDuration and termination (38.2-1825, 1826)Address and/or name changes (38.2-1826(A))Assumed names (38.2-1822(E), (F))Requirement to report felony convictions (38.2-1826(B))Requirement to report other states actions (38.2-1826(C))Continuing education (38.2-1866, 1868.1–1871)Appointment procedures (38.2-1825, 1833–1834.1)Agent's contract with insurer versus agent's appointment with insurerAgent's appointment versus agency's appointmentSolicitation prior to appointmentAppointment requirement after becoming licensedAcknowledgment of appointment/notice to agentRequirement to cease solicitationTermination of appointment/notice to agentTermination of license without active appointmentDisciplinary actionsProbation, suspension, revocation or refusal to issue or renew (38.2-1821, 1831, 1832)Cease and desist order (38.2-219)Penalties (38.2-218, 219, 1823, 1831)1.2 State regulationState Corporation Commission's general duties and powers (38.2-200)Agent regulationActing for an unlicensed insurer (38.2-1802)Record retention (38.2-1809(B))Activities of unlicensed individuals (38.2-1821.1(B), 1822(G); AL 2002-9)Payment and sharing of commissions (38.2-1812)Charging of fees (38.2-310)Illegal compensation; exceptions (38.2-1812.2)Fiduciary capacity (38.2-1813)Responsibility of trust accounts (38.2-1813)Unfair trade practicesMisrepresentation (38.2-502, 512)False advertising (38.2-503)Defamation (38.2-504)Boycott, coercion and intimidation (38.2-505)Unfair discrimination (38.2-508)Rebating (38.2-509)Twisting (38.2-1831(5))Referrals (38.2-1821.1 (B) 8)1
Insurance information and privacy protection (38.2-604, 613.2)1.3 Federal regulationFair Credit Reporting Act (15 USC 1681–1681d)Fraud and false statements (18 USC 1033, 1034)ACA-Related Federal Market Reforms (Article 6, 38.2-3438 through 3454.1)Definitions (38.2-3438)Individual health insurance coverageDependent coverage (38.2-3439)Lifetime and annual limits (38.2-3440)Restrictions relating to premium rates (38.2-3447)Essential health benefits (38.2- 3451)Waiting periods (38.2-3452)1.4 Industry regulationNational Association of Insurance Commissioners (NAIC)2.0 General Insurance6% (8 items)2.1 ConceptsRisk management key termsRiskExposureHazardPerilLossMethods of handling ents of insurable risksAdverse selectionLaw of large numbersReinsurance2.2 InsurersTypes of insurersStock companiesMutual assessment insurersFraternal benefit societiesSelf insurersPrivate versus government insurersAdmitted versus nonadmitted insurersDomestic, foreign and alien insurersFinancial status (independent rating services) and operating resultsMarketing (distribution) systems2.3 Agents and general rules of agencyTypesCaptiveIndependentInsurer as principalAgent of insurerAuthority and powers of agentsExpressImpliedApparentResponsibilities to the applicant/insured2.4 Contracts2
Elements of a legal contractOffer and acceptanceConsiderationCompetent partiesLegal purposeDistinct characteristics of an insurance contractContract of adhesionAleatory contractPersonal contractUnilateral contractConditional contractLegal interpretations affecting contractsAmbiguities in a contract of adhesionReasonable expectationsIndemnityUtmost good oncealmentFraudWaiver and estoppel3.0 Life Insurance Basics6% (8 items)3.1 Insurable interest (38.2-301, 302, 3105)3.2 Personal uses of life insuranceSurvivor protectionEstate creationCash accumulationLiquidityEstate conservation3.3 Determining amount of personal life insuranceHuman life value approachNeeds approachTypes of information gatheredDetermining lump-sum needsPlanning for income needs3.4 Business uses of life insuranceBuy-sell fundingKey personExecutive bonuses3.5 Classes of life insurance policiesGroup versus individualPermanent versus termParticipating versus nonparticipatingFixed versus variable life insurance and annuitiesRegulation of variable products ( FINRA and Virginia) (38.2-3113; 14 VAC 5-20-30, 80)Types of variable products3.6 PremiumsFactors in premium determinationMortalityInterestExpensePremium conceptsNet single premiumGross annual premiumPremium payment mode3
3.7 Agent responsibilitiesRules Governing Advertisement of Life Insurance and Annuities (14VAC 5-41)Solicitation and sales presentations (14 VAC 5-41)Virginia Life, Accident and Sickness Insurance Guaranty Association (38.2-1700, 1715)Policy summaryBuyer's guideReplacement (14 VAC 5-30-40)Use and disclosure of insurance information (38.2-613)Field underwritingNotice of information practices (38.2-604)Adverse underwriting decisions (38.2-610 – 612)Application proceduresRequired signaturesChanges in the applicationConsequences of incomplete applicationsWarranties and representationsCollecting the initial premium and issuing the receiptDisclosures at point of sale (e.g., HIPAA, HIV consent)USA PATRIOT Act/anti-money launderingDeliveryPolicy reviewEffective date of coveragePremium collectionStatement of good health3.8 Individual underwriting by the insurerInformation sources and regulationApplicationAgent reportAttending physician statementInvestigative consumer (inspection) reportMedical Information Bureau (MIB)Medical examinations and lab tests including HIV (38.2-613.01; 14 VAC 5-180-50)Selection criteria and unfair discrimination (38.2-508(1))Discrimination against victims of domestic violence (38.2-508(7))Classification of risksPreferredStandardSubstandardDeclined4.0 Life Insurance Policies10% (14 items)4.1 Term life insuranceLevel termAnnual renewable termLevel premium termDecreasing termIncreasing termReturn of premium4.2 Whole life insuranceOrdinary whole lifeContinuous premium (straight life)Limited paymentInterest sensitive/current assumptionIndexed lifeEquity indexed lifeSingle premium4
4.34.44.54.6Variable whole lifeVariable universal lifeFlexible premium policiesAdjustable lifeUniversal lifeSpecialized policiesJoint life (first-to-die)Survivorship life (second-to-die)Juvenile/student lifeGroup life insuranceCharacteristics of group plansTypes of eligible groups (38.2-3318.1)Employer/employeeDebtor groupsLabor union groupsTrustAssociationsGroup underwriting requirementsBenefit payments (38.2-3330)Covered dependents (38.2-3323)Lives covered (38.2-3322.2)Conversion to individual policy (38.2-3332–3334)Contributory vs. noncontributoryCredit life insurance (individual versus group)5.0 Life Insurance Policy Provisions, Options and Riders5.1 Standard provisionsOwnershipAssignment (38.2-3111)Entire contract (38.2-3304)Right to examine (free look) (38.2-3301)Payment of premiums (38.2-3302)Grace period (38.2-3303)Reinstatement (38.2-3311)Incontestability (38.2-3107, 3305)Misstatement of age and misstatement of gender (38.2-3108, 3306)ExclusionsSuicide (38.2-3106)War clauseInterest on proceeds (38.2-3115)Prohibited provisions including backdating (38.2-3104, 3316)5.2 BeneficiariesDesignation sionRevocable versus irrevocableAnnulment or divorce (38.2-305(C))Common disaster clauseSpendthrift clause5.3 Settlement optionsCash paymentInterest only511% (16 items)
Fixed-period installmentsFixed-amount installmentsLife incomeSingle lifeJoint and survivor5.4 Nonforfeiture optionsCash surrender valueExtended termReduced paid-up insurance5.5 Policy loans (38.2-3308)Cash loansAutomatic premium loansWithdrawals or partial surrendersEducational loans (38.2-3113.3)5.6 Dividend options (38.2-3307)Cash paymentReduction of premium paymentsAccumulation at interestOne-year term optionPaid-up additionsPaid-up insurance5.7 Disability ridersWaiver of premiumWaiver of cost of insuranceDisability income benefitPayor benefit life/disability (juvenile insurance)5.8 Accelerated benefit provision/riderConditions for payment (38.2-3115.1; 14 VAC 5-70-40)Diagnosis of terminal illnessDiagnosis of catastrophic illnessPermanent confinementInability to perform ADLsDisclosure (14 VAC 5-70-80)Written disclosure requiredEffect on death benefitCash valueLoans and loan interestTax consequencesPremium5.9 Riders covering additional insuredsSpouse/other-insured term riderChildren's term riderFamily term rider5.10 Riders affecting the death benefit amountAccidental deathGuaranteed insurabilityCost of livingReturn of premium6.0 Annuities6% (8 items)6.1 Annuity principles and conceptsAccumulation period versus annuity periodOwner, annuitant and beneficiaryInsurance aspects of annuities6.2 Immediate versus deferred annuitiesSingle premium immediate annuities (SPIAs)6
Deferred annuitiesPremium payment optionsNonforfeitureSurrender chargesBail-out provisionsDeath benefits6.3 Annuity (benefit) payment optionsLife contingency optionsPure life versus life with guaranteed minimumSingle life versus multiple lifeAnnuities certain (types)6.4 Annuity productsFixed annuitiesGeneral account assetsInterest rate guarantees (minimum versus current)Level benefit payment amountVariable AnnuitiesEquity indexed annuitiesMarket value adjusted annuities (modified guaranteed annuities) (38.2-107.1, 3113.1)6.5 Uses of annuitiesLump-sum settlementsQualified retirement plans including group versus individualPersonal usesTax-deferred growthRetirement incomeEducation fundsCharitable gift annuity (38.2-106.1, 3113.2)Suitability in Annuity Transactions (14VAC5-45)7.0 Federal Tax Considerations for Life Insurance and Annuities7.1 Taxation of personal life insuranceAmounts available to policyownerCash value increasesDividendsPolicy loansSurrendersAmounts received by beneficiaryGeneral rule and exceptionsSettlement optionsValues included in insured's estate7.2 Modified endowment contracts (MECs)Modified endowment versus life insuranceSeven-pay testDistributions7.3 Taxation of non-qualified annuitiesIndividually-ownedAccumulation phase (tax issues related to withdrawals)Annuity phase and the exclusion ratioDistributions at deathCorporate-owned7.4 Taxation of individual retirement accounts (IRAs)Traditional IRAsContributions and deductible amountsPremature distributions (including taxation issues)Annuity phase benefit paymentsValues included in the annuitant's estate72% (3 items)
Amounts received by beneficiaryRoth IRAsContributions and limitsDistributions7.5 Rollovers and transfers (IRAs and qualified plans)7.6 Section 1035 exchanges8.0 Qualified Plans2% (3 items)8.1 General requirements8.2 Federal tax considerationsTax advantages for employers and employeesTaxation of distributions (age-related)8.3 Plan types, characteristics and purchasersSimplified employee pensions (SEPs)Self-employed plans (HR 10 or Keogh plans)Profit-sharing and 401(k) plansSIMPLE plans403(b) tax-sheltered annuities (TSAs)9.0 Health Insurance Basics6% (8 items)9.1 Definitions of perilsAccidental injurySickness9.2 Principal types of losses and benefitsLoss of income from disabilityMedical expenseDental expenseLong-term care expense9.3 Classes of health insurance policiesIndividual versus groupPrivate versus governmentLimited versus comprehensive9.4 Limited policiesLimited perils and amountsRequired notice to insuredTypes of limited policiesAccident-onlySpecified (dread) diseaseHospital indemnity (income)Credit disabilityBlanket insurance (teams, passengers, other)Prescription drugsVision careCritical illness (specified conditions)Short-term medical9.5 Common exclusions from coveragePre-existing conditionsIntentionally self-inflicted injuriesWar or act of warElective cosmetic surgeryConditions covered by workers compensationGovernment plansParticipation in a felony or illegal occupation9.6 Agent responsibilities in individual health insuranceMarketing requirementsAdvertising (14 VAC 5-90-10–180)8
Life, Accident and Sickness Insurance Guaranty Association (38.2-1715)Sales presentationsField underwritingNature and purposeApplication proceduresRequirements at delivery of policyCommon situations for errors/omissionsNotification of Medicare eligibility9.7 Individual underwriting by the insurerSources of underwriting informationApplicationAgent reportAttending physician statementInvestigative consumer (inspection) reportMedical Information Bureau (MIB)Medical examinations and lab tests (including HIV consent) (38.2-613.01; 14 VAC 5-180-50)Unfair discrimination (38.2-508(2))Discrimination against victims of domestic violence (38.2-508(7))Genetic information privacy (38.2-508.4, 613(D))Classification of risksPreferredStandardSubstandardDeclined9.8 Considerations in replacing health insurancePre-existing conditions (38.2-3514)Pre-existing condition exclusion (38.2-3514.1)Benefits, limitations and exclusionsUnderwriting requirementsVirginia replacement requirements (14 VAC 5-140-90)10.0 Individual Health Insurance Policy General Provisions10.1 Uniform required provisions (38.2-3503 A)Entire contract; changesTime limit on certain defensesGrace periodReinstatementNotice of claimClaim formsProofs of lossTime of payment of claimsPayment of claimsPhysical examinations and autopsyLegal actionsChange of beneficiaryCancellation by insured10.2 Uniform optional provisions (38.2-3504)Change of occupationMisstatement of ageOther insurance in this companyInsurance with other companiesExpense-incurred basisOther benefitsUnpaid premiumCancellation by companyConformity with state statutes911% (16 items)
Illegal occupationIntoxicants and narcotics10.3 Other general provisionsRight to examine (free look) (38.2-3502)Insuring clauseConsideration clauseRenewability clause (38.2-3514.2; 14 VAC 5-140-50 A-C)NoncancelableGuaranteed renewableConditionally renewableRenewable at option of insurerNonrenewable (cancelable, term)Interest on claim proceeds (38.2-3407.1)Military suspension provision (14 VAC 5-140-50(E))11.0 Disability Income and Related Insurance5% (7 items)11.1 Qualifying for disability benefitsInability to perform dutiesOwn occupationAny occupationPure loss of income (income replacement contracts)Presumptive disabilityRequirement to be under physician care11.2 Individual disability income insuranceBasic total disability planIncome benefits (monthly indemnity)Elimination and benefit periodsWaiver of premium benefitCoordination with social insurance and workers compensation benefitsAdditional monthly benefit (AMB)Social insurance supplement (SIS)Occupational versus nonoccupational coverageAt-work benefitsPartial disability benefitResidual disability benefitOther provisions affecting income benefitsCost of living adjustment (COLA) riderFuture increase option (FIO) riderAnnual renewable term riderRelation of earnings to insurance (38.2-3504)Change of occupationOther cash benefitsAccidental death and dismembermentRehabilitation benefitMedical reimbursement benefit (nondisabling injury)Refund provisionsReturn of premiumCash value benefitExclusions11.3 Unique aspects of individual disability underwritingOccupational considerationsBenefit limitsPolicy issuance alternatives11.4 Group disability income insuranceGroup versus individual plansShort-term disability (STD)10
Long-term disability (LTD)11.5 Business disability insuranceKey employee (partner) disability incomeBusiness overhead expense policyBusiness Disability buyout policy11.6 Social Security disabilityQualification for disability benefitsDefinition of disabilityWaiting periodDisability income benefits11.7 Workers compensationEligibilityBenefits12.0 Medical Plans6% (8 items)12.1 Medical plan conceptsFee-for-service basis versus prepaid basisSpecified coverages versus comprehensive careBenefit schedule versus usual/reasonable/customary chargesAny provider versus limited choice of providersInsureds versus subscribers/participants12.2 Types of providers and plansMajor medical insurance (insurers)CharacteristicsCommon limitationsCommon exclusions from coverageDeductiblesCoinsurance featureStop-loss featureMaximum benefitsHealth services plansDefinitions (38.2-4201)Plans offered (38.2-4202–4204, 4209)Other services (38.2-4205)Qualified providers (38.2-4221)Choice of provider or pharmacy (38.2-4209.1, 4218)Provider panels (38.2-3407.10)Disclosure of benefits (38.2-4219)SubscribersHealth maintenance organizations (HMOs) (38.2-4300–4323; 14 VAC 5-211-10–280)Combined health care delivery and financingLimited service area/out of area benefitsLimited choice of providersGatekeeper conceptCopaymentsPrepaid basisPreventive care servicesPrimary care physician versus referral (specialty) physicianEmergency careHospital servicesOther basic servicesSubscribersPreferred provider organizations (PPOs)General characteristicsOpen panel or closed panelPoint-of-service (POS) plans11
Nature and purposeOut-of-network provider access (open-ended HMO)PCP referralIndemnity plan featuresTRI-CAREVirginia Family Access to Medical Insurance Security Plan (FAMIS) (RL 32.1-351)12.3 Cost containment in health care deliveryCost-saving servicesPreventive careOutpatient ambulatory servicesAlternatives to hospital servicesUtilization managementProspective reviewConcurrent review12.4 Virginia eligibility requirementsDependent child age limit (38.2-3500(C), 3525)Coverage for adopted children (38.2-3411.2)Newborn child coverage (38.2-3411)Medical child support coverage (38.2-3407.2)Intellectual disability and physical handicap dependent adult coverage (38.2-3409)12.5 HIPAA (Health Insurance Portability and Accountability Act) requirements (38.2-3430.1–.9; 3432.1–.3)EligibilityGuaranteed issuePre-existing conditionsCreditable coverageRenewability12.6 Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs)DefinitionEligibilityContribution limits13.0 Group Health Insurance5% (7 items)13.1 Characteristics of group insuranceGroup contractCertificate of coverage (38.2-3533)Experience rating versus community rating13.2 Defined groups (38.2-3521.1)EmployerCreditorLabor unionAssociationCredit union13.3 Marketing considerationsAdvertisingRegulatory jurisdiction/place of delivery13.4 Employer group health insuranceInsurer underwriting criteriaCharacteristics of the groupPlan design factorsPersistency factorsAdministrative capabilityEligibility for insuranceAnnual open enrollmentEmployee eligibilityDependent eligibilityCoordination of benefits provision12
Change of insurance companies or loss of coverageCoinsurance and deductible carryoverNo-loss no-gainEvents that terminate coverageReinstatement of coverage for military personnel (38.2-508.1(B))Notification of Medicare eligibilityExtension of benefitsContinuation of coverage under COBRA and Virginia specific rules (38.2-3541)13.5 Small employer medical plans (38.2-3431–3437)Definition of small employer (38.2-3431)Availability of coverage (38.2-3431(C), 3432.2)Disclosure of coverage provisions (38.2-3434)Enrollment eligibility (38.2-3436)Renewability (38.2-3432.1)14.0 Dental Insurance1% (2 items)14.1 Types of dental treatmentDiagnostic and preventiveRestorativeOral ontics14.2 Indemnity plansChoice of providersScheduled versus nonscheduled plansBenefit categoriesDiagnostic/preventive servicesBasic servicesMajor servicesDeductibles and coinsuranceCombination plansExclusionsLimitationsPredetermination of benefits14.3 Employer group dental expenseIntegrated deductibles versus stand-alone plansMinimizing adverse selection15.0 Insurance for Senior Citizens and Special Needs Individuals15.1 MedicareNature, financing and administrationPart A — Hospital InsuranceIndividual eligibility requirementsEnrollmentCoverages and cost-sharing amountsPart B — Medical InsuranceIndividual eligibility requirementsEnrollmentCoverages and cost-sharing amountsExclusionsClaims terminology and other key termsPart C — Medicare AdvantagePart D — Prescription Drug Insurance15.2 Medicare supplement insurance (14 VAC 5-170-10–220)1311% (15 items)
Purpose (14 VAC 5-170-10)Open enrollment (14 VAC 5-170-100)Rating of Medicare supplement plans (14 VAC 5-170-30)Attained ageIssue ageCommunity ratedStandardized Medicare supplement plans (14 VAC 5-170-75, 85, 87)Core benefitsAdditional benefitsHigh deductible plansVirginia regulations and required provisionsStandards for marketing (14 VAC 5-170-180)Advertising (38.2-3609; 14 VAC 5-170-170)Appropriateness of recommended purchase and excessive insurance (14 VAC 5-170-190)Buyer's guide (14 VAC 5-170-150(A)(6))Outline of coverage (38.2-3606; 14 VAC 5-170-150(D))Right to return (free look) (38.2-3604; 14 VAC 5-170-150(A)(5))Replacement (14 VAC 5-170-160, 210)Prohibited policy provisions (14 VAC 5-170-210)Minimum benefit standards (14 VAC 5-170-75)Required disclosure provisions (14 VAC 5-170-150)Pre-existing conditions (38.2-3605)Permitted compensation (14 VAC 5-170-140)Guaranteed issue for eligible persons (14 VAC 5-170-105)Continuation and conversion requirements (14 VAC 5-170-70(B)(5)(c), (d))Medicare SELECT (14 VAC 5-170-90)15.3 Other options for individuals with MedicareEmployer group health plansDisabled employeesEmployees with kidney failureIndividuals age 65 and olderMedicaidEligibilityBenefits15.4 Long-term care (LTC) policies (38.2-5200–5210; 14 VAC 5-200-10–210)LTC, Medicare and Medicaid comparedEligibility for benefits (14 VAC 5-200-187)Levels of careSkilled careIntermediate careCustodial careHome health care (14 VAC 5-200-50, 90)Adult day care (14 VAC 5-200-50)Respite careBenefit periodsBenefit amountsOptional benefitsGuarantee of insurabilityReturn of premiumQualified LTC plans (14 VAC 5-200-40)Deductibility of premiums for LTC insurance for state income tax purposesExclusions (14 VAC 5-200-60(B))Underwriting considerationsVirginia regulations and required provisionsStandards for marketing (14 VAC 5-200-170)Advertising (14 VAC 5-200-160)14
Consumer guide (38.2-5207(3))Outline of coverage (38.2-5207, 5207.1; 14 VAC 5-200-200)Suitability including personal worksheet (14 VAC 5-200-175)Right to return (free look) (38.2-5208)Replacement (14 VAC 5-200-110, 190)Renewal considerations (14 VAC 5-200-60(A))Continuation of benefits (14 VAC 5-200-60(D))Required disclosure provisions (14 VAC 5-200-70)Incontestability (38.2-5209)Inflation protection (14 VAC 5-200-100)Unintentional lapse (14 VAC 5-200-65)Pre-existing conditions (38.2-5204; 14 VAC 5-200-190)Nonforfeiture benefit (38.2-5210; 14 VAC 5-200-185)Benefit triggers (14 VAC 5-200-70(G), 187)16.0 Federal Tax Considerations for Health Insurance2% (3 items)16.1 Personally-owned health insuranceDisability income insuranceMedical expense insuranceLong-term care insurance16.2 Employer group health insuranceDisability income (STD, LTD)Medical and dental expenseLong-term care insuranceAccidental death and dismemberment16.3 Medical expense coverage for sole proprietors and partners16.4 Business disability insuranceKey person disability incomeBusiness overhead expenseBuy-sell policy16.5 Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs), and Flexible Spending Accounts(FSAs)15
3.4 Business uses of life insurance Buy-sell funding Key person Executive bonuses 3.5 Classes of life insurance policies Group versus individual Permanent versus term Participating versus nonparticipating Fixed versus variable life insurance and annuities Regulation of variable produ
