Insurance Licensing Maryland Life Producer Exam Exam Syllabus

1.1 Licensing
Purpose
General Provisions and Definitions
Process (Insurance Article Annotated Code- Sec. 10-118(b)(2); Sec. 10.109;
 Sec. 10-103(c)(1))
 Initial Licensure Qualifications
 Examination
 License fee & application
Types of licensees (Insurance Article Annotated Code- Sec. 1-101(u)(1))
Producers
Advisers
Nonresidents
Business entities
Viatical Settlements
Exceptions
Temporary
Maintenance (Insurance Article Annotated Code- Sec. 10- 211(e)(2)(i); Sec. 10-115;
 Sec. 10-1-05; Sect. 10- 116(a)(2)(i);))
Duration and Termination
Address and/or name changes
Assumed names
Requirement to report felony convictions
Requirement to report other states actions
Renewal (Insurance Article Annotated Code- Sec. 10- 211(e)(2)(i); Sec.
 10-115; Sec. 10-1-05; 10-116)

Continuing education
Appointment procedures (Insurance Article Annotated Code- Sec. 1-101; Sec. 10- 118;
 Sec. 27-209)
Producer's contract with insurer versus producer's appointment with insurer
Producer's appointment versus agency's appointment
Solicitation prior to appointment
Appointment requirement after becoming licensed
Acknowledgment of appointment/notice to producer
Requirement to cease solicitation
Termination of appointment/notice to producer
Termination of license without active appointment
Disciplinary actions (Insurance Article Annotated Code- Sec. 1-301; Sec.
 10- 126(e); Sec. 27-202)
Probation, suspension, revocation or refusal to issue or renew
Cease and desist order
Penalties
Hearings/Notice of Hearings
 Fraud (Insurance Article Annotated Code- Sec. 27- 216(a)(1)(i); Sec. 2-401)
1.2 State regulation
Maryland Insurance Administration’s general duties and powers (Insurance Article
 Annotated Code- Sec. 2-102(a); Sec. 2-103(a)(4); Sec. 2-204(b)(1); 16-601;
 Sec. 1-301; Sec. 2- 101; Sec. 10-126) 
Insurer Regulation (Insurance Article Annotated Code- Sec. 15-204(B);
 Sec. 15-208(A)(1); Sec. 15-211(A); Sec. 27-501(a)(1)
 Forms Sec. 12-203(a)(2)
 Unfair Claims Settlement Practices
 Certificate of Authority Sec. 4-101
Producer regulation (Insurance Article Annotated Code- Sec. 27-209; Sec. 10-105;
 COMAR- Sec. 31.03.03)
Acting for an unlicensed insurer
Record retention
Activities of unlicensed individuals
Payment and sharing of commissions
Charging of fees
Illegal compensation; exceptions
Fiduciary capacity
Commingling of Funds
Responsibility of trust accounts
Advertising
Unfair trade practices (Insurance Article Annotated Code- Sec. 27-304; Sec. 27-213;
 Sec. 27-305(a); Sec. 27-504(b)(1); COMAR- Sec. 31.15.02.12; Sec.31.15.02.18(A);
 Sec. 31.15.02.02; Sec.31.15.02.03(B))
Misrepresentation
False advertising
Defamation
Boycott, coercion and intimidation
False Financial Statements
Prohibited Inducements
Unfair Discrimination
Rebating
Blank Forms
Twisting
Referrals
Insurance information and privacy protection
 1.3 State Insurance Requirements
Policy Replacement (COMAR- Sec. 31.09.05.10)
 Definitions
 Provisions and Disclosure
 Group Life (Insurance Article Annotated Code- Sec. 17-201(a); Sec. 17-202(b);
 Sec. 17-209(a)(2)(i)(ii))
 Eligibility
 Dependent Coverage
 Standard Provisions
 Conversion
 Assignment of Proceeds
 Life and Health Insurance Guaranty Corporation (Insurance Article Annotated Code-
 Sec. 9-405(a)(2); Sec. 9-409(b); Sec. 9-402) 

2.1 Concepts
Risk management key terms
Risk
Exposure
Hazard
Peril
Loss
Methods of handling risk
Avoidance
Retention
Sharing
Reduction
Transfer
Elements of insurable risks
Adverse selection
Law of large numbers
Reinsurance
2.2 Insurers
Types of insurers
Stock companies
Mutual assessment insurers
Fraternal benefit societies
Private versus government insurers
Admitted versus nonadmitted insurers
Purchasing Groups
Government Plans
Domestic, foreign and alien insurers
Financial status (independent rating services) and operating results
Marketing (distribution) systems
Life and Health Insurance Guaranty Corporation
2.3 Producers and general rules of agency
Types
Captive
Independent
Insurer as principal
Producer of insurer
Authority and powers of producers
Express
Implied
Apparent
Responsibilities to the applicant/insured
2.4 Contracts
Elements of a legal contract
Offer and acceptance
Consideration
Competent parties
Legal purpose
Distinct characteristics of an insurance contract
Contract of adhesion
Aleatory contract
Personal contract
Unilateral contract
Conditional contract
Legal interpretations affecting contracts
Ambiguities in a contract of adhesion
Reasonable expectations
Indemnity
Utmost good faith
Representations/misrepresentations
Warranties
Concealment
Fraud
Waiver and estoppel
 2.5 Federal Regulat
Fair Credit Reporting Act
 Fraud and False Statements
 Variable Products
2.6 Industry Associations
 NAIC
 IIPRC (Interstate Insurance Product Review Committee)/ the Compact
 NCOIL (National Conference of Insurance Legislators)
 Industry and Pro

3.1 Insurable interest
3.2 Personal uses of life insurance
Survivor protection
Estate planning
Cash accumulation
Liquidity
Estate conservation
Debt Protection on Personal Mortgages (only)
3.3 Viatical/Life Settlements
Nature and Purpose
Viatical Settlement, Broker Authority, and Licensing
Disclosure to Consumers
General Rules
Fraudulent Acts
Definitions
 Chronically ill
 Fraudulent Viatical Settlement Act
 Terminally ill
 Viatical Settlement broker
 Viatical Settlement provider
 Viatical settlement purchaser
 Viator
3.4 Determining amount of personal life insurance
Human life value approach
Needs approach
Types of information gathered
Determining lump-sum needs
Planning for income needs
 Social Security Benefits
3.5 Business uses of life insurance
Buy-sell funding
Key person
Executive bonuses
3.6 Classes of life insurance policies
Group versus individual
Ordinary

Permanent versus term
Participating versus nonparticipating
Fixed versus variable life insurance and annuities
Regulation of variable products (FINRA)
Types of variable products
 U.S. Government Plans
3.7 Premiums
Factors in premium determination
Mortality 
Interest
Expense
Premium concepts
Net single premium
Gross annual premium
Premium payment mode
3.8 Producer responsibilities
Rules Governing Advertisement of Life Insurance and Annuities
Solicitation and sales presentations
Maryland Life & Health Insurance Guaranty Corporation
Advertising
Illustrations
Policy summary
Buyer's guide
Policy Cost and Benefit Information
Replacement
Use and disclosure of insurance information
Field underwriting
Notice of information practices
Adverse underwriting decisions
Application procedures
 Required signatures
 Changes in the application
 Consequences of incomplete applications
 Warranties and representations
 Collecting the initial premium and issuing the receipt
 Disclosures at point of sale (e.g., HIPAA, HIV consent)
 USA PATRIOT Act/anti-money laundering
Delivery
Policy review
Effective date of coverage
Premium collection
Statement of good health
3.9 Individual underwriting by the insurer
Information sources and regulation
Application
Producer report
Attending physician statement
Investigative consumer (inspection) report
Medical Information Bureau (MIB)
Medical examinations and lab tests including HIV
Selection criteria and unfair discrimination
Discrimination against victims of domestic violence
Classification of risks
Preferred
Standard
Substandard
Declined 

4.1 Term life insurance
Level term
Annual renewable term
Level premium term
Convertible Term
Decreasing term 
Increasing term
Return of premium
4.2 Whole life insurance
 Ordinary whole life
Continuous premium (straight life)
Limited payment
Interest sensitive/current assumption
Indexed life
Equity indexed life
Graded Premium
Single premium
Variable whole life
Variable universal life
4.3 Flexible premium policies
Adjustable life
Universal life
4.4 Specialized policies
Family (Family Protection and Family Plan)
Joint life (first-to-die)
Survivorship life (second-to-die)
Juvenile/student life
4.5 Group life insurance
Characteristics of group plans
Types of eligible groups
Employer/employee
Debtor groups
Labor union groups
Trust
Associations
Group underwriting requirements
Benefit payments
Covered dependents
Lives covered
Conversion to individual policy
Contributory vs. noncontributory
4.6 Credit life insurance (individual versus group) 

5.1 Standard provisions
Ownership
Assignment
Entire contract
Right to examine (free look)
Payment of premiums
Grace period
Reinstatement
Incontestability
Misstatement of age and misstatement of gender
Exclusions
Suicide
War clause
Interest on proceeds
Prohibited provisions including backdating
5.2 Beneficiaries
Designation options
Individuals
Classes
Estates
Minors
Trusts
Succession
Revocable versus irrevocable
Annulment or divorce
Common disaster clause
Facility of Payment Clause
5.3 Settlement options
Cash payment
Interest only
Fixed-period installments
Fixed-amount installments
Life income
Single life
Joint and survivor
5.4 Nonforfeiture options
Cash surrender value
Extended term
Reduced paid-up insurance
5.5 Policy loans
Cash loans
Automatic premium loans
Withdrawals or partial surrenders
Educational loans
Automatic Option Required
5.6 Dividend options
Cash payment
Reduction of premium payments
Accumulation at interest
One-year term option
Paid-up additions
Paid-up insurance
5.7 Disability riders
Waiver of premium
Waiver of cost of insurance
Disability income benefit
Payor benefit life/disability (juvenile insurance)
5.8 Accelerated benefit provision/rider
Conditions for payment
Diagnosis of terminal illness
Diagnosis of catastrophic illness
Permanent confinement
Inability to perform ADLs
Disclosure
Written disclosure required
Effect on death benefit
Cash value
Loans and loan interest
Tax consequences
Premium
5.9 Riders covering additional insureds
Spouse/other-insured term rider
Children's term rider
Family term rider 
5.10 Riders affecting the death benefit amount
Accidental death
Guaranteed insurability
Cost of living
Return of premium

6.1 Annuity principles and concepts
Accumulation period versus annuity period
Owner, annuitant and beneficiary
Insurance aspects of annuities
Suitability
6.2 Immediate versus deferred annuities
Single premium immediate annuities (SPIAs)
Deferred annuities
Premium payment options
Nonforfeiture
Surrender charges
Bail-out provisions
Death benefits
6.3 Annuity (benefit) payment options
Life contingency options
Pure life versus life with guaranteed minimum
Single life versus multiple life
Annuities certain (types)
 Installments for a fixed period
 Installments for a fixed amount
6.4 Annuity products
Fixed annuities
General account assets
Interest rate guarantees (minimum versus current)
Level benefit payment amount
 Variable Annuities
 General Account Assets
 Guarantees
 Level Benefit Payment Amount
Equity indexed annuities
Market value adjusted annuities (modified guaranteed annuities)
6.5 Uses of annuities
Lump-sum settlements
Qualified retirement plans including group versus individual
Personal uses
 Individual retirement plans
Tax-deferred growth
Retirement income
Education funds
Charitable gift annuity
 Suitability in Annuity Transactions 

7.1 Taxation of personal life insurance
Amounts available to policyowner
Cash value increases
Dividends
Policy loans
Surrenders 
Amounts received by beneficiary
General rule and exceptions
Settlement options
Values included in insured's estate
7.2 Modified endowment contracts (MECs)
Modified endowment versus life insurance
Seven-pay test
Distributions
7.3 Taxation of non-qualified annuities
Individually-owned
Accumulation phase (tax issues related to withdrawals)
Annuity phase and the exclusion ratio
Distributions at death
Corporate-owned
7.4 Taxation of individual retirement accounts (IRAs)
Traditional IRAs
Contributions and deductible amounts
Premature distributions (including taxation issues)
Annuity phase benefit payments
Values included in the annuitant's estate
Amounts received by beneficiary
Roth IRAs
Contributions and limits
Distributions
7.5 Rollovers and transfers (IRAs and qualified plans)
7.6 Section 1035 exchanges 

8.1 General requirements
8.2 Federal tax considerations
Tax advantages for employers and employees
Taxation of distributions (age-related)
8.3 Plan types, characteristics and purchasers
Simplified employee pensions (SEPs)
Self-employed plans (HR 10 or Keogh plans)
Profit-sharing and 401(k) plans
SIMPLE plans
403(b) tax-sheltered annuities (TSAs) 

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