Pass Virginia-Life-Annuities-and-Health-Insurance Exam Guide

Virginia Code § 38.2-3107 governs life insurance underwriting, where insurers assess risk using factors like gender (option A, affecting mortality rates), occupation (option C, e.g., hazardous jobs increase risk), and ability to pay premiums (option D, ensuring policy sustainability). Option B (religion) is not a permissible criterion; Virginia Code § 38.2-211 prohibits unfair discrimination in insurance based on religion, race, or other protected traits, reflecting federal and state anti-discrimination laws. The study guide likely explains underwriting with examples—e.g., higher premiums for a male firefighter—but flags religion as an illegal factor, with case studies of compliance, making B the exception.

If the amount of a policy loan plus accrued interest exceeds the life insurance policy’s cash value, the policy will generally lapse and become no longer in force. This occurs because the insurer cannot lend more than the available cash value, and the outstanding loan would exceed the policy’s value, leading to its termination.

Agents are fiduciaries, meaning they must handle clients’ premiums with the highest standard of care. Misuse or misappropriation of funds constitutes a violation of fiduciary duty.

Exact Extract (Virginia Agent Regulations): “Insurance producers act in a fiduciary capacity regarding premiums received from insureds and must promptly remit them to insurers.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-1834 (Fiduciary responsibility of agents)

In Virginia, an insurance agent’s license remains active for 30 calendar days without an appointment. During this period, the agent may not transact insurance business until an appointment is in place.

Appointments link the agent to an insurer and authorize the agent to act on the insurer’s behalf. Virginia regulations require insurers to file appointments promptly, and failure to secure an appointment within the allowed timeframe may result in license inactivity.

This rule ensures regulatory oversight and consumer protection by confirming that agents operate only under authorized insurer relationships.