Georgia Life & Health Insurance Practice Test

Why B is correct

Under O.C.G.A. § 33-23-35, premiums received by a producer are held in a fiduciary capacity - they belong to the transaction, not to the producer's pocket. The producer may not treat them as personal assets, and willful misappropriation is criminal: a misdemeanor, rising to a felony where the amount exceeds $1,000 under § 33-23-35(c). The fiduciary duty is the foundation for Georgia's commingling rules as well.

Why the other options are wrong

• A) Premiums are not the producer's income; § 33-23-35 imposes a fiduciary capacity on their handling from the moment of receipt.
• C) No ninety-day conversion rule exists; the fiduciary duty attaches immediately under O.C.G.A. § 33-23-35.
• D) Premiums are not a loan to the producer; they are fiduciary funds held for the insurer transaction.

Memory hook

Premiums pass through the producer, never into the pocket.

Why D is correct

Under O.C.G.A. § 33-23-18 and the Georgia licensing handbook, a new licensee's first term runs 18 to 29 months so that expiration lands on the last day of the birth month; renewals after that point run the standard two years. New licensees should check their actual expiration date rather than assuming a full two-year term from the issue date.

Why the other options are wrong

• A) Initial terms are prorated to reach the birth month, so they are usually shorter than two years.
• B) Six months is the temporary-license figure, not the term for a new regular license.
• C) Fifteen months is the maximum total duration of a temporary license, not an initial producer term.

Memory hook

First term fits the birthday: 18 to 29 months.

Why C is correct

Under O.C.G.A. § 33-6-4(b)(4), boycott, coercion, and intimidation of policyholders or prospects are unfair trade practices. Threatening to cancel or harm a customer's existing coverage in order to force an additional purchase is a classic coercion scenario. The Insurance Commissioner may pursue cease and desist remedies, including penalties of up to $10,000 for each act, under O.C.G.A. § 33-6-9.

Why the other options are wrong

• A) Rebating involves offering part of the premium or other valuable consideration as an inducement, not threatening cancellation to force a sale.
• B) Twisting is misrepresenting policy terms to induce a lapse, forfeiture, or surrender; the tactic here is a threat, not a misstatement of terms.
• D) Controlled business concerns insurance written on the producer's own interests and has nothing to do with pressuring a policyholder.

Memory hook

Threaten to force a sale and Georgia calls it coercion.