17 Free Louisiana Life & Health Practice Questions: Louisiana Regulation II (2026)
How to Use This Set
Louisiana Insurance Regulation is the one section where the outline cites Louisiana statutes and Administrative Code sections by number. It is 10% of the Life exam, 10% of the Health and Accident or Sickness exam and 23% of the combined exam, the largest single block in the combined outline. This set covers the second half of that material: unfair trade practices, replacement under Regulation 70, the two different refund periods, the guaranty association and the Commissioner's examination power.
Practice Questions 1-6: Replacement, Examinations, Rebating and the Guaranty Association
The first six questions test who must do what in a replacement, what the Commissioner may examine, and which label fits a producer's misconduct.
Question 1 (Chapter 2)
A licensed Louisiana life insurance producer is completing an application for a new policy with a client. During the application process, the client mentions having several existing life insurance policies with other companies. The producer, eager to finalize the sale, deliberately avoids asking the required questions about existing coverage and does not present the client with the notice regarding replacement. Which specific regulatory requirement has the producer failed to meet?
- A) The requirement to provide a 10-day free-look period
- B) The obligation to notify the existing insurer of the proposed replacement
- C) The rule against rebating premiums
- D) The duty to inquire about existing policies and present a notice regarding replacement
Show answer & explanation
Answer: D
According to LAC 37:XIII §§8901–.8925 (Regulation 70) concerning replacement of life insurance and annuities, a producer who takes an application must ask whether the applicant has existing policies or contracts, and if so, must present and read a notice regarding replacement. Option A refers to the ordinary free-look period, which is a policy provision, not a producer's pre-sale duty in replacement. Option B is the replacing insurer's duty, not the producer's. Option C is an unfair trade practice unrelated to replacement procedures.
Question 2 (Chapter 2)
During a routine examination of an insurer's operations in Louisiana, the Commissioner of Insurance requests access to the company's financial records, policyholder data, and marketing materials. The insurer's legal counsel questions the scope of this request. Under what authority can the Commissioner demand access to these books and records?
- A) Only with a court order based on probable cause of misconduct
- B) Under the general power to regulate trade practices, but not financial records
- C) Only if the insurer voluntarily consents to the examination
- D) The Commissioner has broad authority under R.S. 22:1967, 1981, and 1990 to examine an insurer's or producer's books and records
Show answer & explanation
Answer: D
The Louisiana Commissioner of Insurance has broad statutory authority to examine the books and records of insurers and producers. R.S. 22:1967, 1981, and 1990 grant the Commissioner the power to conduct examinations to ensure compliance with the Louisiana Insurance Code. This authority does not require a court order or voluntary consent for routine examinations.
Question 3 (Chapter 2)
A Louisiana producer offers a prospective client a $50 gift card as an inducement to purchase a new health insurance policy, in addition to the benefits outlined in the policy itself. This offer is not part of the policy's terms or a standard offering from the insurer. Which unfair trade practice has the producer committed?
- A) Twisting
- B) Rebating
- C) Defamation
- D) Unfair discrimination
Show answer & explanation
Answer: B
R.S. 22:1964(8) defines rebating as offering or giving any valuable consideration or inducement not specified in the policy. The $50 gift card offered as an inducement to purchase the policy falls directly under this definition. Twisting involves misrepresentation to induce policy replacement. Defamation is making false statements to harm reputation. Unfair discrimination involves unequal treatment based on class or hazard.
Question 4 (Chapter 2)
A Louisiana resident applies for a new life insurance policy. On the application, the individual intentionally misrepresents their medical history, omitting a significant pre-existing condition, to obtain a lower premium rate. After the policy is issued, the insurer discovers the deception. What type of illegal activity has the applicant committed?
- A) Unfair discrimination
- B) Rebating
- C) Twisting
- D) Insurance fraud
Show answer & explanation
Answer: D
R.S. 22:1964(13) and R.S. 22:1921–1929 specifically address insurance fraud, which includes intentionally providing false or misleading information on an insurance application to obtain coverage or benefits. While it involves a misrepresentation, 'insurance fraud' is the more encompassing and accurate term for this criminal act. Unfair discrimination, rebating, and twisting are unfair trade practices typically committed by licensees.
Question 5 (Chapter 2)
A Louisiana policyholder decides to surrender an existing whole life insurance policy and use the cash value to purchase a new variable annuity from a different insurer. The producer facilitating this transaction ensures all regulatory steps are followed, including providing the necessary notice. What is the primary purpose of Louisiana's Regulation 70 (LAC 37:XIII §§8901–.8925) concerning replacement transactions?
- A) To prohibit policyholders from ever replacing their existing life insurance or annuity contracts.
- B) To guarantee that the new policy will always offer superior benefits compared to the surrendered policy.
- C) To simplify the process of surrendering a policy by eliminating all paperwork.
- D) To ensure that policyholders are fully informed of the potential consequences of replacement and that the transaction is suitable for their needs.
Show answer & explanation
Answer: D
The primary purpose of Louisiana's Regulation 70 on replacement (LAC 37:XIII §§8901–.8925) is to protect policyholders by ensuring they are fully informed about the potential advantages and disadvantages of replacing an existing policy or annuity. This includes understanding potential loss of benefits, new waiting periods, and surrender charges, and that the transaction is suitable for their needs. It does not prohibit replacement (A), guarantee superior benefits (B), or eliminate paperwork (C).
Question 6 (Chapter 2)
A producer is attempting to sell a new annuity product to a client in Louisiana. During the sales pitch, the producer mentions that the annuity is backed by the 'Louisiana Life and Health Insurance Guaranty Association,' implying that this provides an absolute guarantee of safety. Which specific rule is the producer violating?
- A) The prohibited advertising and disclaimer rule for the Guaranty Association.
- B) The rule against rebating.
- C) The rule against unfair discrimination.
- D) The rule regarding false financial statements.
Show answer & explanation
Answer: A
The producer is violating the prohibited advertising and disclaimer rule for the Guaranty Association (R.S. 22:2098, LAC 37:XIII §§901–.909). This rule explicitly prohibits any person from using the existence of the Guaranty Association in sales or marketing to imply that policies are guaranteed or that the Association's coverage is a selling point. Rebating (B), unfair discrimination (C), and false financial statements (D) are different unfair trade practices.
Get the 25-question sample set by email
Want a full-exam practice set to study offline? Drop your email — we'll send 25 questions across every content area, each with the answer and explanation.
No spam. Just the questions and one optional follow-up.
Practice Questions 7-12: Enforcement, Refund Rights and Guaranty Coverage
These questions separate the 10-day free look from the 30-day replacement right, then move into what the guaranty association covers and who holds which duty.
Question 7 (Chapter 2)
An insurer operating in Louisiana is found to have systematically violated consumer privacy regulations by improperly sharing nonpublic personal financial information with unauthorized third parties. What action is the Commissioner of Insurance authorized to take under R.S. 22:1967 and R.S. 22:1990?
- A) Only issue a warning letter to the insurer.
- B) Require the insurer to offer free policies to all affected consumers.
- C) Impose fines, suspend or revoke the insurer's certificate of authority, and issue cease and desist orders.
- D) Mandate that the insurer publicly apologize to all policyholders.
Show answer & explanation
Answer: C
Under R.S. 22:1967 and R.S. 22:1990, the Commissioner has broad enforcement powers for unfair trade practices and other violations. These powers include imposing monetary fines, issuing cease and desist orders, and suspending or revoking an insurer's certificate of authority. Options A, B, and D are either too lenient or not explicitly granted as remedies under the statutes for such violations.
Question 8 (Chapter 2)
A Louisiana producer is involved in a transaction where a client is replacing an existing life insurance policy. The producer has asked about existing coverage and presented the required notice regarding replacement. What specific right must the replacing insurer ensure the policy or contract owner receives regarding the new policy?
- A) A 30-day unconditional full refund right-to-return from the date of policy delivery.
- B) A 10-day ordinary free look period from the date of policy delivery.
- C) A guarantee that the new policy will be in force immediately upon application.
- D) The right to cancel the policy at any time without penalty.
Show answer & explanation
Answer: A
For replacement transactions, LAC 37:XIII §8911.A.5 (Regulation 70) mandates that the replacing insurer must give the policy or contract owner notice of the right to return the policy or contract within 30 days of the delivery of the contract and receive an unconditional full refund of all premiums or considerations paid. This is distinct from the ordinary 10-day free look period (B) found in R.S. 22:931 for non-replacement policies.
Question 9 (Chapter 2)
The Louisiana Life and Health Insurance Guaranty Association provides a safety net for policyholders. However, certain types of policies or benefits are specifically excluded from its coverage. Which of the following would generally NOT be covered by the Guaranty Association?
- A) Individual whole life insurance policies
- B) Group health insurance benefits
- C) Self-funded employee benefit plans
- D) Individual annuity contracts
Show answer & explanation
Answer: C
The Louisiana Life and Health Insurance Guaranty Association protects policyholders of *member insurers* (R.S. 22:2082). Self-funded employee benefit plans are typically not considered insurance policies issued by a licensed insurer and therefore fall outside the scope of the Guaranty Association's protection. Individual life insurance, group health insurance, and individual annuity contracts issued by member insurers are generally covered, subject to specific limits (R.S. 22:2083).
Question 10 (Chapter 2)
An individual who resides in Texas purchases a life insurance policy from an insurer that is domiciled in Louisiana and licensed in both states. If this insurer were to become insolvent, would the Texas resident's policy be covered by the Louisiana Life and Health Insurance Guaranty Association?
- A) No, because the Guaranty Association generally covers only Louisiana residents.
- B) Yes, because the insurer is domiciled in Louisiana.
- C) Yes, because the insurer is licensed in both states.
- D) It depends on whether Texas has a reciprocal agreement with Louisiana.
Show answer & explanation
Answer: A
The Louisiana Life and Health Insurance Guaranty Association Law (R.S. 22:2081 et seq.) specifies that coverage generally extends to persons who are residents of Louisiana. While there can be exceptions for non-residents if their state of residence does not have a similar association or if the policy was issued by a domiciled insurer and the non-resident's state of residence is not a member of the association, the primary intent and general rule is to protect Louisiana residents. A Texas resident would typically be covered by the Texas Guaranty Association if the insurer was licensed there, not Louisiana's, unless specific conditions are met that shift coverage to the domiciliary state's association. The most direct answer for general coverage is that it covers Louisiana residents.
Question 11 (Chapter 2)
A Louisiana life insurance producer is presenting a universal life policy to a prospective client. The producer states that the policy's cash value growth is guaranteed to be 8% annually, without mentioning that this is a projected, non-guaranteed rate based on current interest rates, and that the guaranteed minimum is much lower. The client purchases the policy based on this assurance. Which unfair trade practice has the producer committed?
- A) Defamation
- B) Rebating
- C) Misrepresentation
- D) Unfair discrimination
Show answer & explanation
Answer: C
The producer has engaged in misrepresentation by making a false statement about a policy's benefits or terms, specifically by presenting a non-guaranteed rate as a guaranteed one. R.S. 22:1964(1) prohibits making false or misleading statements regarding the terms, benefits, or advantages of any insurance policy. Defamation (A) involves false statements about an insurer's financial condition or a person in the business. Rebating (B) is offering an inducement not specified in the policy. Unfair discrimination (D) involves making unfair distinctions between individuals in underwriting or rates.
Question 12 (Chapter 2)
When a life insurance policy or annuity is being replaced in Louisiana, the producer must present and read a 'notice regarding replacement' to the applicant. Who must receive a copy of this signed notice?
- A) Only the applicant, for their records.
- B) The applicant, the replacing insurer, and the existing insurer.
- C) The applicant and the replacing insurer.
- D) Only the Commissioner of Insurance.
Show answer & explanation
Answer: C
Under LAC 37:XIII §§8901–.8925 (Regulation 70), the applicant must receive a copy of the signed notice, and the producer must submit a copy to the replacing insurer. The replacing insurer then has the duty to notify the existing insurer. Therefore, the notice itself is directly provided to the applicant and the replacing insurer. The existing insurer is notified by the replacing insurer, not necessarily by receiving the signed notice directly from the producer.
Practice Questions 13-17: Limits, Domicile, Exemptions and Examinations
The last five are detail questions: dollar limits, where the association is domiciled, which transactions are exempt from the replacement rules and how the Commissioner treats insurers from elsewhere.
Question 13 (Chapter 2)
A producer in Baton Rouge markets himself as a 'Certified Financial Senior Specialist' to attract retirees. He provides a comprehensive financial plan for a client but fails to disclose that his only actual expertise and intent is to sell a single proprietary annuity product for which he receives a high commission. Under R.S. 22:1964(19), what unfair trade practice is being committed?
- A) Twisting
- B) Defamation
- C) Unfair financial planning practices
- D) Rebating
Show answer & explanation
Answer: C
R.S. 22:1964(19) specifically prohibits producers from representing themselves as financial planners or consultants to sell insurance products without disclosing that they are actually acting as insurance producers and will receive commissions.
Question 14 (Chapter 2)
A Louisiana resident has a $600,000 Major Medical policy with an insurer that becomes insolvent. According to R.S. 22:2083, what is the maximum amount the Louisiana Life and Health Insurance Guaranty Association will pay for this resident's health insurance benefits?
- A) $100,000
- B) $300,000
- C) $500,000
- D) $600,000
Show answer & explanation
Answer: C
The Louisiana Life and Health Insurance Guaranty Association provides a maximum of $500,000 for health insurance benefits per individual.
Question 15 (Chapter 2)
The Louisiana Life and Health Insurance Guaranty Association is a non-profit legal entity. According to R.S. 22:2085, in which Louisiana parish is the Association legally domiciled?
- A) Orleans Parish
- B) Jefferson Parish
- C) East Baton Rouge Parish
- D) Caddo Parish
Show answer & explanation
Answer: C
The statute specifically states that the legal domicile of the Association shall be in the parish of East Baton Rouge.
Question 16 (Chapter 2)
Which of the following transactions is generally EXEMPT from the requirements of Louisiana's Regulation 70 regarding the replacement of life insurance and annuities?
- A) Replacement of an existing whole life policy with a new universal life policy.
- B) Replacement of an existing annuity with a new annuity.
- C) Credit life insurance.
- D) Replacement of a term policy that has been in force for 10 years.
Show answer & explanation
Answer: C
LAC 37:XIII §8905 lists exemptions to Regulation 70, which include credit life insurance, group life insurance (with some exceptions), and policies issued in connection with a pension or profit-sharing plan.
Question 17 (Chapter 2)
The Louisiana Commissioner of Insurance has the authority to examine foreign insurers (insurers domiciled in another state) that are licensed to do business in Louisiana. According to R.S. 22:1981, the Commissioner may accept what in lieu of performing a direct examination?
- A) A letter of recommendation from the insurer's CEO.
- B) An examination report prepared by the insurance department of the insurer's state of domicile.
- C) A copy of the insurer's latest television advertisement.
- D) Nothing; the Commissioner must personally visit every foreign insurer every 3 years.
Show answer & explanation
Answer: B
To avoid duplication of effort, the Commissioner may accept an examination report from the insurer's home state, provided that state's insurance department was accredited by the NAIC at the time of the exam.
The Mistakes That Cost Marks
Using the wrong refund period. Ordinary free look is 10 days from receipt of the policy; the replacement right is a separate 30-day unconditional refund. Read the stem for the word replacing before you choose.
Mixing up the unfair-practice labels. Rebating is a valuable inducement not in the policy; twisting is misrepresentation to induce replacement; misrepresentation is a false statement about terms. The label follows the conduct described.
Treating the guaranty association as a sales feature. Using it to imply a policy is guaranteed is prohibited advertising, and the association has stated dollar limits per category.
Assigning replacement duties to the wrong party. Some duties belong to the producer and some to the replacing insurer. Ask who is acting in the question.
Your Next Step
Work through all 17 questions once untimed, then again timed, and keep a list of the ones you miss. Our free Louisiana practice question hub collects every topic set, and the course preview lets you hear a lesson before you commit.
If you want the format and weights first, read how many questions are on the exam.
Free: 25 Louisiana L&H practice questions
Liked this article? Get 25 exam-style questions emailed to you — with full answer explanations, no credit card. Closest thing to studying offline.
No spam. Just the questions and one optional follow-up.
Study this topic with LanePrep
Listen to these audio chapters on your commute — no screen required.
Related Articles
How to Pass the Louisiana Life, Health and Accident Insurance Exam on the First Try (2026)
10 min read
About $194 All-In: Louisiana Life & Health License Cost 2026
7 min read
25 Free Louisiana Life & Health Exam Practice Questions (2026)
25 min read
Is the Louisiana Life & Health Exam Hard? Pass Rates and Difficulty (2026)
4 min read
17 Free Louisiana Life & Health Practice Questions: General Insurance Concepts (2026)
10 min read
17 Free Louisiana Life & Health Practice Questions: Application and Underwriting (2026)
10 min read
17 Free Louisiana Life & Health Practice Questions: Policy Types and Annuities (2026)
11 min read