17 Free Maryland Life & Health Practice Questions: Maryland Insurance Regulation (2026)
How to Use This Maryland Insurance Regulation Set
Insurance Regulation is section 1.0 of every Maryland Life and Health outline, and it is the largest: 30% of the Life exam (24 of 80 scored items), 30% of the Accident & Health exam (24 of 80) and 30% of the Combo (39 of 130).
The outline cites Insurance Article provisions including §§1-101, 1-301, 2-101, 2-102, 4-101, 10-116, 10-118, 27-209 and 27-213, and COMAR 31.03.03 and 31.15.02.12. This set puts the questions in context: reporting duties of a licensed producer, appointments and terminations, license suspension and hearings, continuing education, assumed names, the Insurance Administration's powers, unfair trade practices and the Maryland Health Benefit Exchange. Each of the 17 questions has an answer and an explanation.
Practice Questions 1-6: Reporting Duties, Unfair Practices, Appointments and Continuing Education
The first six cover address changes, premium funds, an unfair trade practice, solicitation without an appointment, the continuing education requirement and an insurer's duty on appointment.
Question 1 (Chapter 8)
A Maryland-licensed insurance producer moves to a new residence but fails to notify the Maryland Insurance Administration (MIA) of the address change within the required timeframe. Which of the following best describes the consequence under Maryland law?
- A) The producer's license is automatically suspended.
- B) The producer's license is immediately revoked.
- C) The producer must retake the licensing examination to maintain licensure.
- D) The producer may be subject to disciplinary action by the MIA for failure to report an address change.
Show answer & explanation
Answer: D
Under Maryland Insurance Article §10-116(a)(2)(i), licensees are required to report any change in address to the MIA within a specified time. Failure to do so is a violation that may result in disciplinary action, including fines, probation, suspension, or revocation, depending on the circumstances. The license is not automatically suspended or revoked, nor is retaking the exam required solely for an address change violation. Thus, option D correctly identifies the potential consequence.
Question 2 (Chapter 8)
A Maryland-licensed insurance producer is found to have commingled premium funds with personal funds. Which provision of Maryland law most directly addresses this prohibited activity?
- A) Insurance Article §10-105
- B) Insurance Article §27-209
- C) Insurance Article §2-401
- D) COMAR 31.03.03
Show answer & explanation
Answer: D
COMAR 31.03.03 specifically addresses producer responsibilities, including the prohibition against commingling of funds and the requirement to maintain fiduciary responsibility for trust accounts. While §10-105 and §27-209 relate to producer regulation and unlawful activities, and §2-401 addresses fraud, COMAR 31.03.03 is the regulation that directly governs the handling of premium funds and prohibits commingling, making it the most specific and direct provision for this violation.
Question 3 (Chapter 8)
Which of the following constitutes an unfair trade practice under Maryland Insurance Article §27-213 and related provisions?
- A) Charging a fee for financial planning services that is separate from and not contingent on the sale of an insurance product
- B) Providing a client with a comparison of two similar life insurance policies from different insurers
- C) Failing to disclose that a policy recommendation will result in the producer receiving a higher commission than an alternative policy
- D) Using blank forms to solicit insurance when no specific policy has been selected by the prospect
Show answer & explanation
Answer: D
Under Maryland Insurance Article §27-213 and COMAR 31.15.02.12, the use of blank forms to solicit insurance is prohibited as an unfair trade practice. Option A describes permissible fee-based financial planning (if not tied to insurance sales), option B is allowable comparative information (if not misleading), and option C, while potentially problematic under suitability or disclosure rules, is not explicitly defined as an unfair trade practice under the cited statutes. The use of blank forms (D) is specifically prohibited under §27-213 and COMAR 31.15.02.12 as a coercive or misleading practice.
Question 4 (Chapter 8)
A Maryland insurance producer solicits a life insurance policy for a Maryland resident but is not appointed by the insurer issuing the policy. Which of the following best describes the legality of this action under Maryland law?
- A) Prohibited, as solicitation requires a valid appointment with the insurer.
- B) Permitted, as the producer's license alone authorizes solicitation for any insurer.
- C) Permitted only if the producer discloses the lack of appointment to the applicant.
- D) Permitted if the insurer later ratifies the solicitation.
Show answer & explanation
Answer: A
Under Maryland Insurance Article §10-118 and §27-209, a producer must be appointed by an insurer before soliciting or selling insurance for that insurer. The license alone does not grant authority to act for a specific insurer; appointment is required. Disclosure or ratification does not cure the lack of appointment, making options A, B, and D incorrect.
Question 5 (Chapter 8)
A Maryland resident applies for a resident insurance producer license. Which of the following is NOT a requirement for initial licensure under Maryland Insurance Article §10-103(c)(1)?
- A) Being at least 18 years of age
- B) Demonstrating good character and trustworthiness
- C) Providing proof of errors and omissions insurance coverage
- D) Passing the state licensing examination
Show answer & explanation
Answer: C
Under Maryland Insurance Article §10-103(c)(1), initial licensure requires the applicant to be at least 18 years old, demonstrate good character and trustworthiness, pass the state examination, and submit an application with the required fee. Errors and omissions insurance is not a statutory requirement for initial licensure, although it may be required by an insurer or agency as a condition of appointment. Therefore, option D is not a requirement under the cited statute.
Question 6 (Chapter 8)
Under Maryland Insurance Article §27-209, what must an insurer do when appointing an insurance producer?
- A) Provide the producer with a copy of the insurer's annual statement.
- B) Obtain the producer's written consent to the appointment.
- C) File the appointment contract with the producer's home state.
- D) Notify the Maryland Insurance Administration of the appointment.
Show answer & explanation
Answer: D
Section 27-209 requires the insurer to notify the Maryland Insurance Administration of the appointment of a producer. While the producer must acknowledge the appointment (per §10-118), the insurer's duty is to notify the MIA. Providing the annual statement (A), obtaining written consent (B), or filing with the home state (C) are not requirements under this section.
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Practice Questions 7-12: Suspension, Terminations, Hearings, Out-of-State Producers and Assumed Names
Next come what a suspended producer may not do, ending an appointment, the Administration's examination power, the right to a hearing, a producer licensed elsewhere, and assumed names.
Question 7 (Chapter 8)
A Maryland insurance producer's license is suspended by the Maryland Insurance Administration. During the suspension period, which of the following actions is the producer permitted to take?
- A) Sell new policies but not service existing ones.
- B) Continue to solicit insurance as long as no premium is collected.
- C) Perform no acts requiring a license, including solicitation, negotiation, or effectuation of insurance.
- D) Receive renewal commissions on policies sold before the suspension.
Show answer & explanation
Answer: C
During a license suspension, the producer is prohibited from performing any acts that require a license, including soliciting, negotiating, or effectuating insurance policies. Selling new policies (A), soliciting without collecting premium (B), and even receiving renewal commissions (D) may still require license authority and are not permitted during suspension. Only passive activities like maintaining existing policies without new transactions may be allowed, but the producer cannot act as a licensed producer.
Question 8 (Chapter 8)
A Maryland insurance producer is appointed by an insurer to sell its policies. The insurer later terminates the appointment. According to Maryland law, when must the producer stop soliciting for that insurer?
- A) Immediately upon receiving notice of termination from the insurer.
- B) Only after the producer finds a new insurer to represent.
- C) Only after the MIA sends a formal notice to cease solicitation.
- D) The producer may continue soliciting until the license expires.
Show answer & explanation
Answer: A
Under Maryland Insurance Article §27-209 and related appointment rules, a producer must cease solicitation for an insurer immediately upon termination of the appointment. The insurer notifies the MIA, and the producer must stop soliciting without waiting for MIA action. Options B, C, and D are incorrect: there is no 10-day grace period, the MIA does not issue a separate cease solicitation notice, and the license alone does not authorize solicitation for a specific insurer without an active appointment.
Question 9 (Chapter 8)
Which of the following best describes the Maryland Insurance Administration's authority under Insurance Article §2-102(a)?
- A) To examine the books and records of any person transacting insurance business in Maryland.
- B) To issue licenses to insurance producers after they pass the examination.
- C) To appoint insurance producers to represent specific insurers.
- D) To approve continuing education courses for producer license renewal.
Show answer & explanation
Answer: A
Insurance Article §2-102(a) grants the MIA the power to examine the books and records of any person engaged in the insurance business in Maryland, including producers and insurers, to ensure compliance with laws and regulations. Option B is incorrect as producer licensing is handled under separate provisions (§§10-103 et seq.), not this subsection. Option C is incorrect because appointments are made by insurers, not the MIA. Option D is incorrect as CE course approval is handled by a separate vendor (Sircon), not the MIA under this statute.
Question 10 (Chapter 8)
A Maryland insurance producer receives a notice from the MIA that their license will be suspended due to repeated violations of continuing education requirements. The producer wishes to contest this action. What is the producer's first procedural step under Maryland Insurance Article §1-301?
- A) File a written request for a hearing with the MIA within the time period stated in the notice.
- B) Immediately cease all insurance activities and surrender their license to the MIA.
- C) File an appeal directly with the Circuit Court in the county where they reside.
- D) Submit proof of completed continuing education to the MIA to avoid the suspension.
Show answer & explanation
Answer: A
Under §1-301, when the MIA proposes to suspend, revoke, or refuse to renew a license, the producer has the right to request a hearing. The producer must file a written request for a hearing within the time period stated in the MIA's notice. Option B is incorrect because surrendering the license is not required and does not contest the action. Option C is incorrect because judicial appeal comes only after the administrative hearing process is exhausted. Option D is incorrect because submitting proof after the notice of suspension has been issued does not automatically prevent the suspension; the hearing process must be followed.
Question 11 (Chapter 8)
Which of the following activities requires an insurance producer to be appointed by an insurer before acting on behalf of that insurer in Maryland?
- A) Providing general information about insurance products to a friend
- B) Attending an insurance industry conference as a representative of a trade association
- C) Updating personal contact information with the Maryland Insurance Administration
- D) Discussing the features of a specific insurer's annuity product with a prospective client
Show answer & explanation
Answer: D
Under Maryland Insurance Article §10-118 and §27-209, a producer must be appointed by an insurer before soliciting, selling, or negotiating insurance for that insurer. Discussing the features of a specific insurer's annuity product with a prospective client constitutes solicitation or negotiation and requires prior appointment. Providing general information (A) does not require appointment, attending a conference (B) is not insurance solicitation, and updating contact information (C) is an administrative function unrelated to acting for an insurer.
Question 12 (Chapter 8)
A Maryland-licensed insurance producer wishes to use the assumed name 'Old Line Insurance Advisors' for their business activities. What must the producer do to comply with Maryland law regarding assumed names?
- A) Register the assumed name with the Maryland State Department of Assessments and Taxation (SDAT) instead of the Maryland Insurance Administration.
- B) File a fictitious name registration with the circuit court in the county where the business is located, with no MIA notification required.
- C) Notify the Maryland Insurance Administration (MIA) of the assumed name before using it.
- D) Begin using the name immediately; no registration or notification is required as long as the name is not misleading.
Show answer & explanation
Answer: C
Under Maryland Insurance Article §10-116(a)(2)(i), a producer who uses an assumed name must notify the Maryland Insurance Administration of that name before using it. Option A is incorrect because registering with SDAT alone does not satisfy the MIA notification requirement. Option B is incorrect because filing with the circuit court does not substitute for notifying the MIA. Option D is incorrect because an assumed name must be registered with the MIA; it is not automatically permitted.
Practice Questions 13-17: Felony Reports, Insurer Powers, Business Entities, Defamation and the Exchange
The last five cover felony reporting, the certificate of authority, the business entity license, defamation about a competitor and enrollment in the Maryland Health Benefit Exchange.
Question 13 (Chapter 8)
A Maryland insurance producer's appointment with an insurer is terminated. According to Maryland law, what must the producer do upon termination of the appointment?
- A) Continue soliciting for that insurer until the next license renewal period.
- B) Continue solicitation until the producer's license expires.
- C) Notify the Maryland Insurance Administration of the termination.
- D) Immediately cease all solicitation and sales activities for that insurer.
Show answer & explanation
Answer: D
Under Maryland Insurance Article §10-118 and §27-209, when an appointment is terminated, the producer must immediately cease solicitation and sales activities for that insurer. There is no grace period allowing continued solicitation (eliminating A), and the producer's license remaining active does not permit continued solicitation for an insurer that no longer appoints them (eliminating B). While the insurer is responsible for notifying the MIA of the termination, that is not the producer's own obligation under these statutes (eliminating C). Therefore, the producer must immediately cease all solicitation and sales activities, as stated in option D.
Question 14 (Chapter 8)
Which of the following statements accurately describes the Maryland Insurance Administration's authority under Insurance Article §4-101 regarding insurer regulation?
- A) To issue licenses to insurance producers and advisers.
- B) To examine the books, records, and affairs of any person engaged in the business of insurance.
- C) To issue certificates of authority to insurers authorizing them to transact insurance in Maryland.
- D) To collect and maintain statistics and information concerning the business of insurance in Maryland.
Show answer & explanation
Answer: C
Section 4-101 grants the MIA the authority to issue certificates of authority to insurers, which is the permission required for an insurer to legally transact insurance business in Maryland. This is a core insurer regulatory function. Option A describes producer licensing, which falls under §§10-103 et seq. Option B describes examinations, which fall under §2-102(a). Option D describes a different function not granted under this section.
Question 15 (Chapter 8)
An insurance agency, 'Capital City Insurance LLC,' wishes to operate in Maryland and employ licensed producers to sell insurance. What type of license must 'Capital City Insurance LLC' obtain from the Maryland Insurance Administration (MIA)?
- A) A producer license for each individual employee.
- B) A business entity producer license.
- C) A consultant license.
- D) A managing general agent license.
Show answer & explanation
Answer: B
Under Maryland Insurance Article §1-101(u)(1), a business entity that acts as an insurance producer must obtain a business entity producer license. While individual employees who sell insurance must also hold their own individual producer licenses (Option A), the entity itself requires a separate license to conduct insurance business. Options C and D refer to different types of licenses that do not cover the general operation of an insurance agency.
Question 16 (Chapter 8)
A Maryland-licensed insurance producer, during a sales presentation, tells a prospective client that a competing insurer is on the verge of bankruptcy, knowing this statement to be false. The producer then encourages the client to purchase a policy from their own company instead. Which unfair trade practice has this producer committed under Maryland law?
- A) Twisting
- B) Rebating
- C) Defamation
- D) Unfair discrimination
Show answer & explanation
Answer: C
Maryland Insurance Article §27-213 prohibits defamation, which includes making false or maliciously critical statements about the financial condition of any person engaged in the business of insurance, or about the financial condition of any insurer, with the intent to injure. The scenario directly describes defamation. Twisting (A) involves inducing a policyholder to lapse or forfeit an existing policy to replace it with another, often to the policyholder's detriment. Rebating (B) involves offering an inducement not specified in the policy. Unfair discrimination (D) involves treating individuals differently in terms of rates or coverage based on prohibited factors.
Question 17 (Chapter 8)
The Maryland Health Benefit Exchange (MHBE) offers various health plans to individuals and small businesses. For individuals, when is the primary period during which they can enroll in a health plan through the MHBE for coverage beginning the following year?
- A) Special Enrollment Period, triggered by qualifying life events.
- B) Anytime throughout the year, with coverage starting immediately.
- C) The annual Open Enrollment Period, typically in the fall.
- D) Only during the first 60 days after moving to Maryland.
Show answer & explanation
Answer: C
The Maryland Health Benefit Exchange, like other state and federal marketplaces, operates with an annual Open Enrollment Period (OEP), typically occurring in the fall, during which individuals can enroll in or change health plans for coverage effective the following calendar year. Option A, Special Enrollment Periods (SEPs), are for qualifying life events outside of OEP. Option B is incorrect as enrollment is not continuous. Option D describes a specific qualifying life event for an SEP, but not the primary enrollment period.
The Mistakes That Cost Marks
Not separating the unfair trade practices. Misrepresentation is a false statement to induce a purchase. Defamation is a false, injurious statement about another insurer's finances. Twisting is inducing a replacement to the policyholder's harm. Rebating is offering an inducement outside the policy. Read the act, not the setting.
Mixing up reporting and registering. Some duties are to tell the Administration about a change, such as address or name. Others are to register something, such as an assumed name. The question wording says which.
Treating a license as an appointment. The license lets you act as a producer. Authority to solicit for a particular insurer requires that insurer's appointment, and it ends when the appointment ends.
Treating a disciplinary matter as automatic. A proposed suspension carries a right to request a hearing within the time stated in the notice. Submitting proof afterward does not by itself stop it.
Missing the continuing education figures. Renewal requires 24 hours, including 3 hours of ethics.
Assigning the wrong source. Producer conduct and fiduciary duty point to COMAR 31.03.03. Insurer matters, such as certificates of authority, point to a different part of the Insurance Article.
Skipping the business entity. An agency organized as a business needs its own entity license, and the individuals who sell need their own as well.
Your Next Step
Missed questions point to the outline section to revisit. When you are ready, preview the Maryland Life & Health course for the audio lessons and the full question bank, or go back to the free Maryland practice question hub for the other topic sets.
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