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Free New Mexico Accident and Health or Sickness Insurance Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the New Mexico Accident and Health or Sickness Insurance practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A New Mexico resident applies for an insurance producer license. Which item may the superintendent require on the application?

    1. A. The applicant's Social Security number or individual taxpayer identification number
    2. B. A guarantee of first-year premium volume
    3. C. A list of every future client
    4. D. A bond equal to projected commissions

    Answer: A

    Explanation: The controlling text requires "name, date of birth, social security number or individual taxpayer identification number"; the identifier in A matches that requirement.

    Reference: Nmsa Chapter 59A Current — NMSA 1978, § 59A-11-2(B)

  2. 2An insurer raises an applicant's health policy rate partly because of a consumer report. What must it provide under the FCRA?

    1. A. A notice only if the report was the insurer's primary reason for the increase.
    2. B. An adverse-action notice even though the report was only one factor.
    3. C. A notice only after the applicant separately requests the report.
    4. D. An adverse-action notice only if the reporting agency set the new rate.

    Answer: B

    Explanation: "The adverse action notice is required even if information in the consumer report wasn’t the primary reason for the denial, rate increase, or termination." The report's partial role is enough; its weight in the decision does not remove the notice duty.

    Reference: FTC, Consumer Reports: What Insurers Need to Know — FTC guidance, Adverse Action Notice, report as a contributing factor

  3. 3A clinic sets aside its own funds to pay smaller future losses instead of buying coverage for them. Which risk-handling method is it using?

    1. A. Risk avoidance
    2. B. Risk transfer
    3. C. Risk sharing
    4. D. Risk retention

    Answer: D

    Explanation: "Retention - a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company." The clinic internally finances the exposure; buying insurance would transfer it.

    Reference: NAIC, Glossary of Insurance Terms — Glossary, Retention

  4. 4A health insurer reviews an application, evaluates the applicant's health risk, and determines whether to accept it and at what rate. Which process is this?

    1. A. Policy servicing
    2. B. Underwriting
    3. C. Claim adjustment
    4. D. Premium accounting

    Answer: B

    Explanation: "Underwriting - the process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided." The described pre-issue acceptance, classification and rate decision is underwriting.

    Reference: NAIC, Glossary of Insurance Terms — Glossary, Underwriting

  5. 5A producer tells an insured that a verbal promise has changed a New Mexico individual health policy's written coverage. What is the effect under the entire-contract provision?

    1. A. The promise changes coverage if the insured pays the next premium.
    2. B. The promise changes coverage if the producer records it in a file.
    3. C. The producer cannot change or waive the policy's provisions by that promise.
    4. D. The producer can change the policy when a claim has not yet arisen.

    Answer: C

    Explanation: "No agent has authority to change this policy or to waive any of its provisions." A producer’s oral assurance therefore cannot change the written terms.

    Reference: New Mexico Insurance Code, NMSA 1978 Chapter 59A — NMSA 1978 § 59A-22-4, Entire contract; changes

  6. 6A surgeon cannot perform surgery after an injury but can perform another job for which the surgeon is qualified. Which disability-policy definition could still treat the surgeon as disabled?

    1. A. A definition based on inability to perform the surgeon's own occupation.
    2. B. A definition requiring inability to perform any qualified employment.
    3. C. A definition requiring permanent inability to perform every type of work.
    4. D. A definition requiring loss of income without any work restriction.

    Answer: A

    Explanation: "Some may pay benefits if you are unable to perform the duties of your occupation, while others may require that your disability keep you from any gainful employment for which you are qualified." An own-occupation definition can focus on the insured's usual duties; an any-qualified-employment test asks a broader work-capacity question.

    Reference: NAIC, Simplifying the Complications of Disability Insurance — Definition of Disability

  7. 7A medical plan requires the member to pay a specified amount for covered services before the plan begins paying for services subject to that provision. Which cost-sharing term applies?

    1. A. Copayment
    2. B. Deductible
    3. C. Coinsurance
    4. D. Out-of-pocket limit

    Answer: B

    Explanation: "An amount you could owe during a coverage period (usually one year) for covered health care services before your plan begins to pay." A deductible is the amount owed before plan payment begins for services subject to it; the other terms describe different cost-sharing mechanisms.

    Reference: HealthCare.gov, Glossary of Health Coverage and Medical Terms — Glossary, Deductible

  8. 8An employer sponsors health coverage for its workforce under one master arrangement. Who are the parties to the group contract?

    1. A. The insurer and the employer or other group sponsor.
    2. B. The insurer and each employee separately.
    3. C. The producer and each employee separately.
    4. D. The employer and every health care provider.

    Answer: A

    Explanation: "Group contract — An insurance contract between an insurance company and an employer or other entity to cover employees or other group members." The sponsor contracts with the insurer to cover eligible group members; individuals receive coverage under that arrangement.

    Reference: Washington OIC, A Consumer's Insurance Glossary — Glossary, Group contract

  9. 9A Medicare beneficiary compares covered services after a serious illness. Which service falls under Part A hospital insurance?

    1. A. An inpatient hospital admission for covered care.
    2. B. An outpatient physician visit for covered care.
    3. C. A retail prescription filled under drug coverage.
    4. D. Durable medical equipment supplied for home use.

    Answer: A

    Explanation: "Part A helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care." An inpatient hospital admission is a Part A service. The outpatient physician visit and equipment are associated with Part B; prescription drug coverage is Part D.

    Reference: Medicare.gov, Parts of Medicare — Parts of Medicare, Part A

  10. 10For a 2025 federal return, a taxpayer paid eligible medical insurance premiums personally and itemizes deductions. What percentage of AGI must total medical and dental expenses exceed before the excess can be deducted?

    1. A. 5.0% of adjusted gross income
    2. B. 7.5% of adjusted gross income
    3. C. 10.0% of adjusted gross income
    4. D. 12.5% of adjusted gross income

    Answer: B

    Explanation: "You can include in medical expenses insurance premiums you pay for policies that cover medical care." The IRS also states, "You can deduct on Schedule A (Form 1040) only the part of your medical and dental expenses that is more than 7.5% of your adjusted gross income (AGI)." Eligible personally paid premiums enter the medical-expense total, subject to that 7.5% threshold.

    Reference: IRS, Publication 502, Medical and Dental Expenses — Publication 502, Insurance Premiums; What Are Medical Expenses

Topics in this practice bank

These topics describe the available practice for New Mexico Accident and Health or Sickness Insurance. Review the examination outline and its sources for scope and allocation details.

  • Insurance Regulation
    • Licensing
    • Licensing — Process (59A-11-2, 3, 59A-12-12; Reg 13.4.2.8, .9)
    • Licensing — Types of Licensees (Reg 13.4.2.7, .11)
    • Licensing — Types of Licensees (Reg 13.4.2.7, .11) — Insurance Producers (59A-12-2)
    • Licensing — Types of Licensees (Reg 13.4.2.7, .11) — Brokers (59A-12-3)
    • Licensing — Types of Licensees (Reg 13.4.2.7, .11) — Consultants (59A-11A-1-8)
    • Licensing — Types of Licensees (Reg 13.4.2.7, .11) — Nonresident (59A-12-25) (59A-11-24)
    • Licensing — Types of Licensees (Reg 13.4.2.7, .11) — Temporary (59A-11-4; 59A-12-19; Reg 13.4.2.12)
    • Licensing — Maintenance and Duration
    • Licensing — Maintenance and Duration — Expiration and Renewal (59A-11-10, 11)
    • Licensing — Maintenance and Duration — Address Change (59A-12-17) (59A-11-24)
    • Licensing — Maintenance and Duration — Continuing Education (59A-12-26; Reg 13.4.7.9, .12)
    • Licensing — Disciplinary Actions
    • Licensing — Disciplinary Actions — Suspension, Revocation, or Refusal to Renew (59A-11-8, 10, 14–16, 18)
    • Licensing — Disciplinary Actions — Cease and Desist Orders (59A-16-27)
    • Licensing — Disciplinary Actions — Penalties and Fines (59A-1-18, 59A-11- 17, 21)
    • State Regulation
    • State Regulation — Superintendent's General Duties and Powers (59A-2-8-10)
    • State Regulation — Company Regulation
    • State Regulation — Company Regulation — Certificate of Authority (59A-5-10)
    • State Regulation — Company Regulation — Unfair Claims Settlement Practices (59A-16-20)
    • State Regulation — Company Regulation — Complaint Record (59A-16-22)
    • State Regulation — Company Regulation — Appointment of Insurance Producer (59A- 11-12; Reg 13.4.2.17)
    • State Regulation — Company Regulation — Termination of Insurance Producer Appointment (59A-11-13; Reg 13.4.2.29)
    • State Regulation — Insurance Producer Regulation
    • State Regulation — Insurance Producer Regulation — Shared Commissions (59A-12-24)
    • State Regulation — Insurance Producer Regulation — Fiduciary Duties (59A-12-22)
    • State Regulation — Insurance Producer Regulation — Prohibited Premiums or Charges (59A-16- 24)
    • State Regulation — Unfair Insurance Trade Practices
    • State Regulation — Unfair Insurance Trade Practices — Misrepresentation (59A-16-4, 23)
    • State Regulation — Unfair Insurance Trade Practices — False Advertising (59A-16-4, 5)
    • State Regulation — Unfair Insurance Trade Practices — Twisting (59A-16-6)
    • State Regulation — Unfair Insurance Trade Practices — Defamation (59A-16-10)
    • State Regulation — Unfair Insurance Trade Practices — Unfair Discrimination (59A-16, 13, 17(D))
    • State Regulation — Unfair Insurance Trade Practices — Rebating (59A-16-16–18)
    • State Regulation — Unfair Insurance Trade Practices — Boycott, Coercion, or Intimidation (59A- 16-19)
    • State Regulation — Examination of Books and Records (59A-4-3, 4)
    • State Regulation — Insurance Fraud Act (59A-16C-1-16)
    • State Regulation — Consumer Information Privacy (59A-2-9.3; Reg 13.1.3.1-.28)
  • Federal Laws and Regulations
    • Fair Credit Reporting Act - Purpose
    • Privacy [Gramm Leach Bliley]
    • Prohibited Persons in Insurance (18 United States Code (USC) Sections 1033 and 1034) waiver
    • Affordable Care Act (ACA)
    • National Do Not Call List
    • CAN-SPAM Act
  • General Insurance Concepts
    • Risk
    • Risk — Methods of Handling Risk (Avoidance, Retention, Sharing, Reduction, Transfer)
    • Risk — Elements of Insurable Risks
    • Risk — Definitions (Risk, Hazard, Peril, Loss)
    • Elements of a Contract
    • Elements of a Contract — Consideration
    • Elements of a Contract — Competent Parties
    • Elements of a Contract — Legal Purpose
    • Elements of a Contract — Offer
    • Elements of a Contract — Acceptance
    • Authority and Powers of Producers
    • Authority and Powers of Producers — Express
    • Authority and Powers of Producers — Implied
    • Authority and Powers of Producers — Apparent
    • Authority and Powers of Producers — The Law of Agency
    • Legal Interpretations Affecting Contracts
    • Legal Interpretations Affecting Contracts — Reasonable Expectations
    • Legal Interpretations Affecting Contracts — Indemnity
    • Legal Interpretations Affecting Contracts — Good Faith
    • Legal Interpretations Affecting Contracts — Fraud
    • Legal Interpretations Affecting Contracts — Warranties, Representations, Misrepresentations, and Concealment
  • Accident and Health Insurance Basics
    • Field Underwriting
    • Field Underwriting — Application Procedures
    • Field Underwriting — Disclosures and Privacy
    • Underwriting Requirements (Varies by Insurer)
    • Sources of Underwriting
    • Sources of Underwriting — Application
    • Sources of Underwriting — Producer's report
    • Sources of Underwriting — Medical information bureau (MIB)
    • Sources of Underwriting — Inspection report
    • Sources of Underwriting — Medical examination
    • Sources of Underwriting — Attending physician's report
    • Policy Delivery
    • Policy Delivery — Effective Date of Coverage
    • Policy Delivery — Policy Review
    • Policy Delivery — Premium Collection Methods (e.g., Electronic, Physical, EFT, ACH)
    • Policy Delivery — Statement of Good Health
    • Definitions of Perils
    • Definitions of Perils — Accidental Injury
    • Definitions of Perils — Sickness
    • Types of Losses and Benefits
    • Types of Losses and Benefits — Loss of Income from Disability (Short-Term/Long-Term Disability)
    • Types of Losses and Benefits — Medical Expense
    • Types of Losses and Benefits — Long-Term Care Expense
    • Classification of Risks
    • Classification of Risks — Preferred
    • Classification of Risks — Standard
    • Classification of Risks — Substandard
  • Accident and Health Insurance Policy Provisions
    • Uniform Required Provisions
    • Uniform Required Provisions — Time Limit on Certain Defenses
    • Uniform Required Provisions — Grace Period
    • Uniform Required Provisions — Reinstatement
    • Uniform Required Provisions — Claim Forms
    • Uniform Required Provisions — Proof of Loss
    • Uniform Required Provisions — Time of Payment of Claims
    • Uniform Required Provisions — Physical Examinations and Autopsy
    • Uniform Required Provisions — Legal Actions
    • Uniform Required Provisions — Entire Contract
    • Uniform Required Provisions — Payment of Claims
    • Uniform Required Provisions — Change of Beneficiary
    • Uniform Required Provisions — Notice of Claim
    • Uniform Optional Provisions
    • Uniform Optional Provisions — Change of Occupation
    • Uniform Optional Provisions — Misstatement of Age/Sex
    • Uniform Optional Provisions — Illegal Occupation
    • Uniform Optional Provisions — Intoxicants, Narcotics, or Other Controlled Substances
    • Other General Provisions
    • Other General Provisions — Right to Examine/Free Look
    • Other General Provisions — Insuring Clause
    • Other General Provisions — Consideration Clause
    • Other General Provisions — Coinsurance
    • Other General Provisions — Probationary Period
    • Other General Provisions — Elimination Period
    • Other General Provisions — Exclusions
  • Disability Income and Related Insurance
    • Benefits Determination for Disability
    • Benefits Determination for Disability — Indemnity
    • Benefits Determination for Disability — Loss of Income
    • Qualifications of Disability
    • Qualifications of Disability — Total (Own Occupation, Any Occupation)
    • Qualifications of Disability — Partial
    • Qualifications of Disability — Permanent
    • Qualifications of Disability — Presumptive
    • Qualifications of Disability — Recurrent
    • Qualifications of Disability — Residual
    • Qualifications of Disability — Inability to Perform Duties
    • Qualifications of Disability — Occupational versus Non-Occupational
    • Individual Disability Income Insurance
    • Individual Disability Income Insurance — Basic Total Disability Plan
    • Individual Disability Income Insurance — Cost of Living Rider
    • Individual Disability Income Insurance — Future Increase Option Rider
    • Individual Disability Income Insurance — Change of Occupation
    • Individual Disability Income Insurance — Refund Provisions
    • Individual Disability Income Insurance — Exclusions
    • Individual Disability Income Insurance — Waiver of Premium
    • Individual Disability Income Insurance — Probationary Period
    • Individual Disability Income Insurance — Elimination Period
    • Individual Disability Income Insurance — Benefit Limits
    • Unique Aspects of Individual Disability Income Underwriting
    • Unique Aspects of Individual Disability Income Underwriting — Occupational Considerations
    • Unique Aspects of Individual Disability Income Underwriting — Benefit Limits
    • Unique Aspects of Individual Disability Income Underwriting — Policy Issuance Alternatives
    • Group Disability Income Insurance
    • Group Disability Income Insurance — Short-Term Disability
    • Group Disability Income Insurance — Long-Term Disability
    • Group Disability Income Insurance — Coordination of Benefits (Workers' Compensation Benefits and Social Insurance)
    • Group Disability Income Insurance — At-work benefits
    • Business Disability Income Insurance
    • Business Disability Income Insurance — Key Employee Disability Income
    • Business Disability Income Insurance — Disability Buy-Sell Policy
    • Business Disability Income Insurance — Business Overhead Expense
    • Social Security Disability Income
    • Social Security Disability Income — Qualification for Disability Benefits
    • Social Security Disability Income — Definition of Disability
    • Social Security Disability Income — Waiting Period
  • Medical Plans
    • Medical Plan Concepts
    • Medical Plan Concepts — Fee-for-Service
    • Medical Plan Concepts — Prepaid
    • Medical Plan Concepts — Specified disease/Dread disease insurance
    • Medical Plan Concepts — Comprehensive Coverage
    • Medical Plan Concepts — Dependent Coverage
    • Provisions and Clauses
    • Provisions and Clauses — Deductibles
    • Provisions and Clauses — Stop-Loss Provision
    • Provisions and Clauses — Impairment rider
    • Types of Medical Plans
    • Types of Medical Plans — Major Medical Insurance
    • Types of Medical Plans — Health Maintenance Organizations (HMOs)
    • Types of Medical Plans — Preferred Provider Organzations (PPOs)
    • Types of Medical Plans — Point-of-Service (POS) Plans
    • Cost Containment in Health Care Delivery
    • Cost Containment in Health Care Delivery — Managed Care
    • Cost Containment in Health Care Delivery — Preventive Care
    • Cost Containment in Health Care Delivery — Outpatient Benefits
    • Cost Containment in Health Care Delivery — Utilization Management
    • Cost Containment in Health Care Delivery — Preauthorization
    • Cost Containment in Health Care Delivery — Primary Care Physician
    • Limited Health Insurance Policies
    • Limited Health Insurance Policies — Accidental Death and Dismemberment
    • Limited Health Insurance Policies — Hospital indemnity
    • Limited Health Insurance Policies — Critical Illness/Dread Disease
    • Limited Health Insurance Policies — Vision Care
    • Limited Health Insurance Policies — Dental
    • Health Insurance Portability and Accountability Act (HIPAA)
    • Health Insurance Portability and Accountability Act (HIPAA) — Eligibility Requirements
    • Health Insurance Portability and Accountability Act (HIPAA) — Terms
    • Health Insurance Portability and Accountability Act (HIPAA) — Privacy
    • Health Insurance Portability and Accountability Act (HIPAA) — Portability
    • Affordable Care Act (ACA)
    • Affordable Care Act (ACA) — Eligibility
    • Affordable Care Act (ACA) — Dependent coverage
    • Affordable Care Act (ACA) — Essential health benefits
    • Affordable Care Act (ACA) — Levels of Coverage (Metallic Plans)
  • Group Health Insurance
    • Characteristics of Group Health Insurance
    • Characteristics of Group Health Insurance — Group Contract
    • Characteristics of Group Health Insurance — Certificate of Coverage
    • Characteristics of Group Health Insurance — Eligible Groups
    • Characteristics of Group Health Insurance — Contributory versus Non-Contributory
    • Employer Group Health Insurance
    • Employer Group Health Insurance — Underwriting Criteria
    • Employer Group Health Insurance — Eligibility for Insurance
    • Employer Group Health Insurance — Conversion of Coverage
    • Employer Group Health Insurance — Open Enrollment
    • Employer Group Health Insurance — Probation/Waiting Period
    • Employer Group Health Insurance — Coordination of Benefits
    • COBRA
    • COBRA — Eligibility
    • COBRA — Duration of Coverage
    • COBRA — Premium
  • Specialized Health Insurance for Qualified Individuals
    • Medicare
    • Medicare — Eligibility
    • Medicare — Part A
    • Medicare — Part B
    • Medicare — Part C
    • Medicare — Part D
    • Medicare Supplement Insurance
    • Medicare Supplement Insurance — Enrollment Periods
    • Medicare Supplement Insurance — Standardized Plan Benefits
    • Medicaid
    • Medicaid — Eligibility
    • Long-Term Care Policies
    • Long-Term Care Policies — Eligibility for Benefits (Activities of Daily Living)
    • Long-Term Care Policies — Benefit/Elimination Periods
    • Long-Term Care Policies — Levels of care (Skilled, Intermediate, Custodial)
  • Federal Tax Considerations for Health Insurance
    • Health Insurance Premiums and Benefits
    • Health Insurance Premiums and Benefits — Individual
    • Health Insurance Premiums and Benefits — Group
    • Health Insurance Premiums and Benefits — Disability Income (Individual and Group)
    • Health Insurance Premiums and Benefits — Business Disability Insurance
    • Consumer-Driven Health Plans
    • Consumer-Driven Health Plans — Health Savings Accounts (HSAs)
    • Consumer-Driven Health Plans — Health Savings Accounts (HSAs) — High Deductible Health Plans (HDHPs)
    • Consumer-Driven Health Plans — Health Reimbursement Accounts (HRAs)
    • Consumer-Driven Health Plans — Flexible Spending Accounts (FSAs)

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