Nebraska Life & Health Insurance Exam — Study Guide

How to use this chapter

Everything before this point is the national content every state's Life & Health producer exam shares. This chapter is the Nebraska state law portion — the material PSI draws on for the Nebraska-specific items in the Life, Accident and Health or Sickness examination (Series 13-03), and the half that candidates most often fail.

Rules are stated affirmatively. Where Nebraska has a rule — a guaranty association, a replacement regulation, an unfair trade practices act, a free-look right, an annuity best-interest standard — this chapter says so plainly, because those facts are stable and knowable. Numbers are flagged. Dollar limits, credit-hour counts, day counts, and fees move with each legislative session and rule amendment, so figures carry a verify current with the Nebraska Department of Insurance flag. Learn the structure; confirm the number.

Primary sources: Nebraska Revised Statutes Chapter 44 (Insurance) — including the Insurance Producers Licensing Act (§§ 44-4047 to 44-4069), the Insurance Producers Continuing Education Act (§§ 44-3901 to 44-3908), the Unfair Insurance Trade Practices Act (§§ 44-1521 to 44-1535), the Unfair Insurance Claims Settlement Practices Act (§§ 44-1536 to 44-1544), the Nebraska Life and Health Insurance Guaranty Association Act (§§ 44-2701 to 44-2721), the Nebraska Protection in Annuity Transactions Act (§§ 44-8101 to 44-8109), the Insurance Fraud Act (§§ 44-6601 to 44-6608), and the Privacy of Insurance Consumer Information Act (§§ 44-901 to 44-925) — plus Title 210 of the Nebraska Administrative Code, the Department's rules, and Department guidance at doi.nebraska.gov.

1. The Nebraska Department of Insurance and the Director

Nebraska regulates insurance through the Nebraska Department of Insurance, headed not by a "commissioner" but by the Director of Insurance. Candidates coming from other states' study material routinely miss this: every Nebraska statute and regulation says "Director," and the Director is appointed by the Governor — the office is not elected. Exam items that hinge on "who has authority" are testing this word.

Powers. Neb. Rev. Stat. § 44-101.01 makes the Director the chief administrative officer of the Department and gives the office the power and duty to enforce and execute all the insurance laws of this state and to adopt and promulgate all needful rules and regulations to carry out the true spirit and meaning of Chapter 44. Those rules are codified as Title 210 of the Nebraska Administrative Code, and the chapters a life and health producer lives inside are worth memorizing by number:

• Ch. 14 — Advertisements of Accident and Sickness Insurance
• Ch. 15 — Variable Life Insurance Contracts
• Ch. 19 — Replacement of Life Insurance and Annuities
• Ch. 22 — Credit Life, Accident and Health Insurance
• Ch. 26 — Department Administration, Practice and Procedure
• Ch. 33 — Life Insurance Solicitation
• Ch. 36 — Medicare Supplement Insurance Minimum Standards
• Ch. 38 — Continuing Education of Insurance Producers
• Ch. 46 — Long-Term Care Insurance
• Ch. 50 — Life Insurance and Annuities Advertising Rules
• Ch. 61 — Unfair Life, Sickness and Accident Claims Settlement Practices
• Ch. 72 — Life Insurance Illustrations
• Ch. 76 — Viatical Settlements
• Ch. 77 — Standards for Safeguarding Customer Information
• Ch. 82 — Military Sales Practices

Licensing and admission. The Director issues and disciplines producer, agency, consultant, and limited-line licenses; issues certificates of authority to insurers under § 44-303; enforces capital, surplus, and solvency standards (§§ 44-214, 44-305); and reviews policy forms and rates. Nebraska distinguishes domestic (organized in Nebraska), foreign (another state), and alien (another country) insurers, and admitted (holding a certificate of authority) from nonadmitted carriers. Placing life or health business with a nonadmitted carrier is not a technicality — it is a licensing violation.

Examinations. Under the Insurers Examination Act the Director appoints examiners and sets the scope of each examination. Financial examinations test solvency; market conduct examinations test how a company and its producers actually behave — advertising, solicitation, underwriting, replacement, and claims. Section 44-5905 is the records backbone: persons subject to the Act must maintain all books, records, accounts, papers, documents, and computer recordings relating to the business, including market conduct records of transactions with insureds, claimants, and producers and documentation of underwriting, advertising, and trade practices, and must give the Director timely, convenient, and free access. Electronic records must be capable of accurate duplication on paper. Retention runs for a stated minimum after the transaction or until the period has been examined, whichever is later (five years — verify current with the Nebraska Department of Insurance). Refusing access is itself grounds for suspension or revocation.

Enforcement. The Director investigates complaints, holds hearings under the Administrative Procedure Act, issues cease and desist orders (§ 44-1529 for unfair trade practices; § 44-1542 for unfair claims settlement practices), levies civil monetary penalties, and suspends, revokes, or refuses to issue or renew licenses. Criminal insurance fraud is prosecuted under the Insurance Fraud Act (§§ 44-6601 to 44-6608) and § 28-631. Layered on top, 18 U.S.C. § 1033 bars anyone convicted of a felony involving dishonesty or breach of trust from the business of insurance without a § 1034 written consent (a "1033 waiver") — and Nebraska will not license a prohibited person who lacks one. All penalty amounts are verify-current.

One duty producers underestimate: § 44-1525(11) makes it an unfair trade practice to fail to respond to a written inquiry from the Department within the stated response window (fifteen working days — verify current). A Department letter is not correspondence you triage; it is a compliance deadline.

2. Producer licensing in Nebraska

Nebraska's licensing law is the Insurance Producers Licensing Act, §§ 44-4047 to 44-4069.

License required; lines of authority. No person may sell, solicit, or negotiate insurance in Nebraska without a license, subject to the narrow exemptions in § 44-4051 (chiefly clerical and administrative staff who do not sell, solicit, or negotiate, and certain salaried employees who neither receive commission nor discuss specific terms). Section 44-4054 sets out the lines of authority: life (including annuities and, in Nebraska's phrasing, disability benefits attached to life products); accident and health or sickness; property; casualty; variable life and variable annuity products; limited line credit insurance; limited line pre-need funeral insurance; personal lines; and any other line permitted under Nebraska law. Variable products additionally require FINRA/securities registration — an insurance license alone never authorizes a variable sale.

Nebraska licenses insurance consultants separately. Under §§ 44-2606 to 44-2635, a person who holds himself out as advising on insurance for a fee must hold a consultant license. A producer paid by commission for selling is a producer; charging a separate advisory fee moves you into consultant territory. Discipline for consultants runs through §§ 44-2633 and 44-2634.

Getting the resident license. Under §§ 44-4052 and 44-4053, the applicant must be at least the statutory minimum age (eighteen — verify current), file the uniform application (Nebraska applies through NIPR), pay the fee set by the Director under § 44-4064 (verify current amount), be of good character and competent, and — the operative gate — pass the examination for each line of authority applied for.

Two Nebraska points candidates get wrong:

1. Nebraska imposes no general pre-licensing classroom-hour requirement for resident producers. The statutory gate is the examination, not a mandated seat-hour course. (The one carve-out in § 44-4053 runs the other way: an insurer selling limited line credit insurance must provide a program of instruction to the individuals who will sell it.) Prep courses are still the sensible route — but do not answer an exam question by assuming a Nebraska pre-licensing hour count. Confirm the current requirement with the Department before relying on this.
2. The examination is administered by the Department's contracted testing service, PSI Services. The Life, Accident and Health or Sickness examination is Series 13-03, and it blends a general-knowledge portion with a Nebraska statutes-and-regulations portion. Question counts, time limits, passing scores, and exam fees are verify-current. Applicants should also allow processing time between passing the exam and licensure — the Department's published turnaround is verify-current.

Term and renewal — the Nebraska oddity. Section 44-4054 sets a biennial birth-month cycle, and it does so with unusual wording: an individual producer's license expires on the last day of the month of the producer's birthday in the first year after issuance in which his or her age is divisible by two. So an even-age birthday drives your first expiration, and renewals run every two years thereafter. Business entity (agency) licenses expire on April 30 of even-numbered years. Renewal is available during a window before expiration (ninety days — verify current), and a license may still be renewed during a short late window after expiration on payment of a late renewal fee (thirty days — verify current); a license renewed inside that late window is treated as timely renewed. A lapsed individual license may be reinstated without retaking the examination within a limited period from the renewal due date (twelve months — verify current), on payment of a reinstatement fee. Miss that, and you start over with a new application and a new exam.

Continuation is conditional: the license stays in force only so long as fees are paid and continuing education requirements are met by the due date. Nebraska publishes no CE grace period — unmet CE blocks renewal outright. Section 44-4054 also requires a producer to notify the Director of a change of name, address, phone number, or email address within the stated window (thirty days — verify current).

Appointment and termination. Under § 44-4061, a producer acting as an agent of an insurer must be appointed by that insurer; a producer not acting as an insurer's agent is not required to be appointed. The insurer files the appointment notice within the statutory window from the date the agency contract is executed or the first insurance application is submitted (fifteen days — verify current) and pays initial and renewal appointment fees under § 44-4064. Note the asymmetry Nebraska examiners like: appointment is filed on a short clock; termination is reported on a longer one.

Section 44-4062 governs termination. The insurer must notify the Director within the stated window following the effective date of termination (thirty days — verify current) — and must report not only terminations for cause under a § 44-4059 ground or a court or governmental finding, but ordinary terminations as well. Within a further short window after notifying the Director (fifteen days — verify current) the insurer mails a copy to the producer's last known address; where the termination was for cause, that copy goes by certified mail with return receipt requested or by overnight delivery. The producer then has a window (thirty days — verify current) to file written comments with the Director, copying the insurer; those comments become part of the Director's file. Reports made without actual malice carry immunity from civil action, and the documents are confidential and privileged, not subject to public inspection, subpoena, or discovery in private civil litigation — though the Director may share with the NAIC and law enforcement under confidentiality.

Nonresident and temporary licensing. Nebraska issues nonresident licenses on a reciprocal basis (§§ 44-4055, 44-4063) to producers in good standing in their home state, without a separate Nebraska examination. The license is derivative: a home-state lapse, suspension, or revocation follows the producer into Nebraska.

Section 44-4058 authorizes a temporary license without examination for a period not exceeding the statutory maximum (one hundred eighty days — verify current) to: the surviving spouse or personal representative of a producer who dies or becomes disabled; a designee or employee of a licensed business entity on the death or disability of the individual designated in the business entity application; the designee of a producer entering active military service; or any other person where the Director finds the public interest requires it. The Director may limit the authority granted, require a suitable sponsoring licensed producer or insurer to assume responsibility, and revoke the temporary license if the interests of insureds are endangered or on any § 44-4059 ground. The temporary license exists to service existing business, not to shortcut the examination.

Other standing duties. Notify the Director before using an assumed business name (§ 44-4057). Report administrative actions and criminal prosecutions to the Director and to the states in which you are licensed within the statutory windows (§ 44-4065 — verify windows). Keep records available (§ 44-5905). Handle premiums as a fiduciary — commingling client premium with personal or operating funds is a classic disciplinary case.

Grounds for denial, suspension, revocation, and refusal to renew (§ 44-4059). The Director may place on probation, suspend, revoke, or refuse to issue or renew a license, or levy a civil penalty, for:

• providing materially incorrect, misleading, incomplete, or untrue information in a license application;
• violating any insurance law, or any regulation, subpoena, or order of the Director or of another state's insurance regulator;
• obtaining or attempting to obtain a license through misrepresentation or fraud;
• improperly withholding, misappropriating, or converting money or property received in the course of insurance business;
• intentionally misrepresenting the terms of an actual or proposed contract or application;
• conviction of a felony, or of a Class I, II, or III misdemeanor (a Nebraska-specific breadth other states do not match);
• committing an unfair trade practice, an unfair claims settlement practice, or insurance fraud;
• using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility, in Nebraska or elsewhere;
• having a license denied, suspended, placed on probation, or revoked in Nebraska or any other state, province, district, or territory;
• forging another's name on an insurance application or document;
• improperly using notes or reference material to complete a licensing examination;
• knowingly accepting insurance business from an unlicensed individual;
• failing to comply with a child support order; and
• failing to pay state income tax or to comply with a related administrative order.

Procedure matters as much as grounds. A person denied a license may request a hearing within the statutory window (thirty days — verify current), and the hearing is held within a comparable window under the Administrative Procedure Act. A business entity's license may be suspended or revoked where a violation by an individual licensee was known or should have been known by one or more of its partners, officers, or managers and was neither reported to the Director nor corrected. And critically, the Director retains jurisdiction over a person under investigation or charged with a violation even after the license lapses or is surrendered, subject to an outer limit measured from license termination (three years — verify current). Surrendering your license does not end the case.

Controlled business. Under §§ 44-361.01 and 44-361.02 Nebraska limits licensing used principally to write controlled business — coverage on the producer, the producer's family, or the producer's employer or business. A license is a public trust, not a personal discount mechanism. Verify the current percentage test.