5.2 Flashcards
The _____ is a group of laws that determine insurance regulation in a given state. Each state has its own _____, and any entity conducting business within a given state must follow the state’s ______.
Insurance Code
insurance Code
insurance Code
______, developed by the legislative branch of each state’s government, define the roles of both the Insurance Commissioner and state’s insurance regulatory body (Insurance Department or Division). This regulatory body then issues ______ on how insurance is regulated in its respective state.
Statutes
Rules and Regulations
The ______, also known as a Superintendent or Director of Insurance, each state’s insurance department is headed by an individual who performs certain duties that enforce the state’s insurance code.
Commissioner
Although he or she does not legislate or create new laws, the duties of the state Insurance Commissioner are to conduct investigations and examinations, create reasonable rules and regulations to enforce current insurance laws, and ______.
Hire and delegate power to examiners.
The ______ examines insurer, agent, or broker accounts, transactions, etc.
State Insurance Commissioner
Who has the power to subpoena witnesses and administer oaths regarding insurance matters?
State Insurance Commissioner
Which official issues orders and notices on decisions made in matters pending?
State Insurance Commissioner
Who is responsible for issuing insurance licenses and certificates of authority?
State Insurance Commissioner
Who imposes penalties for violations of the Insurance Code?
State Insurance Commissioner
The risk of an insurance company ______ is a major concern in the insurance industry, so much so that regulation such as surplus requirements, reserves, and annual statements are required by every insurer.
having inadequate capital to meet claims or becoming bankrupt
Similar to the Federal Deposit Insurance Corporation (FDIC), ______ protect claimants, policyholders, annuitants, and creditors form insolvent insurers by funding the payments of claims and other related policy benefits.
Guaranty associations
Individual and group life insurance policies, as well as individual annuities, long-term care and disability income insurance policies are covered by ______.
life and health guaranty associations.
Governed by the Insurance Code, insurance producer regulation began with the _____. Governed on the state level, it sets uniform standards for ______. Encouraged by the NAIC, most states allow for a mutual exchange of privileges, meaning that once a producer passes his or her respective state exam, he or she has also satisfied other states’ respective educational requirements.
Producer Licensing Model Act (PLMA)
insurance licensure
To be licensed as a producer, one must be 18 years or older, not committed an act that could lead to denial, suspension, or revocation of an insurance license,
complete a pre-licensing course for a specific line of insurance (health, life, etc.), pay the appropriate state fees, pass the state exam, and ______.
maintain continuing education requirements and fees when due
The ______ develops and regulates the state exam with the assistance of an outside testing service that administers the exam and collects the state testing fees. All fees are nonrefundable.
Commissioner
