Ch 10 Insurance Regulation Flashcards
The authority given by an insurer to an agent to transact insurance or adjust claims on the insurer’s behalf
Appointment
To stop or discontinue
Cease and desist
Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium
Commission
The head of the state department of insurance
Commissioner
Not subject to an obligation
Exempt
A person in a position of trust, someone who handles funds in the trust capacity
Fiduciary
An offer that attempts to influence the other party
Inducement
Unable to meet financial obligations
Insolvent
A formal written law enacted by legislature; insurance statutes can be found in the state insurance code
Statute
Insurance that is not available from admitted insurer’s
Surplus lines insurance
Insurance applicant must be notified in writing whenever insurers request investigative consumer reports.
True
Examination of insurers
Five years
Approval period for policy rates
30 days
Minimum age to apply for producer license
18 years
Producer licensing period
2 years
To reinstate voluntarily surrendered or lapsed license
One year
Insurer must file a notice a producer appointment
15 days
To file notice of termination of producer appointment
30 days
Maximum time of license probation
24 months
Maximum term of revocation before person can reapply for license
5 years
To report change of address or phone number
30 days
To report administrative action or criminal prosecution against producer
30 days
CE required every two years
24 hours of CE
CE credits required an ethics
3 hours
CE required in a classroom setting (half of the total CE hours)
12 hours
Producers must keep records of all insurance transactions
3 years
The maximum allowed value of a gift to a customer to avoid engaging in an unfair trade practice of illegal inducement
$100
Fine for violation of insurance laws or regulations by a producer
$2500
Fine for violation of insurance laws by any other person
$5000
Fine for willful noncompliance with Fair Credit Reporting Act
$2500
Civil fine for violating regulations of interstate commerce
$50,000
Licensing process
- Minimum age requirement 18 years old
- complete required prelicensing education and pass examination
- submit application fees
- be a good character, competent, and trustworthy
- I have not committed any violations that are grounds for license denial
Types of licenses
- Individual producer: resident, non-resident
- Limited lines producer
- adjuster: investigates, negotiate, and settle the claims under a policy
- consultant: advises the public about insurance policies for a fee
Commissioner of insurance
- appointed by the state governor
- supervisors operations of the department of insurance
- enforces insurance code
- examines all authorized insurers (every five years)
- issues, renews, suspense in revokes licenses
Fair credit reporting act
- protects consumers from circulation of inaccurate and obsolete information
- consumer reports an investigative consumer reports
Insurance fraud
- Active fraud: willfully, and with the intent to deceive, making fall statements or omitting material facts
- find an improvement for fraud that affects interstate commerce
Written consent from insurance regulatory official to allow someone convicted of a crime involving dishonesty to work in the business of insurance
1033 waiver
Rules regarding disclosure of nonpublic personal information to nonaffiliated third parties
Graham Leach Bliley act
Do not call list
- National do not call registry
- strict telemarketing rules
- insurers must consult current registry every 31 days
Whom do insurance agents represent?
Insurance agents represent the insurer
Who must be licensed as an insurance producer?
Anyone who solicits insurance and receives commissions from insurance transactions
Can you name some unfair trade practices that produces should avoid?
Misrepresentation, rebating, defamation, unfair discrimination, etc.
Insurance Guaranty Association
- nonprofit legal entity
- protects insureds against insolvent insurers
- funded by member insurers
- pays up to specified limits
- illegal to advertise association protection when selling insurance products
