Ch 10 Insurance Regulation

Question 1

The authority given by an insurer to an agent to transact insurance or adjust claims on the insurer’s behalf

Answer 1

Appointment

Question 2

To stop or discontinue

Answer 2

Cease and desist

Question 3

Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium

Answer 3

Commission

Question 4

The head of the state department of insurance

Answer 4

Commissioner

Question 5

Not subject to an obligation

Answer 5

Exempt

Question 6

A person in a position of trust, someone who handles funds in the trust capacity

Answer 6

Fiduciary

Question 7

An offer that attempts to influence the other party

Answer 7

Inducement

Question 8

Unable to meet financial obligations

Answer 8

Insolvent

Question 9

A formal written law enacted by legislature; insurance statutes can be found in the state insurance code

Answer 9

Statute

Question 10

Insurance that is not available from admitted insurer’s

Answer 10

Surplus lines insurance

Question 11

Insurance applicant must be notified in writing whenever insurers request investigative consumer reports.

Answer 11

True

Question 12

Examination of insurers

Answer 12

Five years

Question 13

Approval period for policy rates

Answer 13

30 days

Question 14

Minimum age to apply for producer license

Answer 14

18 years

Question 15

Producer licensing period

Answer 15

2 years

Question 16

To reinstate voluntarily surrendered or lapsed license

Answer 16

One year

Question 17

Insurer must file a notice a producer appointment

Answer 17

15 days

Question 18

To file notice of termination of producer appointment

Answer 18

30 days

Question 19

Maximum time of license probation

Answer 19

24 months

Question 20

Maximum term of revocation before person can reapply for license

Answer 20

5 years

Question 21

To report change of address or phone number

Answer 21

30 days

Question 22

To report administrative action or criminal prosecution against producer

Answer 22

30 days

Question 23

CE required every two years

Answer 23

24 hours of CE

Question 24

CE credits required an ethics

Answer 24

3 hours

Question 25

CE required in a classroom setting (half of the total CE hours)

Answer 25

12 hours

Question 26

Producers must keep records of all insurance transactions

Answer 26

3 years

Question 27

The maximum allowed value of a gift to a customer to avoid engaging in an unfair trade practice of illegal inducement

Answer 27

$100

Question 28

Fine for violation of insurance laws or regulations by a producer

Answer 28

$2500

Question 29

Fine for violation of insurance laws by any other person

Answer 29

$5000

Question 30

Fine for willful noncompliance with Fair Credit Reporting Act

Answer 30

$2500

Question 31

Civil fine for violating regulations of interstate commerce

Answer 31

$50,000

Question 32

Licensing process

Answer 32

- 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

Question 33

Types of licenses

Answer 33

- 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

Question 34

Commissioner of insurance

Answer 34

- 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

Question 35

Fair credit reporting act

Answer 35

- protects consumers from circulation of inaccurate and obsolete information - consumer reports an investigative consumer reports

Question 36

Insurance fraud

Answer 36

- 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

Question 37

Written consent from insurance regulatory official to allow someone convicted of a crime involving dishonesty to work in the business of insurance

Answer 37

1033 waiver

Question 38

Rules regarding disclosure of nonpublic personal information to nonaffiliated third parties

Answer 38

Graham Leach Bliley act

Question 39

Do not call list

Answer 39

- National do not call registry - strict telemarketing rules - insurers must consult current registry every 31 days

Question 40

Whom do insurance agents represent?

Answer 40

Insurance agents represent the insurer

Question 41

Who must be licensed as an insurance producer?

Answer 41

Anyone who solicits insurance and receives commissions from insurance transactions

Question 42

Can you name some unfair trade practices that produces should avoid?

Answer 42

Misrepresentation, rebating, defamation, unfair discrimination, etc.

Question 43

Insurance Guaranty Association

Answer 43

- 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