Ch 10 Insurance Regulation Part II Flashcards
Who may share in the commission from the sale of a life insurance policy?
Only producers properly licensed for the type of insurance transaction
In general, who can be excluded from producer licensing and examination requirements?
Insurance company officers, directors, and the other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical).
What are the most common penalties for violations of insurance statutes?
A cease and desist order, a fine, and license suspension or revocation
To whom may certificate of authority be issued?
To insurer authorized to transact business in the state
For what reason can a temporary license be issued?
For continuation of business in case the license producer dies or becomes disabled
We can the commissioner or Director examine insurers?
Whenever deemed necessary but at least once every few years (5 years)
If an insurer hold a certificate of authority, it is known as what type of insurer?
Authorized or admitted
Who can usually be granted a temporary license?
Producers spouse or designee in case a licensed producer dies or becomes disabled
If a producer makes maliciously critical statements about another insurer, what is the illegal practice called?
Defamation
What type of license represents the insurance company?
The agent
If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Authorized or admitted
What is the purpose of a cease and desist order?
To prevent a producer or insurer from further violating laws for transacting insurance
What type of licensee represents the insured?
Broker
Who is responsible for the costs associated with the examination of insurers?
The insurer who is being examined
Who must be notified of a producers change of address?
The department of insurance (commissioner/Director/superintendent)
On the advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses of claims. What is the company guilty of?
Misrepresentation
What type of misrepresentation persuades an insured, to his or her detriment, to cancel, labs, or switch policies from one to another?
Twisting
Who is an insurance agent?
A person authorized to sell, solicit and negotiate insurance contracts
What illegal act does a producer commit when the produce represents a policy in a more favorable light then the policy really is?
Misrepresentation
An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?
Rebating
Two individuals who are in the same risk and age class are changed different rates of the insurance policies due to an insignificant factor. What is this called?
Discrimination
What are producers required to do in order to renew their license?
Complete continued education hours and pay a renewal fee
If the commissioner finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?
Cease and desist order
Who is considered a non-resident agent?
An agent who resides and is licensed in another state, but who is authorized to transact insurance in the state
