Ch 10 Insurance Regulation Part II

Question 1

Who may share in the commission from the sale of a life insurance policy?

Answer 1

Only producers properly licensed for the type of insurance transaction

Question 2

In general, who can be excluded from producer licensing and examination requirements?

Answer 2

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).

Question 3

What are the most common penalties for violations of insurance statutes?

Answer 3

A cease and desist order, a fine, and license suspension or revocation

Question 4

To whom may certificate of authority be issued?

Answer 4

To insurer authorized to transact business in the state

Question 5

For what reason can a temporary license be issued?

Answer 5

For continuation of business in case the license producer dies or becomes disabled

Question 6

We can the commissioner or Director examine insurers?

Answer 6

Whenever deemed necessary but at least once every few years (5 years)

Question 7

If an insurer hold a certificate of authority, it is known as what type of insurer?

Answer 7

Authorized or admitted

Question 8

Who can usually be granted a temporary license?

Answer 8

Producers spouse or designee in case a licensed producer dies or becomes disabled

Question 9

If a producer makes maliciously critical statements about another insurer, what is the illegal practice called?

Answer 9

Defamation

Question 10

What type of license represents the insurance company?

Answer 10

The agent

Question 11

If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Answer 11

Authorized or admitted

Question 12

What is the purpose of a cease and desist order?

Answer 12

To prevent a producer or insurer from further violating laws for transacting insurance

Question 13

What type of licensee represents the insured?

Answer 13

Broker

Question 14

Who is responsible for the costs associated with the examination of insurers?

Answer 14

The insurer who is being examined

Question 15

Who must be notified of a producers change of address?

Answer 15

The department of insurance (commissioner/Director/superintendent)

Question 16

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?

Answer 16

Misrepresentation

Question 17

What type of misrepresentation persuades an insured, to his or her detriment, to cancel, labs, or switch policies from one to another?

Answer 17

Twisting

Question 18

Who is an insurance agent?

Answer 18

A person authorized to sell, solicit and negotiate insurance contracts

Question 19

What illegal act does a producer commit when the produce represents a policy in a more favorable light then the policy really is?

Answer 19

Misrepresentation

Question 20

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?

Answer 20

Rebating

Question 21

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?

Answer 21

Discrimination

Question 22

What are producers required to do in order to renew their license?

Answer 22

Complete continued education hours and pay a renewal fee

Question 23

If the commissioner finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

Answer 23

Cease and desist order

Question 24

Who is considered a non-resident agent?

Answer 24

An agent who resides and is licensed in another state, but who is authorized to transact insurance in the state