Ch 13 California Laws and Rules Flashcards
Buyer’s Guide
Buyer’s Guide is a consumer publication that describes the type of coverage being offered and
provides general information to help the applicant compare different policies and reach an informed
decision about whether the proposed coverage is appropriate.
Commissioner of Insurance
The Commissioner oversees the insurance industry in California. This is an elected position that is held for a term of 4 years with a two-term limit.
Notice
An order or notice of the Commissioner must be in writing and signed by the Commissioner or an authorized representative.
Examination of Records
The Commissioner must examine the financial affairs of each insurer operating in California prior to issuing a certificate of authority. At the very least, a company shall be then examined once every 5 years.
Hearings
The Commissioner may call and hold hearings for any purpose deemed necessary. The hearing must be held within 30 days after the notice is served. Within 30 days after the hearing, the Commissioner shall issue an order specifying the amount of the penalties to be paid.
Cease and Desist Order
The Commissioner may issue a cease-and-desist order to any person found to have committed an unfair or deceptive act or has violated a state insurance law.
Insurance Agent
An insurance agent is a person authorized, by and on behalf of an insurer to transact all classes of insurance other than life, disability, or health insurance, on behalf of an admitted insurance company.
Insurance Broker
An insurance broker is a person who, for compensation and on behalf of another person, transacts insurance other than life, disability, or health with, but not on behalf of, an insurer. There is no such license issued in California.
Insolvency
Insurer Insolvency is the impairment of an insurer’s capital, financial stability, and financial strength to the point where policyholders and the public may be harmed.
Impairment
Impairment means that the necessary paid-in capital of the insurer has been compromised.
Conservation
If an insurance company is in an impaired financial condition, the Commissioner may file an application for an order to take control of its affairs for the purpose of improving its condition. This action is known as conservation.
Agent
An insurance agent is a person authorized, by and on behalf of an insurer to transact all classes of insurance other than life, disability, or health insurance, on behalf of an admitted insurance
company.
Continuing Education
All agents must complete 24 hours of continuing education each two-year
license renewal period. Four of those hours must be in Ethics.
Agent Records
Life insurance agents must keep transaction records for 5 years. Claimant: A person who asserts a right of recovery under an insurance policy is called the claimant.
Materiality
Materiality is relevant information that would probably influence a party’s assessment of
a proposed contract.