Ch. 8 State regulations Flashcards
Unauthorized entities
organizations or individuals that are operating in the insurance industry without the necessary legal authorization or licensing required by regulatory authorities
Notice of replacement
formal notification provided by an insurance company or agent when a new insurance policy is issued to replace an existing one
Rules and regulations (Ref: 33-2-9)
The power of the commissioner
The power of the commissioner (9)
- Organize the depratment and assign duties to staff
- Make rules and regulations in regard to HIPPA
- Issue rulings that interpret regulations and create needed forms
- Examine the affairs of insurers
- When a violation of insurance laws exists they have the power to conduct an investigation
- Concudt hearings
- Compile and maintain set of current rules
- New rules must be on public file
- must provide notice and an opportunity to comment on proposed rules before they are adopted
Offers and notices (Ref: 33-2-10)
The Commissioner must put orders and notices in writing and attach their signature to put them into effect
Hearings (Ref: 33-2-16 through 23)
The Commissioner has the authority and responsibility to hold hearings for any purpose within the scope of the insurance code after providing written notice of hearings to those directly involved at least 10 days in advance
Enforcement, Civil Actions, Criminal Violations, and Penalties (Ref. 33-2-24)
the Insurance Commissioner can issue orders to halt activities that violate insurance laws, with a future or immediate effective date depending on urgency. Affected parties have 10 days to request a hearing. The Commissioner can also refer criminal violations to prosecutors and pursue civil actions in court. Penalties include up to one year of probation and fines up to $2,000 per violation, or $5,000 if the licensee knowingly violated the law. Each infraction is treated separately
The Commissioner’s Actions Subject to Judicial Review (Ref: 33-2-25 through 28)
Individuals negatively impacted by an order of the Commissioner may appeal to the Superior Court of Fulton County for relief
Amounts Collected Under This Title (Ref: 33-2-29 through 32)
The Commissioner must promptly pay to the Office of the State Treasurer for credit of the general fund, all taxes, fees, dues, charges, and penalties and interest that the Commissioner authorized to collect under this title
EXAMINATION OF RECORDS (REF: 33-2-10 THROUGH 13)
The Commissioner may conduct a financial examination of any insurance company or other entity as often as deemed appropriate.
INVESTIGATIONS/NOTICE AND HEARINGS (REF: 33-6-6)
The Commissioner has the power to examine and investigate the affairs of everyone engaged in the business of insurance in Georgia to determine whether that person has engaged in unfair methods of competition or any unfair or deceptive practice prohibited by law
PENALTIES (REF: 33-6-9)
If, after a hearing, the Commissioner determines that the person charged has engaged in an unfair method of competition or deceptive practice, the Commissioner will issue a cease-and-desist order
DOMESTIC, FOREIGN, AND ALIEN (REF: 33-3-1)
Insurance companies are classified according to where the insurance company was incorporated. Regardless of the location where it is based, an insurance company must still get a certificate of authority before it transacts insurance within a state
AUTHORIZED/UNAUTHORIZED AND CERTIFICATE OF AUTHORITY (REF: 33-3-2 THROUGH 5; 33-3-13 THROUGH 30)
an insurer must have a certificate of authority to transact insurance in Georgia unless specifically exempted in the state’s insurance code
INSURANCE TRANSACTION/TRANSACTING BUSINESS (REF: 33-1-2)
A licensee may not transact insurance business in this state until the licensee is appointed by an insurer
LICENSING OF AGENTS, COUNSELORS, AND ADJUSTERS (REF: 33-23-1 THROUGH 46; 120-2-3-.09 AND .15)
No individual may sell, solicit, or negotiate insurance without a proper license in the applicable line of insurance
No person may own an agency, own more than 10% of a corporate entity, be an agency officer, or be on its board of directors if such person has had a license refused, revoked, or suspended
No one may pay or accept compensation for activities performed by agents, adjusters, or counselors unless they are duly licensed to do so
Address/name change
Resident licensees must maintain a business location in Georgia and report any change in their business address to the Commissioner within 30 days of the change
Records
All licensees must maintain a record of their transactions at their listed place of business for five years following the transaction or the term of the contract procured, whichever is later
Reporting
Agents must report the premiums due for any policy—which appear in the contract—to the insurer. The willful failure to do so is a misdemeanor. If the amount involved exceeds $1,000, the violation is a felony
Commissions
No person may pay commissions to or accept commissions from an unlicensed individual for selling or negotiating insurance
Placing Contracts with Unadmitted Insurers
No person may solicit or place insurance with an unadmitted insurer without being licensed as a surplus lines broker
Agent appointments (Certificates of Authority)
No licensee may act as an agent for an insurer unless appointed (receives a “certificate of authority”) to work for that insurer
Counselor license
An insurance counselor is any individual who engages in the business of counseling, advising, or rendering opinions as to the benefits promised under any insurance contract
Adjuster license
authorizes individuals to assess, manage, and settle insurance claims, and is regulated by state insurance departments with specific requirements for obtaining and maintaining the license
Minors in insurance
Any person of competent legal capacity age 15 or older can purchase insurance in Georgia
Definition of small employer
A small employer is defined as one that employs between 2-50 employees
Office of Insurance Regulation
The mission is to ensure that insurance companies licensed to do business in a state are financially viable, follow laws, and offer products at fair rates
Agents need what 2 things on an application before submitting it to an insurance company?
Insurance companies name on the first page
The agent license number
What 4 things should group life certificates contain
Group policy number
Description of the insurance protection
Names of the insured, beneficiaries, and dependents
Rights and conditions
COBRA
a federal law that provides individuals with the right to continue their health insurance coverage for a limited time after leaving their job or experiencing other qualifying events
Controlled business
involves policies written by agents or brokers for individuals or entities with whom they have a personal or business relationship
How long is a temporary license valid?
6 months
Who is a commissioner in insurance?
refers to the state official responsible for regulating and overseeing the insurance industry within their state
The life and health insurance guaranty association
Funded by insurance companies through assessments and will pay claims if an insurance company becomes insolvent
Fiduciary responsibility
the obligation to act in the best interests of another party, prioritizing their needs above one’s own
How often must a domestic insurance company be examined by the commissioner?
Every 5 years
In Georgia, An insurance company must notify the commissioner within how many days to terminate an agent’s appointment
30
In Georgia, Monthly-premium accident and sickness insurance policies must provide a grace period of at least how many days?
10 days
How often does an agent’s license need to be renewed?
Every 2 years
How many hours of ethics per counting education reporting period should an agent have?
3
What is the Georgia replacement rule?
designed to protect consumers by ensuring that any replacement of existing insurance policies is done transparently and with full disclosure, helping policyholders make informed decisions about their insurance coverage
Rebating
the practice of offering or receiving a portion of the insurance premium as an incentive or inducement to purchase a policy. This is typically done to attract customers by providing them with a financial benefit not stipulated in the policy terms
Misrepresentation
an agent suggesting that an insurance policy is like a share of stock
