Ch. 8 State regulations

Question 1

Unauthorized entities

Answer 1

organizations or individuals that are operating in the insurance industry without the necessary legal authorization or licensing required by regulatory authorities

Question 2

Notice of replacement

Answer 2

formal notification provided by an insurance company or agent when a new insurance policy is issued to replace an existing one

Question 3

Rules and regulations (Ref: 33-2-9)

Answer 3

The power of the commissioner

Question 4

The power of the commissioner (9)

Answer 4

1. Organize the depratment and assign duties to staff
2. Make rules and regulations in regard to HIPPA
3. Issue rulings that interpret regulations and create needed forms
4. Examine the affairs of insurers
5. When a violation of insurance laws exists they have the power to conduct an investigation
6. Concudt hearings
7. Compile and maintain set of current rules
8. New rules must be on public file
9. must provide notice and an opportunity to comment on proposed rules before they are adopted

Question 5

Offers and notices (Ref: 33-2-10)

Answer 5

The Commissioner must put orders and notices in writing and attach their signature to put them into effect

Question 6

Hearings (Ref: 33-2-16 through 23)

Answer 6

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

Question 7

Enforcement, Civil Actions, Criminal Violations, and Penalties (Ref. 33-2-24)

Answer 7

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

Question 8

The Commissioner’s Actions Subject to Judicial Review (Ref: 33-2-25 through 28)

Answer 8

Individuals negatively impacted by an order of the Commissioner may appeal to the Superior Court of Fulton County for relief

Question 9

Amounts Collected Under This Title (Ref: 33-2-29 through 32)

Answer 9

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

Question 10

EXAMINATION OF RECORDS (REF: 33-2-10 THROUGH 13)

Answer 10

The Commissioner may conduct a financial examination of any insurance company or other entity as often as deemed appropriate.

Question 11

INVESTIGATIONS/NOTICE AND HEARINGS (REF: 33-6-6)

Answer 11

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

Question 12

PENALTIES (REF: 33-6-9)

Answer 12

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

Question 13

DOMESTIC, FOREIGN, AND ALIEN (REF: 33-3-1)

Answer 13

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

Question 14

AUTHORIZED/UNAUTHORIZED AND CERTIFICATE OF AUTHORITY (REF: 33-3-2 THROUGH 5; 33-3-13 THROUGH 30)

Answer 14

an insurer must have a certificate of authority to transact insurance in Georgia unless specifically exempted in the state’s insurance code

Question 15

INSURANCE TRANSACTION/TRANSACTING BUSINESS (REF: 33-1-2)

Answer 15

A licensee may not transact insurance business in this state until the licensee is appointed by an insurer

Question 16

LICENSING OF AGENTS, COUNSELORS, AND ADJUSTERS (REF: 33-23-1 THROUGH 46; 120-2-3-.09 AND .15)

Answer 16

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

Question 17

Address/name change

Answer 17

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

Question 18

Records

Answer 18

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

Question 19

Reporting

Answer 19

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

Question 20

Commissions

Answer 20

No person may pay commissions to or accept commissions from an unlicensed individual for selling or negotiating insurance

Question 21

Placing Contracts with Unadmitted Insurers

Answer 21

No person may solicit or place insurance with an unadmitted insurer without being licensed as a surplus lines broker

Question 22

Agent appointments (Certificates of Authority)

Answer 22

No licensee may act as an agent for an insurer unless appointed (receives a “certificate of authority”) to work for that insurer

Question 23

Counselor license

Answer 23

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

Question 24

Adjuster license

Answer 24

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

Question 25

Minors in insurance

Answer 25

Any person of competent legal capacity age 15 or older can purchase insurance in Georgia

Question 26

Definition of small employer

Answer 26

A small employer is defined as one that employs between 2-50 employees

Question 27

Office of Insurance Regulation

Answer 27

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

Question 28

Agents need what 2 things on an application before submitting it to an insurance company?

Answer 28

Insurance companies name on the first page

The agent license number

Question 29

What 4 things should group life certificates contain

Answer 29

Group policy number

Description of the insurance protection

Names of the insured, beneficiaries, and dependents

Rights and conditions

Question 30

COBRA

Answer 30

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

Question 31

Controlled business

Answer 31

involves policies written by agents or brokers for individuals or entities with whom they have a personal or business relationship

Question 32

How long is a temporary license valid?

Answer 32

6 months

Question 33

Who is a commissioner in insurance?

Answer 33

refers to the state official responsible for regulating and overseeing the insurance industry within their state

Question 34

The life and health insurance guaranty association

Answer 34

Funded by insurance companies through assessments and will pay claims if an insurance company becomes insolvent

Question 35

Fiduciary responsibility

Answer 35

the obligation to act in the best interests of another party, prioritizing their needs above one’s own

Question 36

How often must a domestic insurance company be examined by the commissioner?

Answer 36

Every 5 years

Question 37

In Georgia, An insurance company must notify the commissioner within how many days to terminate an agent’s appointment

Answer 37

30

Question 37

In Georgia, Monthly-premium accident and sickness insurance policies must provide a grace period of at least how many days?

Answer 37

10 days

Question 38

How often does an agent’s license need to be renewed?

Answer 38

Every 2 years

Question 39

How many hours of ethics per counting education reporting period should an agent have?

Answer 39

3

Question 40

What is the Georgia replacement rule?

Answer 40

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

Question 41

Rebating

Answer 41

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

Question 42

Misrepresentation

Answer 42

an agent suggesting that an insurance policy is like a share of stock