Chapter 10: Flashcards
Producers:
An individual appointed by an insurance company that represents the company and presents policies on its behalf is called a producer. A life insurance producer is authorized to solicit, receive and forward applications to the insurer.
Nonresident producers:
A producer who holds a resident license in a different state may apply for a nonresident license in Connecticut, as long as both states have a reciprocal agreement.
Reinstatement and Renewal:
A producer who allows his or her license to lapse may, within 12 months from the renewal date, reinstate the license without retaking the state licensing exam.
Assumed Names:
An insurance producer doing business under any name other than the producer’s legal name is required to notify the Commissioner of Insurance prior to using that assumed name.
Continuing Education:
Producers must complete continuing education courses to renew their licenses every two years, on the basis of the producer’s birthday.
Reporting of Actions:
Producers must report any bankruptcy, felony conviction, or any other administrative action that occurs in Connecticut or another jurisdiction to the Insurance Department within 30 days.
Commissioner’s General Duties and Powers:
The Commissioner oversees all insurance activities in Connecticut, and has the power to make all reasonable rules and regulations necessary to enforce Connecticut laws.
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.
Controlled Business:
Insurance written on the interests of the licensee, the licensee’s employer, or the licensee’s immediate family is considered controlled business.
Misrepresentation:
It is an illegal practice to misrepresent any fact about an insurance policy, such as policy terms, benefits, value, cost, effective date, or existence of a contract of insurance.
False Advertising:
It is an illegal practice to falsely advertise insurance products or services in any way. This includes making false statements about the financial condition of an insurer.
Defamation:
It is an illegal practice to make any public statement or advertisement that contains false information or unsubstantiated criticisms about an insurance company that is intended to harm.
Boycott, Coercion, and Intimidation:
It is an illegal practice to commit or coordinate any act or boycott, coercion, or intimidation in order to unreasonably restrain or monopolize the business of insurance.
False Financial Statements:
It is illegal to publish any false financial statement regarding a person or entity.
Failure to maintain complaint record:
It is an unfair trade practice to fail to maintain complaint handling procedures, including a record of complaints received.
Unfair Discrimination:
It is an illegal practice to unfairly discriminate against a person in any way on an insurance-related matter. An example would be charging a different rate for someone in the same risk category. Fair discrimination is necessary for the issuance of life insurance policies, which is based on mortality.
Twisting:
Twisting involves the inducing a policyowner to lapse, forfeit, or surrender a life insurance policy for the purpose of taking out another a policy with another company.
Rebating:
It is illegal to offer a premium rebate or a special advantage of any kind to consumers as an inducement to purchase a contract of insurance.
Fair Credit Reporting Act:
The Fair Credit Reporting Act (FCRA) is a federal law that regulates the use and disclosure of consumer credit information. Credit reporting agencies, such as Experian, Equifax, and TransUnion, are regulated by the FCRA.
