Chapter 10. Florida Statutes, Rules, and Regulations Common to All Lines

Question 1

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

Answer 1

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

Question 2

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

Answer 2

Cease and desist order

Question 2

To whom may a certificate of authority be issued?

Answer 2

To an insurer authorized to transact business in this state

Question 3

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

Answer 3

Complete continuing education hours and pay a renewal fee

Question 3

In the agent/insurer relationship, who is considered the principal?

Answer 3

Insurer

Question 4

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

Answer 4

Insurance company officers, directors, or any 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 5

Who owns stock companies?

Answer 5

Stockholders

Question 5

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

Answer 5

Only producers properly licensed for the type of insurance transaction

Question 6

What type of licensee represents the insured?

Answer 6

Broker

Question 6

What type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another?

Answer 6

Twisting

Question 7

What is the purpose of a cease and desist order?

Answer 7

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

Question 7

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

Answer 7

Authorized or admitted

Question 8

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

Answer 8

Misrepresentation

Question 8

Who must be a member of insurance guaranty associations?

Answer 8

All insurers authorized to write insurance within a state

Question 8

Who must be notified of a producer’s change of address?

Answer 8

The Department of Insurance (Commissioner/Director/Superintendent)

Question 8

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

Answer 8

Authorized or admitted

Question 9

Who is responsible for the contents of insurance advertisements?

Answer 9

The insurance company

Question 9

When can the Commissioner or Director examine insurers?

Answer 9

Whenever deemed necessary, but at least once every few years (please check your state regulations for specific time requirement)

Question 10

What document is required for an insurance company to transact insurance?

Answer 10

Certificate of Authority

Question 11

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

Answer 11

Defamation

Question 12

What type of licensee represents the insurance company?

Answer 12

The agent

Question 12

Who is considered a nonresident agent?

Answer 12

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

Question 12

What is controlled business?

Answer 12

Insurance on the producer’s own life or property, or the lives or property of the producer’s family or business associates

Question 12

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

Answer 12

Misrepresentation

Question 12

When is controlled business legal?

Answer 12

When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)

Question 12

Who is an insurance agent?

Answer 12

A person authorized to sell, solicit and negotiate insurance contracts

Question 13

Insurers are classified according to their domicile. What are the three types of insurers?

Answer 13

Domestic, foreign, and alien

Question 13

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 13

Rebating

Question 13

Who can usually be granted a temporary license?

Answer 13

Producer’s spouse or designee in case the licensed producer dies or becomes disabled

Question 13

For what reason can a temporary license be issued?

Answer 13

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

Question 13

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

Answer 13

The insurer who is being examined

Question 14

Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?

Answer 14

No, advertising of the existence of the guaranty association for the purposes of solicitation and sale of insurance policies by insurers is an illegal business practice.

Question 14

What is the purpose of insurance guaranty associations?

Answer 14

To protect policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers

Question 14

Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Answer 14

Discrimination