Chapter 11- Laws and Rules Flashcards
An insurance company incorporated or organized under the laws of any jurisdiction outside of the United States.
Alien Insurer
An insurance producer doing business under any name other than the producer’s legal name shall notify the Commissioner before using the assumed name.
Assumed Names
An insurance company that has been issued a Certificate of Authority by the commissioner authorizing the company to transact insurance business in this state.
Authorized (Admitted) Insurer
The Commissioner may issue an order to any person found to have committed an unfair or deceptive act or has violated a state insurance law.
Cease and Desist
A license granted by the Commissioner to an insurance company authorizing them to transact insurance in this state.
Certificate of Authority
A producer who has combined premiums collected with personal funds has engaged in ___
Commingling
The amount paid by an insurer to a producer for transacting insurance.
Commission
is biannual education required for a producer to maintain their insurance license.
Continuing Education
can be defined as policies written on people that the licensed agent has direct influence over: including family, employers/employees, and/or any company to which the agent has stock control.
Controlled Business
This is an unfair practice where a producer or insurer makes false and maliciously critical statements regarding the financial condition of a competing insurer.
Defamation
solicitation means any offer by an insurance company to persons in this state (either directly or through a third party) to effect life or health insurance coverage which enables the individual to apply for the insurance on the basis of the offer.
Direct Response
An insurance company incorporated or organized under the laws of this State.
Domestic Insurer
Producers possess this responsibility since they handle the monies of the public.
- A producer must account for all premiums collected, or they have failed to uphold this duty.
- Anyone who possesses this duty must act with a high degree of trust.
Fiduciary Responsibility
An insurance company incorporated or organized under the laws of the United States or any jurisdiction within the United States.
Foreign Insurer
are a corporation, society, or order that have a representative form of government and are organized through a lodge system.
- solicit insurance only among its members and exist for the benefit of its members and their beneficiaries.
Fraternal Benefit Society
is the intentional misrepresentation or intentional concealment of a material fact used to induce another party to make or refrain from making a contract, or to deceive or cheat a party.
- is grounds for voiding an insurance contract.
Fraud
federal law makes it illegal to lie, falsify, or conceal information (orally or in writing) from a federal official.
Fraud and False Statements
protects policy owners against the insolvency of an insurer by providing a mechanism for the payment of covered claims under certain insurance policies and surety bonds.
The Insurance Guaranty Association or Fund
An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation is an
insurance Agent
in Texas is a representative of the insured.
Insurance Broker
the chief officer of the state insurance department
Insurance Commissioner
any person who, for a fee or commission, offers insurance advice.
- This can also include someone who has completed a recognized insurance course and is designated as a certified financial planner, chartered life underwriter (CLU), chartered financial consultant, or general insurance agent.
Insurance Counselor
any person who sells, solicits, or negotiates insurance contracts for compensation on behalf of an insurer.
- may also be referred to as an agent or field underwriter.
insurance Producer
An unfair trade practice involving the commingling or misappropriation of premiums by a producer.
Larceny
an insurance company owned and controlled by its policyholders.
- issue participating policies that may pay dividends to policyholders.
Mutual Insurance Company
contains specific information on the provisions, benefits, and coverage of the policy applied for.
Policy Summary - The policy summary
One of the parties in an agency relationship.
- The other is the agent who acts on behalf of the principal.
- This relationship describes the insurance business where a producer (i.e., agent) represents the insurer (i.e., the principal).
Principal
Paying, offering or giving anything of value not specified in the policy to any person as an inducement to apply for or renew an insurance policy
Rebating
The combined funds required by law that are set aside by an insurer to assure the payment of future claims.
Reserve
An insurance company is owned and controlled by its stockholders who share in its divisible surplus.
- issue non-participating life insurance.
Stock Insurance Company
The amount by which the assets of an insurer exceed its liabilities.
Surplus
A license issued to an applicant who is being considered for appointment as an agent by another license holder, an insurer, or a health maintenance organization.
Temporary License
Making a misrepresentation for the purpose of inducing or tending to induce the lapse, forfeiture, exchange, conversion, or surrender of an insurance policy with the intention of writing the insurance with another insurer.
Twisting
An insurance company that has been denied or not yet applied for a Certificate of Authority may not sell or solicit insurance in this state.
Unauthorized (Non-admitted)
All States have regulations prohibiting these activities.
- such activities are illegal and subject the individual engaging in these activities to monetary fines and/or imprisonment.
These unfair acts include but are not limited to:
- rebating
- twisting
- misrepresentation
- defamation
- coercion and boycott
- larceny
- perjury
Unfair Trade Practices (unfair marketing practices)
