Chapter 15 - State Laws Flashcards
1
Q
Who is responsible for regulating licensing, rates, policy form, market conduct, claims, and certificates of authority?
A
Office of Insurance Regulation
2
Q
Who is responsible for protecting the public through oversight of insurance company solvency?
A
Office of Insurance Regulation
3
Q
Who conducts investigations to protect consumers from financial entities that violate state laws and rules?
A
Bureau of Financial Regulation
4
Q
Who is responsible for the administration of state insurance law?
A
Chief Financial Officer
5
Q
What does the Department of Financial Services do?
A
Supervises methods of obtaining businesses, including agent licensing and control of unfair trade practices.
6
Q
What is the fine when you fail to answer a subpoena or order?
A
$1,000 fine
7
Q
What is the fine when you violate of cease and desist order?
A
Up to $50,000 fine
8
Q
What is the fine when you willfully violate the insurance code?
A
Misdemeanor of the 2nd degree (imprisonment up to 60 days)
9
Q
What is the fine when you conduct in twisting or churning?
A
1st degree misdemeanor (imprisonment up to one year)
Willful violation - $75,000
Non-willful violation - $5000
10
Q
What is the fine when you willfully submit fraudulent signatures?
A
3rd degree felony (5 year imprisonment)
Non-willful violation - $5000
Willful violation - $75,000
11
Q
What is the Office of Insurance Regulation supervises?
A
Supervises Insurers via approving new rates and forms
12
Q
Florida requires Insurers to submit a rate filing how many days before use?
A
30 days
13
Q
What are the four sections of Market Investigation of the OIR?
A
Property and Casualty Section
Life and Health Section
Investigations - Special Investigations Unit
Market Analysis Section
14
Q
Which forms require approval from the Office of Insurance Regulation?
A
Insurance policy or annuity contract form
Printed application
Group policy certificates
printed rider, endorsement, renewal certificate
15
Q
What are the general duties of the Office of Financial Regulation?
A
Enforcement of the Insurance Code
Protect public against unauthorized behavior
Taking over insolvent companies
Auditing carriers every 3 years
16
Q
Can a person act as an Insurer without a Certificate of Authority?
A
No
17
Q
When is a certificate of authority not needed?
A
- When a formerly authorized insurer needs to investigate a claim.
- Transactions regarding surplus lines
- For authorized reinsurance transactions
- for investment by a foreign insurer in florida real estate if foreign insurer complies with florida laws
18
Q
Someone acting as an Insurer without a certificate of authority and collects less than $20K in premiums will be punished how?
A
3rd degree felony and up to $5000 fine and up to 5 years imprisonment
19
Q
Someone acting as an Insurer without a certificate of authority and collects between $20K and $100K will be punished how?
A
2nd degree felony 15 years imprisonment
20
Q
Someone acting as an Insurer without a certificate of authority and collects more than $100K will be punished how?
A
1st degree felony Up to 30 years
21
Q
Define a Public Adjuster
A
Person hired by an insured or third party claimant to settle a claim
22
Q
Define All Lines Adjuster
A
Person who is self employed or employed by an insurer.
23
Q
How often does an Agency need to renew their license?
A
3 years
24
Q
Does an agent working out of his home, need to license their home?
A
No, as long as it is not advertised as a business
25
Describe the Florida Guaranty Association
- All insurers authorized in Florida must be members.
- non-profit legal entity
- pays for claims if insurer is subsequently rehabilitated
26
Define Sliding
- When a product s represented as something that is required by law OR freely included in the policy when it actually cost something
- charging for something without the Insured's consent
27
Define Misrepresentation
When someone knowingly makes false or misleading statements
28
Define Defamation
Promoting or making a statement that is designed to be malicious or critical of a person or company
29
Define Controlled Business
When an agent sells policies or annuities to him/herself, family members, officers, firms they are a part of, etc.
Cannot be more than 50% of total business within 12 month period
30
Define Twisting
Knowingly making misleading representations of an insurance company inducing a lapse in policy.
31
Define Churning
Using the cash value of an existing policy (life insurance, annuity) to purchase another insurance policy with the same Insurer for the purpose of earning more commission
32
Define Rebating
Offering incentives for purchasing insurance with them. Example - paying the client's first three months if they buy the policy
33
How many days must be given to the Insured for non-renewal?
45 days
34
How many days must be given for notice of cancellation for non-payment of premium?
10 days
35
How many days must be given for cancellations other than non-payment within the first 90 days?
20 days
36
Property insurers must issue claims payments to who?
To the primary policy holder and mortgagee, but not for personal property
37
Third-party total loss auto claim payments are made out to who?
To the third party and the lienholder, if there is one.
38
What is another phrase for a premium finance agreement?
Promissory note
39
What is the max value a premium finance company can issue a service charge?
up to $12 per $100 per year and up to non-refundable $20.
40
If the Insured fails to pay a premium finance company, how many days must be given to notify the Insured that the policy is in danger of cancelling?
10 days
41
What is the max interest amount an Agency can charge on premium financing?
18%
42
What is the max service charge amount an Agency can charge on premium financing?
$3 per installment or $36 per year
43
For dwelling limits between $100,000 and $250,000, Insurer's can offer what two options, instead of a $500 deductible?
2% deductible or guarantee that the insurer will not non-renew for reasons of reducing hurricane losses for one renewal period
44
For dwelling limits over $250,000, what deductibles MUST the Insurer offer?
2%, 5% 10%
45
True or False - Every Insurer in FL must offer catastrophic ground cover collapse coverage
True
46
True or False Every Insurer in FL must offer sinkhole coverage
True, for additional premium
| Subject to 1%, 2%, 5%, 10% deductible
47
What are the four requirements of catastrophic ground cover collapse?
- abrupt collapse of ground cover
- visible depression in ground
- structural damage to building and foundation
- structure being condemned
48
What is considering the beginning of a hurricane occurrence?
When a hurricane watch or warning is issued for any part of FL
49
What is considered the end of a hurricane occurrence?
72 hours after the last hurricane watch or warning was issued for any part of FL.
50
When is a hurricane watch issued?
48 hours
51
When is a hurricane warning issued?
36 hours and can stay in effect
52
An HO - 6 policy must have at least what amount of loss assessment?
$2000
53
What is the max deductible amount for loss assessment claims?
$250
54
When must the peril of hurricane, windstorm or hail be excluded?
If the property is eligible for Citizens Property Insurance Corporation (CPIC), UNLESS prior approval was received from the CPIC
55
How many day does the Insurer have to make a claims payment once a person and the insurer have made an agreement?
20 days, if not received, 12% interest per year will apply
56
The Insurer must begin investigating claims within how many days after proof of loss has been provided?
10 working days
57
Describe Valued Policy Law
When there is a covered total loss of building and the insurer must pay the amount of money the building is insured for.
58
Who requires Insurers to provide windstorm coverage to eligible applicants?
Citizen Property Insurance Company
59
What is the purpose of the Florida Surplus Lines Service Office?
Non-profit association that protects consumers seeking insurance in Florida and make sure surplus lines are available through approved surplus lines insurers.
60
For dwellings under $1,000,000, how many rejections are required to be considered a diligent effort?
3 authorized insurers
61
For dwellings over $1,000,000, how many rejections are required to be considered a diligent effort?
1 authorized insurer
62
What are the minimum PIP limits for FL?
$10,000 for medical payments and disability benefits
| $5,000 in death benefits resulting from BI
63
What are the three types of PIP coverages?
Medical benefits, disability benefits, and death benefits
64
Medical benefits under PIP coverages must pay for what percentage of expenses and within how many days of the motor accident?
80% and within 14 days
65
Disability benefits under PIP coverages must pay for what percentage of gross income or earning capacity and how often must they be paid?
60% and every 14 days
66
When are PIP payments considered overdue?
After 30 days
67
Describe the Extended PIP Endorsement
Allows the Insured to increase the Medical Benefits from 80 to 100% and Disability benefits from 60 to 80%.
68
Describe the Additional PIP Endorsement
Increases the $10,000 limit for medical benefits and disability benefits but does not increase the death benefits
69
What are the minimum Auto limits required for FL?
$10,000 for BI or death of one person in any one crash
$20,000 for BI or death of 2 or more persons in any one crash
$10,000 for PD of other in any one crash
70
What are the minimum FL Auto limits for someone who has a DUI?
$100,000 for BI or death to one person
$300,000 for BI or death for 2 or more persons in any 1 crash
$50,000 for PD in anyone crash
71
How long does someone who has had a DUI need to carry the higher limits required for FL?
Minimum of 3 years
72
Under PIP, are death benefits in addition to the medical and disability benefits?
Yes
73
In FL, when is it required for motorcycle riders to wear a helmet?
When they carry less than $10,000 in medical coverage for motorcycle related injuries
74
Can motor vehicle liability insurance be purchased without UM/UIM?
NO, unless rejected in writing.
75
What are the required limits of UM/UIM?
Cannot be less than the limits of BI liability purchased
76
What is the minimum amount of hours of instruction required to obtain a Motorcycle license?
12 hours, 6 of which are on a motorcycle
77
How can the motorcycle testing requirement be waived in FL?
Over 21 and has completed a rider education course
78
Can a person under 16 rent a motorcycle or moped?
No
79
How many hours of behind the wheel experience are required for a teen to obtain their drivers license after having their permit for 12 months?
50 hours, 10 being night time experience
80
With regard to comparative negligence law, describe pure comparative fault
When each party is evaluated and to be determined to be a certain percent at fault. Each would collect from the other
81
With regard to pure comparative fault, If a person is under the influence and is more than 50% at fault, would they be eligible for recovery?
No
82
With regard to Comparative Negligence Law, describe Effect of Contributory Fault
When the claimant is trying to prove the injured party is a percentage at fault, resulting in decreasing the claimant's percentage at fault. Both parties do not collect payment, and the amount paid to the injured party depends on the claimant's contributory fault.
It does not bar recovery like Common Law defense Contributory Negligence.
83
What is the purpose of the Florida Automobile Joint Underwriting Association?
Group of insurers who divide insurance for applicants who are unable to obtain automobile insurance through standard markets.
All authorized insurers must be part of the FAJUA
84
Insurers placing applicants through the Florida Automobile Joint Underwriting Association but notify the Insured within how many days of placing coverage?
10 days
85
What is the purpose of the Florida Worker's Compensation Joint Underwriting Association?
9-member board that allows companies that are required by law to have WC but have been rejected by 2 authorized carriers to have WC.
86
What are the three possible tiers Insured's can be placed in if WC insurance was obtained through the Florida WC Joint Underwriting Association?
Tier 1 - 25% over market rates
Tier 2 - 50% over market rates
Tier 3 - Can be whatever
87
What is the amount of the deductible added by Florida to Expediting Expenses of Boiler and Machinery /Equipment Breakdown
$250
88
Each Boiler and Machinery/Equipment Breakdown accident has what amount of a deductible?
$500
89
With regard to Health Insurance, what is the grace period for a weekly, monthly, and all other policy?
Weekly - 7 days
Monthly - 10 days
All other - 31 days
90
After reinstating a health insurance policy, what is the waiting period for accidents and sickness?
Accident - immediate
| Sickness - 10 day waiting period
91
With regard to Health Policies, the Insurer is allowed how much time to use fraudulent statements in the application to void or deny a claim?
2 years
92
With regard to Health Policies, what is the waiting or elimination period?
The period of time between issuance and when sickness benefits begin.
93
With regard to Health Policies, what happens to the Insured's premium if he/she becomes totally disabled?
It is waived and remains in force until the policy expires or the duration of the disability. Whichever occurs first
94
With regard to Health Policies, define double indemnity
The death benefit is doubled if due to an accident under certain circumstances
95
With regard to Health Policies, define Optionally Renewable
The Insurer does not have the right to cancel midterm but can non-renew
96
With regard to Health Policies, define Conditionally Renewable?
Insurer can non renew for circumstances listed in the policy
97
With regard to Health Policies, define Guaranteed Renewable
Insurer must renew the policy until a certain age, BUT can increase premium
98
With regard to Health Policies, define Noncancelable
The Insurer cannot cancel the policy, change the benefits, increase premium, and renew. This is all at the option of the Insured
99
Describe Hospitalization Expense Insurance
Allows the Insured to indemnify themselves after basic hospital expenses, nursing care, lab fees, OR, and medical supplies.
100
Describe Hospital Indemnity Insurance
Pays a flat amount per day in the hospital, regardless of expenses. Can be used to supplement.
101
Describe Accident Insurance
Provides coverage for expenses from accidents and loss of income.
102
Describe Surgical Expense Insurance
Covers the fees for performing surgery. Different rates apply for level or procedure
103
Describe Dread Disease
limited benefits for the payment of diagnosing and treating cancer.
104
Describe Major Medical Insurance
Allows broad coverage for a covered sickness or injury. Excludes dental expenses, cosmetic surgery unless required due to an accident, normal childbirth
105
Describe Disability Income Insurance
Provides periodic payments when the insured is not able to work due to sickness or injury
106
What riders are available for Disability Income Insurance
Waiver of premium, cost of living adjustment, social security rider, guaranteed insurability rider (insured is guaranteed to purchase additional insurance)
107
What is another name for Medicare Supplement Insurance?
Medigap
108
How many Medicare Supplement Plans are available and what are their names?
10 A-D, F, G, K, L, M, and N
109
Describe Health Maintenance Organization
It is a non-insurance alternative that provides comprehensive health services for a pre-paid fixed fee.
Have broad coverage, fewer exclusions, low deductibles, and co-insurance.
110
What is co-insurance in regards to Health Insurance?
The percentage of total costs you pay after you have paid your deductible
111
What is a co-pay in regards to Health Insurance?
Flat fees paid for a specific service
112
Describe a Preferred Provider Organization
Select groups of medical practitioners that have a contract with traditional insurance companies to provide services at a prearranged cost. - Tricare
113
List the policies subject to Diligent Effort Requirements for Surplus Lines
- residential and multi-peril residential policies
| - boats or aircrafts used for personal use or transportation of executives/employees
114
The ISO Homeowner 2011 policy adds an additional coverage for what three items?
Bacteria, Fungi, Wet or Dry Rot
