Chapter 20 Flashcards
What is the role of the Director of Insurance in South Carolina?
The Insurance Director oversees the insurance industry in South Carolina.
What must the Director do before issuing a certificate of authority?
The Director must examine the financial affairs of each insurer operating in South Carolina.
How often must an insurer be examined?
At least once every 5 years.
What is required of insurers during examinations?
Insurers must not impede an examination and are required to assist in the examination procedures.
What can the Director do if unfair or deceptive acts are found?
The Director may issue a cease-and-desist order.
What is a Certificate of Authority?
A certificate issued by the Director allowing insurers to transact business in South Carolina.
What happens if an insurer becomes insolvent?
The Director will suspend the certificate of authority.
What authority does the Director have regarding rates?
The Director can set reasonable standards for rate-making.
What is required before using policy forms?
Policy forms must be submitted to and approved by the Director.
What is the timeframe for the Director to notify insurers about policy form approval?
Within 30 days.
How long can a lapsed license be reinstated?
Within six months of the renewal date, with a penalty fee.
What must producers report regarding address or name changes?
Producers must report changes to the Department of Insurance within 30 days.
What actions must producers report to the Insurance Department?
Any bankruptcy, felony conviction, or administrative action within 30 days.
How long must producers maintain transaction records?
For a period of 5 years.
Under what condition can a producer share a commission?
When the other producer is licensed in the same line of business.
What is the fiduciary responsibility of producers?
Producers must not mingle client funds with their personal funds.
What type of insurance company is a Domestic Insurance Company?
A company that resides and is incorporated under the laws of its home state.
What defines a Foreign Insurance Company?
A company whose home office is located in another state.
What is an Alien Insurance Company?
A company chartered and headquartered in a country other than the United States.
What is an Authorized Insurer?
An insurance company that has received a Certificate of Authority to sell insurance in the state.
What is an Unauthorized Insurer?
An insurance company that has been denied or not applied for a Certificate of Authority.
What defines a Stock Insurance Company?
An insurance company owned and controlled by stockholders.
What is a Mutual Life Insurance Company?
An insurance company owned and controlled by its policyowners.
What is misrepresentation in insurance?
It is illegal to misrepresent any fact about an insurance policy.
