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Insurance Cert > Chapter 20 > Flashcards

Chapter 20 Flashcards

1
Q

What is the role of the Director of Insurance in South Carolina?

A

The Insurance Director oversees the insurance industry in South Carolina.

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2
Q

What must the Director do before issuing a certificate of authority?

A

The Director must examine the financial affairs of each insurer operating in South Carolina.

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3
Q

How often must an insurer be examined?

A

At least once every 5 years.

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4
Q

What is required of insurers during examinations?

A

Insurers must not impede an examination and are required to assist in the examination procedures.

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5
Q

What can the Director do if unfair or deceptive acts are found?

A

The Director may issue a cease-and-desist order.

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6
Q

What is a Certificate of Authority?

A

A certificate issued by the Director allowing insurers to transact business in South Carolina.

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7
Q

What happens if an insurer becomes insolvent?

A

The Director will suspend the certificate of authority.

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8
Q

What authority does the Director have regarding rates?

A

The Director can set reasonable standards for rate-making.

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9
Q

What is required before using policy forms?

A

Policy forms must be submitted to and approved by the Director.

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10
Q

What is the timeframe for the Director to notify insurers about policy form approval?

A

Within 30 days.

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11
Q

How long can a lapsed license be reinstated?

A

Within six months of the renewal date, with a penalty fee.

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12
Q

What must producers report regarding address or name changes?

A

Producers must report changes to the Department of Insurance within 30 days.

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13
Q

What actions must producers report to the Insurance Department?

A

Any bankruptcy, felony conviction, or administrative action within 30 days.

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14
Q

How long must producers maintain transaction records?

A

For a period of 5 years.

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15
Q

Under what condition can a producer share a commission?

A

When the other producer is licensed in the same line of business.

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16
Q

What is the fiduciary responsibility of producers?

A

Producers must not mingle client funds with their personal funds.

17
Q

What type of insurance company is a Domestic Insurance Company?

A

A company that resides and is incorporated under the laws of its home state.

18
Q

What defines a Foreign Insurance Company?

A

A company whose home office is located in another state.

19
Q

What is an Alien Insurance Company?

A

A company chartered and headquartered in a country other than the United States.

20
Q

What is an Authorized Insurer?

A

An insurance company that has received a Certificate of Authority to sell insurance in the state.

21
Q

What is an Unauthorized Insurer?

A

An insurance company that has been denied or not applied for a Certificate of Authority.

22
Q

What defines a Stock Insurance Company?

A

An insurance company owned and controlled by stockholders.

23
Q

What is a Mutual Life Insurance Company?

A

An insurance company owned and controlled by its policyowners.

24
Q

What is misrepresentation in insurance?

A

It is illegal to misrepresent any fact about an insurance policy.

25
Q

What constitutes false advertising in insurance?

A

Falsely advertising insurance products or services.

26
Q

What is defamation of an insurer?

A

Making false or malicious statements about an insurance company.

27
Q

What is illegal regarding boycott, coercion, and intimidation in insurance?

A

Committing acts to restrain or monopolize the business of insurance.

28
Q

What is illegal about financial statements in insurance?

A

Publishing false financial statements regarding a person or entity.

29
Q

What is unfair discrimination in insurance?

A

Unfairly discriminating against a person on an insurance-related matter.

30
Q

What is twisting in insurance?

A

Making false statements to replace an existing policy to the detriment of the insured.

31
Q

What is the Insurance Fraud Act?

A

It is illegal to commit acts of insurance fraud, which involves deception or misrepresentation.

32
Q

What are prohibited inducements in insurance?

A

Promising employment or profits to induce the sale of an insurance product.

33
Q

What is the limit for merchandise given for advertising purposes?

A

The value must not exceed $25.

34
Q

What is the timeframe for insurers to pay claims?

A

Claims must be paid within 30 days after proof of loss is received.

35
Q

How long can a lapsed policy be reinstated?

A

Within 3 years from the due date upon evidence of insurability.

36
Q

What is the incontestability period?

A

The policy terms shall be incontestable after 2 years from its date of issue.

37
Q

What does the entire contract provision state?

A

The policy and the application constitute the entire contract between the parties.

Insurance Cert (20 decks)

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