Chapter 6: Colorado Statutes, Rules, and Regulations Common to All Lines Flashcards
The Commissioner may examine or investigate any company or person involved in insurance transactions as often as deemed appropriate, but MUST investigate companies at least every how many years?
5 years
Who pays for the cost of examination?
The insurance company
What crime is any person guilty of if that person knowingly or willfully testifies falsely in reference to any matter material to an examination, or makes false statements in a company’s books or papers with the intent of deception?
Class 2 misdemeanor
How often must an insurance company provide a financial statement to the Commissioner?
Once every year before march 1
How long must insurance companies operating in the state of Colorado keep their records?
They must keep the current calendar year plus 2 prior calendar years
How long do companies have to provide a complete and accurate response to an Examination Request/Comment Form or Examination Request/Memo Form?
10 calendar days
For all other inquires from the Division of Insurance how many calendar days do insurance companies have to respond?
20 calendar days
If the window of communication with the division of insurance is missed by a company how large is the penalty?
$500 civil penalty for the initial violation and up to $5000
What is the first step of disciplinary action the commissioner takes against a insurance company?
A hearing with the commissioner
If, after a hearing, the Commissioner determines that the person charged has engaged in an unfair method of competition or an unfair or deceptive act or practice, the Commissioner will do what?
Send a cease and desist order requiring the person to stop engaging in such method of. competition, act, practice, or violation.
What would happen if any person who violates a cease and desist order of the Commissioner?
A monetary fine up to $10,000 per violation by an insurer
A monetary fine up to $500 per violation by an individual
License suspension and revocation.
How long would an insurance producer have to wait to get a new insurance producer license after it was revoked by the commissioner?
2 years
How long does an individual have to surrender or return their license?
15 days
How many hours of relicensing education must an individual seeking insurance producer licensure authority complete?
50 TOTAL HOURS, including
3 hours of insurance industry ethics
4 hours of state laws
How long do certificates of completion last?
1 year
Every insurance producer who solicits or negotiates an application for insurance of any kind on behalf of an insurer will be regarded as representing who?
The insurer
How often must insurance producer license be renewed?
Every 2 years
How long do you have to report a change of address or administrative actions?
30 Days
Are licenses required if a person does not receive commission?
No
When are fees due for license renewal?
The last day of the producer’s birth month every other year
How many months do producers have to take the required CE training after they have renewed their license?
24 Moths
How many of the 24 hours of CE must be in approved courses in the authorities for which the producer is licensed?
18 Hours
What happens to a producer who does not keep up with their CE?
Their license will be suspended by the Commissioner
What two types of licenses do not require CE?
Limited and restricted license
How long must producers keep their CE credit hour records?
5 years
How many days does a producer have to inform the Commissioner of an address change?
30 Days
How many days does a producer have to inform the Commissioner of any administrative action taken in another jurisdiction or by another governmental agency?
30 Days with any relevant documents.
What must a producer do in order to add a line of authority to their license?
A producer must complete the minimum requirements necessary for the additional authorities and submit documentation on a form prescribed by the Commissioner, as well as paying all appropriate fees.
What must a producer do in order to delete a line of authority to their license?
A producer must return the license for amendment. Any request for change to the permanent license must be submitted in writing to the Commissioner.
How long does a producer have to reinstate their license if their license has been canceled?
Within 1 year
How long does an insurer have to notify the Commissioner that they have terminated a producer?
30 Days
How long does the insurer have to mail a copy of the notification, sent to the Commissioner, to the producer who has been terminated?
15 Days
How long does the producer have to respond to the termination notification sent by the insurer?
30 Days
Are producers subject to civil liability (in the absence of willful and reckless behavior)?
No.
Do insurance producers have to register assumed names with eh commissioner?
Yes
How long must an insurance producer retain a copy of the disclosure statement?
Not less than three years
How must premiums be treated?
In a fiduciary capacity
How long does the producer have to give premiums to the insurer?
45 Dats
How long do the insurers have to return premiums?
30 days
Are producers allowed to commingle premiums belonging to insurers and returned premiums belonging to insureds with their personal funds or with any other funds except those directly connected with the producer’s insurance business.
No.
What will the Commissioner do if they believe that an unauthorized person is engaging in the business of insurance in violation of the provisions of the Insurance code?
Issue an emergency cease and desist.
What is misrepresentation?
It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, or the payment of dividends.
What is rebating?
Rebating is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy.
What is coercion?
An illegal activity that is intended to restrict fair trade or to create a monopoly.
Coercion is to require, as a condition to a loan, that the applicant purchase insurance from a specific insurer.
True or False: Discrimination in rates, premiums, or policy benefits for persons within the same class or with the same life expectancy is illegal.
True
True or False: Any person who fails to comply with the regulations regarding HIV testing and limitations on disclosure of test results commits a Class 2 misdemeanor.
True
What is defamation?
Defamation occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business. This also applies to statements that are maliciously critical of the financial condition of any person or a company.
True or False: Defamation is a Class 2 Misdemeanor
False it is a petty offense
What is controlled business?
Controlled business is any coverage written on a producer’s own life, health or property, and/or that of the producer’s immediate family or business associates.
How is a producer’s license deemed to have been, or intended to be, used for the purpose of writing controlled business?
If during any 12-month period the aggregate amount of premiums on controlled business exceeds the aggregate amount of premiums on all other insurance business of the applicant or licensee.
True or False: Every licensed insurance company (except in contracts of reinsurance) doing business in Colorado must prepare, implement, and maintain an insurance anti-fraud plan.
True
Who investigates fraudulent insurance acts?
The attorney general has concurrent jurisdiction with the district attorneys of Colorado to investigate and prosecute allegations of criminal conduct related to insurance fraud.
How much is the fine for violation of Insurance Code?
$1000
What is the maximum fine for false testimony material to investigation or examination?
$5000
What is the maximum fine per violation of cease and desist order by insurer?
$10,000
What is the maximum fine per violation of cease and desist order by an individual?
$500
