Chapter Fred Loya Flashcards
TDI may deny suspend or revoke agents license he/she has committed any
Guilty of fraudulent acts of dishonest practices
Misrepresentation of terms and conditions of policy
Elements of Insurable Risk
Loss Definite and Definable Risk as to time and place to prevent claims loss must be measurable as represented
Hardship and costs: Lost must be great enough
Loss must be accidental: not insurable if caused by intentional acts
Certificate of Authority
Insurance must be issued certificate to transact insurance business in TX
Dept may inquire carrier affairs and may refuse to issue certificate is not worthy of public confidence
TDi refuses to issue a certificate carrier the time and place for hearing which be no sooner than 10 days no later than 20 days after not given
Commissioner of Insurance Duties
Administer, enforce and may levy fines up to 25,000 per violation
May issue and carry provisions of insurance code in laws
Commissioner of Insurance
State Regulations
Appointed by governor for 2yr terms
Subject to d=advice and consent of senate
2yr term will end February each odd number year business or government/practicing practicing attorney or CPA at least 5 years
Office the commissioner must furnish a 50,00 bond
Change of Address
Agent must update TDI of current address at all times
Address must be included in each license application and renewal forms
Probation for Disability
After notice and opportunity, TDI may plate such person on probation
Agent is suffering from physical, mental, or emotional disability which renders to carry out duties
Agent Responsibilities
Responsibility to the Insurer (company)
Responsible to handle responsibility and ethically
Remit payments timely when due
Keep accurate records
Adhere to terms of insurer contract
Not exceeding binding authority
Furnish insurer w/ complete and accurate application
Responsibilities to the insured (costumer)
Services customer ethically, professionally at all time
Handle customers trust has been places
Failure to do so may lead to lawsuit
Responsibility which is developed when person’s actions, advice, partially. Accepts premiums and issue binder
Type of authority an agent may have
Express written and oral authority
Implied the public may believe agent to have
Apparent- created when an action or inaction of insurer creates the impression
Federal Law- Fair Credit Reporting Act
Credit reports to obtain info about application through consumer agency
Explore personal, character, reputation, habits, and lifestyle of applicant
Public reaction to misuse of personal information led federal credit reporting act in 1971
Protects consumers by requiring notification removing outdated incorrect info
Act was designed to insure credit reporting agencies responsibly respected customer privacy right
Federal Law- Fair Credit reporting Act
1.regular
2.Investiagtive
Usually prohibited more than 14 yrs old
Notice to costumers must be in writing no later than 3 days after report is ordered
Notice to costumers
Unfair Trade practices
Representation-written/oral statement made by insured, agent or insurer
Misrepresentation- a false written/oral statement
False Advertising
Making, publishing, or circulating in any matter information, which is untrue
Defamation
To publish/circulate any oral/written statement which is false or derogatory to financial statement
Boycott, Coercion, Intimidation
No one may commit or agree to commit with others any act will result in monopoly or unreasonable trade
False Financial Statement
NO person may publish, circulate false financial condition. Illegal act to make false entries in any book
Course must be approved by TDI
Any person already licensed as an LRA on effective date any person applying for emergency LRA
Any person applying for emergency LRA
Any person holding CPU character property and casualty underwriter
CIC certified insurance consumer
AIA accredited adviser in insurance
Any person holding a bachelor degree from 4yrs college/bachelor w/ major insurance
Any person within the 2 years preceding application was licensed in a different state
Any person seeing a license under which authority to transact business will be exclusively to the solicitation and writing coverage
Emergency License without examination
Upon death or disability of licensed agent local recording agent found to be insolvent and unable to remits premiums
Emergency license are period of 90 days in 12 month period
Expiration and License renewal
License will exp 2 yrs after date unless renew exp date
Renewal notice will mail 30 day prior
Agent shall renew by filling application and paying $ every 2 years
If licensed expires but is renewed if expired more than 90 days agent must reapply and take exam and other requirements
License cannot be renewed if expired more than 90 days agents must reapply and take exam and other requirements
At least 30 hrs of education must be completed within ea period every 2 years
Joint Advertising
Two or more advertise
Jointly present their agency name to public
each agent must hold on active license
ea agent must be authorize by insurer
Examination of Records
Commissioner may examine carriers financial condition at any time but at least every 3 yrs
New companies are audited every 1 yr for 1st 3yrs after 1 every 3 yrs
Type of agents: Solicitors
Ask for business
Duties are limited within office
Type of insurer : Admitted (authorized)
Has been granted a certificate of authority from state
Non-authorized (unauthorized)
do not qualify for certificate of authority. They do not meet required
Exception to license requirements
Upon death once family member passed away family may get $ to profit as long as they preform duties
Type of License: Individuals
will offer license offered the business as partners
Type of License: Partnership
each must have license under partnership
Financial Responsibility
Deposit of cash securities w/ fair market value of 25,000
Non Resident MAY NOT
Maintain office in state
ask for insurance in state by any method
Elements of legal contract: Consideration
Ea party must give value of ea other
Insurance contract the premium paid by the insured
Promise to pay covered loss
Elements of legal contract: Agreement
Results only when 1 party makes offer and other parties accept
In property and casualty insurance
Company either accepts the risk, rejects it, or modifies it through underwriting
Elements of legal contract: component parties
Each must be legally component
Minors, insane under the influence of drugs and alcohol are not considered.18 is legal age in TX
penalty for assisting after license is revoked or suspended
Anyone acting as an agent/solicitor after license has suspended/revoked may be fined 5,000 could be inprissioned up to 2yrs
Anyone helping shall be guilty and fined 1,000 or be placed up to 6 months
anyone giving insurance without authority may be fined up to $100
Examinations and Exceptions
Applications will 1st submit an exam testing center
Applications for long recording who previously held such license not required
Temporary Local Recording Agents License
Upon passing local recording agent exam issued temporary license
License will expire 2 years from date
Has same laws and regulations as permanent LRA
Education Requirements for permanent LRA
within a year must meet requirements to receive permanent LRA
Classroom course in insurance at school
Correspondence course in insurance
Non Resident Insurance
Meet all requirements of dept may waive requirements who has valid license from another state
Same privileges’ and right of local recording agents
Financial Responsibility
Errors and omissions policy against errors at least 100,000 w/ no more than 10,000 deductibles or coverage of 300,000 w/ no more than 25,000 dedcutibles
Financial Responsibility
Sponsor bond executed by coporation as principal sum of 25,000 payable to TX dept of insurance
Qualification for License
Texas Resident
Passed exams
Good Character
Helps w/public and doesn’t apply for purpose of law at least 18 years of age
Type of agent
Local Recording Agent
Agent writes insurance as authorized by company also forward application to the home office maintains office responsibility
DOES NOT EXECUTE RECORDS OF THE COMPANY
Unfair claims settlement practices
Not attempting to make prompt fair claim
Misrepresentation pertinent information relating to coverage
Failing to provide claims
Delaying under 1st party coverage under basis 3rd parties responsible for damage
Attempting to enforce full and financial release
Failing to respond promptly to reg for contract
Pay, asking for federal tax returns9Unless by court for examination by company
Failing to maintain complete record of complaints during last 3 yrs or since last date
Denial and Revocation of Licensing
TDI shall refuse to issue license or revoke to renew license and may asses a penalty (fine) or revoke a license holder for any violation
License will automatically cancel if agent does not have valid appointment
Solicitor license will automatically if such individual doesn’t have appointment from agent
TDI may deny suspend or revoke agents license she/he has committed any
guilty of rebating
found guilty using agents license sole purpose of controlled business
not bale to carry professional duties (TDI may placedisabilty probation)
TDI may deny, suspend or revoke agent license he/she has committed any
Misappropriated/converted his/her own use or illegally withheld money belonging to a carrier, agent, insured, or beneficiary
Misrepresenting/Making incomplete comparisons regarding terms and conditions of policy to induce the owner to surrender policy to lapse and break contract
Convicted of felony
TDI may deny, suspend or revoke agent license she/he has committed any
Willfully violated insurance law
Made a misrepresentation in the application
Obtain/tried to obtain license by fraud or misrepresentation
Agent Licensing Requirements
Must have license to sell insurance>it must be filled at the Texas Department of Insurance if not following the law it could be revoked
