Hawaii Laws And Rules Common To All Lines

Question 1

In general, who can be excluded from producer licensing and examination requirements?

Answer 1

Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services.

Question 2

Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?

Answer 2

No, advertising of the existence of the guaranty association is an illegal business practice.

Question 3

What document is required for an insurance company to transact insurance?

Answer 3

Certificate of Authority

Question 4

When is controlled business legal?

Answer 4

When the commissions from controlled business do not exceed the aggregate commissions on all the other business

Question 5

Who must be notified of a producers change of address?

Answer 5

The Department of Insurance

Question 5

Who may share in the commission from the sale of a life insurance policy?

Answer 5

Only producers properly licensed for the type of insurance transaction

Question 6

If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

Answer 6

Defamation

Question 7

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

Answer 7

Cease and desist order

Question 8

What type of licensee represents the insured?

Answer 8

Broker

Question 8

For what reason can a temporary license be issued?

Answer 8

For continuation of business in case the licensed producer dies or becomes disabled

Question 9

Who is responsible for the costs associated with the examination of insurers?

Answer 9

Insurer

Question 10

In the agent/insurer relationship, who is considered the principal?

Answer 10

Insurer

Question 11

Who is responsible for the contents of insurance advertisements?

Answer 11

Insurance company

Question 12

What is controlled business?

Answer 12

Insurance on the producer’s own life or property, or the lives or property of the producer’s family or business associates

Question 13

If an insurer meets the state’s financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Answer 13

Authorized or admitted

Question 14

What is the purpose of insurance guaranty associations?

Answer 14

To protect policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers

Question 15

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?

Answer 15

Rebating

Question 16

What are the most common penalties for violations of insurance statutes?

Answer 16

A cease and desist order, a fine, and license suspension or revocation

Question 17

Who is an insurance agent?

Answer 17

A person authorized to sell, solicit and negotiate insurance contracts

Question 18

What type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another?

Answer 18

Twisting

Question 19

What type of licensee represents the insurance company?

Answer 19

The agent

Question 20

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

Answer 20

Misrepresentation

Question 21

When can the Commissioner or Director examine insurers?

Answer 21

Whenever deemed necessary, but at least once every few years (please check your state regulations for specific time requirement)

Question 22

Who owns stock companies?

Answer 22

Stockholders

Question 23

Insurers are classified according to their domicile. What are the three types of insurers?

Answer 23

Domestic, foreign, and alien

Question 24

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

Answer 24

Misrepresentation

Question 25

What are producers required to do in order to renew their license?

Answer 25

Complete continuing education hours and pay a renewal fee

Question 26

Who is considered a nonresident agent?

Answer 26

An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state

Question 27

Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Answer 27

Discrimination

Question 28

What is the purpose of a cease and desist order?

Answer 28

To prevent a producer or insurer from further violating laws for transacting insurance

Question 29

Who can usually be granted a temporary license

Answer 29

Producer’s spouse or designee in case the licensed producer dies or becomes disabled

Question 30

To whom may a certificate of authority be issued?

Answer 30

To an insurer authorized to transact business in this state

Question 30

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

Answer 30

Authorized or admitted

Question 31

Who must be a member of insurance guaranty associations?

Answer 31

All insurers authorized to write insurance within a state