Illinois Insurance laws and regulations Flashcards
Attempt to sell or ask a person to apply for a particular kind of insurance from a particular insurance company
Solicit
Confer with or offer advice to a prospective purchaser concerning benefits or terms.
Negotiate
Negotiating also includes ______ rates
quoting
Exchange an insurance policy for money or it’s equivalent on behalf of an insurance company.
Sell
Selling includes ________ and ________ insurance
binding ; renewing
An insurance producer license is required of an individual to:
- Solicit
- Negotiate
- Sell
- Give advice for a fee
- Receive commissions
Is an agreement between the producer and the insurance company which authorizes the producer to acts as the insurance company’s representative and sell the insurance company’s policies
An Agency Contract
Is selling policies issued by insurance companies which the producer does not regularly represent, does not have an agency contract with and/or for which the producer only infrequently sells.
Brokering
A _________ is a producer who arranges policies for insureds through insurance companies for which the producer does not have an agency contract
Broker
All Insurance Producers, Limited Lines Producers, Temporary Producers or Business Entities involved in the sale of an insurance policy must be identified in the policy
Disclosure
Disclosure applies if the sale was made by:
- An insurance producer in-person
- A call center telephone insurance producer
- An online internet insurance producer
Acting as an insurance producer without a license is a fine up to $_____ and/or up to _ year in jail.
$1,000 ; 1 year (1 and 1)
Acting as an insurance producer without a license is a Class _ misdemeanor
A
Acting as an Insurance Producer without an insurance producer license AND misappropriating premiums is a fine up to $________ and/or up to _ years in prison
$5,000 ; 5 years
Acting as an Insurance Producer without an insurance producer license AND misappropriating premiums is a Class _ felony
4
The state attorney general may file in court a request for an _____ against an individual acting as an insurance producer without an insurance producer license, restraining the individual from further selling of insurance
Injunction
To apply for an insurance producer license, you must be at least __ years old
18
The applicant must not have committed any acts that would be grounds for _____, ______, or ______ of a license.
suspension ; revocation ; denial
If an individual fails part of an exam and retests within ___ days, he/she will be required to retake only the part or parts failed.
90
Is there a limit to the number of times that the exam can be taken?
N
The purpose of obtaining the license is not to
sell ________ business
controlled
Is insurance sold to oneself, a spouse, or employer or a person’s own business.
Controlled business
No more than __% of the premiums a producer sells can be on controlled business
50
___ hours of pre-license education per line of insurance
20 hours
The covers must be a ____ certified course from a ______ certified provider
state
The course provider must submit proof of ______ to the IL Dept. of Insurance.
completion
___ hours of Continuing Education every 2 year license term prior to license renewal for as long as the individual holds an IL resident insurance producer license
24
Of the 24 hours that’s required, __ hours must be a state of IL certified ethics course
3
C.E. must be a ____ certified course from a ______ certified provider
state
No one course will be recognized for more than __ hours credit
12
Self study must include an ___ ___ final exam
open book
CE must be completed at least ___ month prior to the expiration of the insurance producer’s license
one
Insurance producers can accumulate up to __ hours of continuing education on file with the IL DEPT of Insruance
36
An individual cannot repeat the same course within a __ year license term
2
Each producer must keep a file of courses completed for __ years
3
The state certified course provider must submit ____ of completion to the IL DEPT of insurance
proof
Many insurance companies require that the policies be ________ by the insurance producer who sold the policy
countersigned
It is ___ required by state insurance law for policies to be countersigned
not
State insurance laws require that all producers, temporary producers, and business entities involved is an insurance sale be _______ in the policy
disclosed
Disclosure applies if the sale was made by:
a. An insurance producer __ _____
b. A ___ ___ telephones insurance producer, or
c. an online ______ insurance producer
in person ; call center ; internet
The individual must apply and pay an IL Insurance DEPT ___ year $___ fee. the individual must also pay $____ NIPR/SBS service fee
2 ; $215 ; $5.60
The _______ _______ ______ will contain the producers name, resident address, date of issue, and class or classes of insurance that the insurance producer is authorized to sell
insurance producer license
The insurance producer license will also contain the insurance producer’s ________ _______ Number
National Producer (NPN
The insurance producer and limited lines producer license remains ______ in effect (is perpetual) as long as the fees are paid, the bond is maintained, and the license has not been suspended or revoked.
continuously
Every Insurance Producer or Business Entity who brokers insurance must maintain a ______ _____
surety bond
Insurance producer license brokers bond must be in ______ of the people of the State of Illinois
favor
Insurance producer license brokers bond must be _____ in form
Continuous
Insurance producer license brokers bond must be in a face amount of no less than $_____ or if greater than _% of the premiums brokered in the previous year, whichever greater. It does not have to exceed $_______
$2,500 ; 5% ; $50,000
Is a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity who employs individuals to act as Insurance producers.
Business Entity
Business Entity is the same as ?
Insurance agency
There must be an ______ licensed individual who is authorized to act of behalf of the Business Entity
authorized
The business entity’s licensed, authorized individual must complete a ______ Business Entity Application and pay a $____ two year fine
Uniform ; $150
If the Business Entity is to broker insurance, it must maintain a ____ ____ in favor of the people of the State of Illinois
surety bond
An insurance producer must report to the Insurance director a change of resident address within __ Days
30
A Business Entity must report a change of business within __ days
30
There is no fee for reporting a change of ___ or _____ to the State Insurance Director
address ; name
There is no _____ required for limited lines producer license (4 things)
examination, Pre-license education, continuing education, or bond requirements
An appointing ____ _____ must make the application for a limited lines producer license and must pay a $__ a year fee
insurance company ; $50
An insurance producer license can be terminated by the _____ ______, the State insurance _______, or it _____ terminates when the individual fails to meet the _________ education, ____ year fee, or ____ requirements
licensed individual ; Director ; automatically ; continuing ; two ; bond
If an insurance company terminates an Insurance Producer’s agency contract or a Limited Lines Producer’s license for any of the causes for revocation or suspension of a license, the insurance company must notify the state insurance director of the termination within __ Days
30 days
The _____ ______ ______ cannot use any information provided by the insurance company about an Insurance Producer or Limited Lines Producer against the insurance copmany
State Insurance Director
The insurance company must notify the producer or limited lines producer within ____ days of notifying the Insurance Director that the Insurance Director has been notified
15
The insurance company has __ days to file comments with the insurance director
30
If the insurance company fails to give the SID proper notice of termination or reported maliciously untrue info, the SID may charge the insurance company with a _____ penalty or _______, or _______ of license
civil ; suspension ; revocation
Is a monetary penalty charged to someone or to an organization with an insurance license by the Insurance director
Civil penalty
A civil penalty does not have to be prosecuted through the _____
courts
Is a monetary penalty which must be prosecuted through the courts by a states attorney or the state attorney general
A fine
Is when a license is taken away from a person or organization for a temporary time period
A suspension of license
Is when a license is taken away from a person or organization permanently.
Revocation of license
The person or organization who had a license revoked must be allowed to reapply every _ years
3
Allows an individual new to insurance sales to start selling insurance and earning commissions while at the same time preparing for the state exam
Temporary insurance producer license
a temp insurance producer license is issued for a one ___ day period and ____ be renewed
90 ; cannot
An individual may have only ___ Temp Insurance Producer License per lifetime
one
To acquire a temp insurance producer license, the ___ ___ must apply and will be billed a $____ fee
insurance company ; 50
To get a temp license, the applicant must be in the process of fulfilling the ___-______ education requirements and msut be enrolled in a qualified _____ program
pre-license ; training
An insurance companyis considered by the state to have a qualified training program when each six month period is at least ___% of its temp insurance producers obtain _____ _____ license
50 ; insurance producers
Temporary insurance producer license may be issued to a surviving _____ or court appointed personal representative of a deceased or disabled Insurance Producer or the designee of an Insurance Producer entering active military services
spouse
Temporary Insurance Producer License in case of death, disability, or military service requires __ examination, Pre-license ______ or ________ Education
no ; Education ; Continuing
Temporary Insurance Producer License in case of death, disability, or military service is issued for a period of ____ days and may be renewed for one additional ___ day term
180
Situations in which no license is required:
- attorneys offering clients legal advise incidental to insurance
- Bank trust officers performing duties incidental to their position
- Actuaries or Certified Public Accountants engaged in a consulting capacity.
- Licensed Public adjusters who render claims assistance services to insurance consumers for a fee
- Officers, directors who perform executive, admin, underwriting but don’t solicit, negotiate or sell insurance
- Persons who sponsor or administer group insurance or employee benefit programs
- Persons who live in and are licensed as insurance producers in another state who sell commercial insurance on property located in IL, but the property owner’s principal place of business is another state
- Salaried, full-time employees who advise their employees on the employer’s insurance programs
An exam is not required if the reinstatement of an insured producer license without retaking an examination is allowed within ___ year of termination of an insurance producer license.
1
If an insurance producer is reinstated within one year of termination, there is a $____ reinstatement fee that applies in addition to the $_____ two year insurance license renewal fee. The applicant must also submit proof that they had completed their _____ _____ for the previous license term
$215 ; $215 ; continuing ed
Is required is a person who has an insurance producer license or its equivalent in another state and who intends to sell in IL only as a non-resident.
Non-Resident Insurance Producer license
If the producers state does not require exams or education requirements on IL producers, IL will in turn not require the outside resident from that state to do it in IL. This is called?
reciprocity
Applicants who move to IL and become residents of IL are exempt from IL insurance producer examination and pre-license education requirements if they meet 3 requirements:
a. The applicant must submit to the IL Insurance director a cert from the state insurance official of their prior state showing that they held a license in the previous state for which they passed an exam, and;
b. the applicant must submit to the IL Insurance Director a “letter of clearance” from the state insurance official of their prior state showing that their license has been terminated in the prior state in good standing, and
c. The applicant must be applying for their Illinois resident Insurance license within 90 days of becoming a resident of IL.
Owned by stockholders
stock
owned by policyholders
Mutual
Owned by a fraternal society
fraternal (ie knights of columbus)
Original charter / same state as sale
Domestic
another state =
foreign
another country =
alien
where the insurance is obtained it’s - _____ _____
original charter
Means licensed or authorized in the state in which the sale is to be made
Admitted
Means non-licensed or unauthorized in the state in which the sale is to be made
Non-admitted
A special, additional license required to sell policies issued by insurance companies which are non-admitted in the state in which the sale is to be made.
Surplus Lines Producer License
Penalties for selling a policy issued by a non-admitted company without a Surplus Lines Produce license
- Class _ Misdemeanor - Selling a policy without a proper license (_ and _)
- Class _ Felony - Selling one or more policies without the proper license and misappropriating premium monies (_ and _)
- An ______ may be files in the courts to restrain an unlicensed individual from selling insurance
A ; 1 and 1 ; 4 ; 5 and 5 ; Injunction
Insurance companies can pay commissions / service fees/ brokerage fees/or other fees to another individual or business entity for _____, ______, or _____ insurance policies only if the individual/business entity are licensed for the classes of insurance sold at the time the sale was made
soliciting, negotiating, or selling
Written notice prior to the performance of the services or issuance of the policy must be given to the insured if an insurance producer is to charge a _____ charge
service
Commissions may be paid to an individual or business entity not currently ________ only if they were _____ at the time the policy was originally sold.
licensed
Insurance producers can charge premiums and bill on account. a late charge of up to __% per month can be charge on the unpaid balance for up to ____ days
1.5% ; 90
Is required to finance premiums. Financing premiums is loaning customers the premium money
Premium Finance company license
If an insurance producer allows more than ____% of accounts receivable to go over ___ days from their original due date, they are _____ premiums
10 ; 90 ; financing
Are total premiums due to an Insurance Producer by clients.
Accounts Receivable
If an account is collected in installments with some of the installments collected more than ___ days after their first due date, the entire account is considered to be over __ days
90
The penalty for financing customer’s premiums without a premium finance company license is a ___ penalty charged by the Insurance Director of up to $_____ per violation
civil ; $1,000
State Director of Insurance = ?
Insurance Director
The Illinois Insurance Director is appointed by the ______ for a ___ year term
Governor ; two
The Insurance Director is accountable to the _______
Governor
