Illinois Statutes and Regulations common to All Lines

Question 1

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

Answer 1

Twisting

Question 2

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

Answer 2

Only producers properly licensed for the type of insurance transaction

Question 3

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

Answer 3

Certificate of Authority

Question 4

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 4

Discrimination

Question 5

Who must be notified of a producer’s change of address?

Answer 5

The department of insurance (Commissioner/Director/Superintendent

Question 6

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

Answer 6

Complete continuing education hours and pay a renewal fee

Question 7

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

Answer 7

Authorized or admitted

Question 8

Who can usually be granted a temporary license?

Answer 8

Producers spouse or designee in case the licensed producer dies or becomes disabled—– Can renew Temp. Licence up to 2 times

Question 9

To whom may a certificate of authority be issued?

Answer 9

To an insurer authorized to transact business in this state

Question 10

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

Answer 10

The insurer who is being examined

Question 11

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 11

Rebating

Question 12

What is controlled business?

Answer 12

Insurance on the producers own life or property, or the lives or property of the producers family or business associates

Question 13

What is the purpose of a cease and desist order?

Answer 13

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

Question 14

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

Answer 14

The insurer

Question 15

When can the Commissioner or Director examine insurers?

Answer 15

Whenever deemed necessary, but at least once every few years

Question 16

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

Answer 16

No, advertising of the existence of the guaranty association for the purpose of solicitation and sale of insurance policies by insurers is an illegal business practice

Question 17

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

Answer 17

Defamation

Question 18

What type of licensee represents the insurance company?

Answer 18

The agent

Question 19

Who must be a member of insurance to guarantee associations?

Answer 19

All insurers authorized to write insurance within a state

Question 20

In 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

For what reason can a temporary license be issued?

Answer 21

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

Question 22

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

Answer 22

Cease and desist order

Question 23

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

Answer 23

Misrepresentation

Question 24

Who is an insurance agent?

Answer 24

A person authorized to sell, solicit and negotiate insurance contracts

Question 25

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

Answer 25

Domestic, Foreign, and Alien

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

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

Answer 27

Authorized or admitted

Question 28

Who is responsible for the contents of insurance advertisements?

Answer 28

The insurance company

Question 29

What is the purpose of insurance guaranty associations?

Answer 29

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

Question 30

What type of licensee represents the insured?

Answer 30

Broker

Question 31

When is controlled business legal?

Answer 31

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

Question 32

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

Answer 32

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