Insurance Laws Rules And Regulations

Question 0

The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?

Answer 0

Fiduciary

Question 1

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

Answer 1

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

Question 2

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

Answer 2

Twisting

Question 3

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 3

Misrepresentation

Question 4

If the commissioner finds a license engaging in an unfair method of competition or an unfair practice, what order will be issued?

Answer 4

Cease and desist order

Question 5

When is controlled business legal?

Answer 5

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

Question 6

When can the commissioner or director examine insurers?

Answer 6

Whenever deemed necessary, but at least once every few years (5 years NC)

Question 7

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

Answer 7

The insurer being examined

Question 8

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

Answer 8

Misrepresentation

Question 9

What is the purpose of insurance guaranty associations?

Answer 9

Protect the policy owners, insured’s and beneficiaries form financial losses caused by insolvent insurers

Question 10

What is a controlled business?

Answer 10

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

Question 11

Who is an insurance agent

Answer 11

A person authorized to sell, solicit and negotiate insurance contracts

Question 12

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 12

Discrimination

Question 13

What type of licensee represents the insurance company?

Answer 13

Agent

Question 14

To whom may a certificate of authority be issued?

Answer 14

To an insurer authorized to transact business in this state

Question 15

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

Answer 15

Only producers properly licensed for the type of insurance transaction

Question 16

For what reason can a temporary license be issued?

Answer 16

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

Question 17

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

Answer 17

CE hours and renewal fee

Question 18

Who can usually be granted a temporary license?

Answer 18

Spouse or designee

Question 19

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

Answer 19

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

Question 20

Who must be a member of insurance guaranty associations?

Answer 20

Authorized insurer within the state

Question 21

What type of license represents the insured?

Answer 21

Broker

Question 22

Who is considered a nonresident agent?

Answer 22

Any agent who resides and is licensed in another state but who is authorized to transact insurance in the state

Question 23

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

Answer 23

Defamation

Question 24

What is the purpose of a cease and desist order?

Answer 24

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

Question 25

If an insurer holds a certificate of authority, it is known as what type of insurer?

Answer 25

Authorized or admitted

Question 26

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

Answer 26

Department of insurance/The commissioner

Question 27

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

Answer 27

No. It’s illegal

Question 28

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 28

Rebating

Question 29

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 29

Authorized or admitted