Insurance Regulation

Question 1

Who is exempt from the licensing requirement in this state?

Answer 1

Officers, directors, or employees of an insurer or of an insurance producer who do not receive commission on policies written or sold are exempt from licensing requirements.

Question 2

What is the main purpose of a temporary license, and how long can it be in effect?

Answer 2

A temporary license may be issued for the continuation of business in the event of the provider’s death or disability, and it may remain in effect for 180 days.

Question 3

What are continuing education requirements in this state?

Answer 3

Producers must complete 24 CE hours every 2 years, including 3 hours in ethics education, and 3 hours regarding state law changes.

Question 4

How long does a producer have to notify the Director of a change of address?

Answer 4

Change of address must be reported to the Director within 30 days.

Question 5

Upon what grounds can a license be suspended or revoked?

Answer 5

Willful violations of or noncompliance with Insurance Code or any other state and federal laws.

Question 6

How long must insurance companies keep records of insurance transactions under the license for the Director’s examination?

Answer 6

At least 3 years.

Question 7

If an agent’s appointment with the insurer is terminated, how long does the insurer have to notify the Director?

Answer 7

Within 30 days of appointment termination.

Question 8

What is a “fiduciary”?

Answer 8

A fiduciary is a person legally appointed to hold assets for another person in the position of trust.

Question 9

What constitutes rebating?

Answer 9

Rebating includes premiums payable on the policy, special favors or services, advantages in dividends or benefits, stocks, bonds, securities, and their profits (and similar inducements).

Question 10

What is the purpose of the Fair Credit Reporting Act?

Answer 10

The act established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used. It also protects consumers against the circulation of inaccurate or obsolete information.

Question 11

What is the difference between a consumer report and an investigative consumer report?

Answer 11

Investigative consumer reports are similar to consumer reports in that they also provide information on the consumer’s character, reputation, and habits. The primary difference is that the information is obtained through an investigation and interviews with associates, friends and neighbors of the consumer.

Question 12

A temporary license is normally valid for

Answer 12

180 days.

Question 13

A producer’s license must be renewed

Answer 13

Every year on the anniversary date of insurance.

Question 14

Which of the following is a continuing education requirement in this state?

Answer 14

24 hours every 2 years

Question 15

An agent who offers a cash reward to a prospect for buying a policy is guilty of

Answer 15

Rebating

Question 16

Insurance producers must report their change of business or residence address within

Answer 16

30 days.

Question 17

Insurance sold by agents only to family members, relatives, and employees is

Answer 17

Controlled business.

Question 18

An agent who deliberately makes a malicious statement about another insurance company is guilty of an illegal trade practice called

Answer 18

Defamation.

Question 19

Who is considered a nonresident agent?

Answer 19

An agent who resides in another state, but is licensed to write insurance in this state.

Question 20

Which of the following would be required to be licensed as an insurance producer?

Answer 20

A salaried employee who solicits insurance.

Question 21

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Answer 21

Fair Credit Reporting Act.

Question 22

What is the main purpose of requiring licenses for person who transact insurance?

Answer 22

To protect the general public.

Question 23

Within what maximum time period can a producer reinstate a lapsed license without having to retake a written examination?

Answer 23

12 months.

Question 24

All of the following are unfair claims settlement practices EXCEPT

Answer 24

Suggesting negotiation in settlement the claims.

Question 25

If the Director issues a cease and desist order, that means the insurer must

Answer 25

Stop committing a particular violation.

Question 26

If the Director requests information regarding a claim, within how many must the insurer provide a response?

Answer 26

21 days.