Insurance Regulation Flashcards
What regulation gave jurisdiction of the insurance industry back to the States?
McCarron-Ferguson Act (Public Law 15)
Established to minimize intrusiveness; to make it known to public that they can expect personal information to handle in confidence.
California’s Privacy Act
It protects consumers by requiring notification, establishing provisions for removal of outdated or incorrect information.
Fair Credit Reporting Act
These interviews are illegal unless the insurer suspects fraud or criminal activity…
Pre-text interviews
Risks that are unique are usually classified as…
Surplus lines or excess lines
(Blank) includes provisions to protect consumers’ personal financial information held by financial institutions (require annual notices).
Gramm-Leach-Bliley Act
(Blank) imposes penalties for fraud and false statements made in connection with insurance transactions.
Civil fines up to…
Federal Law Title XVII
Fines up to $50,000 per violation or amount; up to 10 years imprisonment
Purpose of the Code
1) Prevent insurer insolvency
2) Make sure rates are not inadequate, excessive or unfairly discriminatory.
3) Prevent fraud
4) Set up procedure for operation of insurance business in this state
5) Purpose is NOT TO INTERPRET POLICY PROVISIONS
Under HIPAA the number of days pertaining to creditable coverage is…
63 days
The process to determine prices.
Rate-making
Types of Rating Laws
- Prior approval
- File and use
- Use and File
- Open competition (open rating)
Annually an accredited financial statement must be given to both the…
Department of Insurance (DOI) and the National Association of Insurance Commissioners (NAIC)
What is insolvency?
Any impairment in paid in capital. An insurer’s inability to meet its financial obligations when due.
If an individual fails to send the documents when the Commissioner issues a Notice of Seizure the penalty is…
Guilty of a misdemeanor and punishable by a fine up to $1,000 and/or 1 year imprisonment.
California has two guarantee associations. What are they?
California Insurance Guarantee Association (CIGA)
California Life & Health Insurance Guarantee Association (CLHIGA)
(Blank) is leading a client to expect dividends; stating an insurer is a member of the Guarantee Association in sales or advertisement.
Unfair Methods of Competition
(Blank) is settling for less than what a reasonable person would expect by referring to printed or advertising material; misleading the claimant.
Unfair Claims Practices
Penalties for violating unfair practices.
$5,000 if not willful per violation
$10,000 if willful per violation
3 mistakes in a single policy = $15,000
The Commissioner considers an insurer’s (blank) when determining if the rates are adequate or excessive, not whether or not the insurer is competitive.
Investment income
When an agent holds both a life and property & casualty license they are considered to be (blank) licensed.
Concurrent - holding more than 1 license.
If an agent’s license is inactive they cannot transact any insurance business for which a license is required to transact they would need to file an…
Appointment
An applicant for a license can be denied if the applicant has been..
Convicted of a felony
What always requires approval before usage?
Agency name
A person who diverts or misappropriates fiduciary funds is guilty of…
Theft
