Insurance Regulation Questions (Set One)

Question 1

What does a producer’s license indicate?

Answer 1

That the individual or corporation is permitted to transact business and enter into contracts on behald of an insurer.

Question 2

What steps need to be taken to obtain a resident producer’s license?

Answer 2

Acquire a resident producer’s license, complete a pre-license education program, pass an examination and complete a battery of forms.

Question 3

Who are non-resident licenses often given to?

Answer 3

Producers who are already licensed as producers in their home state. Often estate administrators and members of the military.

Question 4

What is the expiration date for a non-resident license?

Answer 4

180 days.

Question 5

What do you need in order to be a resident lines broker?

Answer 5

A property and casualty license for at least two years or two years experience working on behalf of a P&C insurer.

Question 6

What do you need in order to be a non-resident lines broker?

Answer 6

A certification saying you’re approved to serve in their home state.

Question 7

How long are producer’s licenses issued for?

Answer 7

Two years at a time.

Question 8

What is the time frame for licenses being reinstated?

Answer 8

Within Five years of its’ lapse.

Question 9

What must be indicated on a producer’s license applicant?

Answer 9

Whether they hold a license in another state, if they have a license that is suspended, revoked, or denied, or if they owe money to a general producer or insurer.

Question 10

What percentage of income is allowed to be obtained through controlled business?

Answer 10

25% or less.

Question 11

What are the continuing education requirements for P&C/L&H but P&C only? (B)

Answer 11

20 hours.

Question 12

What are the continuing education requirements for both property and casualty? (C)

Answer 12

The sum of both courses, 36 hours.

Question 13

What are the continuing education requirements for L&H only? (D)

Answer 13

16 hours.

Question 14

How long must you wait to reapply after having your license revoked?

Answer 14

One year after the first offense and 5 after any other.

Question 15

What can cause a producer to be put on probation?

Answer 15

Failing to pay child support, failing to serve the interest of the insurance company or client, violating insurance laws, or intentionally misstating/misrepresentating an insurance contract.

Question 16

What is the time frame for a hearing to occur after the producer or company files bankruptcy?

Answer 16

Within 5 days.

Question 17

What should a ruling include?

Answer 17

The action taken, effective date of action, the evidence and the findings supporting the evidence.

Question 18

What is the fine for accidental or unintentional violations? (A)

Answer 18

$1,000

Question 19

What is the fine for intentional violations (standard maximum)? (B)

Answer 19

$25,000

Question 20

What is the fine for violation of a cease and desist? (C)

Answer 20

$25,000

Question 21

What is the fine for violations by corporations? (D)

Answer 21

$50,000

Question 22

What is the fine for violations by individuals? (E)

Answer 22

$10,000

Question 23

What does the “Violent Crime Control & Law Enforcement Act of 1994” state?

Answer 23

Any individuals who have been convicted of a felony must obtain the explicit consent of the licensing authority in order to participate in the insurance business.

Question 24

Who is the “law of agency insurer”?

Answer 24

The principle agent responsible for dealing with third parties and their clients.

Question 25

What are the auditing requirements for new companies?

Answer 25

Every 6 months for the first 3 years, then once a year for the next two years.

Question 26

What are the auditing requirements for established companies?

Answer 26

Once every 5 years.

Question 27

What is misrepresentation?

Answer 27

Intentionally false presentation of facts.

Question 28

What is defamation?

Answer 28

Dissemination of false or malicious information about other insurance professionals.

Question 29

What is rebating?

Answer 29

Offering inducements for the purchase of insurance (but policy holders may be granted dividends)

Question 30

What is controlled business?

Answer 30

When personal income is greater than 25% of gross commission from insurance.

Question 31

What is considered “unfair”?

Answer 31

To settle a claim based on misrepresentation; to fail to acknowledge, settle, or deny a claim promptly; to delay the investigation or payment of a claim without reason; to settle a claim for less than the amount originally stated.

Question 32

What is considered “fraud”?

Answer 32

Misrepresentation or concealment of important information that causes damage or loss to another party; selling the policies or diverting the funds of an insolvent insurer.

Question 33

What is the punishment for failure to share commissions?

Answer 33

$2,000 fine or 6 months in prison.

Question 34

What are the continuing education requirements for Property and Casualty only? (A)

Answer 34

16 hours.