Insurance Regulation Questions (Set One) Flashcards
What does a producer’s license indicate?
That the individual or corporation is permitted to transact business and enter into contracts on behald of an insurer.
What steps need to be taken to obtain a resident producer’s license?
Acquire a resident producer’s license, complete a pre-license education program, pass an examination and complete a battery of forms.
Who are non-resident licenses often given to?
Producers who are already licensed as producers in their home state. Often estate administrators and members of the military.
What is the expiration date for a non-resident license?
180 days.
What do you need in order to be a resident lines broker?
A property and casualty license for at least two years or two years experience working on behalf of a P&C insurer.
What do you need in order to be a non-resident lines broker?
A certification saying you’re approved to serve in their home state.
How long are producer’s licenses issued for?
Two years at a time.
What is the time frame for licenses being reinstated?
Within Five years of its’ lapse.
What must be indicated on a producer’s license applicant?
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.
What percentage of income is allowed to be obtained through controlled business?
25% or less.
What are the continuing education requirements for P&C/L&H but P&C only? (B)
20 hours.
What are the continuing education requirements for both property and casualty? (C)
The sum of both courses, 36 hours.
What are the continuing education requirements for L&H only? (D)
16 hours.
How long must you wait to reapply after having your license revoked?
One year after the first offense and 5 after any other.
What can cause a producer to be put on probation?
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.
What is the time frame for a hearing to occur after the producer or company files bankruptcy?
Within 5 days.
What should a ruling include?
The action taken, effective date of action, the evidence and the findings supporting the evidence.
What is the fine for accidental or unintentional violations? (A)
$1,000
What is the fine for intentional violations (standard maximum)? (B)
$25,000
What is the fine for violation of a cease and desist? (C)
$25,000
What is the fine for violations by corporations? (D)
$50,000
What is the fine for violations by individuals? (E)
$10,000
What does the “Violent Crime Control & Law Enforcement Act of 1994” state?
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.
Who is the “law of agency insurer”?
The principle agent responsible for dealing with third parties and their clients.
What are the auditing requirements for new companies?
Every 6 months for the first 3 years, then once a year for the next two years.
What are the auditing requirements for established companies?
Once every 5 years.
What is misrepresentation?
Intentionally false presentation of facts.
What is defamation?
Dissemination of false or malicious information about other insurance professionals.
What is rebating?
Offering inducements for the purchase of insurance (but policy holders may be granted dividends)
What is controlled business?
When personal income is greater than 25% of gross commission from insurance.
What is considered “unfair”?
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.
What is considered “fraud”?
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.
What is the punishment for failure to share commissions?
$2,000 fine or 6 months in prison.
What are the continuing education requirements for Property and Casualty only? (A)
16 hours.
