Laws and Regs Flashcards
not being properly licensed
a. acting as an insurance producer, limited insurance rep or temp ins producer without proper licensing =
b. acting as a licensed person without proper licensing and misappropriating premium monies
class A misdemeanor class 4 felony
an ins co who has not given the state ins director proper notice of termination of an agency contract or license when required is subject to
civil penalty, suspension of license or revocation of license
financing premiums without a premium finance company license is subject to
civil penalty up to $1000 per violation
violating an order issued by the state insurance director as a result of an examination or hearing (3)
- license may be suspended or revoked
- fine up to 10000
- held guilty of a business offense
unfair methods of competition 2
fine of not less than $100 - not more than $5000
may be ordered to cease and desist
rebating is a
class B misdemeanor
Prohibited activities
4
a. civil penalty of $5000 per offense, but not more than 20k
b. suspension of license (temp)
c. revocation of license (permanent). can reapply every 3 yrs
d. application for license may be denied
misappropriation of premiums
4
a. prohibited activity penalties
b. class A misdemeanor
c. class 4 felony
d. class 3 felony
the insurance director can administratively charge a person with ____ penalties. criminal penalties must be prosecuted by either the state attorney general or a local states attorney through the courts
administrative
insurance producer license fee
180 per 2 years
business entity license fee
150 per 2 yr
limited lines ins producer license fee
50 per year paid by ins co
temp ins producer license fee
50
license reinstatement fee
180
six basic qualities needed to be professional
a. unselfishness (___)
b. professional societies or ____
c. codes of professional ___
d. a formal body of specialized, technical ___
e. a broad or general ___ or background
f. Qualifying ____
altruism associations ethics knowledge education examination
illinois insurance guaranty fund
a. illinois admitted life/health insurance cos to guarantee payment of ____ and ____
b. the purpose of the guaranty fund is to protect ______ and to assure quick settlement of claims
c. this fund will pay per policyholder either:
1. 300k in ins benefits in life ins benefits, or
2. 300k in health ins benefits
claims and benefits
policyholders
illinois HMO guaranty assoc
the maximum benefits it will pay to or on behalf of one person is ____
500k
advertising and sales promotion of life insurance regulation
a. the name of the ____ ___ must be clearly identified
b. no ad should use the terms ‘investment’, investment plan, profit sharing, to mislead a purchaser to believe that they will receive something other than a ___ ins policy or some other benefit not available to everyone
c. introductory, special, or initial offerings must not imply that a policy will receive substantial advantages not available at a later date unless such is a fact
d. dividends- participating policies pay dividends out of ___
1. dividends are never ____
e. ____ must be genuine, represent the current opinion of the author and be applicable to the policy advertised.. and financial interests must be disclosed
insurance company life surplus guaranteed testimonials
life insurance policy illustrations rule
a. this rule provides standards for both ___ and ____ life insurance policy illustrations
b. if an illustration shows non-guaranteed benefits, such as dividends or cash values, must be clearly labeled as non guaranteed
c. the ins co must provide each policyowner with an _____ ___
individual group
annual report
a ____ ____ must be provided to prospective customers with an ins producer proposes new life insurance.
buyer’s guide
life insurance replacement regulation
a. a replacement is considered to be occurring whenever new life insurance is being purchased and it is known that the producer that as part of the transaction existing life insurance has been:
1. surrendered and a ____ option exercised
2. borrowed against in an amount of __% or more of the loan value
b. exemptions are not considered a replacement when
1. the new life insurance is being issued as a result of the insured exercising a conversion provision contained in the original policy or the new life ins is being issued to replace a conditional or binding receipt
c. duties of a producers when a replacement is to take place. a producer must:
1. present the applicant a “notice regarding replacement of life insure or annuity’ in the form specified by state insurance department regulations
nonforfeiture
25
correlated sale of mutual funds and life ins regulation
a. when selling life ins and mutual funds together as a package sale:
1. the right to purchase life ins separate from mutual funds must be disclosed
2. the life insurance premium must be disclosed separate from other charges
3. the amount of life ins death benefit must be shown separately from other benefits which may accrue at the death of the insured
b. a ___ ____ license is required to sell mutual funds
security representative
accelerated life ins benefits regulation
a. life ins benefits on a policy containing an accelerated benefit cannot be reduced by any more than the amount of the benefit paid in advance plus the current yield on 90 day treasury bills, or the current max policy loan interest rate
b. the policyowner or ____ holder and any____ ____ must consent to the payment of the accelerated benefit
certificate, irrevocable beneficiary
viatical settlements regulation
a. viatical settlement providers must provide full disclosure to viators as to insurance, tax, and other financial ___ of entering into the viatical setllement
b. viatical settlement providers must report ____ to the director of ins a list of viatical settlement contracts they have entered
c. when a viatical settlement agreement is completed, the viatical settle provider pays the agreed purchase price to a trust or escrow account
consequences
the state ____ standards rule establishes requirements that individual accident/health policies issued or delivered in IL must meet
minimum
after a policy has been in effect for two years, coverage may not be ____ except for fraud
rescinded
