Louisana Insurance Regulations Flashcards
A person licensed to quote insurance policies, market, & sell insurance products, & consult.
Individual Producer (Insurance Agent)
A legal business entity, coporation, partnership, LLC, etc.
Business Entity Producer
Requirements for Louisiana Insurance Code for a producer’s license…
- Be at least 18 years of age.
- Reside or work mainly from an office located in Louisiana.
- Complete pre-licensing education required to prepare for the state required exam.
- Paid fees & submitted application (Form 1546A).
- Successfully pass exam with 70% or higher.
How many times is a license issued?
Once
Final approval determined by…
The Commissioner
When does license expire?
Every 2 years
Where are renewals sent?
Louisiana Department of Insurance (LDI)
When does the Department need to be notified of an address change?
within 10 days
What form is required to officially change address?
Change of Address
organization in charge of insurance laws for all states and pay their fees
National Association of Insurance Commisioners
NAIC
How long does a producer have after moving from one state to another to become a resident license?
90 days after establishing legal residence
What is valid for 180 days and may be granted under the following 3 circumstances…
Temporary license
Death
Disability
Active Military
Who can revoke, non-renew, suspend, or refuse to issue any producer’s license, as well as charge fines?
The Department of Insurance and the Commissioner
What needs to happen prior to the producer selling insurance products?
The insurer eeds to appoint a producer.
How much is renewal of company appointments?
$20 per appointment
When an insurer terminates an appointment, how long does the insurer have to notify the Department?
30 days from the termination date
Someone solicits insurance, they need a license according to whom?
Licensing Model Act
Who is NAIC?
National Association of Insurance Commissioners
What organization in charge of insurance laws for all states & pay their fees?
NAIC
Producers with a Property & Casualty license must submit how many hours of continued education?
24 hours
How many hours of continuing education must be on Ethics and flood?
3 hours on ethic & 3 hours on flood
Leagal term for STOP
Cease & Desist
What makes the insurer an admitted company and proves that the Department of Insurance finds the company financially sound and structured well enough to meet the requirements of the state insurance code to conduct insurance business in Louisiana?
Certificate of Authority
A company is unable to pay debts owed
Insolvent
Who is the Louisiana Department of Insurance Commissioner?
James Donelon
What is the Commisioners primary goal?
Protect the public
In protecting the public, what are the duties of the Commisioner?
Issuing/revoking licenses & Certificates of Authorities.
Hire employees and examiners.
Examine the records of any insurer or producer.
Subpoena witnesses.
Conduct hearings for alleged violations of the Insurance Code.
Give out cease and desist orders.
Impose penalties for violations of the Insurance Code.
Who regulates the marketing and advertising of insurance policies?
The State
Who is responsible for the content of advertisements?
The insurer
How long do advertisements need to be kept on file?
Until the state examines the insurer
How long is the Commissioner in office?
4 years
What is it called when someone gets into the insurance business in Louisiana to sell only to themselves, their family, & employer?
Controlled Business
Is it legal to acquire an insurance license for the purpose of writing controlled business?
No
How does the Commissioner determine a controlled business?
By looking at a producer’s book of the business for a 12 month period.
When is a business considered a controlled business?
When commissions earned from policies sold to themselves, their family, & members of their employer is more than 25% of the total commissions for that year.
What are the consequences of somone paying or accepting commissions without an insurance license?
Fine between $1,000 and $5,000
and/or
Maximum of 2 years in jail
What are the consequences of any unlicensed business entity paying or accepting illegal commisions?
Fine between $2,000 and $50,000
and/or
Maximum of 3 years in jail
Distributing misleading or false information and orally deceiving the public with regard to a policy’s terms and benefits is illegal
Misrepresentation
Any advertising, print, multimedia, internet or otherwise, cannot deceive the public in anyway and misrepresenting terms, benefits, advantages, dividends, financial strength, or misrepresenting the intent of a policy, loans or assignments, or saying an insurance policy is the same as a share of stock are all prohibited acts
False advertising
oral or written statements trying to injure a person or entity is prohibited, especially when it is critical of the financial status of a person or insurer
Defamation
illegal acts intended to stop fair trade or monopolize insurance business are prohibited
Boycott, Coercion, or intimidation
intentionally deceiving the public or a regulator as to the financial standing of an insurer is prohibited
False Financial Statements
changing rates based on marital status, race, color, national origin, creed or ancestry within the same mortality class is illegal
Unfair Discrimination
Offering and accepting any incentives for buying a policy, including money, unauthorized discounts or money back, special favors or personal services, are all illegal acts
Rebates
When can the Commissioner examine a business of insurance?
Anytime
What are the 9 unfair trade practices?
- Misrepresentation
- False Advertising
- Twisting
- Churning
- Defamation
- Boycott, coercion, or intimidation
- False financial statements
- Unfair Discrimination
- Rebates
When will the Department review insurance companies for financial stability?
At least once every 5 years
The intent to deceive by providing materially false information to someone in a business transaction.
Fraud
What states that no information can be accessed by the insurers without the person’s consent & prevents insurers releasing this information to anyone without consent from the insured.
Privacy Regualtion
States that anyone has committed a felony must receive written authority from a regulatory official, Commissioner, Deputy Commisioner before working in insurance that affects interstate commerce.
The Violent Crime Control & Law Enforcement Act of 1994
Said the federal government had the right to regulate insurance only to the extent it is not regulated by state law.
McCarran-Ferguson Act
Removed the barriers between commercial banking, investment, and insurance
Gramm-Leach-Bliley Act (GLBA)
Administered by the Federal Trade Commission to protect consumers against the circulation of inaccurate or obsolete information & to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.
Fair Credit Reporting Act
What are the 2 categories of the Fair Credit Reporting Act?
Consumer Reports & Investigative Consumer Reports
___ includes written and/or oral information regarding a consumer’s credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources
Consumer reports
___ include written and/or oral information on the consumer’s character, reputation, and habits.
Investigative Consumer Reports
Age to apply for a producer’s license
18
Temporary license period
180 days
Producer license valid
2 years
Fee for late license renewal application
$25
To report change of address
10 days
To report administrative action or conviction
30 days
CE required for property and casualty producers every 2 years
24 hours
Fine per violation of insurance licensing laws
$500
Total fine for all violations of insurance licensing law in 1 year
$10,000
Fine per violation for unintentional violations of Insurance Code
$1,000
Aggregate fine for unintentional violations of Insurance Code
$100,000
Fine per violation for willful violations of insurance Code
$25,000
Fine for all willful violations of insurance code
$250,000
Commisionser’s term of office
4 years
to file notice of appointment with Commissioner
15 days
to notify Commissioner of termination of appointment
30 days
Length of time Commissioner to examine Insurances
5 years
Fair Credit Reporting Act passed
1970
Fine for willful noncompliance with Fair Credit Reporting Act
$5,000
Bankruptcies-Prohibited information in consumer reports
10 years
Negative Information- Prohibited information in consumer reports
7 years
