MN Laws, Rules, and Regulations

Question 1

Regulatory authority that oversees the insurance industry. The Commissioner of Commerce heads this department.

Answer 1

Department of Commerce

Question 2

Duties included:
1. Enforce insurance laws
2. Create rules that assist with the enforcement of insurance laws
3. Conduct investigations and hold hearings
4. Examine and approve policy forms
5. Examine the books, records, and documents of any person or entity engaged in the business of insurance
6. Appoint a staff to assist with enforcement duties

Answer 2

Commissioner of Commerce

Question 3

Insurers operating in Minnesota must be examined at least once every how many years

Answer 3

5

Question 4

Order issued if an insurance company’s capital surplus, or reserves become impaired

Answer 4

“Restore any Deficiency” Order

Question 5

Order issued to prevent an insurer from transacting business that may harm the company’s policyholders or the public

Answer 5

“Cease and Desist” Order

Question 6

How many days does an insurer or producer have who disagrees with the Commissioner’s findings?

Answer 6

Within 30 days of the order

Question 7

All forms and rates used for the business of insurance in the state of MN must be filed with Commissioner of Commerce how many days before use?

Answer 7

At least 60 days before use

Question 8

Includes any of the following activities involving the business of insurance:
1. Solicitation
2. Selling
3. Advertising
4. Taking or transmitting applications
5. Receiving or delivering policies
6. Receiving, paying, collecting, or transmitting a premium insurance

Answer 8

Insurance Transaction

Question 9

Definition includes the following elements:
1. A mechanism by which a group of people who are fairly and equally exposed to the same risks
2. Shift the risk to the insurer
3. In return for a consideration (premium)

Answer 9

Insurance

Question 10

Domestic or foreign corporation, indemnity or guaranty company, partnership, fraternal order, association, or individual that transacts insurance business

Answer 10

Insurer

Question 11

A person licensed to sell, solicit, or negotiate insurance. All agents must be licensed by the Commissioner for each line of insurance they plan to sell.

Must also hold a certificate of authority (appointment) from at least one admitted insurer

Answer 11

Insurance Producer

Question 12

An applicant for a resident producer license in Minnesota must:

Answer 12

1. Be at least 18
2. Not have committed any act that is grounds for denial, suspension, or revocation
3. Completed a pre-licensing course of study for the lines applied (20 hours per line of authority)
4. Have passed the state exam for the lines of authority in which licensure is sought
5. Submit the application with fees
6. Consent to a criminal background check and fingerprinting

Question 13

A temporary license may be issued by the Commissioner of Commerce for a maximum of how many days?

Answer 13

180 days

Question 14

Resident producers must renew their license every how many years to keep their license active by completing at least 24 hours of continuing education credits

Answer 14

2 years

Question 15

A lapsed producer license may be reinstated withing how many months from the due date of the renewal fee, without taking the written exam with the penalty of twice the unpaid renewal fee?

Answer 15

12 months

Question 16

How many days prior to termination must a producer appointment notify the Commissioner?

Answer 16

30 days

Question 17

How many days does a producer have to notify the Commissioner of a change of address?

Answer 17

10 days

Question 18

How many days does a producer have to report any convictions involving moral turpitude?

Answer 18

10 days

Question 19

Policies must be delivered or mailed to the insured within how many days?

Answer 19

30 working days

Question 20

An insurance company’s license to transact business in MN. It certifeis that the company has complied with the requirements of the MN insurance laws and is admitted to transact business in the state.

Answer 20

Certificate of Authority

Question 21

An insurance company that is owned and controlled by stockholders (shareholders). Stockholders provide the capital and share in profits or losses
Considered nonparticipating because the policyowners do not share in the profits of the company
Objective is to produce profits for the owners, the stockholders

Answer 21

Stock Insurance Companies

Question 22

An insurance company owned and controlled by its policyowners who elect a board of trustees or governing body to manage the firm.
Considered participating because profits are returned to the policyowners in the form of dividends or retained as surplus to meet future obligations.
Objective is to provide insurance to its owners, the policyowners, at the lowest net cost

Answer 22

Mutal Insurance Companies

Question 23

All the following are examples of…
1. Misrepresentation
2. False Advertising
3. Defamation
4. False Financial Statements
5. Unfair Discrimination
6. Rebating (offering something of value)
7. Boycotting
8. Twisting (misrepresentation)
9. Suitability
10. Discrimination of Military Personal

Answer 23

Unfair Trade Practices

Question 24

Acts, omissions, or practices of the following are defined as…
1. Misrepresenting to insured pertinent facts or policy provisions relating to coverage
2. Failing to acknowledge and act reasonably and promptly with communications related to claims
3. Failure to adopt or implement reasonable standards for prompt investigation and processing
4. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss was obtained
5. Denying an insurance claim without indicating the basis of denial under the policy
6. Not attempting in good faith to effect prompt, fair, and equitable settlements of claims

Answer 24

Unfair Claims Methods

Question 25

Association that provides claim payment of admitted, insolvent (financially incapacitated) insurers.

Answer 25

MN Insurance Guaranty Association

Question 26

Federal law that regulates the use and disclosure of consumer credit reports. The primary purpose is to protect consumers with guidelines regarding credit reporting and distribution.

Answer 26

Fair Credit Reporting Act

Question 27

Right to Examine - Free Look
How many days does a policyowner have to decide whether or not to keep a policy?

Answer 27

10 days

Question 28

How long does an insurer have before they can no longer contest the validity of the policy for any reason other than failure to pay the premiums?

Answer 28

2 years

Question 29

The provision that states the policy constitutes the entire contract between the parties and that all statements made by the insured are representations, not warranties

Answer 29

Entire Contract

Question 30

How long must a policy be in force before the policyowner can borrow against the cash value?

Answer 30

3 years

Question 31

How long is the grace period provided after the due date?

Answer 31

30 days

Question 32

If an insurer dies during the grace period, what is the result?

Answer 32

The insurance company may deduct any premium due from the death benefit

Question 33

How long does a policyowner have till they can reinstate a lapsed policy?

Answer 33

3 years

Question 34

In order to reinstate a policy, what is required?

Answer 34

1. Written application
2. Evidence of insurability
3. Back payment of premiums
4. Any interest

Question 35

Policies cannot be backdated further than how many months?

Answer 35

6 months

Question 36

What is the purpose of backdating a policy?

Answer 36

Making it effective at an earlier date to preserve a slightly lower premium rate at that reduced age

Question 37

A person covered by a group policy has the right to convert such coverage to an individual policy without proving insurability.

Answer 37

Conversion

Question 38

If the insured dies during the conversion, how much will their beneficiary receive?

Answer 38

Amount payable under the group policy

Question 39

Transaction in which a new policy or contract is to be purchased, and the producer is aware that an existing policy or contract has been, or will be:
1. Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated
2. Converted to reduced paid-up insurance
3. Modified to cause a reduction in benefits or length of the policy term
4. Reissued with a deduction in cash value
5. Used in a financial purchase

Answer 39

Replacement

Question 40

What must be given when one policy is replaced with another and signed by both the applicant and the insurer

Answer 40

Notice of Replacement