North Carolina Regulations for Life

Question 1

What type of licensee represents the insurance company

Answer 1

The agent

Question 2

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?

Answer 2

Rebating

Question 3

For what reason can a temporary license be issued?

Answer 3

For continuation of business in case the licensed producer dies or becomes disabled.

Question 4

Who must be notified of a producer’s change of address?

Answer 4

The Department of Insurance (Commissioner/Director/Superintendent)

Question 5

What are producers required to do in order to renew their license?

Answer 5

Complete continuing education hours and pay a renewal fee.

Question 6

If an insurer meets the state’s financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Answer 6

Authorized or admitted

Question 7

What type of licensee represents the insured?

Answer 7

Broker

Question 8

Who is considered a nonresident agent?

Answer 8

An agent who resides and is licensed in another state, but who is authorized to transact in this state.

Question 9

If a producer makes maliciously critical statements about another insurer, what is this illegal called?

Answer 9

Defamation

Question 10

Who is responsible for the cost associated with the examination of insurers?

Answer 10

The Insurer who is being examined

Question 11

Two individuals who are in the same risk and age class are charged Different rates for their insurance policies due to an insignificant factor. What is this called?

Answer 11

Discrimination

Question 12

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses of claims. What is the company guilty of?

Answer 12

Misrepresentation

Question 13

Who is an insurance agent?

Answer 13

A person authorized to sell, solicit and negotiate insurance contracts.

Question 14

Who can usually be granted a temporary license?

Answer 14

Producer’s spouse or designee in case the licensed producer dies or becomes disabled.

Question 15

In general, who can be excluded from producer licensing and examination requirements?

Answer 15

Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibility include administrative, executive or clerical)

Question 16

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

Answer 16

Authorized or admitted

Question 17

Who may share in the commission from the sale of a life insurance policy?

Answer 17

Only producers properly licensed for the type of insurance transaction

Question 18

What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

Answer 18

Twisting

Question 19

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

Answer 19

Cease and desist order

Question 20

To whom may a certificate of authority be issued?

Answer 20

To an insurer authorized to transact business in this state.

Question 21

What is the purpose of a cease and desist order?

Answer 21

To prevent a producer or insurer from further violating laws for transacting insurance

Question 22

When can the commissioner or director examine insurers?

Answer 22

Whenever deemed necessary, but at least once every few years (please check your state regulations for specific time requirement)

Question 23

What are the most common penalties for violations of insurance statutes.

Answer 23

A cease and deist order, a fine, license suspension or revocation

Question 24

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

Answer 24

Misrepresentation