QUIZ - section 4 Flashcards
Which of the following describes prior approval as a type of rating law?
The insurer files policy rate information with the Department of Insurance. After filing, the insurer delivers evidence that the rates proposed are reasonable and fair. Then the insurer waits (30-60 days) for approval.
An insurance company must file the rates with the commission, but can then use those rates until they hear back from the commission.
Insurers compete with one another by quickly changing rates without review by the state regulators.
An insurance company uses the rate they determine appropriate first and then file that rate with the commission.
The insurer files policy rate information with the Department of Insurance. After filing, the insurer delivers evidence that the rates proposed are reasonable and fair. Then the insurer waits (30-60 days) for approval.
Which is not a violation of Unfair Practice?
Defamation of an insurer
Delaying an investigation
Misrepresentation
Age discrimination
Age discrimination
CIGA pertains to:
insurer’s insolvency
insurer’s forms
insurer’s fraud unit
insurer’s rating
insurer’s insolvency
When the Commissioner takes over a company that is insolvent, his/her first responsibility is to:
sell all the company assets and pay any open claims.
liquidate the company and appoint new officers.
attempt to restore the company if possible.
shut down the company`s operations and start a full investigation.
attempt to restore the company if possible.
Which of the following is a penalty for violating the Insurance Information and Privacy Protection Act?
$5,000 fine for violations committed with regularity showing they are a general business practice
$20,000 fine for violations committed with regularity showing they are a general business practice
$50,000 fine for violations committed with regularity showing they are a general business practice
$100,000 fine for violations committed with regularity showing they are a general business practice
$50,000 fine for violations committed with regularity showing they are a general business practice
A subsequent violation of a cease and desist would result in:
imprisonment up to 5 yrs
a minimum fine of $5000
a fine up to $55,000
license suspension
license suspension
Which of the following describes use and file as a type of rating law?
An insurance company must file rates with the commission, but can then use those rates until they hear back from the commission.
An insurance company uses the rate they determine appropriate first and then file that rate with the commission.
The insurer files policy rate information with the Department of Insurance. After filing, the insurer delivers evidence that the rates proposed are reasonable and fair. Then the insurer waits (30-60 days) for approval.
Insurers compete with one another by quickly changing rates without review by the state regulators.
An insurance company uses the rate they determine appropriate first and then file that rate with the commission.
The State of California requires that all admitted insurers be a member of the:
Privacy Protection Committee
California Code and Ethics Board
Insurance Board Council
California Insurance Guaranty Association
California Insurance Guaranty Association
Insurer has up to how many days to accept or deny a claim?
30 days
15 days
21 days
40 days
40 days
What is the significance of the SEUA case of 1944?
The court decided the federal government should regulate insurance.
The court gave authority to the federal government to apply antitrust laws to the insurance business that was not being regulated by the state level.
The court established the right of the states, instead of the federal government, to regulate insurance.
The court exempted the insurance industry from the federal regulation required for most interstate commerce industries.
The court decided the federal government should regulate insurance.
If convicted of insurance fraud:
the fine can be up to $150,000 and up to 5 years in state prison.
the fine can be up to $10,000.
the fine can be up to $50,000.
the fine can be up to $10,000 and up to 5 years in state prison.
the fine can be up to $150,000 and up to 5 years in state prison.
All of the following are penalties for unfair discrimination EXCEPT:
$15,000-$100,000 for frequent violations
$2,500 for first violation
prison
Incorrect Answer$5,000 for subsequent violations
prison
Which of the following is NOT a purpose of the Unfair Practices Article?
To protect the public from agents who practice bad methods of selling insurance.
To regulate trade practices in the insurance business.
To keep agents honest when selling insurance.
To determine the punishment for an agent found guilty of unfair practices in insurance.
To determine the punishment for an agent found guilty of unfair practices in insurance.
Who administers the California Administrative Code of Regulations?
State Senate
Commissioner
Governor
Congress
Commissioner
Which of the following is a responsibility of the Commissioner?
To change the law of insurance.
To write the law of insurance.
To enforce the law of insurance.
To form and appoint a council that will regulate the code.
To enforce the law of insurance.
To change the California Insurance Code a bill is brought before the Assembly and the Senate. After both parties vote on the bill and it is approved, it moves on to the:
State Senate
Governor
Congress
Commissioner
Governor
Solvency requires the insurer to have enough assets to cover:
reinsurance
paid-in-capital
all of these
liabilities
all of these
An example of a self-regulatory authority of the insurance industry is:
the State legislature
the NAIC
the ISO
the Commissioner
the NAIC
How is the Insurance Commissioner put into office?
Elected by the citizens
Elected by the council
Appointed by the governor
Appointed by the previous commissioner
Elected by the citizens
Once insured an insurer are in agreement payment must be made within: 15 business days 15 calendar days 30 calendar days 30 business days
30 calendar days
Which of the following statements about insolvency is TRUE?
An insurer cannot escape the condition of insolvency except by permission from the Commissioner.
An insurer can escape the condition of insolvency by meeting its financial obligations when they are due.
An insurer cannot escape the condition of insolvency by being able to provide for its liabilities and reinsurance of all outstanding risks.
An insurer can escape the condition of insolvency by being able to provide for its liabilities and reinsurance of all outstanding risks.
An insurer cannot escape the condition of insolvency by being able to provide for its liabilities and reinsurance of all outstanding risks.
According to the Code a “Notice of Claim” is a(n):
oral notification
either qualify
neither qualify
written notification
either qualify
What is the role of the Commissioner and the Department of Insurance in relation to consumers?
Commissioner and the DOI are responsible for making sure companies bring in more income than claims being paid out.
The Commissioner and the DOI are responsible for regulating the conduct of agents and insurers.
The Commissioner and the DOI are responsible for advertising to the public the roles and responsibilities of insurance.
The Commissioner and the DOI are responsible for making sure the public is given the opportunity to purchase insurance.
The Commissioner and the DOI are responsible for regulating the conduct of agents and insurers.
Which of the following is NOT considered an unfair practice?
Filing false financial documents.
Unfairly discriminating against classes of insured`s.
Making false statements that mislead the public.
Failing to display the license in a clearly visible place for the public to see.
Failing to display the license in a clearly visible place for the public to see.
