State Regulations Flashcards
In-Depth Review
Notice of Conviction and/or change of address
Time frame to report change of address, administrative actions, or criminal convictions to commissioner
10 days
Civil penalties for violating North Carolina Insurance Code
$100 minimum per day, $1000 maximum per day; violations may result in suspension, revocation, monetary penalty, and restitution
An insurer should file a notice of appointment within ___ days after the first application is submitted.
15 days
An insurer must file written notice of termination with commissioner within ___ days.
30 days
Insurers must mail copy of termination to producer within ___ days after notifying the Commissioner.
15 days
Nonresident producer must obtain a resident license within ____ days of moving to North Carolina.
90 days
Maximum amount of time the Commissioner may issue a temporary license.
180 days
Penalties for violating Unfair Claims Practice or Unfair Method of Competition
$1000 - $5000, for each willful unfair practice violation
Maximum liability for Life and Health Insurance Guaranty Association are
$300,000 for all life or health benefits including cash values/ $500,000 for basic medical, hospital, or surgical expense policies
Insurance Information and Privacy Protection Act states that if an individual request access to personal information obtained by an insurer, it must be provided within _____ business days of the request.
30 business days
In accordance with the Insurance Information and Privacy Protection Act, an insurer must act within ____ business days if individual request correction, amendment, or deletion of information.
30 business days
Fill in the blank
Anyone who adjusts a claim on an illegal policy or one issued by an unauthorized insurer can be found guilty of a _.
Class 1 misdemeanor
A producer may accept discounts from a repair service company for customer referrals or recommendations,
so long as the policyowners were advised that they are not obligated to use any recommended repair service.
Any producer who unknowingly solicits, negotiates, or sells insurance for an unauthorized insurer is
guilty of Class 1 misdemeanor
Class H Felony
violation for intentionally representing an unauthorized insurer
Penalties for signing a blank policy
misdemeanor, $1000-$5000 fine
Producers may indirectly accept a commission or fee for business brokered through an unlicensed agent. True or false?
FALSE - Producers may ONLY accept commissions or fees from other licensed and appointed agents (producers).
Any agent, broker or administrator that embezzles more than $100k is guilty of a
Class C felony. If less than $100k it will be a class h felony.
Commissioner investigations
True or False: If a violation is found, the company, in addition to any other penalties allowed, is liable for the expenses of the investigation.
True
Complaint Records Retention
Complaint logs
Retained for 5 years and must provide;
* nature of complaint
* policy or claim number
* disposition of complaint
Unfair Discrimination
Insurers may not unfairly discriminate on the basis of:
-blindness or partial blindness
-deafness or partial deafness
-race, color, national/ethnic origin
Lender Insurance Requirements
Lenders MAY NOT require the purchase of insurance from them or an affiliate or subsidiary of the lender as a condition for making, refinancing, renewing, or setting terms of a loan.
Lender Insurance Requirements
Fill in the blank: Real estate lenders for one-to four-family homes must accept as evidence of insurance a ____________
temporary written insurance contract or binder
What requirements must be met for an insurer to accept payment of an insurance premium by credit or debit card?
-the insurer does not unfairly discriminate; and
-the insurer pays the fees charged by the credit or debit card company
Notice of Suspension
Who must the Commissioner notify regarding any license suspension, revocation, or nonrenewal?
-NAIC (national association of insurance commissioners);
-all appointing insurers; and
-the licensee
Assumed Business Names
Use of any name other than the producer’s legal name. Producer’s using an assumed business name MUST notify the Commissioner.
Privacy
Insurers and producers MUST provide “____” to all applicants and policyholders.
“written notice of information practices”
Privacy
When must an insurer or producer provide written notice of information practices?
No later than:
-the policy delivery date when personal information is only collected from the applicant or public records; or
-the date when personal information is collected from outside source (third party).
Misrepresentation, defamation, monoply of insurance business, false financial statements, unfair discrimination, rebates, and unfair claim settlement practices are all forms of
Unfair Trade Practices
True or false: Licensees must maintain CE records for 5 years after obtaining those credits.
TRUE
Notice of Premium Default
For life insurance policies WITHOUT a grace period
Premium default notice must be sent at least 15 days, but no more than 45 days, before the due date.
Notice of Premium Default
For life insurance policies WITH a grace period
Premium default notice must be sent at least 5 days, but no more than 45 days, before the due date.
Person licensed to solicit insurance applications or negotiate an insurance policy.
Agent
Broker
a person who is licensed as a producer and obtains insurance for third parties through an agent of an insurer for which the broker is not authorized to act as an agent.
a person required to be licensed to sell, solicit, or negotiate insurance. This could be an agent or broker.
Insurance producer or producer
a person authorized by the Commissioner to solicit contract for credit life, accident and health, dental, or motor club services
limit representative
any corporation, partnership, limited liability company, limited liability partnership, or other entity EXCLUDING sole proprietorships
business entity
This license is granted by the Commissioner to rental car companies to provide coverage on rental vehicles. Coverage is limited to excess liability, accident and health, and personal effects insurance. Terms of coverage may not exceed 30 days.
limited license
A producer may be licensed for all of the following lines EXCEPT:
A. Accident and health
B. Life
C. Variable life and annuity
D. property and casualty coverage sold for commercial purposes
D. property and casualty coverage sold for commercial purposes
A producer may be licensed for property and casualty sold for **NONcomme
When must a limited representative’s license be renewed?
Limited representatives must have licenses renewed and pay all renewal fees by each April 1st
License surrender
Any licensee who ceases to maintain residency in North Carolina must deliver the insurance license to the Commissioner within ____ days after terminating residency.
30
-license issued by Commissioner to foreign military sales agent to represent life insurer
-renewable annually
-valid in foreign country and on US military base
restricted license
Ethical Standard
What are producers required to do when dealing with the public?
-identify themselves and their occupation
-provide NPN and license status upon request
-behave in manner that inspires confidence; act fairly and honorably
True or False: Producers that accept gratuity or other compensation from a provider of services for recommending that provider to claimants are violating ethical standards.
True
Any company or association that pays money conditioned upon the continuance or cessation of human life is a
life insurance company
premiums are payable monthly or more often; face amount MAY NOT exceed $1,000
industrial life insurance
additional to the rights offered in a policy; provides for accumulation of profits over a period of years and for the payment of accumulated profits ONLY to policyholders until the end of specified period
tontine policy
Notice of coverage must be provided in connection with application for coverage or within 30 days after the effective date of the coverage and must include a statement that the employer may maintain coverage after termination.
required for any employee covered for the benefit of the employer (key-person or business continuity)
What are North Carolina’s required provisions of life insurance policies?
- grace period of 31 days for all premium payments EXCEPT the first
- incontestability provision: 2 years
- misstatement of age or gender provision
- suicide provision: 2 years
- reinstatement provision: policy may be reinstated any time within 5 years after default of premium
The premium suggested by insurer to be paid at consistent, level basis throughout the policy’s life to continue to fund the death benefit under the option selected. Intended simply to cover death benefit.
Universal Life (UL) target premium
Universal Life premiums
Front-end load
fees for sales commission and administrative costs rolled into the premium
rear-end load
administrative expenses and sales commissions costs charged to policyholder when policy is surrendered
Universal Life premiums
How many days does a person have to request the reason for an adverse underwriting decision
90 business days
True or false: Under the Insurance Information and Privacy Act, an insurer or producer may provide an abbreviatd notice informing applicant or policy holder of insurance information practices.
True) *An abbreviated notice is acceptable but the regular notice MUST be furnished upon request. *
The Commissioner may issue a _ upon finding that an insurer/producer has violated the Insurance Information and Privacy Act. Further violations may be subject to _.
cease and disist order; a fine no more than $10,000 for each violation or a maximum fine of $50,000 for violations that consitute a general business practice; or license suspension or revocation.
