State Supplement Flashcards
Who is the superintendent of insurance?
The chief officer and director of insurance
WHat are the powers of the superintendent of insurance?
The superintendent has the power to:
- Approve and monitor insurers, their procedures, products and producers
- Adopt, amend, and rescind insurance rules and regulations
- Execute and enforce all of Ohio’s insurance laws
When the superintendent of insurance determines that a violation has occurred - he may do what?
- Take testimony of all persons
- Inform the prosecuting attorney
- Furnish prosecuting attorney with all case files
The superintendent of insurance has the power to do what?
- Summon/subpoena witnesses
- Aminister oaths, compel the attendance of witnesses, and punish them for refusal to testify
- Require the production of records
- Regulate insurance companies for solvency
- Collect fees and issue and regulate insurance licenses
- Conduct hearing due to complaints
- Regulate Premium Rates
- Revoke licenses of nsurers, agents, or brokers
May the superintendant examine the financial affairs of any insurance company doing business in the state of ohio as often as the superintendant deems them necessary?
Yes
How frequently must the superintendant examine insurance companies?
Once every 3 years - but can’t be delayed for more than 5
Are the examination expenses generally the expense of the firm being examined?
Yes
How much pre-license study time is generally required?
20 hours
Are applicants subject to background check and criminal checks with fingerprinting?
Yes
HOw are nonresident licenses provided?
Must be licensed in their home state and in good standing - and must submit license applications and fees (note, the producers home state must do the same for residents of ohio
A nonresident insurance agent who satisifies continuing ed requiremets in his state will have also satisified continuing ed in ohio -t/f?
True
In the state of Ohio, may an insurance agent act as an insurance agent before being appointed by an insurer?
No
When is an agent considered to be acting as an agent of an insurer?
When the agent
- Negotiates any product of the insurer
- Agent is compensated by the insurer
When must an insurer file an notice of appointment?
- Within 30 days after the agency contract is executed
2. When the first insurance application is executed - whichever is earlier
An insurer must do what annually with respect to the agents it request appointments or the renewal of appointment for?
Before June 30 of every year - must certify to the superintendent the names and addresses of the agent for whom it requests appoints or the renewal of appointments
Must an insurer notify the Superintendent within 30 days of any agent’s termination?
Yes - if the termination is for violation of Ohio Insurance code, must promptly notify the superintendent of any additional information the insurer discovers upon further review
How soon after notifying the superintendent must the insurerer notify the agent of termination?
within 15 days
If an agent’s license is surrendered, revoked, or suspended, all appointments held by the agent are what?
Made void
Must name or address change be filed with the superintendent within 30 days of the change?
Yes
Assumed business name must be filed with the superintendent before using the assumed name - t/f?
True
What is the “duty to report” ? How many days after occurrence must the report be made
An agent must report any administrative action taken against the producer in another jurisdiction or taken by another governmental agency within 30 days after final disposition
Must an agent report any criminal prosecution?
Yes - within 30 days after the initial hearing
Temporary Licenses may be issued for what?
up to 180 days
What are temporary licenses issued for?
To surviving spouses or personal representatives of a producer who dies or becomes disabled
To a member or employee of an employee of a business entity that is licensed as a producer on the death or disability of an individual who is the designated producer
To the designee of a producer who enters military service
Can temporary licenses be issued without licensing examinations?
Yes
Must a temporary license be sponsored by a licensed insurance agent or insurer?
Yes
Is it true that the superintendent may limit or rescind the autrhoity of any temporary license in any way deemed necessary to protect the insurers and the public?
Yes
What do individual agent licenses renew?
Biennially (every 2 years) on or before the last day of the agents birth month
To renew a license, what must an agent do?
- Submit a renewal application to the superintendent
- The application must be accompanied by a biennial renewal fee
- The agent must complete CE
An individual license or business entity license may be reinstated after what?
within 12 months of license lapse effective date (renewal date)
FOr what reasons may the superintendent suspend a licnnse?
- Failing to provide a written response to a department inquiry within 21 calendar days
- Providing untrue information in the license applicatio
- Violating any insurance laws
- Obtaining a license through misrepresentation
- Withholding money in the course of doing business
- Having been convicted of a felony
- Being guilty of any unfair trade practices
- Accepting contracts from an unlicensed individual
- Failing to pay state income taxes
- Having any professional license of FINRA (securities registration) suspended or revoked or having been barred from participation in any industry
Before suspending, denying, or revoking an insurance agent’s license, what must a superintendent provide?
The applicant with an opportunity for a hearing
In the event of a violation, the superintendent may take any of what actions?
- Assess a civil penalty in an amount up to $25,000 per violation
- Assess administrative costs to cover the department’s hearing expenses
- Suspend or permanently revoke all the person’s licenses for all lines of insurance
- Prohibit the person from being employed in any capcity in the business of insurance
If a violation has or may cause substantial harm, the superintendent may do what?
Issue a cease and decist order
If there is a cease and decist order, notice of the order must be delivered when?
Immediately after its issuance to all persons known to be involved in the violation
What might violation of a cease and decist order result in?
Criminal proceeding and a per violation penalty of $25,000
If a superintendent finds that any person has violated an unfair trade practice statute, the superintendent may do what?
- Suspend/revoke the person’s insurance license
- Order that an insurance company or agency not employ the person
- Order the person to return any payments, with interest, received by the person as a result of the violation
- Order the person to pay one-half of the state’s expenses in investigating the violation (up to $100,000)
For each unfair trade practice, the court may do what?
(1) impose civil penalties up to $3,500 for each violation
(2) maximum aggregate penalty of $35,000 in any 6-month period
(3) For each violation of an unfair trade practice, cease and desist order issued by the superintendent, a civil penalty of up to $10,000 may be assessed
Notice of suspension must be given how?
By registered mail and must inform the party that he is etitled to a hearing if requested within 30 days of the notice
How soon after notice of suspension must an agent request a hearing?
30 days
If a party requests a hearing, the date set for the hearing must be within how many days?
15 - but not earlier than 7, after the party has requested a hearing, unless underwise agreed to by both the agency and the party
When may an insurer or agent be found to have engaged in unfair or deceptive practices when not from their-own practice?
if they knew or should have known of the misconduct of its licensed agent or sub-agent and
(1) Expressly encouraged or tolerated such misconduct
(2) Failed to notify the department of insurance of suspected violation and
(3) Failed, upon the request of the department of insurance, to make a reasonable investigation to determine if such misconduct has occured
What are the continuing ed requirements of agents in Ohio?
- 24 hours of CE each license renewal period
2. 3 hours must be approved ethics training
What must agents do with respect to CE if they wish to be permitted to engage in the sale of annuities?
They must complete a 4-hour annuity-specific CE course to be permitted to engage in the sales of annuities
If a nonresident agent completes an annuity suitability specific training course, that has been approved in another state with laws similar to Ohio’s, then the agent will be deemed to have complied with this rule - t/f?
True
If a person cannot complete CE requirements due to disability or other similar circumstances, the superintendent may grant what?
The person a reasonable extension
Violations of the pre-licensing requirements and CE rules may result in what?
a $500 fine per violation
What would violations of pre-licensing requirements and CE include?
- False documentation
- Accepting a completion certificate for a course not completed
- Disruptive Behavior in a course or examination
- Unauthorized use of Telecommunication Device
The terms marketing and trade practices include what?
- Sales Practices
- Claim Methods and procedures
- Methods of competition
- Other Practices applicable to the sale
The terms “marketing” and “trade” practices include sales practices, claim methods and procedures, methods of competition, and other practices applicable to the sale and transaction of insurance
Note
Is it true that agents may not offer an inducement any rebate of premiums or any valuable consideration whatsoever that is not specified in the contract?
Yes
Illegal inducements include what?
- Offering to make any agreement other than those plainly expressed in an insurance contract
- Paying as inducement to such insurance any special favor or valuable consideration not specified in the contract
- Selling any securities or other obligations of value not specified in the contract
Is readjustment of the rate of premium for a group insurance policy based on the loss or expense experience an example of illegal inducement?
No
Failing to fulfill a refund obligation in a timely manner is an unfair trade practice an is illegal
Note
What are the policies against defamation?
No company doing business in Ohio, nor any of its officers or agents, may make, publish, or distribute any material that is defamatory of any insurance company doing business in Ohio or that contains any false and malicious criticism calculated to injure the company’s business reputation
WHat are the 4 examples of misrepresentation that insurance companies operating in Ohio must observe?
No insurance company doing business in ohio may make any statement that:
(1) Misrepresents the terms of any policy or to be issued by it or any other company
(2) Misrepresents the benefits and advantages of any policy
(3) Make a misleading estimate of dividends or shares of surplus to be received under the policy
(4) Implies the policy dividends are anything other than an equitable distribution of surplus
What is “misrepresentation”
AN unfair trade practice to misrepresent the provisions of an insurance contract
What is “twisting”
The illegal replacement practice of misrepresenting a policy to induce a policyholder to lapse, forfeit, or surrender an existing policy to purchase a new policy from a different issuer
What is “unfair discrimination”
It is illegal to permit any unfair discrimination between individuals of the same class and life expectancy or hazard in the:
- amount of premium
- policy fees or rates charged
- benefits payable
- underwriting standards and practice
- eligibility requirements
- terms or conditions of the contract
It is illegal for an insurance company to charge different premiums and pay different benefits on the basis of race - t/f?
True (example of unfair discrimination)
Is it illegal for an insurance company to use unfair underwriting standards to discriminate against any handicapped person?
Yes
Is it true that life insurers may not make any distinction among life insured persons of the same class and equal life expectancy in the amount of premiums, rates charged, dividends or other benefits or in any of the terms and conditions that the contracts make
Note
What is insurance fraud?
Fraudulent insurance is an act committed by a person who, knowingly and with the intent to defraud, does the following:
(1) Prepares an insurance application that contains materially false information
(2) Conceals any material fact for the purpose of misleading the insurer
(3) Prepares or submits any claim that contains false information
What is “immunity from liability” with respect to reporting insurance fraud?
Any person who files a report or furnishes information about possible insurance fraud without malice cannot be held liable for any civil damages
Insurance fraud is a misdemeanor of the first degree - with what exceptions?
- if the claim is at least $1000 but less than $7500, then it is a felony of the 5th degree
- If the claim is at least $7,500 but less than $150,000, then it is a felony of the 4th degree
- If the amount of the claim is $150,000 or more, it is a felony of the third degree
What acts are considered unfair claim settlement practices?
- Failing to acknowledge or respond (within 15 days) upon receiving written or oral communications regarding victims
- Failing to respond to an inquiry from the department of insurance within 21 days
- Misrepresenting policy provisions relating to coverage
- Failing to adopt and implement reasonable standards for the prompt investigation of insurance claims
- Not selling claims in a fair manner
- Compelling claimants to accept settlement of less than the mount previously awarded in arbitration
- Attempting to delay the investigation r payment of claims by requiring an insured and the insured’s physician to submit a preliminary claim report and subsequent formal proof of loss form
What is the life and health guarantee association?
THe purpose of the Association is to protect Ohio Policyowners and beneficiaries against insurers who become financially impaired or insolvent
Is it true that insurers and producers may not use the existence of the life and health guarantee association for the purpose of selling any form of insurance covered by the association?
Yes
Is it true that insurers admitted to do business in Ohio must be a member?
Yes
What are the guarantees from the “Life and Health Guarantee Association” for life insurance death benefits?
$300,000
What are the guarantees from the “Life and Health Guarantee Association” for life insurance cash values?
$100,000
What are the guarantees from the “Life and Health Guarantee Association” for the present value of annuity payments?
$250,000
What are the guarantees from the “Life and Health Guarantee Association” for life basic hospital, medical, or surgical insurance or major medical insurance benefits?
$500,000
What are the guarantees for disability insurance benefits?
$300,000
What are the guarantees for long-term care insurance benefits?
$300,000
What area the guarantees for other health insurance benefits?
$100,000
Insurance advertising must be truthful and not misleading
Note
Coverage exceptions, reductions, and limitations must be disclosed in advertisements
Note
Testimonials used in advertisements must be genuine
Note
Must the insurer’s name be used in all advertisements?
Yes
Must an insurer keep copies of all adverstisements for at least four years or until the next regular examination of the insurer, whichever is longer?
Yes
An advertiser may not state or imply that an insurer or a policy has been approved or endorsed by an individual, group of individuals, society, association, or other organization, unless that is fact
Yes - note
Insurers and agents may not pay any compensation to an unlicensed person for selling, soliciting, or negotiating insurance
Note
An agent must be appointed with an insurer in order to be paid commissions by the insurer
Note
Is it true that insurers and agents may not pay any form of compensation to an unlicensed person for a referral fee? (unless what conditions are satisified)
Yes - it is true - unless (1) the compensation is a fixed dollar amount for each referral and (2) payment does not depend on whether the person referred purchases of an insurance product
An agent may charge a customer fee if what is the case?
- Fee is disclosed in a way that identifies the fee and the premium
- Fee is not calculated as a % of the premium
- Fee is not refunded, waived, or offset by any commission
- Amount of the fee, and the obligation to pay it, are not conditions of the purchase, canellation, lapse, declination, or nonrenewal of coverage
If an agent wishes to charge a fee, does it need to be disclosed as a fee charged by the agent, as opposed to the insurer?
Yes
Does the agent need to disclose that neither state law, nor the insurer requires the fee and that the fee is refundable?`
Yes
Must the customer agree to pay the fee for an agent to charge a fee?
Yes
Must the agent not discriminate in charging a fee based on race, sex, national origin, religion, disability, health status, age, marital status or geographic location and does not unfairly discriminate between the persons of the same class or risk
Yes
Is it true that a fee may not be taken for taking or submitting an initial application or processing change to an existing policy, a cancellation, a claim, or a renewal to (1) a private passenger automobile policy (2) a homwners policy, including coverage for tenants or codndominium owners, owner occupied fire or dwelling property coverage, personal umbrella liability, or any other personal lines-related coverage
Yes
Each policy that provides coverage for family members must cover what?
Expenses for a periodic review of a child’s phsycial and emotional health from birth until 9 years old
Dependent children may be covered under their parent’s health plan until when (what age)?
Age 26
Must adopted children be covered on the same basis as other dependents?
Yes
Under what conditions can children be listed as dependents beyond the termination age (of 26)
If the dependent child is:
(1 ) Incapable of self-sustaining employment because of a mental impairment or physical handicap, nd
(2) Dependent upon the policyowner for support and maintenance
After the child reaches the age limit (26) what needs to be done to confirm that the child should remain asa addepenedent?
The Policyowner must provide proof of the child’s dependency within 31 days after the child’s reaching the age limit
Must group health insurance policy cover services provided by a licensed practitioner? What are 4 examples?
- Chiropractors
- Optometrists
- Osteopath
- Podiatrist
An employee’s group, hospitals, surgical, and medical policy must provide that any eligible employee may continue the insurance under the policy, for the employee and the employee’s eligibile dependents for a period of up to 12 months after the date that the insurance coverage would otherwise terminate by reason of the termination of the employee’s employment
Note
What is a small employer group health plan?
A small group employer health plan employs at least 2 but no more than 50 employees
For a small employer Group health plan, coverage must be renewable at the employer’s option except for what 5 scenarios?
- Nonpayment of Premium
- Fraud
- Employer Out of Business
- Failure to Comply with plan Participation Requirements
- When new Business is no Longer written by the insurer
What is defined as an “eligible employee’ according to Small Employer Group Health Plans? Must coverage be offered to all eligible dependents on an open enrollment basis? Must health benefit plans provide for the special enrollment periods of at least once every 12 months?
- An eligible employee is one who works a normal work week of 30 or more hours
- Coverage must be offered to all eligible employees and their dependents on an open enrollment basis
- Health benefit plans must provide for the special enrollment periods of at least once every 12 months
Must medicare supplements be guaranteed renewable?
Yes
How long is the free-look period for medicare supplement?
30 days
what is the maximum pre-existing condition exclusion period for medicare supplement?
6 months
What is an outline of coverage with respect to medicare supplement? Must one be provided at the time of application?
A medicare supplement outline of coverage must be provided at the time of application
- Description of the principal benefits and coverage provided in the policy
- Statement of renewal provisions
- Statement that the outline of coverage is a summary of the policy and that the policy should be consulted to determine governing contractual provisions
What are medicare supplement commissions capped at?
Medicare supplement first year commissions may not exceed 200% of the compensation for servicing the policy in the second year
Is it true that medicare supplement first year commissions may not exceed 200% of the compensation for servicing the policy in the second year?
Yes - note
FOr medicare supplement, renewal commissions must be the same as those paid in the second year and must be provided for at least 5 years
Note
Must long-term care insurance be guaranteed renewable or noncencellable?
Yes
How long must the free-look provision be for long-term care?
30 days
What is the maximum pre-existing conditions period for long-term care insurance?
6 months
For long-term care insurance, must optional inflation protection of at least 5% be offered?
Yes - it MUST be offered
What are two components related to lapses in coverage for long-term care?
- Unintentional Lapse
2. Reinstatement
What is the “Unintentional Lapse” Provision in long-term care?
Unless waived in writing by the applicant, the applicant must provide the insurer with the name of at least one person who is to receive notification of a lapse or termination
What is the “reinstatement provision” for long-term care?
Policies must contain a reinstatement provision in the event of a lapse occurs and the insurer is provided proof of cognitive impairment or functional incapacity
With respect to Long-term care coverage, an outline of coverage and a notice that consumer information is available from the department of insurance must be delivered to a prospective applicant for long-term care insurance at the time of the initial solicitation
Note
Must a long-term care “shopper’s guide” be provided to all prospective applicants?
Yes
What are HICs? What must they establish?
Health insuring companies (HICs) are also known s health maintenance organizations (HMOs). HICs must establish and maintain a system to handle customer complaints
What is “CHIP”
The Ohio Children’s Hospital Insurance Program (CHIP) - is authorized under the social security act. The program provides health assistance to uninsured individuals under 19 years of age with family incomes not exceeding 200% of the federal poverty guidelines
