The Insurance Marketplace

Question 1

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

Answer 1

The insurer who is being examined.

Question 2

Who is considered a nonresident agent?

Answer 2

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

Question 3

Who can usually be granted a temporary license?

Answer 3

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

Question 4

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

Answer 4

A cease and desist order, a fine, and license suspension or revocation.

Question 5

When can the commissioner or director examine insurers?

Answer 5

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

Question 6

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

Answer 6

Mistepresentation

Question 7

What type of license represents the insured?

Answer 7

Broker

Question 8

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

Answer 8

Misrepresentation.

Question 9

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 9

Rebating.

Question 10

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

Answer 10

Complete continuing education hours and pay a renewal fee.

Question 11

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

Answer 11

The department of insurance (commissioner/ director/ superintendent).

Question 12

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

Answer 12

Discrimination.

Question 13

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

Answer 13

Defamation.

Question 14

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

Answer 14

Twisting.

Question 15

For what reason can a temporary license be issued?

Answer 15

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

Question 16

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

Answer 16

Cease and desist order

Question 17

In general, who can be a x life’s from producer licensing and examination requirements?

Answer 17

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

Question 18

To whom may a certificate of authority be issued?

Answer 18

To an insurer authorized to transact business in this state.

Question 19

If an insured holds a certificate of authority, it is know as what type of insurer?

Answer 19

Authorized or admitted.

Question 20

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 20

Authorized or admitted.

Question 21

What type of licensee represents the insurance company?

Answer 21

The agent.

Question 22

Who is an insurance agent.

Answer 22

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

Question 23

What is the purpose of a cease and desist order?

Answer 23

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

Question 24

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

Answer 24

Only producers properly licensed for the type of insurance transaction.