Uniform Trade Act- Other MI Regulations (P77-87) Flashcards
Misrepresentation
A lie
Twisting
The act of dropping existing coverage due to some illegal or unethical persuasion for the purpose of purchasing new insurance. ***This is illegal or unethical replacement of coverage
Penalty of Misrepresentation or Twisting
Max fine of $1,000 for each violation or imprisonment in jail, revocation of license and no new license for at least 1 year
Acts of boycott, coercion or intimidation is illegal when?
When it tends to result in unreasonable restraint of trade, or a monopoly in the business of insurance
Rebating
Any inducement in the sale of insurance which is not specified in the insurance contract. One could say it is a bribe.
Rebating is NOT
Offering premium reductions to policyholders from accumulated surplus or premium adjustments for group insurance policies
Penalty for rebating
A misdemeanor and carries a fine of up to $100 per violation, or imprisonment in the county jail where the offense took place.
Discrimination
Refusing to insure, or refusing to continue to insure, or limiting the amount of coverage available to an individual because of race, color, creed, marital status, sex, or national origin. Refusing to insure because the applicant was previously denied. Charging a different rate for the same coverage.
Penalty for discrimination
$500 fine for each violation. Any company officer or producer- misdemeanor punishable by up to 1 year of imprisonment, a fine of at least $50 but less than $500, or both fine and imprisonment.
False statements penalty
Fine of up to $1,000 or by imprisonment not exceeding 6 months, or both.
Controlled business
Life insurance placed on 1) the producer’s own life 2) the producer’s spouse (or immediate family) 3) the producer’s business partners
Controlled business may be written as long as it does not…
Exceed 15% of the premium. Commissions will be paid on controlled business as long as the agent has an aggregate face amount of $10,000 of insurance on at least 4 other persons (not-controlled business clients)
Sliding
An agent’s failure to fully disclose all the details of, and obtain informed consent to, the purchase of all products and services being included in an insurance transaction
Penalty for insurance fraud regulations
imprisonment for not more than 4 years and/or a fine of no more than $50,000 and ordered to pay restitution
Penalties imposed by the commissioner
Cease and desist order and a civil fine of not more than $1,000 per violation. If the producer should have known they were in violation 5k for each violation (not to exceed 50,000) Violation of cease and desist $20,000 per violation, not to exceed $100,000