Uniform Trade Act- Other MI Regulations (P77-87)

Question 1

Misrepresentation

Answer 1

A lie

Question 2

Twisting

Answer 2

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

Question 3

Penalty of Misrepresentation or Twisting

Answer 3

Max fine of $1,000 for each violation or imprisonment in jail, revocation of license and no new license for at least 1 year

Question 4

Acts of boycott, coercion or intimidation is illegal when?

Answer 4

When it tends to result in unreasonable restraint of trade, or a monopoly in the business of insurance

Question 5

Rebating

Answer 5

Any inducement in the sale of insurance which is not specified in the insurance contract. One could say it is a bribe.

Question 6

Rebating is NOT

Answer 6

Offering premium reductions to policyholders from accumulated surplus or premium adjustments for group insurance policies

Question 7

Penalty for rebating

Answer 7

A misdemeanor and carries a fine of up to $100 per violation, or imprisonment in the county jail where the offense took place.

Question 8

Discrimination

Answer 8

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.

Question 9

Penalty for discrimination

Answer 9

$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.

Question 10

False statements penalty

Answer 10

Fine of up to $1,000 or by imprisonment not exceeding 6 months, or both.

Question 11

Controlled business

Answer 11

Life insurance placed on 1) the producer’s own life 2) the producer’s spouse (or immediate family) 3) the producer’s business partners

Question 12

Controlled business may be written as long as it does not…

Answer 12

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)

Question 13

Sliding

Answer 13

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

Question 14

Penalty for insurance fraud regulations

Answer 14

imprisonment for not more than 4 years and/or a fine of no more than $50,000 and ordered to pay restitution

Question 15

Penalties imposed by the commissioner

Answer 15

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

Question 16

Violation of any provision of the insurance code

Answer 16

$5,000 and or imprisonment for up to 6 months

Question 17

Penalties for violation of producer licensing regulations

Answer 17

Fine of $300 per violation, if the violation was unintentional. Willful violations $1,500 per violation max total limited to $10,000

Question 18

The limits of the association’s liability to provide benefits for Michigan policyholders is….

Answer 18

$300,000 for all policy benefits which includes up to $100,00 in cash value per policy.

Question 19

All insurance and annuity companies doing business in MI must be members of the association except….

Answer 19

1) Nonprofits, 2) health maintenance organizations (HMO), 3) Fraternal benefit society

Question 20

Occupations considered coercive

Answer 20

Banking, automobile, and funeral industry.