Unit 20 Flashcards
a commissioner (executive director) is
the commissioner (executive director) of insurance of kentucky
the department (office) is
the department (office) of insurance of kentucky unless context indicates otherwise
who is the department headed by?
the commissioners
a certificate of authority is…
certificate proving that the insurer is authorised by the executive director proving they have authority to transact insurance in kentucky
an authorized insurer (admitted) is…
insurer who holds a current certificate of authority issued by the commissioner
an unauthorized insurer is also known as
non-admitted
casualty insurance
insurance of…
-vehicle insurance
-liability insurance
-workmen’s compensation and employers liability
-boiler and machinery insurance
reinsurance
contract when originating insurer (ceding aka world trade center) procures insurance for itself in another insurer (assuming/reinsurer) with respect to part/all insurance risk or originating insurer (304.5)
the executive director is the head of…
the kentucky office of insurance
the executive director is appointed by…
the governor with the consent of the senate, for a term not to exceed four years
licensees must inform executive director for address/name change within how many days?
30 (subject to 1,000 fine)
any person who violates rules regulations etc or the order of the executive director/provision of the insurance code is subject to
suspension or revocation of authority of license, administration fine, or both (can’t imprison)
an agent is…
individual/business entity appointed by insurance to sell or solicit applications for insurance/annuity contracts, or negotiate insurance/annuity contracts
qualifications for agent license:
- 18
- fulfilled residence requirements
- trustworthy, reliable, good reputation
- competent to exercise license
- 20 hour pre-licensing course for each line of authority applied for (40 hours for property/casualty)
- financially responsible
- deposited with the executive director cash, or cash surety bond executed by insurer and authorized to write business in this commonwealth in sum of $20,000
being financially responsible to exercise the license and law entails…
enduring to the benefit of any aggrieved party as the result of any single occurrence in the sum of no less than $20,000 and $100,000
a consultant is
person who is an independent contractor in relation to their client, for fee or compensation other than insurer
qualifications for consultant license:
-25 or older
-5+ years experience as licensed agent
-thorough knowledge of insurance and annuity contracts
-satisfy executive director by written exam
-competent, trustworthy under highest fiduciary standards, financially responsible
-filed bond required by section 304.9-320
for consultant license, 5 years of experience as a licensed agent includes:
-being licensed with respect to the kinds of insurance and contracts to be covered by the license
-special experience
-education and training
consultant who is licensed as an agent shall not…
directly or indirectly receive or share both a fee or compensation paid from an insured/insurer with respect to any insurance or annuity contract
controlled business examples… insurance on:
- own interest or family or employees
- annuity contracts
- motor vehicles
- real property mortgage
- limited line credit and rental vehicle
individual applying for license requiring an examination must pass
a written examination unless exempt
the pre-licensing education requirement and written exam requirement do not apply to
any applicant for license covering any line of authority to which the applicant was licensed under a similar license in kentucky (other than a temporary license) within 12 months next preceeding date of application
an applicant is not eligible for exemption if…
previous license was revoked or suspended by executive director for reasons other than failure to maintain financial responsibility or meeting continuing education requirements
license of an agent may not specify the…
name of any particular insurer
licenses renew every
2 years
a license whose birth date is an even number year must continue education requirements…
on or before the last day of the licensee’s birth month in the even numbered year
each continuing education biennium, any licensee who is not exempt must complete.. (certain number of hours)
a minimum of 24 hours of continuing education courses
executive director may issue a temporary license for a period not to exceed how many days
180
temporary license is necessary for the servicing of an insurance business in these cases:
- surviving spouse or representative of licensed agent who dies or is mentally/physically disabled
- member or employee licensed as an agent
- designee or licensed agent going into service
- executive director deems the public interest will be best served by issuance of this license
- temp license only covers same insurance as replaced agent was licensed for
- temp license represents under licenses all insurers last represented by replaced agent
- temp license has same license powers/duties under permanent license
- no sale of insurance may be made upon licensee’s life or lives of relatives (blood or marriage)
individuals and business entities issued a license with kentucky as its home state must have…
place of business in kentucky accessible to the public, and where licensee principally conducts transactions
licenses of licensee must be displayed in a part of the…
place of business customarily open to the public
portion of prelims or moneys shall be held by
insurance producer in fiduciary capacity and won’t be misappropriated or converted to his or her own use or illegally withheld
splitting commissions is prohibited means…
you can’t receive commissions in a line of authority you aren’t licensed in
who can place on probation, suspend, or impose conditions upon continuance of a license?
executive director
executive director can place on probation, suspend, or impose conditions on continuance of license for no more than how many months?
12
a person whose license has been revoked twice is not eligible for
any license under this code under any circumstances
executive director will not issue a new license under this code to any person whose license has been revoked until after how many years?
one year and person qualifies again in accordance with the applicable provisions of this code
a licensee must report to the executive director any administrative action taken against another jurisdiction or by governmental agency in kentucky within how many days?
30
unlawful advertising (no person shall make or disseminate orally, or in any way, an advertisement, information, matter, statement or thing examples
- misrepresenting the terms of any policy
- using any name or title of any policy or class of policies misrepresenting the true nature thereof (speak truth)
- setting forth any misleading representation or any misrepresentation as to the financial condition of an insurer
discrimination - denial of insurance
no person shall fail or refuse to issue or renew insurance to any person because of race age color religion national origin or sex except that rates determined through valid actuarial tables are acceptable
rebates are…
prohibited
illegal inducements example
any prizes, goods, ware, merchandise, or property of an aggregate value in excess of $25 (can’t bribe you with more than $25)
illegal collection of premiums means (3 scenarios)
1: no person shall willingly money for a policy when they do not have insurance or will no tbe provided it. Can only do when the policy is good or can be reinstated with a premium payment of when they will be getting insruance once the payment activates the policy.
2: no person shall willfully collect as premium for more than what it says a person is owed
3: no person shall willfully or knowingly fail to return to the person entitled thereto a refund that they owe.
power to contact insurance; purchase by minors
any minor not less than 15 may, notwithstanding their minority, contract for or own annuities
person convicted of violations shall be guilty of
a misdemeanor where the aggregate of the claim, benefit, or money referred to in this section is less than of equal too $500
this misdemeanor is punishable by:
- imprisonment for no more than one year
- a fine no more than $1,000
- both imprisonment and fine
where the claim, benefit, or money exceeds an aggregate of $500, a person shall be guilty of a felony and punished by
- imprisonment for no less than five years
- fine no more than $10,000 per individual or $100,000 per corporation
- both imprisonment and fine
gross negligance
a total disregard for the safety of others
reckless, wanton and willful misconduct
severability condition
insurance applies separately each insured
- does not decrease the limit of liability
constructive total loss
although property is not completely destroyed, the cost to salvage or repair would exceed the value of the property, treated as a total loss had occurred
breach of an implied warranty can…
void a contract
no binder shall be valid beyond…
the issuance of the policy with respect to which it was given, or beyond 90 days from its effective date, whichever period is the shorter
