Unit 38: All Licensing Candidates

Question 1

Page 624 (Note says these will be on the test)

What does “Commissioner” mean?

Answer 1

The Commissioner of Insurance of KY (duh :-)

Question 2

What does “Department” refer to?

Answer 2

Dept of Insurance of KY (unless otherwise indicated)

Question 3

What are the 3 Types of Insurer Authority and what do they mean?

Answer 3

1. Domestic insurer (an insurer formed under the laws of KY)
2. Foreign insurer (an insurer formed under the laws of any state besides KY)
3. Alien insurer (an insurer formed under the laws of any other country other than US)

Question 4

What is a “certificate of authority?”

Answer 4

certificate issued by commiss showing that insurer can transact insur in KY

Question 5

What is an “authorized insurer?” (aka “admitted” per a note)

Answer 5

an insurer that holds a current cert. of authority issued by commiss.

Question 6

What is an “unauthorized insurer?” (aka “non-admitted” per a note)

Answer 6

an insurer that does NOT hold a current cert. of authority

Question 7

Page 629
What is “reinsurance?”

Answer 7

A contract where originating insurer gets insurance for itself (called assuming insurer or reinsurer).

• Note: This was Bampa’s career, reinsurance. He explained it as when an insurance policy was going to be bigger than what his company could cover, his insurance company would have to get “reinsurance” to help carry the load in case of a claim.

Question 8

Insurance commissioner.
Note says there could be 4 questions out of this.

What is the insurance commissioner? Duplicate ?

Answer 8

Head of KY Dept of Insur.

Question 9

How is the Commissioner chosen?

Answer 9

Appointed

Question 10

Who appoints the commiss?

Answer 10

Governor (with consent of senate)

Question 11

How long is the appointment for?

Answer 11

No more than 4 years

Question 12

Page 630

What happens if you are a licenses insurer and you move or change your name?

Answer 12

Must inform commiss in writing of any change (address/name) within 30 days of change.

Question 13

What could happen to people who willfully violate rules, regs, subpoenas, orders from commiss?

Answer 13

• suspension
• revocation of license/cert of authority
• fined
  Commiss can do ALL these EXCEPT send someone to jail

Question 14

Page 634
Define agent

Answer 14

Indiv or business entity appointed by an insurer to sell or solicit applications for insurance
(seems like you outta know this by now :-)

Question 14

Page 637
What are the qualifications to be a licensed agent?

Answer 14

• 18 years at least
• fulfilled residency requirement
• trustworthy, reliable, good reputation (uh oh :-)
• competent to use the license he/she has:
• completed 20 hours of course study per line of insurance (except for limited lines licenses)
• passed exams required by commiss for licenses you’re seeking except for limited lines licenses)
• paid fees
• financially responsible to use the licenses he/she has:
  DAVID, look at page 637 bottom. I don’t know how to word this or what they are trying to say

Question 15

Page 639
What is an [insurance] consultant?

Answer 15

one who, as an independent contractor in relationship to his client, for fee or compensation other than from an insurer, advises people looking for insurance

Question 16

Page 645
What is “controlled business?”

Answer 16

Insurance business that you write for people you know, only to serv your own interests, covering yourself or members of your family

Question 17

Page 646
Who has to pass a written exam?

Answer 17

Someone applying for any license a line of insur, unless exempt

Question 18

Page 647
Who is exempt from prelicensing classes and exams?

Answer 18

Any applicant for a license covering any law of authority who already has a similar license in KY (other than a temp) “within the 12 months next preceding date of application.” (Huh? Word vomit.)

Question 19

Page 648
LOOK at page. I have NO idea what the heck to ask?
English please!!

Question 20

Page 653
Handwritten note, but not highlighted:

“Must be in compliance by the last day of your birth month in the year your license renews odd or even”

Question 21

What must a licensed insur agent do every two years?

Answer 21

complete a minimum of 24 hours of continuing ed courses. 3 of the 24 hours must be on “ethics.”

Question 22

Page 655
What are temporary licenses and how do you get one?

Answer 22

Commiss can issues a temp license for max of 180 days without requiring an exam or pre-licensing course if commiss deems the temp license necessary

Question 23

Page 656
What must indiv and business with a KY insur license do regarding place of business?

Answer 23

maintain a place of business in the state of KY that is accessible to public where licensee principally conducts transactions

Question 24

What must licensees do regarding displaying their licenses?

Answer 24

Conspicuously display them in place of business

Question 25

What must happen with premiums?

(May need to read the entire paragrah called “accounting for premiums)

Answer 25

Be held by the insurance producer in a fiduciary capacity and not used for his/her own use or illegally withheld

Question 26

Page 657
Is splitting commissions allowed?

Answer 26

No. You can’t share a commission without a license in that particular “authority.” (authority - meaning a line of insurance, I believe)

Question 27

Page 665
What is unlawful advertising?

Answer 27

speaking or any other manner of advertising that:
- misrepresents the terms of any policy
- does not use the title/name/class truthfully (speak the truth!)
- conveying any misleading info about the financial condition of the insurer

Question 28

Page 670
Prohibited–Unfair Discrimination
(this headline is highlighted but no text below it is)

Question 29

Can an insurer discriminate against a potential customer?

Answer 29

No, must not discriminate because of race, color, national origin, gender EXCEPT “that rates determined through valid actuarial tables are acceptable.”

Question 30

Are rebates allowed?

Answer 30

No, can’t entice customer with any special favors/discounts/dividends

Question 31

Page 671
What are illegal inducements?

Answer 31

prizes, goods, wares, merchandise, property of an aggregate value in excess of $25.

(David, you’re suppose to know the $25 amt according to the note. But this makes it sound like you CAN entice customers as long as it’s under $25. LOOK AT THE PAGE for claritiy)

Question 31

Page 672
Is it legal to willfully collect more premium than what is needed?

Answer 31

No

Question 32

Next page - image 00012.jpeg is too blurry!

Question 33

Page 679
What happens if you…
where the aggregate of claim benefit or money referred to “in this section” is less than/equal to $500

(I can’t write the question, don’t know what “violation of this section” means.)

Answer 33

• guilty of misdemeanor
• imprisonment for 1 yr max
• fine of $1,000 max per individual/$5,000 per corp
• both imprisonment and fine

Question 34

What happens if you…
where the aggregate of claim benefit or money referred to “in this section” exceeds $500

(I can’t write the question, don’t know what “violation of this section” means.)

Answer 34

guilty of felony punished by:
- imprisonment for 1-5 years
- fine of $10,000 max per individual/$100,000 per corp (or twice the amount of gain received resulting from violation)
- both fine and prison