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FL INSURANCE LICENSE MATERIAL > Unit 8: The FL Dept of Financial Services > Flashcards

Unit 8: The FL Dept of Financial Services Flashcards

1
Q

_________ Responsibilities:

  • Accounting and Auditing
  • Consumer Services
  • Insurance Agent and Agency Services
  • Public Assistance Fraud
  • Rehabilitation and Liquidation
  • Risk Management
  • State Fire Marshall
  • Treasury
  • Unclaimed Property
  • Workers’ Compensation
A

Chief Financial Officer

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2
Q

_______________ was developed to protect the public by regulating the:

(1) insurance,
(2) banking, and
(3) securities industries

commission is comprised of:

(1) the Governor,
(2) Attorney General,
(3) Chief Financial Officer, and
(4) Commissioner of Agriculture

The commission appoints the officials who manage the: (1) Office of Financial Regulation, and
(2) Office of Insurance Regulation.

A

The Financial Service Commission

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3
Q

_____________ is comprised of:

(1) the Governor,
(2) Attorney General,
(3) Chief Financial Officer, and
(4) Commissioner of Agriculture

A

The Financial Service Commission

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4
Q

Regulatory oversight for Florida’s financial service providers:
– to promote a safe and sound financial marketplace
– to contribute to Florida’s growth with effective regulation of the financial services industry

A

Office of Financial Regulation

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5
Q

Regulatory oversight to promote a stable and competitive insurance market for consumers

Key objectives:
– product review
– financial oversight
– company admissions
– market investigations
A

Office of Insurance Regulation

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6
Q

_____________ oversees:

  • Agent and Adjuster Licensing.
  • Consumer Services.
  • Insurance Fraud.
  • Receivership.
  • Unclaimed Property.
  • Other Powers – Responsibilities.
A

Department of Financial Services (DFS)

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7
Q

____________ is to approve the issuance of licenses to agents, customer representatives, and claims adjusters, after having satisfied itself that the applicant is, in good faith, qualified to write and service or adjust claims on property and casualty insurance.

A

Agent and Adjuster Licensing

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8
Q

The ___________________ also creates, provides, and distributes information and education for the public regarding financial and insurance topics.

  • has an equally important responsibility in the supervision of claims activity of the various companies, so that a policyholder may be assured of fair treatment and prompt settlement in the event of a loss under a policy.
A

The DFS: Consumer Services

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9
Q

The DFS: __________________ assists and supports Florida businesses and the public against acts of fraud.

  • has a duty to investigate charges of unethical conduct and to take judicious action in such cases in order to insure that a spirit of harmony will prevail among all segments of the industry.
A

Division of Public Assistance Fraud

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10
Q

In the event of an insurance company becomes insolvent; the DFS manages the liquidation process to protect the interest of claimants, the public, and the Guarantee Fund (on behalf of the public).

A

DFS: Receivership

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11
Q

Unclaimed property is held by Florida’s “_____________” program (source of property is/are dormant accounts in trust, utility companies, insurance and financial institutions) with the objective to return the property to its lawful owner(s).

A

Unclaimed Property

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12
Q

Regulatory oversight to promote a stable and competitive insurance market for consumers

– product review
– financial oversight
– company admissions
– market investigations

A

Office of Insurance Regulation (OIR)

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13
Q

The function of the _____________________ is to:

  • examine the qualification of insurance companies seeking to do business in Florida
  • admitting such companies to the state when they have met the necessary qualifications
  • After such companies have been licensed to do business in the state, their financial condition is examined periodically by the _________.
A

Office of Insurance Regulation (OIR)

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14
Q

The ___________________________ Unit is responsible for property and casualty rates and policies.

A

OIR’s Property and Casualty Product Review

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15
Q

_____________________ Unit is comprised of the –

  • Property & Casualty Section – regulatory oversight of
    business practices
  • Life & Health Section – regulatory oversight of
    business practices
  • Special Investigations Unit – investigates authorized
    insurers, unauthorized entities and illegal insurance
    activities
  • Market Analysis Section – analyzes the marketplace
    to uncover unlawful or harmful practices negatively
    impacting insurance consumers
A

Market Conduct Examinations

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16
Q

Insurance consumers can request assistance from the OIR in dealing with insurance questions, problems, and complaints from the ________________________.

A

Agency Actions Unit

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17
Q

The _______________________ – investigates authorized insurers, unauthorized entities and illegal insurance activities.

A

Special Investigations Unit

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18
Q

Regulatory oversight for Florida’s financial service providers.

– to promote a safe and sound financial marketplace.
– to contribute to Florida’s growth with effective regulation of the financial services industry.

A

Office of Financial Regulation (OFR)

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19
Q
  • provides regulatory oversight to Florida’s financial service providers. Those providers include banks, credit unions, finance companies, and the securities industry.
A

Office of Financial Regulation

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20
Q

The Four main divisions within the _____ are:

  1. Division of Consumer Finance
  2. Division of Financial Institutions
  3. Division of Securities
  4. Bureau of Financial Investigations
  • was created in 2003 & reports to the Financial Service Commision
  • has 3 Divisions & 1 Bureau and is headed by a Commisioner who is appointed by the Commission
A

The Office of Financial Regulation (OFR)

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21
Q

The Bureau investigates security and lending fraud with staff that has accounting, legal, forensic, and financial expertise.

A

Bureau of Financial Investigations

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22
Q
  1. 02 ______ defined –”___________” is a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies.
    - two party contract. 1st party= insured, 2nd party = insurer
A

Insurance

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23
Q

624.10 ___________ — “Transact” with respect to insurance includes any of the following:

  • solicitation or inducement
  • preliminary negotiations
  • effectuation of a contract of insurance
  • transaction of matters subsequent to effectuation of a
    contract of insurance
A

Transacting insurance

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24
Q

624.03 “_____________” defined –”___________” includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.

A

Insurer

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25
Q

is the method by which insurers transfer loss exposure they have taken on in their selling and underwriting of insurance policies to business and individuals to: other insurers (reinsurers)

insurance company = ceding party

reinsurer = company t(normally
the reinsurance is layered so there are multiple reinsurers) that
accepts the exposure to loss from the primary insurer

This transfer of exposure and loss provides stability to the insurance company in the event of either large aggregated losses over a period of time (per year) or specific losses due to catastrophic losses (i.e. wind reinsurance).

A

Reinsurance

26
Q

_____________ is an insurance product purchased by insurance companies to transfer portions of their risk exposure thus making their exposure to loss more manageable and predictable; you might think of it as insurance for the insurance company.

A

Reinsurance

27
Q

: the insurer and reinsurer establish a percentage of premium and loss exposure to be borne by each; a pro-rata distribution of the premium and the loss exposure.

A

Proportional Reinsurance

28
Q

: the insurer and reinsurer establish a price for the reinsurance contract and the exposure to loss is based upon a threshold to loss incurred by the insurer; the reinsurer pays all loss amounts after the threshold has been pierced.

A

Non-proportional Reinsurance

29
Q

: the insurer negotiates on a risk by risk basis for each exposure and the reinsurer is not obligated to accept any/all of the offered risk.

NOTE: used but is much more limited in scope

A

facultative reinsurance

30
Q

(1) A “domestic” insurer is one formed under the laws of this state.
(2) A “foreign” insurer is one formed under the laws of any state, district, territory, or commonwealth of the United States other than this state.
(3) An “alien” insurer is an insurer other than a do­mestic or foreign insurer

A

624.06 “Domestic,” “foreign,” “alien” insurer defined

31
Q

(1) An “authorized” insurer is one duly authorized by a subsisting certificate of authority issued by the depart­ment to transact insurance in this state.
(2) An “unauthorized” insurer is one not so autho­rized.

A

624.09 “Authorized,” “unauthorized” insurer defined

32
Q

: have been granted a license to do business within their respective state (e.g. Florida)

A

Admitted Insurance Companies

33
Q

: are not authorized “by the state insurance department” to business within a state

Note: ____________ Company may still transact business in the surplus lines market if the insurance in unavailable from any admitted insurer).

A

Not-Admitted Companies

34
Q

: are owned by shareholders who elect a board of directors which oversees the management of the company.

A

Stock Insurance Companies

35
Q

: are owned by the policyholders; the policyholders are in effect “shareholders”. As a policyholder, the insured can vote for board members and also receive dividends if declared by the board of directors.

A

Mutual Insurance Companies

36
Q

A __________ Group is an insurance company owned by its policyholders AND the policyholders have common business practices, activities, or products that unite them around their common interest and exposures (these groups were codified with the 1981 Product Liability Risk Retention Act and later the 1986 Liability Risk Retention Act).

A

Risk Retention

37
Q

____________ :’

  • ARE considered insurance companies
  • set up as non-profit organizations
  • provide life and health insurance to members of a
    religious or social organization
  • operate solely for the benefits of their members
  • are smaller in policyholder count than commercial
    insurer counterpart
  • are “regionalized” organizations most of the time
  • They provide non-insurance benefits to membership
    (outside of insurance protection)
A

Fraternals

38
Q

F.S. 624.401 _________________ required

Florida law prohibits any one person or entity from transacting insurance unless they are authorized to do so by the state as evidenced by a ________________ issued by the office, (except as to such transactions as are expressly otherwise provided for in this code).

  • First degree felony if premium in transaction is over
    $100,000
  • Second degree felony if premium in transaction is
    under $100,000
  • Third degree felony if premium in transaction is under
    $20,000
A

Certificate of authority

39
Q

_____________ regulatory concern:

  • Potential for criminal activity within the business of insurance
  • Adverse economic impact upon authorized insurers and other insurance licensees
  • Potential for large quantity of unpaid claims due to dishonesty and actuarial unsoundness
  • Absence of state or federal guaranty fund to cover unpaid claims
  • Adverse impact on future insurability of participants
  • Adverse economic impact upon health-care providers from unpaid claims
A

unauthorized entities

40
Q

ERISA’s language states that the federally mandated ERISA laws supersedes state laws, this is known as ___________

A

pre-emption

41
Q

ERISA has a “__________ clause” which sets apart for the states all rights not reserved under ERISA

A

savings

42
Q

ERISA’s language includes a “_______ clause” which deems that employee plans and trusts are not to be construed as insurance companies

A

deemer

43
Q

consequences for ____________________ insurer include:

  • a third degree felony.
  • responsibility to pay for all unpaid claims.
  • suspension and/or revocation of insurance licenses.
A

aiding and abetting an unauthorized insurer

44
Q

Possible consequences for _________________ include –

  • a third degree felony.
  • responsibility to pay for all unpaid claims.
  • suspension and/or revocation of insurance licenses.
A

acting as an insurer without a proper license

45
Q

Which unit investigates charges of unethical agent conduct and is also responsible for agent licensing?

A

Division of Agents & Agencies Services

46
Q

Which department is responsible for: the receipt and review of insurance company financial statements; and on-site financial examinations?

A

The Bureau of Property & Casualty Insurer Solvency

47
Q

Which unit investigates charges of unethical agent conduct and is also responsible for agent licensing?

A

Division of Agents & Agencies Services

48
Q

Which unit reviews and approves company applications to sell insurance?

A

Applications Coordination Unit

49
Q

Which government agency is responsible for: insurance company solvency; market conduct performance; and policy forms and rates?

A

The Office of Insurance Regulation

50
Q

If someone believes they have or are suffering from any type of unethical insurance practice you should reer them to which department?

A

Bureau of Market Conduct

51
Q

Which Department of Financial Services (DFS) Division supports Florida businesses and the public against act of fraud?

A

Division of Public Assistance Fraud

52
Q

Which Department of Financial Services (DFS) Division has the responsibility in the supervision of insurance company claims activity?

A

Consumer Services

53
Q

The OIR’s Property and Casualty ___________ Unit has the responsibility to ensure company rates are adequate for the insurer to perform properly and at the same time make sure that the rates are not excessive or unfairly discriminatory to the consuming public.

A

Product Review

54
Q

Insurance consumers can request assistaance from the OIR in dealing with insurance questions, problems, and complaints from the ____________.

A

Agency Actions Unit

55
Q

The Office of _________ Regulation has regulatory oversight to promote a safe and sound financial market.

A

Financial

56
Q

Insurance consumers can request assistance from the OIR in dealing with insurance questions, problems, and complaints from the _______________

A

Agency Actions Unit

57
Q

In the event of a company becomes insolvent, the DFS manages the liquidation process to protect the interest of claimants, the public, and the Guarantee Fund (on behalf of the public). The administration of the liquidation is known as:

A

receivership

58
Q

The Office of Insurance Regulation has regulatory oversight to promote a stable and competitive insurance market for consumers.

All of the following are key objectivesof the Office of Insurance Regulation EXCEPT:

  • product review
  • tax and audit assistance
  • market investigations
  • financial oversight
A

A: tax and audit assistance

NOTE: The Office of Insurance Regulation has regulatory oversight to promote a stable and competitive insurance market for consumers. Its four major objectives are:product review, financial oversight, company admissions and market investigations.

59
Q

An unauthorized insurer was caught transacting business without a Certificate of Authority. The amount of the premium involved in the transaction was over $100,000.
What degree felony is this unauthorized insurer guilty of?

  • 1st degree felony
  • 2nd degree felony
  • 3rd degree felony
A

first degree felony if the premium transaction is over $100,000.

NOTE: Unauthorized insurers transacting insurance in the state of Florida are subject to a:

  • third degree felony if the premium transaction is under $20,000
  • second degree felony if the premium transaction is under $100,000
  • first degree felony if the premium transaction is over $100,000.
60
Q

Which part of the OIR’s ‘market conduct examinations’ analyzes the marketplace to uncover unlawful or harmful practices negatively impacting insurance consumers?

A

Market Analysis Section

NOTE: The OIR’s Market Analysis Section analyzes the marketplace to uncover unlawful or harmful practices negatively impacting insurance consumers.

61
Q

A Risk Retention Group an insurance company that is owned by its policyholders AND the policyholders have:

  • common business practices that unite them around their common interest and exposures
  • common activities that unite them around their common interest and exposures
  • common products that unite them around their common interest and exposures
  • all of the above
A

a: all of the above

NOTE: A Risk Retention Group an insurance company that is owned by its policyholders AND the policyholders have common business practices, activities, or products that unite them around their common interest and exposures.

FL INSURANCE LICENSE MATERIAL (12 decks)

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