Unite 7: Florida Insurance Topics & Laws Flashcards
1
Q
“_______” with a focus on health insurance listing the following areas of 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
2
Q
__________ language states that the federally mandated ERISA laws supersede state laws, this is known as “pre-emption”.
ERISA has a “savings clause” which sets apart for the states all rights not reserved under ERISA.
ERISA’s language includes a “deemer clause” which deems that employee plans and trusts are not to be construed as insurance companies.
A
ERISA “Pre-emption” and State Insurance Regulation
3
Q
ERISA’s language states that the federally mandated ERISA laws supersede state laws, this is known as _____
A
pre-emption
4
Q
ERISA’s language includes a “__________” which deems that employee plans and trusts are not to be construed as insurance companies.
A
deemer clause
5
Q
MEWA is an abbreviation for a
A
Multiple-Employer Welfare Arrangement.
6
Q
______ are considered insurers by Florida Statute and require a Certificate of Authority.
A
MEWAs
7
Q
________ fall under state insurance regulation and under ERISA regulation.
A
MEWAs
8
Q
______ provide benefits to two or more employers.
A
MEWAs
9
Q
_______ have risk-bearing activities (for example the payment of claims).
A
MEWAs
10
Q
Organizations which “pool” funds for claims payments are considered
A
risk-bearing
11
Q
“__________” can be an exception to the MEWA definition if there is a bona fide collective bargaining agreement.
A
Union Plans
12
Q
“___________” are considered a MEWA
- NO employer-employee relationship.
- Are fully insured and the insurer falls under state
regulation.
A
Association Plans
13
Q
“_______” are considered a MEWA
- NO true employer-employee relationship.
- Florida Statutes prohibit PEOs from sponsoring self-
insured health plans.
A
PEOs
14
Q
Union Plans can be an ________ to the MEWA definition if there is a bona fide collective bargaining _________.
A
exception / agreement
15
Q
Possible consequences for ________________ an unauthorized insurer include –
- a third degree felony.
- responsibility to pay for all unpaid claims.
- suspension and/or revocation of insurance licenses.
A
aiding and abetting
16
Q
Possible consequences for ___________ without a proper license include –
- a third degree felony.
- responsibility to pay for all unpaid claims.
- suspension and/or revocation of insurance licenses.
A
acting as an insurer
17
Q
Made the business of insurance state regulated in 1945
A
McCarran-Ferguson Act
18
Q
Health insurance has been the main problem area for “_______________”
Insurance market is cyclical (hard and soft market). The hard markets spawn fraudulent
activity.
Problems with “unauthorized entities started about 1974 with the enactment of the Employee
Retirement Income Security Act (ERISA)
A
Unauthorized Entities
19
Q
Can be an exception to the MEWA if U.S. Department of Labor makes express finding.
If no express finding by the US DOL, then is subject to state regulations
A
Union Plans
20
Q
These plans are not exempt from state regulation
A
Association Plans
21
Q
sponsored health plans not exempt from state regulation
A
Professional Employer Organization (PEG)
22
Q
WHAT is the code of ethics?
A
- Honesty & Truth
- Responsibility & Accountability
- Respect & Tolerance
- Fairness & justice
- Compassion & caring
23
Q
________________________ : is to authorize and enable the licensee actively and in good faith to engage in the insurance business and supervise activities with respect to the public interest and not just for controlled business
A
Florida Statute (F.S.) 626.730, Purpose of License
24
Q
________ is the study of moral behavior and is the cornerstone of professionalism in the insurance industry.
A
ethics
25
Insurance discounts for _____________ became law in 2007 when discount were mandated for retrofitted older homes or newly constructed homes modified or built to withstand damage caused by hurricanes and high winds.
- All residential property insurers are required to file loss mitigation credits with the OIR.
- All insured’s must be put on formal notice of discounts.
- Construction elements must be documented by licensed professional for discount.
- Agents and Customer Representatives must take 1 hour of Wind Mitigation CE every 2 years.
wind mitigation
26
- All residential property insurers are required to file loss mitigation credits with the OIR.
- All insured’s must be put on formal notice of discounts.
- Construction elements must be documented by licensed professional for discount.
- Agents and Customer Representatives must take 1 hour of Wind Mitigation CE every 2 years.
Wind Loss Mitigation Discounts
27
_________ :
- have two roof lines which basically form an A.
- are NOT eligible for any type of discount.
- The external walls of the structure and the roof lines are forced to absorb a great deal of pressure in hurricane winds. Homes without proper bracing are susceptible to wall damage and roof collapse.
Gable roofs
28
_______:
- have roof lines continuously on all sides of the building (like the shape of a pyramid).
- are eligible for discounts.
- External walls are protected on all sides and the continuous roof line is capable of distributing pressure throughout the entirety of the roof structure.
Hip Roofs
29
- Asphalt Shingles
- Barrel Tiles / Flat Tiles
- Metal panels
(all must be tested and installed according to Building Code requirement)
- 1994 South Florida Building Code for Broward and Dade counties.
- 2001 Florida Building Code for all other counties.
Roof Covering Options:
30
_________ is the material under the roof covering.
- Most utilized material & do NOT qualify for mitigation credit: Plywood & oriented strand board
- Now Dimensional lumber & concrete roof decking are being used more other & ARE eligible for mitigation credits
Roof Decking
31
Roof decking can be attached to the trusses in a home as follows & ELIGIBLE for discount -
- 8d common nails at six inch intervals along the panel edges and 6 or 12 inch intervals in the field
32
Roof decking can be attached to the trusses in a home as follows & NOT eligible for discount-
6d common nails at six inch intervals along the panel edges and 12 inch intervals in the field
33
Common connectors that are ELIGIBLE for mitigation credit include –
Straps & Clips
34
Common connectors that are NOT ELIGIBLE for mitigation credit include –
Toe Nails
35
such as windows, skylights, doors with and without glass, sliding glass doors, and garage doors must be tested and approved with either the Florida Building Code or Miami-Dade County Building Code. Unless they have been tested and approved, they do not qualify for mitigation
discounts.
Opening Protection
36
The “________________” is two impacts from a 2×4 weighing nine pounds shot from a canon at a speed of 50 feet per second.
NOTE: To be eligible for discounts, mitigation protection must meet the Florida Building Code “__________ impact test” with coverings or products rated as a “wind borne debris protection devices”.
large missile impact test
37
________________: installation of tape, flashing, and adhesive materials used to fill cracks between the home’s roof decking.
Secondary Water Resistance
38
Wind Mitigation forms and rules must be filed with the _____ for credits to apply/
OIR
39
_______________________ a.k.a. ____ was created by the Florida congress in 1970.
Florida Insurance Guaranty Association a.k.a. FIGA
40
_______ :
- is a non-profit corporation.
- handles claims of insolvent (unable to pay debts owed)
property and casualty insurance companies.
- members are made up of all Florida licensed insurance
companies.
- Surplus lines companies ARE NOT eligible for FIGA
coverage.
- covers up to $300,000; if the damage is to a structure
and contents on a homeowner’s claim then FIGA will pay
up to an additional $200,000.
Florida Insurance Guaranty Association a.k.a. FIGA
41
FIGA membership can be determined using the company search function on the OIR website and confirming the company authorization type is “_________________”.
Certificate of Authority
42
_______________________________ (FSLSO) was statutorily created in 1997 to oversee the surplus lines industry.
The Florida Surplus Lines Service Office (FSLSO)
43
Some of the numerous responsibilities of the____________include-
- Review all surplus lines insurance policies and
documents.
- Maintain records of policies and report to the DFS.
- Collect surplus lines taxes.
- Collect service fees.
- Train and educate surplus lines agents.
The Florida Surplus Lines Service Office (FSLSO)
44
Not all property and liability exposures can be insured by the admitted markets due to any one or more of the following-
- Complexity of the risk.
- Uniqueness of the risk.
- Lack of actuarial information about the risk and risks like
it.
- Newness of the exposure.
- Loss history of the risk.
- Inadequate availability of coverage in the admitted
markets.
The _______________ provides coverage that the standard market cannot or will not provide.
surplus lines market
45
___________ – the “standard market” that most insurance policies are purchased in.
The Admitted Market
46
________ – the “non-admitted market” which distributes surplus lines policies through insurance brokers and agents.
The Surplus Lines Market
47
___________ – regulator of the surplus industry for the state of Florida.
The Florida Surplus Lines Service Office (FSLSO)
48
_______________ – the policies and premiums in the surplus lines market are not regulated by the department and therefore subject the insuring public to the following exposures:
- non-standard coverage
- inadequate surplus and capitalization – surplus lines
company exposing the insured to insolvency.
- unfair competition – admitted markets disadvantaged;
surplus lines don’t have same capitalization
requirements.
- disruption in markets – default of niche surplus lines
insurer may have a destabilizing effect .
Surplus lines exposure
49
To be “__________” the circumstances surrounding the required coverage must have the following features-
- the insurance coverage desired must not be available in
admitted markets after a diligent effort is made.
- the diligent effort to obtain the coverage in the admitted
markets must be documented.
- the premium rate of the surplus lines carrier must not be
lower than the majority of admitted products.
- the Surplus lines coverage must not be more favorable
than the admitted products.
- the Surplus lines coverage should not offer more
attractive deductible options than the admitted products.
exportable (Eligibility for export)
50
627. 7142 ____________ : An insurer issuing a personal lines residential property insurance policy in this state must provide a Homeowner Claims Bill of Rights to a policyholder within 14 days after receiving an initial communication with respect to a claim, unless the claim follows an event that is the subject of a declaration of a state of emergency by the Governor.
purpose: is to summarize, in simple, nontechnical terms, existing Florida law regarding the rights of a personal lines residential property insurance policyholder who files a claim of loss.
627.7142 Homeowner Claims Bill of Rights.
51
_________________ =
YOU HAVE THE RIGHT TO:
1. Receive from your insurance company an acknowledgment of your reported claim within 14 days after the time you communicated the claim.
2. Upon written request, receive from your insurance company within 30 days after you have submitted a complete proof-of-loss statement to your insurance company, confirmation that your claim is covered in full, partially covered, or denied, or receive a written statement that your claim is being investigated.
3. Within 90 days, subject to any dual interest noted in the policy, receive full settlement payment for your claim or payment of the undisputed portion of your claim, or your insurance company’s denial of your claim.
4. Free mediation of your disputed claim by the Florida Department of Financial Services, Division of Consumer Services, under most circumstances and subject to certain restrictions.
5. Neutral evaluation of your disputed claim, if your claim is for damage caused by a sinkhole and is covered by your policy.
6. Contact the Florida Department of Financial Services, Division of Consumer Services’ toll-free helpline for assistance with any insurance claim or questions pertaining to the handling of your claim. You can reach the Helpline by phone at (toll-free phone number) , or you can seek assistance online at the Florida Department of Financial Services, Division of Consumer Services’ website at (website address).
YOU ARE ADVISED TO:
1. Contact your insurance company before entering into any contract for repairs to confirm any managed repair policy provisions or optional preferred vendors.
2. Make and document emergency repairs that are necessary to prevent further damage. Keep the damaged property, if feasible, keep all receipts, and take photographs of damage before and after any repairs.
3. Carefully read any contract that requires you to pay out-of-pocket expenses or a fee that is based on a percentage of the insurance proceeds that you will receive for repairing or replacing your property.
4. Confirm that the contractor you choose is licensed to do business in Florida. You can verify a contractor’s license and check to see if there are any complaints against him or her by calling the Florida Department of Business and Professional Regulation. You should also ask the contractor for references from previous work.
5. Require all contractors to provide proof of insurance before beginning repairs.
6. Take precautions if the damage requires you to leave your home, including securing your property and turning off your gas, water, and electricity, and contacting your insurance company and provide a phone number where you can be reached.
HOMEOWNER CLAIMS BILL OF RIGHTS
52
ERISA has a _____ which sets apart for the states all rights not reserved under ERISA.
savings
53
unauthorized entities persent a regulatory concern because of the potential for _______ claims.
unpaid
54
A reciprocal exchange is legally controlled by an _________
attorney-in-fact
55
An "authorized insurer is one with an authorized Certificate of Authority issued by the dept to __________ insurance in this state
transact
56
ERISA's languange includes a "_________ clause" which deems that employee plans and trusts ar enot to be construed as insurance companies or insurance.
deemer
57
FIGA __________ are capped at 2% of a company's net direct premium and an additional 2% for emergenct assessments for hurricanes
assessments
58
An insurance company that is operating without the permission or oversight of the Department.
Unauthorized Insurer
59
Law/Act which federally mandates the state regulation of insurance.
McCarran-Ferguson Act of 1945
60
ERISA's rule which declares that the federally mandated ERISA laws supersedes state laws.
Pre-emption
61
ERISA rule which sets apart for the states all rights not reserved under ERISA.
ERISA Savings Clause
62
ERISA's rule which deems that employee plans and trusts are not to be construed as insurance companies.
ERISA Deemer Clause
63
Criminal consequence for aiding and abetting an unauthorized insurer.
Third Degree Felony
64
The code of conduct to uphold truth, equity, and loyalty when working on behalf of the insurance consuming public.
Ethics
65
Roof shape eligible for Wind Mitigation discounts.
Hip Roof
66
The materials attached above the roof decking (i.e. shingles).
Roof Coverings
67
The material under the roof covering (i.e. plywood).
Roof Decking
68
Straps and Clips are a common attachment of a dwelling's walls to the roof trusses.
Roof to Wall Connection
69
The Florida non-profit corporation which handles claims of insolvent property and casualty insurance companies.
Florida Insurance Guaranty Association FIGA
70
The non-admitted market providing coverage that the standard market cannot or will not provide.
Surplus Lines Market
71
The regulator of the surplus industry for the state of Florida.
Florida Surplus Lines Service Office
72
True or False? There is no difference between ethics and law.
The law is the minimal starting point and the lowest acceptable threshold of behavior. Ethics transcends the law by not only doing what is lawful but what is morally correct.
73
A co-employee advises you to do something which is legal but unethical. How will you respond?
Reject the co-employee’s advice and explain to them that lawfulness is the most basic level of treatment to be extended to an insured
74
______________ market is the standard market that most insurance policies are purchased in.
Admitted
