AD Banker Chapter 8

To qualify for an original certificate of authority to transact one or more classes of insurance, a domestic insurer must possess and maintain a minimum of _______________________ in capital stock or in surplus.

$1.5 million

The Commissioner has _________________ days to approve or disapprove an application.

90

How many hours of CE would an agent who had been licensed for 10 years need to complete during each biennium? A) 20 B) 24 C) 10 D) 12

B) 24

To qualify for a certificate of authority, an insurer must comply with the provisions of the law as a domestic insurer as one of the following:

Incorporated stock or mutual insurer Fraternal benefit society Nonprofit hospital or medical service corporation Lloyd's association; or Reciprocal insurer

he chief officer of Georgia's Department of Insurance is the _____________________________, who is elected to office for a term of 4 years.

Insurance Commissioner

What are the classifications of insurance?

Life, accident, and sickness Property, marine, and transportation Casualty Surety Title Health Maintenance Organization

True or False? The Commissioner, or a person authorized by the Commissioner, may conduct an examination of any insurer authorized to do business in this state as often as necessary, but most domestic insurers must be examined at least once every 5 years.

True

Any person willfully testifying falsely under oath regarding information that is material to an examination, investigation, or hearing will have committed the offense of _____________________________

false swearing

____________________ will be served in the same manner as if issued by a superior court. Failure to obey a subpoena that has been issued and served to a person required to appear will result in an order by a superior court requiring the individual to comply with the subpoena and to testify.

Subpoenas

The ________________ or other person so examined will pay all costs of the examination, including actual travel and living expenses.

insurer

Before any proposed action is taken, a __________________________________ will state the proposed action to be taken unless such person can show cause as to why the action should not be taken.

notice to show cause

True or False? An insurer that uses a name that is similar to an already authorized insurer and creates uncertainty or confusion, or uses a name which would deceptively mislead as to the insurer's type of organization, may not be authorized to transact insurance.

True

If any person without just cause fails to obey a subpoena (to testify or produce records or documents) or to answer any lawful inquiry, the individual will be guilty of:

a misdemeanor

The Commissioner will hold a hearing if required by a provision of the law or a written demand made by an:

aggrieved person

The order and notice will be delivered by _______________________ with a return receipt.

registered or certified mail or overnight mail

The penalties for a violation of a cease and desist order are: A fine of up to _____________________ per violation ___________________________________ of the person's license if the person knew he/she was in violation Such other relief as is reasonable and appropriate

$10,000; Suspension or revocation

Which of the following individuals is required to hold an insurance license? A) Representatives of ocean marine insurers B) Representatives of farmers' mutual fire insurance companies C) A public adjuster D) An attorney who advises clients on incidental insurance matters in the course of acting as their legal representative

C) A public adjuster

In general, the Commissioner must give at least _________ days' advance notice of the time and place of a hearing stating the matters to be considered.

10

The order will include a notice of opportunity for a hearing, which must be requested within ____________________ days of receipt of the order.

10

The Commissioner must provide a copy of the proposed examination report to the insurer examined at least ___________ days before the report is filed.

20

The Commissioner or a person authorized by the Commissioner, may conduct an examination of any HMO and its providers no less than once every ________________________ years.

3

The Insurance Commissioner has which of the following duties and powers? A) The Commissioner has the authority to make necessary rules and regulations B) The Insurance Commissioner may institute investigations of unfair trade practice if he or she obtains the permission of the Attorney General C) The Insurance Commissioner creates and enforces the insurance code (laws) D) The Commissioner's orders and notices are deemed to be in effect, regardless of whether they are oral or in writing

A) The Commissioner has the authority to make necessary rules and regulations

The Commissioner may refuse to issue, or, after a hearing, refuse to renew or may revoke or suspend a certificate of authority if the insurer:

Violates any insurance provision, law or regulation Knowingly fails to comply with or violates any rule or order of the Commissioner Is found to be in such condition that any further transactions in Georgia are deemed to be hazardous to its policyholders or to the public Compels claimants to accept less than the amount due to them or to bring an action against it to secure full payment Refuses to be examined Fails to pay any final judgment rendered against it in Georgia within 30 days after such judgment becomes final Is under the same general management or ownership as another insurer transacting direct insurance in Georgia without a certificate of authority, unless such company is a permitted surplus line insurer

To apply for ________________________, an insurer must file an application showing its name, home office location or principal office in the United States if an alien insurer, kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, names of general officers with the number of shares held by each general officer, a copy of its corporate charter, and bylaws.

a certificate of authority

If the act, practice, or transaction occurring (or about to occur) constitutes imminent peril to the public health, safety, or welfare, an ______________________________ will be issued, effective immediately.

emergency order

The Commissioner must consider whether the violation was committed willfully. In addition to issuing a cease and desist order, the Commissioner has the authority to: Place the violator on probation for up to ________________ for each act in violation Assess a penalty of up to _____________________ for each act or violation, or up to _______________________ per violation if the person knew or reasonably should have known he/she was in violation

1 year; $2,000; $5,000

If those persons are unknown, notice may be published in a newspaper of general circulation at least __________ days prior to the hearing.

10

Any demand for a hearing must be held within ______________ days after receipt of such demand.

30

The Commissioner must issue a final order within _________________ days after a hearing is concluded.

30

An insurer that is qualified to transact insurance in Georgia may be authorized to transact any one kind or combination of kinds of insurance, except as follows:

A reciprocal insurer may not transact life insurance A Lloyd's insurer may not transact life insurance; and A title insurer is term-33authorized to transact only title insurance

The Commissioner must have rules or regulations approved by the ______________________ and on public file for at least ______________________ days before a rule/regulation becomes effective.

Attorney General; 10

The Commissioner may impose which of the following penalties on any person who violates a cease and desist order following a hearing? A) A fine of up to $5,000 per violation B) A fine of up to $10,000 per violation C) A sentence of one year in jail or on probation, under Georgia's Penal Code D) Suspension but not revocation of one's license

B) A fine of up to $10,000 per violation

All of the following statements regarding producer appointments are true, except: A) An appointing insurer must notify the Commissioner within 30 days of terminating an agent's appointment B) Certificates of Authority for subagents must be renewed biennially C) An agent is responsible for securing Certificates of Authority for his or her subagents D) An insurance producer may not act as an agent unless he or she has at least one Certificate of Authority

B) Certificates of Authority for subagents must be renewed biennially

The qualifications for becoming an insurance producer include which of the following? A) The candidate must be at least 21 years of age B) Applicants for licenses may not have worked for the Insurance Commissioner within the 90-day period preceding their application C) Applicants for a resident license must reside in Georgia at least half the year or have a business domiciled in the state D) Everyone who applies to be licensed must be fingerprinted without exception

C) Applicants for a resident license must reside in Georgia at least half the year or have a business domiciled in the state

No person may act as an insurer or transact insurance in Georgia unless a __________________________ has been granted by the Commissioner.

Certificate of Authority

Which of the following statements regarding certificates of authority is correct? A) In order to qualify for a certificate of authority and insurer must have at least $1 million in capital stock, or in surplus B) An insurer affiliated with an authorized insurer in Georgia does not need a separate certificate of authority C) Investigating and adjusting claims in Georgia are in themselves deemed to constitute the transacting of insurance, which requires a certificate of authority D) If an insurance company refuses to be examined by the Commissioner, its certificate of authority may be suspended or revoked

D) If an insurance company refuses to be examined by the Commissioner, its certificate of authority may be suspended or revoked

Certificates of authority expire at midnight on ___________________ of the year following date of issuance or renewal. Renewal forms must be filed by _____________________ preceding expiration. Certificates must be renewed annually.

June 30; March 1

All personal homeowners, tenants, and automobile insurance policies, individual life or health insurance policies, certificates of group insurance coverage and coverage booklets provided by insurers and issued or delivered in this state must be written in ________________________.

a simplified form

Orders and notices from the Commissioner are effective only when they are ___________________________ the Commissioner's authority.

in writing and signed by

If the Commissioner finds accounts and records to be inadequate or incorrectly kept or posted, the person being examined will have _______ days upon notification to correct the accounting.

60

If an aggrieved person demands a hearing, the Commissioner is obliged to hold one within ________ days, and must give all parties advanced notice of at least ______ days. A) 30 and 10 B) 30 and 30 C) 10 and 10 D) 10 and 30

A 30 and 10

Which of the following statements regarding the ability of the Insurance Commissioner to examine insurers and other persons is true? A) The Commissioner must provide an insurance company with a copy of the final report of any examination within 20 days after it is published B) The Commissioner's ability to examine insurers is limited to domestic carriers C) The Commissioner may examine the records of any licensee as often as the Commissioner deems advisable D) The Commissioner may not examine insurer records more often than once every 5 years

C) The Commissioner may examine the records of any licensee as often as the Commissioner deems advisable

The Commissioner may, after a hearing, impose an administrative fine if an insurer, or its representative:

Failed to use diligence in processing claims, failed to pay claims in a timely manner, or failed to provide proper notice when required as to the reason the insurer failed to make claim payments Compelled, without just cause, insureds or claimants to accept less than the amount due, or to bring action against an insurer to secure the full amount of the claim or settlement Accepted money or other remuneration for referring automobile or other property repair business, including glass breakage, to a particular repair company The fine imposed cannot exceed $1,000 for each misconduct resulting in a violation, or $5,000 for each willful misconduct resulting in a violation.

If it appears that a person has engaged in, is engaging in, or is about to engage in a prohibited act, the Commissioner may issue a ______________________________ if it is in the public's best interest to prohibit that person from continuing such act, practice, or transaction.

cease and desist order