Ch. 06 Florida Statutes, Rules, & Regulations Common to All Lines.

The CFO & Office of Insurance of Regulation conduct examination at least how often?

5 years.

Who is considered a nonresident agent?

An agent who is licensed in another state, but who can transact insurance in this state.

Rebating

Any inducement offered to the insured in the sale of insurance products that is not specified in the policy.

What does the office of insurance have the authority to do?

Approve all policy forms! Forms must be filed within 30 days.

What type of license represents the insured?

Broker.

What are producers required to do in order to renew their license?

Complete continuing education hours and pay a renewal fee.

Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination.

Insurers are classified according to their domicile. What are the three types of insurers?

Domestic, foreign, and alien.

For what reason can a temporary license be issued?

For continuation of business in case the licensed producer dies or becomes disabled.

Sliding

Illegal practice of falsely leading an applicant to believe that a specified

Misrepresentation

Illegal to use, publish or circulate any sales that is false, misleading or deceptive as to policy benefits or terms.

In general, who can be excluded from producer licensing and examination requirements?

Insurance company officers, directors, and any other employee who do not transact insurance.

What is controlled business?

Insurance on the producer's own life of property, or the lives or property of the producer's family or business associates.

Which is owned by the policyowner?

Mutual Companies.

Who has the authority to approve all the policy forms?

Office of insurance regulation.

The purpose of insurance regulations is too..

Protect the public interest.

Who must be notified of a producer's change of address?

The Department of Insurance (Commissioner)

What type of license represents the insurance company?

The agent.

Who is responsible for the contents of insurance advertisments?

The insurance company.

Who is responsible for the costs associated with the examination of insurers?

The insurer who is being examined.

The Guaranty Association maintains

The life insurance account, annuity account, and health insurance account.

Who owns stock companies?

stockholders

What are the most common penalties for violations of insurance statutes?

A cease & desist order, a fine, & license suspension or revocation.

What is reinsurance?

A contract under which one insurance company (the reinsurer) indemnifies another insurance company for part or all of its liabilities.

Who must be a member of insurance guaranty associations?

All insurers authorized to write insurance within a state.

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

Authorized/ Admitted.

If an insurer meets the state's financial requirements and is approved to transact business in the state, is it considered what type of insurer?

Authorized/ Admitted.

What does the office of financial regulation take care of?

Banks, credit unions, finance companies & securities industries.

False Advertising

Cannot include any untrue or misleading statements that apply to the business.

If the commissioner/ superintendent finds a license engaging in an unfair method of competition or an unfair practice, what order will be issued?

Cease & Desist Order.

Prior to transacting business in a specific state, insurers must obtain a..

Certificate of Authority.

What document is required for an insurance company to transact insurance?

Certificate of Authority.

If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

Defamation.

An insurer conducting business in the state which it was incorporated in is called?

Domestic.

Who holds the fiduciary funds?

Insured/ Insurer.

An insurance contract is an agreement between whom?

Insurer & Policyowner.

In the agent/ insurer relationship, who is considered the principal?

Insurer.

Unfair Discrimination

Is illegal.

What does the office of insurance regulation take care of?

Licensing, certificates of authority, rates & policy forms, premium financing, etc..

On its advertisement, a company claims that it has funds in it possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

Misrepresentation.

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

Misrepresentation.

The oldest and largest trade organization in the insurance field is called..

NAIFA.

Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?

No, illegal practice.

What are the two offices of commission?

Office of insurance & financial regulation.

Who may share in the commission from the sale of a life insurance policy?

Only producers properly licensed for the type of the insurance.

Defamation

Oral or written is made that is intended to injure a person engaged in the insurance business.

Cease and Desist Order

Penalty of up to $50,00, suspension or revocation of the person's license.

Who is an insurance agent?

Person authorized to sell, solicit, and negotiate insurance contracts.

Twisting

Persuades an insured to his detriment.

Who can usually be granted a temporary license?

Producer's spouse or designee in case the licensed producer dies or becomes disabled.

An agent offers a client free tickets to a sporting event in exchange for the purchase of insurance policy. What is the agent guilty of?

Rebating.

A contract under which one insurer indemnifies another insurer for part or all its liabilities is called..

Reinsurance.

Churning

Replacing insurance policies for the sole purpose of making commissions.

An insurance transaction includes which of the following?

Solicitations, negotiations, & effectuation of a contract of insurance.

Who examines the books & records of insurance companies in Florida?

The CFO.

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in this state.

What is the purpose of a cease & desist order?

To prevent a producer or insurer from further violating laws for transacting insurance.

What is the purpose of insurance guaranty associations?

To protect policyowners, insureds and beneficiaries from financial losses cause insolvent insurers.

Fraternal benefits societies are not considered insurers? T or F

True

The office of financial services includes a Bureau of investigation. T or F

True

What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

Twisting.

When is controlled buisness legal?

When the commissions from controlled business do not exceed the aggregate commissions on all the other business.

When can the Commission or Director examine insurers?

Whenever is necessary but at least every 5 years.

Can a person be charged with a third-degree felony & be held liable for any unpaid claims & refund of premiums when representing an unauthorized insurer?

Yes.

When representing an unauthorized insurer, a person may be charged with..

third-degree felony, liability for unpaid claims, refund of premiums.