Ch 15
Causing a person to give up an existing contract through surrender, lapse, or other forfeiture is known as:
Twisting Causing a person to give up an existing contract through surrender, lapse, or other forfeiture (such as exchanging a whole life policy for a reduced paid-up or extended term policy), is also known as 'twisting.'
Furnishing false information to the Commissioner is subject to a civil penalty of $100,000 plus what amount per 30 days period of noncompliance?
$5,000 Civil penalties for persons who furnish false information to the Commissioner may be issued up to $100,000 per violation, as well as a $5,000 penalty for every 30-day period during which the person fails to comply with a request.
Persons who transact insurance without being appropriately licensed may be issued a cease and desist order, carrying administrative penalties of up to how much per day?
$5,000 Persons who transact insurance without being appropriately licensed may be issued a cease and desist order, carrying administrative penalties of up to $5,000 per day for each day a violation occurred.
Insurers must respond in writing to an insured's or claimant's notice of loss within how many days?
15
Upon receiving a request for records, insurers and/or agents must deliver the records to the Commissioner within how many days?
30
When a producer makes an agreement that unreasonably restrains the potential insured, he/she may have violated regulations against:
Boycott, coercion, and intimidation Boycott, coercion, and intimidation are methods to restrain the choices of an insured.
A Property & Casualty Broker-Agent also licensed as a Life-Only or Accident & Health agent must do all of the following prior to renewing his or her license, except:
Complete 24 hours of continuing education in each line of licensing Mandatory CE requirements can result in a producer completing more than the 24 hours of required continuing education needed to renew a license. There is no requirement to complete CE in each line of licensing. Must do: - Complete 24 hours of continuing education in any line of licensing -Complete all mandatory continuing education required for any line of licensing, regardless of the total hours of CE already credited toward renewal -Complete 3 hours of ethics continuing education
An article that includes false statements about the financial condition of an insurer is an example of:
Defamation Defamation is a maliciously critical statement about an insurance company's financial condition.
Which is true of the California Insurance Code?
It establishes as a goal that policies be reasonably priced and widely available
A Life Settlement Broker is exclusively the representative of the __________ who seeks to sell his interest in the policy.
Policyowner
When a producer offers a prospective insured a portable dishwasher as a bonus for purchasing a policy, he/she could be guilty of:
Rebating A producer may not offer an insured anything of value as an inducement to purchase insurance.
Who enforces the regulations found in the CCR?
The insurance commissioner The Commissioner enforces the Code by writing and adopting regulations that specify the manner of enforcement or provide details that are not explicitly cited in the Code.
A Surplus Line Broker must do all of the following, except:
Use only an insurer identified in the List of Approved Nonadmitted Insurers Although a Surplus Line Broker may use any of the Approved nonadmitted insurers on the list, the Department's list is not exclusive.
What is the maximum number of appointments a producer may accept?
Unlimited An agent may be appointed by an unlimited number of insurers, and appointments remain in effect until terminated by either the insurer or the agent, or in the event the agent's license is cancelled.
A Property & Casualty Broker-Agent who is also licensed as a Life-Only agent may not charge a fee to a consumer for which of the following acts?
Analyzing a person's universal life insurance policy Only a licensed Life & Disability Insurance Analyst may charge a consumer a fee to analyze a life or disability insurance policy or annuity. There is no prohibition against a Broker-Agent from charging a fee to represent a consumer and also collecting a commission for placing a consumer's business with an insurer, but the Broker-Agent is expected to disclose to the consumer that a commission may be paid to the Broker-Agent in addition to any fee charged.
California's Unfair Trade Practices Act does which of the following?
Applies to all licensed persons under the Insurance Code, as well as unlicensed persons who would otherwise be regulated under the Code Most violations of the Act are civil, not criminal, but the Act does not provide for 'private attorney general' actions by consumers. The Commissioner may take direct administrative action against any person who violates the Act, including persons who may or may not be licensed. The Act provides that the Commissioner may conduct hearings to determine whether unspecified acts are unfair or deceptive.
Under the California Insurance Code, an insurance agent cannot act as a broker for any insurer by which the agent is actively:
Appointed Under the California Insurance Code, an insurance agent cannot act as a broker for any insurer by which the agent is actively appointed.
Which of the following is not an unfair claims settlement practice?
Attempting to settle claims by arbitration Attempting to settle claims by arbitration when there is a disagreement is proper.
An application for __________ of an expired license without retesting may be filed after the expiration date until the same month and day of the next succeeding year, providing the delinquent fee for that year is paid.
Renewal
Before a regulation proposed by the Insurance Commissioner takes effect, all of the following must occur, except:
The state legislature must enact the regulation after the OAL has approved it The legislature is not involved in the process of creating regulations.
In California, all of the following are true statements, except:
To be licensed as a Life and Disability Analyst, the applicant must have worked as a life licensee or employee of a licensee for at least 3 years prior to application The applicant must have worked as a life licensee or employee of a licensee for 5 years prior to application.
Under California law, a Life Settlement Broker must be a licensed Life-Only agent for more than 1 year or have completed a _____-hour course in life settlements.
15 Under California law, a Life Settlement Broker must be a licensed Life-Only agent for more than 1 year or have completed a 15-hour course in life settlements.
Producer G took 28 hours of approved CE in the term preceding her last license renewal. How many hours will she need to complete at her next renewal term?
20 Because producers can 'roll over' excess hours to the next license term, Producer G will only need 20 additional hours.
How much time does a licensee have to respond to the Department of Insurance after receiving an inquiry concerning a claim?
21 calendar days If the licensee is initially unable to provide the requested information within 21 calendar days, an extension of time must be requested within 21 days, which indicates the amount of additional time that will be needed.
A Life and Disability Insurance Analyst must have a written agreement signed in advance stating the service to be performed for a fee, the amount of the fee and must be retained for:
3 years Under the California Insurance Code, a Life and Disability Insurance Analyst must have a written agreement signed in advance stating the service to be performed for a fee, the amount of the fee and the agreement must be retained for 3 years.
Under the California Annuity Suitability Education Requirements, a life-only agent who sells annuity products to individual consumers must complete ___ hours of subsequent training every 2 years prior to license renewal.
4 Under the California Annuity Suitability Education Requirements, a life-only agent who sells annuity products to individual consumers must complete 4 hours of subsequent training every 2 years prior to license renewal.
Under most circumstances, within how much time is an insurer expected to affirm or deny a claim?
40 days Although it may need more time to determine the amount of a loss and pay a claim, an insurer must normally accept responsibility for or deny a claim within 40 days of an insured's or claimant's notice of claim.
In California it is the obligation of each life, life and disability, and disability insurance agent to preserve and maintain, at their place of business, all applicable production records relating to policies sold for a minimum of ___ years.
5 Such records are to be maintained for a minimum of 5 years.
Under the California Insurance Code, the Commissioner has continuing authority to act against a former agent whose license has been surrendered or expired for up to:
5 years Under the California Insurance Code, the Commissioner has continuing authority to act against a former agent whose license has been surrendered or expired for up to 5 years.
The Code requires insurers to notify the Fraud Division within how many days of uncovering an incident of actual or suspected fraud?
60 All admitted insurers are required to maintain a Special Investigations Unit (SIU) for the express purpose of detecting and investigating fraudulent claims. The Code also requires insurers to notify the Fraud Division within 60 days of uncovering an incident of actual or suspected fraud.
A Life and Disability Analyst cannot be employed or paid by the insurer and must meet all of the following requirements, except:
Be at least age 18 Under the California Insurance Code, a Life and Disability Analyst cannot be employed or paid by the insurer and must meet be a resident of the state of California and at least age 23.
A Property & Casualty Broker-Agent also licensed as a Life-Only or Accident & Health agent must do all of the following prior to renewing his or her license, except:
Complete 24 hours of continuing education in each line of licensing Mandatory CE requirements can result in a producer completing more than the 24 hours of required continuing education needed to renew a license. There is no requirement to complete CE in each line of licensing.
A licensed producer may not do which of the following?
Enter into an exclusive relationship with a lender to provide homeowners insurance to loan applicants A person who is required to obtain insurance as a condition of purchasing real or personal property may not be required to obtain insurance from a specific agent, broker, or insurance company.
What is it called when a producer, agent, or broker makes a false statement about an insurer's financial condition?
Misrepresentation Misrepresentation includes making any statement misrepresenting the terms of any policy, using any name or title misrepresenting the true nature of any policy, misrepresenting the financial condition of any insurer, or making any misrepresentation to a policyholder insured by any company for the purpose of inducing the policyholder to lapse, forfeit, or surrender a policy.
Regarding Proof of Notice under the California insurance code, the __________ is responsible for notifying the insurer of address changes including any change of email address.
Policyowner Under the California insurance code the policyowner is responsible for notifying the insurer of address changes including any change of email address.