Ch. 7 Primerica

Unfair Claim Settlement Practices Act

- It is an unfair claim settlement practice and a violation of the Insurance Code for an insurer - violation of $2500

What acts are considered unfair claims settlement practices?

- Misrepresent pertinent facts or policy provisions - Refuse to pay claim - Attempt to settle a claim based on altered application - Fail to include a statement of the coverage under which payment is being made. - Fail to settle a claim promptly - Fail to promptly provide, on request, a reasonable explanation.

Rebating

- Offered to insured in the sale of insurance products - Anything above $25

A temporary license is normally valid for

15 months

How often does the Commissioner examine authorized insurers?

At least once every 5 years

Which of the following is NOT required to be appointed by an insurer?

Broker

Insurance Adviser

Give advice to clients about insurance exposures and coverages and make recommendations about changes in coverage and limits.

Which of the following types of discrimination would be considered legal?

In benefits on the basis of different life expectations

Twisting

Misrepresentation in efforts to persuade an owner.

Fiduciary Responsibility

Obligated to exercise the same degree of care as would be expected from a reasonable, prudent, and competent professional in the field.

Defamation

Occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business.

Fiduciary

Producer who handles insurer funds in a trust capacity

What are the broad powers and duties of the Commissioner of Insurance?

Regulate affairs the Insurance Department, prescribe forms and procedures, aid in interpretation of laws.

What constitutes rebating?

Relating includes premiums payable on the policy, special favors or services, advantages in dividends or benefits, stocks, bonds, securities, and their profits.

Who is responsible for making sure insurance policies are quality, understandable products and the rates are reasonable?

The Maryland Insurance Administration

A temporary license may be issued if

The agent is disabled and the disability keeps him from working.

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

Twisting

How long is a producer's license valid before a renewal is required?

Two years

The Commissioner of Insurance is responsible for all of the following actions EXCEPT

a) Issuing Certificates of Authority b) Enforcing the Insurance Code c) Setting premium rates d) Issuing cease and desist orders Answer: C

A producer CANNOT receive a commission from an insurance company without which of the following?

An appropriate license

A producer recieves a written notification regarding a Commissioner's order against the producer. within how many days must the producer request a hearing?

30 days

For how long, and under what circumstances can a temporary license be issued?

A temporary license may be issued for 15 months for the continuation of business to the surviving spouse or personal representative of an agent who dies or becomes disabled.

what are the applicable penalties for noncompliance with the state's Insurance code?

License suspension, revocation or denial, and/or monetary fines.

Licenses expire every 2 years on which date?

Licenses expire every 2 years (birth month)

An agent who deliberately makes a malicious statement about another insurance company is guilty of an illegal trade practice called

Defamation

An insurer that holds a Certificate of Authority in the state in which it transacts business is consdiered

an authorized insurer

What is the minimum age to apply for a producer license in this state?

18 yrs old

An agent who offers a cash reward to a prospect for buying a policy is guilty of

Rebating

Describe a producer's fiduciary responsibilities.

Producers are obligated to exercise the same degree of care as would be expected from reasonable, prudent, and competent professional in the field.

What are the continuing education requirements for producers in this state?

Producers must complete 24 credit hours of continuing education every 2 years, with at least 3 of these hours in ethics.

What is the difference between an authorized/admitted and unauthorized/nonadmitted insurer?

authorized/admitted: is qualified and recieved a Certificate of Authority from the DOI to transact insurance in the state. unauthorized/nonadmitted: an insurance company that has not applied for, or has been denied a Certificate of Authority and may not transact insurance.

when handling premium funds in the conduct of their business, insurance producers are acting in a/an

fiduciary capacity

Within what maximum time period may a producer reinstate an expired license?

1 year

All of the following are unfair claims settlement practices EXCEPT

Suggesting negotiations in settling the claim. (Insurance companies are just supposed to pay the claim)