chapter 1 review fred loya

List the function of an agent.

1. Act as an agent (perform duties) 2. Adjust a loss on behalf of an insurer 3. Maintain an office 4. record business transactions 5. Examine, inspect or effect insurance 6. Perform recognized insurance business 7. Solicit, negotiate, and procure on behalf of an insurer 8. Make or propose to make an insurance contract 9. Take applications for insurance 10. Bind Risk 11. Receive premiums or commissions for insurance 12. Sign, execute, and deliver policies

What are the requirements a person must meet in order to obtain an insurance license?

1. be 18 2. Maintain a place of business in Texas 3. Meet the application requirements 4. Take and pass the licensing exam, get finger printed 5. pay the examination, application and licensing fees 6. Have not committed an act for which a license may be denied

How many hours of continuing education is a Limited Lines agents required to complete?

10 Hours.

What percentage of an agent's sales must come from the general public?

25%

Someone who has knowledge of a fraudulent act, must report it with in how many days?

30 Days.

Agents must inform TDI if they change their address with in how many days?

30 days

if an agent is terminated, the company must renew all policies issued by agent for how long?

6 months

How long is the term for temporary agent's license?

90 days

What is the definition to Managing General Agent (MGA)?

A person, firm,. or corporation that has supervisory responsibility for the local agency and field operations.

Can a temporary license be renewed?

A temporary license cannot be renewed or issued more than once in a 6-month period. Limited on the type of business that can conduct.

What are the requirements a corporate agency/ agency must meet in order to transact in the insurance business?

A. It must be a corporation or partnership in a good standing in any US state. B. At least on officer or partner and anyone doing insurance business must hold an appropriate Texas insurance agent's license. C. The corporation or partnership must be able to pay UP TO $25,000 for any claims made against it. This can be accomplished with a $25,000 bond payable to the TDI or a $25,000 errors and omissions policy WITH A DEDUCTIBLE OF 10% OR LESS.

What requirements must a bank meet to transact in the insurance business?

A. at least one bank officer and each individual who will be preforming the acts of an insurance agent must be individually licensed.

What are your responsibilities as an agent, to the insurer?

A. if the agent incorrectly implies or tells an insured that there is coverage under a policy when no coverage actually exist under that policy, the insurer could be held liable for the loss. B. the insurer might have to pay the loss but could then have a valid claim against the agent and could sue to recover the amount paid to the insured.

How many hours of continuing education must an agent complete before their license renewal?

All agents are required to complete 24 hours of CE.

What is the vocabulary term for an agent that solicits insurance only from their family, friends or business associates and not the general public?

Controlled Business

What could happen if an agent incorrectly tells a customer that they have coverage, when no coverage actually exists?

If an agent incorrectly implies or tells an insured that there is coverage under a policy when no coverage actually exist under that policy, the insurer could be held liable for the loss.

When an agent gives the insures something of value as an inducement to the purchase insurance it is called _______.

Inducement

When is a emergency license issued?

Issued when an agent dies or becomes disabled to preserve the agent's assets.

What is the definition to defamation?

Making any oral or written statement that is false or derogatory as to the FINANCIAL CONDITION of any insurer and that is circulated to injure any person or company.

Can continuing education hours be transferred from one term to another?

No CE hours can be carried over from one term to another.

does the MGA license allow the agent to sell insurance to the public? Explain.

No, MGAs who wish to also sell insurance must have the appropriate license.

Is a risk Manager allowed to sell insurance to the public?

No.

Anyone who has knowledge of a fraudulent act must report it to whom?

TDI Fraud Unit

If a license lapse more than 90 days but less than 1 year, what must an agent do to renew their license?

The license may not be renewed. Instead, a new license will be issued, and the agent must pay all back penalties and fees.

If a license lapses for less than 90 days, what must an agent do to renew their license?

The licensee must pay a 50% penalty with the renewal fee

How long is the term of an emergency license?

Valid for 90 days

What is a non resident agent?

agent resides outside the state of Texas and wishes tp transact insurance business in the state of Texas.

Agents must retain proof if continuing education for how long?

agents are to retain proof of CE for 4 YEARS (records are subject to inspection by the commissioner).

is an agent able to share commissions with everyone? explain.

agents cannot share commissions with someone that is not licensed. Only the spouse or children of a deceased agent can get the agent's commission. They can however, share commissions with a person that is licensed.

What is a surplus lines agent?

an individual must be currently licensed as a general property and casualty agent or as a managing general agent. at least ONE agent in an agency must be licensed as a surplus lines agent for the agency to sell surplus lines.

Who is exempt from completing continuing education hours?

an individual who has continuously held an insurance agent license for at least 20 years is exempt from CE.

How many times can you take the licensing exam?

any number of times.

How often must an agent renew their license?

every two years.

What is a risk Manager?

examines, assesses, or evaluates risk for reduction of risks.

Before an agent's license can get suspended or revoked they are entitled to what?

hearing in Travis County District Court after 10-day notice from the insurance department.

instead of revoking an agent's license, the Commissioner of insurance can impose a fine of up to how much?

instead of suspending or revoking a license, the Commissioner may impose a fine of up to $2,000 per violation.

What is the definition of twisting?

making an y misrepresentation to any policyholder for the purpose of inducing or tending to induce that person to lapse or surrender his insurance.

Violating the Unfair Competition and Unfair Practice Law may results in what type of penalties?

may result in conviction for a Class A misdemeanor, a $500 fine, and/ or six month in jail per violation, in addition to any other penalty.

What is the definition of fiduciary capacity?

someone who undertakes a high level of trust when acting in the interest of another person.

If an agent wishes to charge additional fees, what must the agent do before the expenses are incurred?

the agent must advise the client of these fees in advance and obtain the client's written consent before the expenses are incurred.

What are the penalties for acting as an agent with a suspended or revoked license?

the fine is up to $5,000, 2 years in jail, or both.

An insurance company is force to pay for a claim, after the agent incorrectly tells the insured that they have coverage, when no coverage actually exists. What can the insurance company do to the agent?

the insurer might have to pay the loss but could then have claim against the agent and could sue to recover the amount paid to the insurer.

What can a customer do if his agent fails to recommend a needed coverage that results in a loss that is not covered?

the insures may have a valid claim against the agent.

Once a temporary agent has been appointed by the insurer, what must the agent do?

the temporary agent must complete 40 hours of instruction within 14 days of appointment ( 10 hours must be in the classroom).

What are your responsibilities as an agent, to the insured?

to EVALUATE the client's insurance and make a proper recommendations with regard to coverage if an agent fails to recommend a needed coverage gap that results in a loss that is not covered, THE INSURED MAY HAVE A VALID CLAIM AGAINST THE AGENT.

What are the requirements a non resident agent must meet to obtain a TX insurance license?

valid license in that state and is in good standing.