Chapter 5 QUIZ

A non resident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residence to transact insurance business in it. This is known as a/n

Reciprocity agreement

The maximum penalty that may be assessed for a single non willful violation of the insurance code is

$1,000

An insurance agent has received a request for a hearing from the commissioner. Within how many days must the hearing be held?

30 days

Which of the following persons is required to hold a producer license?

A person who negotiates insurance contracts

Which of the following is another term for an authorized insurer?

Admitted

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate Authority

What term is used for replacing policies for the sole purpose of making commissions?

Churning

In insurance transactions, fiduciary responsibility means

Handing insurer funds in a trust capacity

State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT

Inviting prospective clients to the grand opening of the company's new office

What is the function of a Certificate of Authority?

It allows an insurer to transact insurance in Georgia

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association

Which of the following is an example of a producers fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered

felony

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

foreign

Who elects the Commissioner of Insurance to office?

registered voters

An insurance producer just sold an insurance policy to his sister. What kind of business is this?

Controlled

Which of the following would not be considered an unfair and deceptive practice?

Controlled business

When a producer was reviewing a potential customer's coverage written by another employee company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

Defamation

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

All of the following statements regarding continuing education requirements in this state are true except

Producers may repeat the same courses to meet the required CE hours for a licensing period.

All of the following are true regarding rebates except

Rebates are allowed if it's in the best interest of the client.

In this state, what is the maximum fine for transacting insurance without a license?

$1,000

Which of the following would be considered an unfair claims settlement practice?

Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

an inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

how often does an agent's insurance license expire?

Every 2 years

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. The insurer is hoping that this advertising will help to eliminate the competition and therefore create a monopoly. Which of the following best describes this act

illegal

Which of the following best describes a misrepresentation?

issuing sales material with exaggerated statements about policy benefits