Life insurance chp 5
The violation of a cease and desist order may result in a fine of....
$10000
When fulfilling a premium loan request, an insurer must provide a policyowner with:
1. A notice regarding the interest rate at the time a cash loan is made 2. A notice specifying the interest rate and frequency of rate determination 3. Advance notice of interest rate increases
2 types of licenses:
1. Individuals- resident and nonresident 2. Temporary license- valid for 6 months, issued to maintain the existing business
Maintenance and duration licensing requirements:
1. Must be renewed every 2 years 2. Continuing education- must be completed every reporting period 3. Disciplinary actions
All life insurance policies that allow for policy loans must contain at least one off the interest rate provisions, which Are:
1. Rate of interest on policy loans is not to exceed 8% per annum 2. The Max policy loan interest rate is adjustable
When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for:
3 years
How many years must insurers keep filled off all advertisements used in Georgia
4 years
What are the most common penalties for violations of insurance statutes
A cease and desist order, A fine, and license suspension or revocation
What is the closest term to an authorized insurer
Admitted
Who must a member of insurance guaranty associations
All insurers authorized to write insurance within a state
Who is considered a non resident agent
An agent who resides and is licensed in another state but who is authorized to transact insurance in this state
Insurer who has received a certificate of authority from the department of insurance to transact insurance in this state
Authorized insurer
If an insurer holds a certificate of authority, it is known as what type of insurer
Authorized or admitted
If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer
Authorized or admitted
What type of licensee represents the insured
Broker
To stop our
Cease and desist
If the commissioner/superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued
Cease and desist order
What document is required for an insurance company to transact insurance
Certificate of authority
Defined as replacing insurance policies for the sole purpose of making commissions
Churning
Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium
Commission
The head of the state department of insurance
Commissioner
What are producers required to do in order to renew their license
Complete continuing education hours and post a renewal fee
The act of trying to discourage a policy holder from dropping their existing policy is called
Conservation effort
If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?
Defamation
Revealed info to help someone make an intelligent and educated decision
Disclosure
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 see classified according to the domicile. What are three types of insurers
Domestic, foreign, and alien
Refers to location where an insurer is incorporated, not necessarily where the insurer conducts business
Domicile
Authority granted to an agent through the agents contract is referred to as
Express authority
Based upon trust and confidence, when handling the financial affairs of their customers
Fiduciary capacity
For what reason can a temporary license be issued
For continuation of business in case the licensed producer dies or becomes disabled
Insurer headquarters, principals place of business
Home office
An offer that attempts to influence the other party
Inducement
Unable to meet financial obligations
Insolvent
In general, who can be excluded from producers licensing and examination requirements
Insurance company officers, directors, or any other employees who don't trust insurance and who don't receive commissions for their services
What is a controlled business
Insurance on the producers own life or property, or the lives or property of the producers family or business associates
In the agent/insurer relationship, who is considered the principal
Insurer
Operate an insurance mechanism, in which my renters are liable only for their portion of risk
Lloyds associations
Oh it's advertisement, a company claims that it has funds in its possession that are 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
Conduct that is contrary to community standards of justice, honesty, or good morals
Moral turpitude
Can insurers advertise protection by the insurance guaranty association
No they can't
Benefits of a life insurance policy that the policyowner doesn't forfeit even if the policy lapses
Non forfeiture values
Who may share in the commission from the sale of a life insurance policy
Only producers properly licensed for the type of insurance transaction
Who is an insurance agent
Person authorized to sell, solicit and negotiate insurance contracts
What grants authority to an agent through the agent
Principal
who can usually be granted a temporary license
Producers spouse of designee in case the licensed producer dies or becomes disabled
To make public, to put into action
Promulgate
An agent offers a client free tickets to a sporting event in exchange for the precise of an insurance policy. What is the agent guilty of?
Rebating
A mutual interchange of rights and privileges
Reciprocity
When a nonresident agent may receive a nonresident licensee if they reside in a state that awards nonresident agent license to residents of Georgia on the same basis
Reciprocity agreement
A formal written law enacted by legislature; insurance statutes can be found in the state insurance code
Statute
Who owns stock companies
Stockholders
Insurance not available from authorized insurers; placed with nonadmitted insurers who specialize in offering insurance to the high risk market
Surplus lines
What type of license represents the insurance company
The agent
Who is responsible for determining whether an advertisement might mislead or decide a pest on oof average education and intelligence
The commissioner
Who must be notified of a producers change of address
The department of insurance
Who is responsible for the contents of insurance advertisements
The insurance company
Who is responsible for the contents of life insurance advertising
The insurer
Who is responsible for the costs associated with the examination of insurers
The insurer who of being examined
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 and desist order
To prevent a producer or insurer from further violation laws for transacting
What is the purpose of insurance guaranty associations
To protect policyowner, insurers and beneficiaries from financial losses caused by insolvent insurers
What type of misrepresentation persuaded an insured, to cancel, lapse, or Swift policies from one to another
Twisting
When is controlled business legal
When the commissions from controlled business do not exceed the aggregate commissions on all other business
When can the commissioner or director examine insurers
Whenever necessary, but at least once every few years