NC PC exam
How many days does a license applicant have to report to the insurance commissioner if a change of address or a crime occurs
10 days
Is replacement auto covered if the insured doesn't notify insurer
Yes Liability and medical payments
Tort and types
a wrongful act or an infringement of a right (other than under contract) leading to civil legal liability. Intentional (gross negligence) and unintentional (negligence) Negligence: Duty owed, violation of duty, etc
Loss valuation methods
Actual Cash Value; Replacement Cost; Functional Replacement Cost; Market Value; Agreed Value; Stated Amount; and Valued Policy.
Report to the Commissioner
Any insurance company, employee, representative, or licensee who has reason to believe that any other person has violated the law or that any entity licensed by the Commissioner is financially impaired must inform the Commissioner and provide a complete statement of all relevant facts. The Commissioner may suspend, revoke, or refuse to renew the license of any licensee who fails to comply.
Judicial Review
Any order or decision made, issued, or executed by the Commissioner will be subject to a judicial review in the Superior Court if a petition is filed within 30 days from the date of delivery of the order or decision. The judicial review does not apply to an order regarding financial impairment or a decision that the premium rates charged or filed on any class of risk are excessive, inadequate, or unfairly discriminatory.
What forms DO NOT require the name insured to be the owner/occupant of the insured dwelling
HO-4L Contents Broad form Made for tenants (Renters insurance) HO-6: Unit owners form (Made for condominiums)
What is the purpose of part two of workers comp
Handle suits against the employer for damages arising from an injury to an employee when those damages are not covered by Workers' Compensation
Coverage E: Additional living expenses
Limit is UP TO 20% of coverage A
CGL Will supplementary payments reduce limits & Payments
Supplementary payments WILL NOT reduce limits of the policy Coverages A &B , 250 bail bond and 250 max for loss of earnings a day Premises and operations exposures- Places where business is being done and acting in business occurs
BOP Limits of insurance
The most the policy will pay for loss or damage, in any one occurrence, is the applicable limit of insurance under Section I - Property, as shown in the Declarations. The most the policy will pay for damage to outdoor signs attached to the building is $1,000 per sign per occurrence. The limit of insurance for Buildings will automatically increase by 8% unless a different percentage is shown in the Declarations. An automatic seasonal increase applies to the limit of insurance for business personal property. If no percentage is shown on the declaration, the policy automatically provides a limit increase of 25% for seasonal fluctuations in value. This seasonal increase only applies if the limit shown for business personal property in the Declarations is at least 100% of the insured's average monthly values during the 12 months immediately preceding the loss.
Insuring agreement I
The promise to pay. Includes perils that are covered
Compliance Year
The second year of the biennial compliance period.
Fungi
Up to $5,000 for damage under Coverages A, B, C, and D resulting from or consisting of fungi, wet/dry rot, or bacteria that is the direct result of an insured peril
What type of property is not covered
Vehicles subject to motor vehicle registration
What vehicles are excluded from uninsured definition
Vehicles that are being used as a residence
A violation of the Privacy Protection Act is punishable by all of the following, except:
100k fine
How long must insurers hold records of complaints
5 years
Debris Removal
500
Limited Representative
A limited representative is authorized by the Commissioner to solicit or negotiate contracts of insurance that are restricted in the scope of coverage they afford.
unoccupied
A property that has contents or furnishings in it, but is not being used or lived in.
What is False regarding the consumer division?
A receipt for an insurance premium must be dated and signed by the agent is NOT TRUE of the consumer divison
Declarations - D
Who, what, where, when, how much
Blank Policies
An agent or limited representative who signs a blank contract or insurance policy is guilty of a Class 3 misdemeanor and upon conviction will be punished by a fine of $1,000 - $5,000.
False Statements in Applications and charge
Any agent, applicant, or person who knowingly makes any false or fraudulent statements or representations on an insurance application for the purpose of obtaining any fees or commissions from a company engaged in the business of insurance will be guilty of a Class 1 misdemeanor.
Coverage A (DP)
Coverage includes materials/supplies near or on. NO COVERAGE for land or Farm. Must be ATTACHED TO DWELLING
Coverage C: Personal Property
DOES NOT INCLUDE Money, animals, data, etc.
What are DP-1 ,2, 3 losses paid as
DP-1 = ACV 2/3: Replacement
Specific limit
Insures a single item of property for a single limit of insurance.
Scheduled Limit
Insures one or more items of property on a single policy and the amount of insurance applying to each item is shown on a schedule.
Blanket limit
Insures property located at more than one location OR more than one type of property at the same location OR both.
BOP paid losses
MOST insurance losses are settled on a REPLACEMENT COST basis. UNLESS ACV is selected in declarations
BOP Mechanical breakdown- optional coverage
Mechanical breakdown is AN optional coverage and IS NOT automatically covered
Do medical benefits have limits?
NO
Is breach of contract a personal injury
NO
CGL Protection areas
Products exposure completed operations contingent liability premises and operations
Homeowners coverages Section 1 & 2
Section 1 Coverage A- Dwelling Coverage B- Other structures Coverage C- Personal property Coverage D- Loss of Use Section 2 Coverage E- Personal liability Coverage F- Medical payments to others
BAP Sections
Section 1- owned autos Section 2- coverage Section 3- garage keepers (Autos in the care, custody, and control (servicing, repair, parking, storing)
Coverage B: Other Structures (DP)
Separated from dwelling by CLEAR space, fence, utility line. NO COVERAGE for structures rented to others. Commercial, Manufacturing, farming isn't included. The Coverage B limit of insurance is up to 10% of the Coverage A limit and is automatically provided under each of the dwelling forms. In the case of a DP-1, this limit does not increase the amount of insurance provided by Coverage A. The DP-2 and DP-3 forms provide additional insurance.
Bailer
Servicer= clothes, cars, etc
DP-3 Special Form
Shifts coverage A&B to open perils
Exclusions - E
Standard- Law, earth movements, war, and whatever else named perils (If on upon perils)
Correction of Recorded Personal Information
Within 30 days after an insurer receives a written request from a client to correct, amend, or delete personal information about the client, the insurer must either: Correct, amend, or delete the disputed information; or Notify the client of its refusal to make such corrections, the reason for the refusal, and the individual's right to file a formal statement with the insurance institution
Can SDIP surcharge a person with less than 3 years
Yes
Products exposure
any goods or products that are manufactured, sold, handled, distributed, or disposed by the insured and others conducting business under the insured's name. Real property, such as buildings and land, are not considered a product. Goods and merchandise are not typically considered a product until after their sale by the insured and once they leave the insured's premises.
How does HO-5 differ from HO-3?
because PERSONAL PROPERTY IS insured on an OPEN PERIL BASIS HO-5 open peril^
ACV (Actual Cash Value)
cost to repair or replace MINUS depreciation
Bodily injury
death, illness, loss of earnings
Misc. Com What is the bill of lading used for?
for shipping during transportation
Burglary
forcible entry
uninsured motorist coverage
may be up to $1 million per person/per accident
Insured definition
named insured other residents of the name insured Full time students- under age 24 and related
If a company wants to self insurance, how many total fixed assets are needed
need @ least 500,000
Robbery
threat
How is the commissioner of insurance obtained
voted in by residents
Is intentional damage done by someone younger than 13 covered
yes
Whats in a certificate of insurance
Effective/Name of insurer/ Name of insured/ and limits of liability.
What is a risk
possibility of loss
CGL- Coverages
- Coverage A-bodily injury and property damage liability - Coverage B-personal and advertising injury liability - Coverage C-medical payments
What is the max length a temp license can be used
180
How many hours of pre licensing education is required for the insurance exam
20 per test
SL How many hours every 2 years are needed for the agent
24 hours
Giving Notice to Employer and Filing Claims
30 days 2 yrs statue
Records Maintenance/Inspection
All companies, agents, or brokers doing any kind of insurance business in North Carolina must make and keep a full and correct record of the business done by them. This includes: The policy/certificate of renewal number, date, term, amount insured, premiums The person(s) to whom it was issued Information from these records must be provided to the Commissioner on demand, and the original books of record shall be open to the Commissioner's inspection whenever they so request.
Adjuster
An adjuster is an individual who, for a salary, fee, commission, or other compensation, investigates or reports to their principal with respect to claims arising under contracts other than life or annuities. An attorney who occasionally adjusts losses incidental to their profession or an adjuster of marine losses are not considered adjusters within the intent of the law.
Payment of Premium to Agent
An agent, broker, or limited representative who acts for a person other than themselves when negotiating a contract of insurance is considered the company's agent for the purpose of receiving the premium. Any producer receiving premiums through fraudulent representations is guilty of a Class 1 misdemeanor.
Can the commissioner issue a restraining order
CANNOT only if criminal charges are filed
What is the name of the right to sue
Chose in action
DICE
Declarations, Insuring Agreement, Conditions, Exclusions
What is the discovery period? Com. Crime
Discovery form covers losses that are discovered DURING policy period
Is farm and construction equipment insurable by the NC motor vehicle reinsurance facility
Farm and construction equipment IS NOT
License Denial
If the Commissioner finds that the applicant has not fully met the requirements for licensing, the Commissioner will refuse to issue the license and send written notification to the applicant and the appointing insurer of the denial, stating the grounds for the denial. A license applicant may request a review by the Commissioner within 30 days after receiving notice that the license application has been denied. An applicant who disagrees with the outcome of the review may request a hearing within 30 days.
Hearings and Penalties
If there is reason to believe a person has violated any part of the Act, the Commissioner will issue and serve a statement of charges and notice of hearing to be held not less than 10 days after the date of service at a fixed time and place. A violation of privacy regulation is punishable by one or more of the following penalties: License suspension or revocation A monetary fine up to $10,000 per violation A monetary fine up to $50,000 if the violations occur with a frequency that constitutes a general business practice A legal action regarding illegal disclosure of private information must be brought within 2 years from the date the alleged violation is or should have been discovered.
Is ice/snow covered under EC Dp-1
NO
Will a completed operations claim reduce a general ag limit
NO
is a spouse of a trustee insured in BOP?
NOT INSURED
HO-2 Broad form
Named perils for dwelling (Coverage A), Other structures (Coverage B) AND personal property (Coverage C). Ice/sleet
vacant
No people or stuff
CGL and its two forms and what triggers them
Occurrence and claims made occurrence happens when something happens DURING policy period Claims made form triggers if something happens AFTER period and is reported during policy period
Do other states need to state monopolistic on its info page
Other state coverage DO NOT include that Monopolistic states may be listed on the info page
BOP Optional Coverages
Outdoor signs, money, employee dishonesty, and equipment breakdown
Bailee
Owner of something
What are the parts of Personal Auto policy?
Part A- Liability coverages part b- Medical payments part C- Uninsured motorist Part D- Coverage for damage to your auto Part E- Duties after an accident or loss Part F- General provisions +++ Selected endorsements
DP-1 Basic Form
Perils: Fire, lightning, internal explosion Losses are PAID on a ACV basis
HO-6: (unit owner form)
The Unit-owners Form provides named perils coverage to the owner of a condominium or cooperative unit under Coverage A - Dwelling and Coverage C - Personal Property. Coverage B does not appear in this form; however, if the owners of condominiums or cooperative units wish to insure other structures, the value of other structures may be included in the Coverage A limit of insurance. The form insures real property (building and building items) for which the insured is responsible under the bylaws of the condominium association or cooperative corporation. It also insures personal property of the insured while anywhere in the world.
Split limits
The amounts of coverage for bodily injury and property damage are separate. Split limits are expressed using 3 separate limits: a bodily injury (BI) limit per person, a bodily injury (BI) limit per accident, and a separate limit for property damage (PD) per accident.
Adverse Underwriting Decisions
The applicant has 90 days to request reasons for the adverse underwriting decision and the response must be made within 21 days of being received.
What is true of coinsurance
The coinsurance clause increases the policy's deductible amount
Replacement value
The cost to replace property with property of like kind and quality, at current pricing, WITHOUT a deduction for depreciation.
Conditions C
The duties in the event of the loss Calling police is only needed if law is broken
Theft
Theft is a BROAD category includes burglary and robbery
Home Day Care Business (HO 32 96)
This endorsement limits Section I, Coverage C, Special Limits of Liability to $2,500 for business property used in a home day care business on the residence premises. It also increases coverage to $500 on home day care business property which is 'away from the premises'.
Injuries
When the injury or death is caused by the employer's willful failure to comply with any Workers' Compensation statute or requirement, compensation shall be increased 10%. When the injury or death is caused by the willful failure of the employee to use a safety appliance or by the willful breach of any rule or regulation adopted by the employer, compensation shall be reduced 10%. The employee must have been made aware of the employer's standards or safety appliance requirements prior to the injury. The burden of proof shall be upon the party who claims an exemption or forfeiture.
HO-3 special form
open peril for Coverage A/B. Losses are valued on Replacement value basis. EXCLUDES: V&MM as long it has been vacant for 60 straight days prior to loss
is glass breakage covered under BAP losses
no
Is bap medical payments automatically there
no. They must be added by endorsement
Strict Liability
products
What is false regarding the rating facility policies
rates must be developed to produce a profit.
Personal Injury
slander, libel, false arrest, and invasion of privacy
Who does the broker represent
the insured (customer)
is increased cost of construction covered in BOP
yes
Com auto out of state coverage
§ If the financial responsibility of other states and jurisdictions require an insured vehicle to possess certain coverages and limits of liability when driving within their boundaries, the liability coverages provided by the business auto coverage form automatically conforms to the types of coverages and limits of liability required by any jurisdiction within the policy's coverage territory when being used in that jurisdiction.
If an agent is convicted of a misdemeanor how many days do they have to report it to the commissioner
30
What is General business regulations for property insurance include for interest
6 %
Principally Garaged
6 months
Gen regulations of Business (prop laws)
7 years 6% per year
Agent R holds a North Carolina nonresident insurance license when they move to North Carolina. To continue being licensed, R must apply for resident licensure within-
90 days
Licensee Exemptions
A licensee age 65 or older who has been continuously licensed in the line of authority for at least 25 years and either holds a professional designation for that line or certifies annually that they are an inactive agent taking no part in agency operations is exempt from the continuing education requirement.
Twisting
An insurer may not willfully misrepresent, or incompletely compare, the terms, conditions, or benefits of any insurance policy in order to induce a policyholder to replace an existing policy.
Liberalization Clause
Broadening coverage without any extra charge, no need for endorsement
BOP Section 1
Buildings and structures
The insured can request the following initial information be added to a property policy, EXCEPT: Deficiency charge Claim surcharge Property improvement credits Basis rate
Claim Surcharge Upon request from the insured, the basis rate, deficiency charge, property improvement credits, and the rate at which the policy was written must be added to a property policy and provided upon request after any changes to the policy.
BOP does section 2 cover medical payments to volunteer workers
DOES NOT exclude medical payments to volunteer workers, only to paid employees. (Workers comp)
BOP What it won't cover
Everything ACCEPT automobile stations, repair, parking lots, restaurants (Except fast food), manufactures, amusement
What does the outdoor property coverage extension insures
Explosion, riot and civil commotion.
What is a passive UNFAIR claim
Failing to promptly explain, based on applicable provisions or laws, a claim's denial.
DP 2 broad form
INCLUDES Dp-1 (fire, lightning, INTERNAL explosion) and V&MM. Theft coverage is available ONLY through an endorsement.
Is the NC Insurance Guaranty association for profit?
IS NOT A for profit entity
BOP Restoration period
It begins 72 hours after the time of the direct physical loss and ends when repairs are completed or when business resumes at a new physical location
Com auto Usage of Business auto
The Business Auto Coverage Form is used to cover owned, leased, hired, rented, or borrowed private passenger autos, trucks, trailers, and semi-trailers that are owned or used by the insured.It provides liability coverage for trailers being towed by a covered vehicle, but it does not provide automatic coverage for physical damage to trailers. It also Covers non-owned vehicles, including autos owned by employees while being used in the business. The only types of mobile equipment that may be insured are those required to be registered to drive on public roads. Vehicles that are sold, stored, or repaired for others may NOT be insured on the business auto coverage form, as these vehicles are insured on the garage coverage form.
HO-5 (Comprehensive form)
The Comprehensive Form provides the broadest coverage of any of the homeowners forms. Coverage A - Dwelling, Coverage B - Other Structures, and Coverage C - Personal Property provide insurance on an open perils basis. Losses to the dwelling and other structures are valued on a replacement cost basis, losses to personal property are valued on an actual cash value basis.
Ho-4 (Contents Broad Form) aka renters insurance
The Contents Broad Form is also known as the renter's or tenant homeowners policy. It doesn't provide any coverage for the dwelling or other structures because it's designed to insure those who are tenants. The HO-4 insures personal property under Coverage C against loss from the 16 named broad form perils found in the HO-2 and HO-3 forms. Personal property losses are valued on an actual cash value basis, as they are on the HO-2 and HO-3 forms.
What type of endorsement or declaration will allow a motorcycle
The Miscellaneous type vehicle endorsement allows a motorcycle to be eligible by amending the definitions to include ANY miscellaneous type vehicle
What is com auto section 2?
The coverage section Coverage is provided for bodily injury or property damage caused by an accident for which the insured is legally responsible. The accident must occur within the policy territory, during the policy period, and result from the ownership, maintenance, or use of a covered auto
If there are two auto policies what would be paid
The highest limit of the two
Contingent Liability exposure-
The liability of others arises when a business is held legally liable for the actions, or failures to act, of other parties, such as sub-contractors or independent contractors. Owners and Contractors Protective
Combined Single Limit
The limit of the policy may be applied to bodily injury (BI) and/or property damage (PD). A combined single limit policy has a maximum aggregate per accident, regardless of the type of loss (BI or PD).
HO-8: Modified Form
The loss valuation method for the Modified Coverage Form is typically Actual Cash Value (ACV). The Modified Coverage Form is often used to insure older homes when the replacement and market values of the dwelling are disproportionate or if a moral hazard would be created if insurance were written at 100% of replacement cost
A person who willingly and knowingly made submitted several fraudulent claims over the past several years is subject to which of the following penalties? =
Treble damages
What are the motor vehicle liability policy requirements?
Uninsured motorist coverage may be up to $1 million per person/per acciden
Which is a TRUE statement about motor vehicle liability policy requirements?
Uninsured motorist coverage may be up to $1 million per person/per accident Insurers are not required to provide more than $1 million 24hrs 60 days
BOP policy features
Unlike the Commercial Package Policy, which was designed to accommodate the needs and exposures of larger businesses, the BOP contains features that are automatically included and better serve the needs and exposures of small to medium-sized businesses. Such features include: § The method of valuation on the building and business personal property is replacement cost, provided that at the time of the loss the limit of insurance on the lost or damaged property is 80% or more of the full replacement cost of the property. § The limit of insurance for the building automatically increases by an annual percentage shown in the Declarations. The increase is the building limit times the percentage of annual increase shown in the Declarations, divided by 365 (the amount of insurance applicable on any given day). § Business Income and Extra Expense coverages are automatically included, and the policy pays the actual loss sustained for up to 12 consecutive months during the "period of restoration" following a covered direct loss. The "period of restoration" begins 72 hours after the time of direct physical loss, and ends when repairs are completed or when business resumes at a new permanent location.
Out of State Coverage
When a "your covered auto" is being driven outside the state in which it is principally garaged (and also within the coverage territory), Part A - Liability Coverage extends to provide coverage as required by the financial responsibility or compulsory insurance laws of that state or Canadian province 25 miles into mexico
Completed Operations Exposure
When a business performs services or work, such as installation, construction, or repair, it's vulnerable to lawsuits and claims resulting from improper or defective workmanship. This exposure typically begins after the insured's operations have been completed and the insured leaves the job site. Injury or damage must occur away from the premises the insured owns or rents.
Com auto Supp payments
§ In addition to the limit of liability, supplementary payments include claims expenses incurred by the insurer, up to $2,000 for the cost of bail bonds required because of an accident, reasonable expenses incurred by the insured at insurer's request, including up to $250 per day for an insured's actual loss of earnings, costs taxed against an insured in a lawsuit defended by the insurer, and post-judgment interest.
Com auto Who is an insured
§ The named insured for any covered vehicle § Anyone else using a covered vehicle with permission of the named insured § Anyone liable for the conduct of an insured, but only to the extent of that liability
Appointment
To appoint a licensed individual as its agent, the appointing insurer must file a notice of appointment within 15 days after the first insurance application is submitted, and must pay the appointment fees as required by the Commissioner. The insurer must submit a renewal fee for each appointed agent by line of insurance prior to April 1 of each year.
What are the minimum policy limits that the Facility will cover a risk ceded by a member insurer?
30/60/25 30,000 60,000 25,000
Renewal motor vehicle
45 days
How long must licensee keep records of their courses
5
Cancellation/Non-Renewal of Motor Vehicle Policy
60 days or more, or is a renewal policy, the insurer must give notice stating one of the following reasons at least 15 days
Broker
A broker is a person who is licensed as an agent and obtains insurance for the insured through a duly authorized agent of an insurer licensed to do business in this state, but for which the broker is not authorized to act as an agent. A person not duly licensed who procures insurance for the insured is a broker within the intent of the law and becomes personally liable for all the duties, requirements, liabilities, and penalties to which a broker is subject.
The right to sue a person to recover property is called:
A chose in action
Investigations of Complaints
A citizen of this state may file a complaint that a company authorized to do business in this state has violated any provisions of these laws. The Commissioner must investigate the citizen's complaint against an insurer and may examine the insurer's books, records, and documents. The Commissioner may request information for an investigation from any person. Any person, employee, or agent acting without malice, is not subject to civil liability for libel or slander by providing to the Commissioner reports or other information relating to any known or suspected fraudulent insurance claims or transactions. If the complaint is justified, the insurer must pay investigation expenses and any appropriate fines.
Contract of Insurance
A contract of insurance is an agreement that obligates an insurer to compensate an insured when there is destruction, loss, or injury to something in which the insured has an interest.
Continuing Education Course
A course that is directly related to insurance principles and practices or a course designed and approved specifically for licensees. This does not include a business course of a general nature or an insurance marketing or sales course. Courses must be for instructional purposes only and not for promoting the interests of, or recruiting employees for, any particular insurance agency or company.
Insurance Producer
A producer is a person required to be licensed to sell, solicit, or negotiate insurance. An insurance producer includes an agent, broker, and limited representative.
Consumer Division What statement is false An agent may not buy salvage from a claimant A receipt for an insurance premium must be dated and signed by the agent An agent charging a service fee must display that fee in their office Commingling is prohibited
A receipt for an insurance premium must be dated and signed by the agent
Commissioner of Insurance Duties/Powers
Advises the Governor on insurance matters DOES NOT ESTABLISH LAWS/Rules/Regulations!! Administering and executing the applicable laws in North Carolina and adopting rules to enforce and carry out the provisions of those laws Receiving and examining each financial statement required by law Conducting examinations, investigations, and hearings as necessary to administer state insurance laws Reporting to the Attorney General any violations of laws relative to insurance companies and the overall business of insurance Compiling and making available to the public a list of rates charged and explanations of coverages provided by insurers in connection with residential property and private passenger insurance Approving or disapproving rates, forms, classification plans, rating plans, plans of operation, and Safe Driver Incentive Plans Upon request by any citizen of North Carolina, providing a statement of the provisions of any insurance contract offered or issued to that citizen Seeking restraining orders, from the appropriate superior courts, against persons who are violating insurance laws
Broker Licensing
An applicant for a broker's license must already possesses an agent's license and maintain an agent's license throughout licensure as a broker. A broker's license will be issued only for the same lines of insurance authorized under the agent license. Suspension or revocation of the agent license will immediately suspend or revoke the broker's license as well. A broker's license must be renewed annually on April 1st. Prior to the issuance of a license as a broker, the applicant must post a $15,000 surety bond in favor of the state of North Carolina. The bond may not be terminated unless at least 30 days' prior written notice is given by the surety to the licensee and the Commissioner.
Proof of Loss Forms
An insurer must provide claim forms to a claimant within 15 days of receiving notice of loss. If the insurer fails to do so, the claimant will be deemed to have satisfied the proof of loss requirements as long as the claimant provides the supporting documentation within the policy's time frame.
Payment of Premiums- Who pays the premiums of cc/DC
An insurer, agent, or broker may accept premiums by credit or debit card if the insurer complies with the prohibition against unfair discrimination and pays the fees charged by the credit card company for the payment of premiums.
Acting without a License
Any person acting as or pretending to be a principal, agent, broker, limited representative, adjuster, or licensed motor vehicle damage appraiser by soliciting, investigating, or examining risks or collecting premiums will be deemed guilty of a Class 1 Misdemeanor.
Representing an Unlicensed Insurer
Any person who solicits, negotiates, or sells insurance for an unauthorized insurer is strictly liable for any losses or unpaid claims if an unauthorized insurer fails to pay any claim in part or in full. The person making the sale will be guilty of a Class 1 misdemeanor if they do not know the insurer is unauthorized and a Class H felony if they knew or should have known the insurer was not authorized.
What are binders?
Binders are temp insurances, THEY DO NOT specify a premium amount
Individual Biennial Compliance Period
Every licensee must complete the 24 ICECs by the last day of their birth month in the compliance year.
Licensee Requirements
Every person holding a property, casualty, personal lines, or adjuster license must: Obtain 24 ICECs during each biennial compliance period Complete at least 3 ICECs in ethics during each biennial compliance period Complete at least 3 ICECs on flood insurance and the National Flood Insurance Program, or any successor programs, every other biennial compliance period
What can the Commissioner suspend/revoke/refuse
Fails to respond to Department inquiries within 7 calendar days Requests an extension or waiver under false pretenses Refuses to cooperate with the Department in an investigation or inquiry
Transportation Expenses
For an additional premium covered and non-owned autos have extended transportation expensed covered up to $15 per day. The maximum paid will be $450, and an additional deductible is required.
Post-Assessment Insurance Guaranty Association (Guaranty Fund)
INSURERS INSOLVENCY The Association is obligated to pay covered claims—those existing before, and arising within 30 days after, an insurer's insolvency—of more than $50 and less than $300,000, subject to the following exceptions:
Insurance Continuing Education Credit
If an approved course is taken in a classroom setting, each instruction period must be at least 50 minutes in order to count for one hour of CE credit.
Civil Penalties or Restitution for Violations
Violation of any provisions of the general statutes subjects the licensee to suspension or revocation, after notice and opportunity for a hearing. After a hearing, the Commissioner may, in addition to or instead of suspending or revoking a license, order payment of a monetary penalty. The penalty cannot be less than $100 or more than $1,000 and will be in addition to payment of any other penalty for a violation of the criminal laws of this state.
Notice of Insurance Information Practices
In the case of a policy renewal, a notice shall be provided no later than the policy renewal date, except that no notice shall be required in connection with a policy renewal if personal information is collected only from the policyholder or from public records or a privacy information notice has been provided within the previous 24 months. The notice must be in writing and must state: Whether personal information may be collected from persons other than the insurance applicant The types of information that may be collected and sources and techniques used to collect such information The types of disclosures required, which ones require prior authorization, and the frequency they must be provided A description of the individual's rights and how they may be exercised
License Qualifications (Insurance producer)
Is at least 18 years of age Has completed at least 20 hours of prelicensing education for each license sought Has taken and passed a required licensing examination Paid the applicable fees Has not committed any act that would be grounds for license probation, suspension, revocation, nonrenewal, or denial
Penalties
Violation of the placement of business by unauthorized insurers may result in the following fines: For the first offense, a fine not more than $5,000 For the second and subsequent offenses, $10,000 for each violation Each day during which a violation occurs constitutes a separate violation
Business Entity Licensing
Licenses are not required for officers, directors, or employees of insurers or insurance producers if these persons do not receive commissions from policies written or sold to insure risks within North Carolina. Licenses are not required for those who gather information for, enroll individuals in, issue certificates for, or help administer group or blanket plans.
Punishment for Misstatements
Making willful misstatements of information in financial or other required statements is a Class I felony, punishable by a fine of not less than $2,000 and not more than $10,000.
Policy Forms
No policy form for insurance transactions may be used unless it has been filed with the Commissioner by the Bureau and it has either been approved or 90 days have elapsed and the form has not been disapproved.
Converge D: Fair Rental Value
Rental value really limit of 20% of the coverage A limit.
How many days for Resident/non resident
always 30 small clause An individual licensed as an insurance producer in another state who moves to North Carolina and applies for a resident insurance producer license in this state for the same kinds of insurance is exempt from education and examination requirements if the license application is received within 90 days after the person's license in the former state is cancelled.
Disclosure Limitations and Conditions
An insurer or agent must notify a person at least 30 days before disclosing private information, and they must notify the Commissioner if a person's application for coverage has been denied.
Notifications to the Commissioner
Every applicant for a license MUST provide the Commissioner with a residential address and email address. A licensee MUST notify the Commissioner in writing within 10 days of a change in residential address or email address. Same goes for violations (10 days) If a licensee is convicted in a court of competent jurisdiction for any crime, OTHER than a minor traffic infraction, the licensee must notify the Commissioner in writing within 10 days after the conviction.
Continuing Education Biennial Compliance Period
24-month period during which an agent or adjuster must comply with continuing education requirements.
Self insurance
90 days filing 500,000 in assets 60 days to correct denial
fraud claims
A Class 1 misdemeanor if the amount at issue is less than $1,000 A Class H felony if the amount at issue is $1,000 or more
Workers comp law- NC
The following is not considered employment covered by Workers' Compensation: Part time, seasonal agricultural work Domestic services
Coverage for Damage to Rental Vehicles Authorized
$250. This includes loss of use and any costs or expenses related to the damage or loss that the renter is legally obligated to pay. The vehicle must be rented on a daily-rate basis for no more than 21 consecutive days.
Commissioner of Insurance (election)
- Elected by NC residents - Severs for four years - If they leave prior to end of term, the governor takes over position
North Carolina Rate Bureau Forms Purpose and General Regulations
210 days The purpose of the North Carolina Rate Bureau is: To assess and recommend rates for property and casualty insurance against loss to residential contents and real property with not more than four housing units, theft and physical damage loss to nonfleet private passenger motor vehicles, and Workers' Compensation and employers' liability insurance To hold hearings for grievances and concerns To act as a risk-sharing plan, providing insurance for uninsurable or high-risk persons or property and sharing the risks among all property and casualty insurers
Activities by Lenders and Temporary Contracts
A lender is not prohibited from refusing to accept a binder as long as the refusal is reasonable. To be acceptable, the binder must include: The name and address of the insured The name and address of the mortgagee A description of the insured collateral A provision that it may not be cancelled within a term of the binder except with 10 days' written notice to the mortgagee The amount of insurance bound The binder must be accompanied by a paid receipt for one year's premium, except in the case of a policy renewal subsequent to the closing of a loan. The binder must also include an undertaking of the agent to use their best efforts to have the insurance company issue a policy.
Coinsurance Clause
An insurance company or agent licensed in this state may not issue any property insurance policy that contains a clause requiring the insured to maintain a larger amount of insurance than what is expressed in the policy. A coinsurance clause or provision may be written in or attached to a policy when the words "Coinsurance Contract" are stamped on the declaration page. If there is a difference in rate for the insurance with or without the coinsurance clause, the rates must be provided upon request.
employee don't count
Any person selling newspapers or magazines under a contract with the publisher(s) where the person buys the items from the publisher and sells them to the consumer at a fixed price set by the publisher Any person performing voluntary service as a ski patrolman who receives no compensation for their services other than meals, lodging, or the use of ski facilities Domestic workers Farm laborers (when the employer has fewer than 10 full-time, non-seasonal employees) Casual employment Railroad workers or federal government employees in North Carolina Prisoners, unless assigned to work for an employer Requirements
False Statements to Procure or Deny Benefits
Any person who presents a written or oral statement that contains false or misleading information material to a claim to procure or deny benefits is guilty of a Class H felony. The person must have the intent to injure, defraud, or deceive an insurer or insurance claimant. Each claim is considered a separate count. Upon conviction the court may impose probation and order the defendant to pay restitution, including compensatory damages, attorney's fees, costs, and reasonable investigation costs.
SDIP
At-fault accidents Convictions of major moving traffic violations Convictions of minor moving traffic violations; or A combination of these The Plan may provide for separate surcharges for major, intermediate, and minor accidents. A major accident is an at-fault accident resulting in either bodily injury or death, or only property damage of at least $3,000. An intermediate accident is an at-fault accident resulting in only property damage of more than $1,800, but less than $3,000. A minor accident is an at-fault accident resulting in only property damage of $1,800 or less. The Plan may also exempt certain minor accidents from the recoupment (recovery of expenses) surcharge.
Producer of Record
Every insurance agency transacting insurance business in North Carolina shall appoint a producer of record. This person shall have the responsibility of seeing that all records are maintained as required and provided to the Commissioner as requested. Any person who is subject to and violates the record-keeping regulations may be subject to the following disciplines after a notice and hearing: For the first offense, the person may have their license suspended or revoked for not less than one month or more than 6 months For the second offense, the person may have their license suspended or revoked for one year Any person who refuses to provide records required by the Commissioner or who makes any false statements about records is guilty of a Class 1 misdemeanor and subject to license suspension or revocation.
Special Cases
The Commissioner will award 24 biennial continuing professional educational credit hours based on government service relative to insurance or finance, such as service as a legislator on a committee in the General Assembly that hears insurance and finance matters.
Assignment
The insured may not transfer ownership of the policy without the insurer's written permission
Which of the following is NOT true about unauthorized insurers?
The insurer is subject to North Carolina insurance laws
Failure to complete
The license will be reinstated when the person has completed the continuing education requirements and paid an administrative fee of $75. This must be done within 4 months after the end of the person's previous compliance year.
Insurance Information and Privacy Protection Act
The purpose of this Act is to: Establish standards for the collection, use, and disclosure of information gathered in connection with insurance transactions Maintain a balance between the need for information by those transacting insurance and the public's need for fairness in insurance information practices Minimize intrusiveness Establish a regulatory mechanism to enable individuals to determine what information is being collected about them in connection to insurance transactions and to have access to the information to verify or dispute its accuracy Limit the disclosure of information collected in connection with insurance transactions Enable insurance applicants to obtain the reasons for adverse underwriting decisions
Notice of Coverage or Rate Change
Whenever an insurer changes the coverage, other than at the request of the insured, or changes the premium rate, the insurer must give the insured at least 15 days' advance written notice of the coverage or premium rate change. A copy of the notice must also be sent to the agent. This regulation applies to all policies and coverages except Workers' Compensation insurance and Employers' Liability insurance.
Responsibilities of the Facility and Its Agents
The Facility provides 100% reinsurance as follows: $30,000 for bodily injury per person $60,000 for bodily injury for 2 or more persons in any one accident $25,000 for property damage per accident $1,000 for medical payments per person, except for motorcycles and uninsured motor vehicles
Complaint Records
Every insurer or its agents must maintain a record of all written complaints for at least 5 years after the complaint's final disposition. For domestic companies, the complaint must be kept until the Commissioner has adopted a final report of a general examination that contains a review of those records for that calendar year, or for 5 years, whichever is later. These records may be subject to inspection and should contain at a minimum the: Insured's name Nature of the complaint Policy/claim number of the insured Final disposition of the complaint
False Pretenses and Cheats
Penalty - If the value of the money, goods, property, services, chose in action, or other thing of value is $100,000 or more, a violation is a Class C felony. If the value of the money, goods, property, services, chose in action, or other thing of value is less than $100,000, a violation of this section is a Class H felony.
Homeowners Policy Endorsements Refrigerated Property Coverage (HO 04 98)
This endorsement provides $500 for property stored in refrigerators or freezers on the residence premises, The deductible for damages covered under this endorsement is $100. This endorsement can be used with all standard HO forms except HO-8.
What is a contract of indemnity
An insurance contract is considered which type of contract because it restores the insured to the same financial condition as before the loss?
IECC
A member of a professional insurance association may receive up to 4 ICECs during the biennial compliance period based solely on membership in that association. The association must: Have been in existence for at least 5 years Be approved as a continuing education provider Have been formed for purposes other than providing continuing education Only whole ICECs may be carried over from one biennial compliance period to the next biennial compliance period. There is no limit on the number of ICECs that can be carried over.
Minor
A minor is a person who has not attained age 19, or age 23 if they are a full-time student.
Agent
An agent is a person licensed to solicit applications for or to negotiate a policy of insurance on behalf of an insurer. A person not duly licensed who solicits or negotiates a policy on behalf of an insurer is an agent within the intent of the law and becomes personally liable for all the duties, requirements, liabilities, and penalties to which an agent is subject. A company that compensates a person for soliciting insurance policies accepts and acknowledges the person as its agent in the transaction.
How many days can an individual who holds another license get an adjuster
An individual who holds a property, casualty, or personal lines insurance license may apply for an adjuster license without having to take the adjuster exam if the property, casualty, or personal lines insurance license is surrendered within the previous 60 days.
Embezzlement
An insurance agent, broker, or administrator who does any of the following with money or consideration received based on their performance will be guilty of a felony: Embezzles Fraudulently converts for their own use or withholds Disposes of Appropriates Lends Invests Embezzlement in the amount of $100,000 or more is a Class C felony; less than $100,000 is a Class H felony.
Termination of Appointment
An insurer that terminates a producer's appointment must notify the Commissioner within 30 days after the termination's effective date. Upon written request, the insurer must provide additional information, documentation, or records pertaining to the termination or activity of the producer. The insurer must give the producer a copy of the termination notice within 15 days after notifying the Commissioner of the termination. If the producer is terminated for a cause that is grounds for suspension, revocation, or nonrenewal, the notice must be sent to the producer's last known address by certified mail and with a return receipt requested. The producer has 30 days after receiving the termination notice to file written comments with the Commissioner and insurer. These comments will be included with any report distributed or disclosed about the producer as permitted by law.
Beach Area
Beach Area - Commonly called the Outer Banks, the area of North Carolina from south and east of the inland waterway, from the South Carolina line to Fort Macon (Beaufort Inlet), to south and east of Core, Pamlico, Roanoke, and Currituck sounds to the Virginia state line. Coastal Area - Except for any area defined as beach area, all of the following counties: Craven county Jones county Every county (except Bertie county) that borders the ocean
Insurance Continuing Education Credit (ICEC)
Credit hour assigned to a course by the Commissioner after review and approval of course information.
Representation
Every agent or limited representative who solicits or negotiates an application for insurance of any kind, in any controversy between the insured or beneficiary and the insurer, is regarded as representing the insurer and not the insured or beneficiary. Every broker who solicits an application for insurance of any kind, in any controversy, between the insured or beneficiary and the insurer issuing any policy upon that application, is regarded as representing the insured or beneficiary and not the insurer. An insurer that delivers an insurance policy to a broker directly or through an authorized agent is deemed to have authorized the broker to receive payment of premium that is due at the time of policy delivery.
Temporary Licensing
The Commissioner may issue a temporary license, without regard to education, experience, or exam requirements, for up to 180 days: To the spouse, representative, or guardian of a deceased or disabled producer To a member or an employee of a licensed business entity if the designated producer dies or becomes disabled To the designee of a licensed producer entering the Armed Forces As the Commissioner deems appropriate to the public interest
Member insurer writing workers comp
The insurer will issue a binder, good for 30 days, to provide insurance once the premium is paid. The Bureau must maintain a list of employers that have been denied voluntary Workers' Compensation coverage. The Bureau may cancel a Workers' Compensation policy for material misrepresentation.
Absolute Windstorm or Hail Coverage (HO 32-94)
his endorsement can be used for all HO forms, and it deletes the windstorm or hail exclusion
are Additional coverages added to the policy for an additional premium?
yes
What can't an insurance producer do
issue policies. That is the insurer's job.