Part 8: Insurance Regulation

MAXIMUM VALUE OF ALLOWABLE PRIZES, MERCHANDISE, OR PROMOTIONAL ITEMS

$25

MINIMUM AGE TO APPLY FOR AN AGENT LICENSE

18

REQUIRED CD HOURS IN ETHICS

6 HOURS

TRUE or FALSE? If the license of a business entity has been SUSPENDED OR REVOKED, any members, officers, or designated providers of that business entity cannot be issued a license or serve as designated producers of that entity during the SUSPENSION or REVOCATION PERIOD.

TRUE

TRUE or FALSE Any NONRESIDENT PRODUCER who wishes to continue being a producer after moving to Arizona, must apply to become a resident licensee within 90 days.

TRUE

When may the DIRECTOR ISSUE A CEASE AND DESIST ORDER?

Whenever it appears that any person is violating an insurance law of Arizona or any rule or regulation made by the DIRECTOR, the DIRECTOR may issue a CEASE AND DESIST ORDER.

May any producer who transacts property or casualty insurance also be licensed as a resident surplus lines broker at the Director's discretion?

YES

REPORT ADMINISTRATIVE ACTIONS OR CRIMINAL PROSECUTIONS AGAINST THE AGENT

30 DAYS

REPORT CHANGE OF NAME OR ADDRESS

30 DAYS

TIME PERIOD TO REINSTATE A LAPSED LICENSE

1 YEAR

What cannot be included in ADVERTISING?

It cannot include any untrue, deceptive, or misleading statements that apply to the business of insurance or anyone who conducts it. The violation of this rule is called FALSE ADVERTISING.

Can BROKERS BIND COVERAGE?

NO

In general, ADJUSTERS do not include the following:

1. Licenses attorneys-at-law 2. Salaried employees of insurers 3. Licensed producers who adjust their own policies 4. Employees of political subdivisions 5. Independent contractors retained by licenses adjusters

Catch All Phrase found within Insurance Oppurtunities

Any other line of insurance allowed under the state law or rules adopted by the Director

Define licensing in PROPERTY

Coverage against legal liability, including liability for death, injury, disability or damage to real or personal property

Define Licensing in ACCIDENT AND HEALTH OR SICKNESS

Coverage for sickness, bodily injury or accidental death and may include benefits for disability income

What are the policies concerning a CHANGE OF ADDRESS OR NAME with insurance licensing?

Every producer licensed in Arizona must notify the Director, in writing, of any change of personal or business address or name within 30 DAYS!

TRUE or FALSE Readjustments to the premium rate may be made for group insurance policies based on the loss or expense experience of the previous year.

TRUE

When should a PAYMENT OF PREMIUM be marked PAID?

The payment of an insurance premium will be marked as paid on the date on the postmark or any other official mark of the UNITED STATES mail stamped on the payment envelope.

Do applicants for surplus lines broker licenses have to pass the written examination?

YES, applicants for a surplus lines broker license must pass the written examination.

What does FALSE ADVERTISING include?

It covers a wide scope of communication, from publishing an ad in a newspaper or magazine, to broadcasting a commercial on television or the internet.

Before the director will issue a license, an applicant must meet the following qualifications:

1. Be at least 18 years old 2. File an application with Director 3. Pay the appropriate License Fee 4. Have not committed any act that is grounds for denial; 5. Pass each examination which is required for the license being sought

How can the insurer ESTABLISH THE POSTMARK DATE?

1. By retaining the envelope or, 2. if the envelope has been discarded or the postmark is illegible, may assume the payment was mailed 5 DAYS before the insurer received it.

Define VENDING MACHINES as they pertains to insurance licensing

1. Only licensed insurance producers authorized by the Director may solicit applications and issue policies by means of a vending machine. 2. The producer must supervise the machine to ensure that the types of policies issued by the machine are suitable and of practical use to the public.

The licensing regulation does not apply to applicants who meet both of the following qualifications:

1. The individual is a citizen of a foreign country, or lives in a foreign country at the time of application 2. The benefits related to the license do not require the individuals to be in the United States to receive those benefits

Are both the OFFER and ACCEPTANCE OF A REBATE ILLEGAL?

Yes, they are both illegal. Rebates may include, but are not limited to, the following: 1. Rebates of premiums payable on the policy 2. Special favors or services. 3. Advantages in the dividends or other benefits 4. Stocks, bonds, securities, and their dividends or profits

What are the stipulations for insurance licensing regarding INACTIVE LICENSE STATUS DURING MILITARY SERVICE?

A licensee who is ordered into ACTIVE MILITARY SERVICE may request that the license be placed on inactive status by sending the department a written statement that includes all of the following: 1. The Licensee's Name 2. The Licensee's License Number or Social Security Number 3. The Date that the ACTIVE MILITARY SERVICE BEGINS 4. A REQUEST FOR INACTIVE STATUS

Explain the reasoning behind LICENSING ELIGIBILITY and LAWFUL PRESENCE

An insurance license cannot be issued to a person who fails to present documents showing that the person's presence in the United States is authorized under federal law. Agencies and political subdivisions of Arizona cannot issue a license to an individual if the individual does not provide documentation proving citizenship or alien status.

In addition to that, the NAIC PROPERTY AND CASUALTY INSURANCE COMMITTEE and its TERRORISM INSURANCE IMPLEMENTATION WORKING GROUP - TIIWG recently adopted MODEL BULLETIN which does the following:

Expedites filing from intended to help state insurance regulators advise insurers about regulatory requirements related to providing terrorism insurance under the revised program.

What rules are there concerning auto insurance policies as far as FEES are concerned.

Specifically regarding auto insurance policies, insurers and producers cannot charge service fees beyond the premium for motor vehicle insurance policies that insure no more than 6 motor vehicles.

TRUE or FALSE In Arizona, laws against prohibited inducements apply to any prizes, goods or merchandise worth more than $25 in aggregate value.

TRUE

What is the PRIMARY DIFFERENCE between CONSUMER REPORTS and INVESTIGATIVE CONSUMER REPORTS

The primary difference is that the information is obtained through an investigation and interviews with associates, friends and neighbors of the consumer.

What happens if the CONSUMER CHALLENGES any of the information in the report?

The report agency is required to re-investigate and amend the report, if warranted. If a report is found to be inaccurate and is corrected, the agency must send the corrected information to all parties to which they had reported the inaccurate information within the last 2 years.

True or False

These regulations, however, do not prohibit fees charged by a reciprocal or mutual insurer if the fees are filed with the Director and are included by an insurer in supplemental rate information.

Define CREDIT

Limited line credit insurance or

The FORMS PROVIDED BY AN INSURER to an insured or any other person for filing a notice or making a claim in connection with a policy or contract issued by the insurer must include the following statement in at least 12-point type:

"For YOUR PROTECTION ARIZONA LAW requires the following statement to appear on this form. Any person who knowingly presents a false or fraudulent claim for payment of a loss is subject to criminal and civil penalties."

LICENSE RENEWAL PERIOD

4 YEARS

CE REQUIRED EVERY 2 YEARS

48 HOURS OF CE

EXAMINATION OF INSURERS BY THE DEPARTMENT

5 YEARS

How does TRIA defin an ACT OF TERRORISM?

An act certified by the Secretary of the Treasury, in concurrence with the Secretary of State, and the Attorney General of the United States with the following characteristics: 1. The act must be violent or dangerous to human life, property, or infrastructure 2. The act must have resulted in damage within the United States, to an air carrier as defined in the US Code, to a US flag vessel or other vessel based principally in the US and insured under US regulation, or on the premises of any US mission 3. The act must have been committed by someone as part of an effort to coerce the US civilian population, to influence US policy, or to affect the conduct of the US government by coercion 4. The act must produce property and casualty insurance losses in excess of a specified amount

What does GENETIC TEST mean?

An analysis of an individual's DNA, gene products or chromosomes. This analysis is intended to indicate susceptibility to illness or other disorders.

What is the PENALTY FOR KNOWINGLY MAKING FALSE STATEMENTS?

Anyone engaged in the business of insurance whose activities affect interstate commerce, and who knowingly make false material statements may be fined, imprisoned for UP TO 10 YEARS OR BOTH. If the activity jeopardized the security of the accompanied insurer, the punishment can be UP TO 15 YEARS.

Define an ADJUSTER

Anyone who adjusts, investigates or negotiates the settlement of claims arising under the insurance contracts for a fee.

What is considered to be UNFAIR DISCRIMINATION in the insurance world?

DISCRIMINATION in rates, premiums, or policy benefits for persons within the SAME CLASS or with the same life expectancy is illegal. No discrimination may be made on the basis of an individual's marital status, race, national origin, gender identity, sexual orientation, creed, or ancestry unless the distinction is made for a business purpose or required by law.

What about a person who WILLFULLY VIOLATES THIS ACT?

If they violate this Act enough to constitute a general pattern or business practice will be subject to a penalty of up to $2500.

Explain "Discrimination on Basis of Blindness"

Individuals may not be considered to have a different life expectancy, or to be a different class for essentially the same hazard, or as having substantially different insuring risks and exposure factors solely because they are blind, or physically disabled, unless such blindness or disability is relevant to the expected risk of loss.

What do GENE PRODUCTS refer to?

Refer to gene fragments or DNA sequence information

With the GRAMM-LEACH=BLILEY ACT is there an opt-out option available?

The customer must also receive an annual privacy disclosure, and have the right to opt out, or choose not to have their private information shared with other parties.

What happens to a person who commits and act of fraud with the intent to injure, defraud or deceive an insurer?

They are guilty of a CLASS 6 FELONY.

What about a person who UNKNOWINGLY violates the FAIR CREDIT REPORTING ACT?

This person is liable in the amount equal to the loss to the consumer, as well as any reasonable attorney fees incurred in the process.

How long does a CERTIFICATE OF AUTHORITY LAST?

It remains in effect until terminated at the request of the insurer or revoked or suspended by the Director.

What are the rules concerning Genetic Testing?

1. An insurer cannot refuse to consider an application for life or disability insurance on the basis of genetic condition, developmental delay or developmental disability. 2. Genetic testing may not be performed without specific, written informed consent of the subject. 3. Results of genetic tests are confidential and may not be released to any party without the expressed consent of the subject.

Besides these factors, and underwrite will sometimes request additional information about a particular risk from an outside source. These reports generally fall into what 2 categories:

1. CONSUMER REPORTS 2. INVESTIGATIVE CONSUMER REPORTS

There are some EXCEPTIONS to the DO NOT CALL REGISTRY include the following types of calls:

1. From or on behalf of organizations which have established a business relationship with the consumer -established business relationships last 18 months from the date of a sale or transaction 2. For which the consumer has given prior written permission 3. Not commercial or that do not include unsolicited advertisements 4. By or on behalf of tax-exempt nonprofit organizations

Give details on INSURANCE INFORMATION AND PRIVACY PROTECTION

1. Insurance institutions and producers must provide notice of their information practices to applicants and policyholders, no later than the time the policy is delivered. 2. If information is collected from a source other than the applicant or public records, notice must be given at the time the information is collected. 3. A notice is not required in the case of policy renewal if information is gathered only from the policyholder or public records, or if a notice has been provided within the prior 12 MONTHS. 4. A notice must state the type of information that may be collected, the type and source of investigative techniques that may be used, that information may be disclosed to other parties, and a description of the rights of the party being investigated. 5. A briefer notice is permitted if it states that a more detailed notice is available upon request.

In addition, without affecting state regulatory authority, the NARAB is required to provide a mechanism for the adoption and multi-state application of requirements and conditions pertaining to:

1. Licensing, continuing education, and other qualifications of non-NARAB insurance producers 2. Resident or nonresident insurance producer appointments 3. Supervision and disciplining of such producers 4. Setting of licensing fees for insurance producers

To be in COMPLIANCE with this legislation, the entity that sends out e-mails must do the following:

1. Make sure that the advertiser is identified in the FROM LINE 2. Not use misleading subject lines 3. Include an opt-out mechanism and honor all opt-out requests within 10 days 4. Include the advertiser's valid physical postal address 5. If the message is unsolicited, it must be identified as an ADVERTISEMENT somewhere in the e-mail.

Insurers cannot engage in which following acts concerning individual's blindness (even partial blindness):

1. Refusal to insure (including denial by an insurer of disability insurance coverage, if the policy covers loss of eyesight) 2. Refusal to continue to insure 3. Limiting the amount, extent or kind of coverage available 4. Charging a different rate

What is the GRAMM-LEACH BLILEY ACT? This act stipulates that in general, an insurance company may not disclose nonpublic personal information to a non-affiliated third party except for the following reasons:

1. The insurance company clearly and conspicuously discloses to the consumer in writing that information may be disclosed to a third party. 2. The consumer is given the opportunity, before the time that information is initially disclosed, to direct that information not be disclosed to the third party. 3. The consumer is given an explanation of how the consumer can exercise a nondisclosure option.

What does the GRAMM-LEACH-BLILEY ACT require?

2 DISCLOSURES to a customer - a consumer who has an ongoing financial relationship with a financial institution: 1. When the customer relationship is established - i.e.., policy is purchased - and 2. Before disclosing protected information

Are the reporting agency and users of the information subject to CIVIL ACTION FOR FAILURE TO COMPLY with the provisions of FAIR CREDIT REPORTING ACT?

A person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses may also be fined and/or imprisoned for up to 2 years.

CAN-SPAM required that any commercial e-mail must contain an opt=out mechanism. What does that entail?

All opt-out requests must be honored WITHIN 10 BUSINESS DAYS.

What will happen if the DIRECTOR suspects that an insurer or its agent has committed a violation or is in engaged in an UNFAIR TRADE PRACTICE?

Because the Director's role is to enforce insurance laws and to protect the public from unfair trade practices, the Director may issue a statement of charges and hold a hearing for any purpose deemed necessary (within the scope of the INSURANCE CODE).

How often to BROKER'S LICENSES required to be renewed? Is there a fee?

Broker licenses may be renewed every 4 years on the anniversary date. A renewal fee is required.

How is the ACCEPTABILITY OF A RISK determined?

By checking the individual risk against many factors directly related to the risk's potential for loss.

What important information is there to know about CAN-SPAM Act of 2003?

CAN-SPAM... 1. legislation was established to set rules for commercial e-mail, and to give recipients the right to reject commercial messages. 2. Covers all commercial electronic messages, including business-to-business messages, the purpose of which is the commercial advertisement or promotion of a product or service.

Explain the details of the VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT OF 1994

Federal law makes it illegal for any individual convicted of a crime involving dishonesty, breach of trust or violation of the Act to work in the business of insurance affecting interstate commerce without receiving written consent from an insurance regulatory official - Director of Insurance, or Commissioner of Insurance - a 1033 WAIVER.

What may a DIRECTOR DENY, SUSPEND for up to 12 months, REVOKE or REFUSE to RENEW a PRODUCER'S LICENSE?

For any of the following causes: 1. Providing incorrect information in the license application 2. Obtaining a license through misrepresentation or fraud 3. Improperly withholding any monies or properties in the course of doing insurance business 4. Intentionally misrepresenting the terms of a contract or application 5. Having been convicted of a felony 6. Committing an unfair trade practice 7. Using dishonest practices 8. Demonstrating incompetence or un-trustworthiness 9. Having a similar license denied, suspended or revoked in any other state 10. Forging another's name to any document related to a transaction 11. Aiding anyone in an unauthorized transaction

Similarly, the DIRECTOR MAY DENY, SUSPEND, REVOKE or REFUSE to RENEW THE LICENSE OF A BUSINESS ENTITY for what reasons?

For the same reasons. In addition, action may be taken if any individual producer's violation was known by any member, officer, director, manager or designated producer within the entity.

What is considered IMPROPER CLAIMS PRACTICES?

If committed in conscious disregard for the law or if committed with such frequency as to indicate a general business practice to engage in that type of conduct: 1. Misrepresenting to insureds pertinent facts or policy provisions relating to coverages at issue 2. Failing to acknowledge and act reasonably promptly upon communications with respect to an insurance claim 3. Failing to adopt and implement reasonable standards for prompt investigation and processing of insured's claims; 4. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements completed and submitted by insureds 5. Not attempting in good faith to effect prompt, fair and equitable settlements of claims om which liability has become reasonably clear. 6. Compelling insureds to initiate suits to recover amounts due under an insurance policy by offering substantially less than the amount ultimately recovered in those suits 7. Refusing to pay claims without conducting reasonable investigations 8. Property and casualty insurers failing to recognize the valid assignment of a claim 9. Attempting to settle a claim for an amount that is less than a reasonable person would believe he or she was entitled to - based on any advertising material 10. Attempting to settle claims on the basis of an application which was altered without the knowledge of the insured 11. Making claims payments, without stating the coverage under which those payments are being made 12. Making known to insured or claimants a policy of appealing from arbitration awards in favor of insureds, with the intention of compelling them to accept settlements that are less than the amounts awarded in arbitration; 13. Delaying the investigation or payment of claims by requiring an insured, a claimant or the physician of either to submission of formal proof of loss forms containing the same information 14. Failing to promptly settle claims if liability is reasonably clear 15. Failing to promptly provide a reasonable explanation for the denial of a claim or for the offer of a compromise settlement 16. Denying liability for a claim under a motor vehicle liability policy without having substantial evidence - if the loss was caused by the insured and its denial is based solely on a medical condition that could affect the insured's driving ability.

What are the TELEMARKETING SALES RULES of insurance sales?

In 2003, the Federal Trade Commission - FTC - and the Federal Communications Commission - FCC worked together to create a NATIONAL DO NOT CALL REGISTRY - - allowing consumers to include their telephone numbers on the list to which solicitation calls cannot be made by telemarketers. Insurance companies need to comply with this regulation when making solicitation phone calls.

What the policies of insurance in consideration of MARITAL STATUS in the state of Arizona?

In ARIZONA, certain rules have been imposed to eliminate gender discrimination and discrimination based on marital status. Marital status may be considered for the purpose of defining persons eligible or dependent benefits, but in nearly all other cases there can be not discrimination among members of the same classification based on sex or marital status.

What is the purpose of licensing?

Insurance professionals must be properly licensed for a specific line of authority in order to transact insurance. 1. The purpose of licensing is to ensure that a producer meets educational and ethical standards required to fulfill producer's responsibilities to the insurer and to the public.

Define FRAUD

It is any misrepresentation of a material fact, made knowingly and with the intent that another person will rely on it and suffer financial injury as the result. Fraud is an act of deceit or cheating.

Define BOYCOTT, COERCION, or INTIMIDATION

It is illegal to be involved in any activity of BOYCOTT, COERCION, or INTIMIDATION that is intended to restrict fair trade or to create a monopoly. This would include unfair behavior that influences not only clients, but competing agents and brokers.

What does the TERRORISM RISK INSURANCE ACT require?

It requires that all commercial insurers offer insurance coverage for acts of terrorism. The federal government will then reimburse the insurers for a portion of paid losses for terrorism.

What is the purpose of the TERRORISM RISK INSURANCE ACT - TRIA?

It was to create a temporary federal program that would share the risk of loss from future terrorist attacks with the insurance industry.

Can insurance producers use a disclosure authorization form or statement which authorizes the disclosure of an individual's personal information?

No, they cannot unless it includes specifications about the length of time that the authorization will remain valid. The authorization period cannot be longer than: -30 MONTHS from the date of authorization (if application involves LIFE AND HEALTH INSURANCE) or -1 YEAR from the date of authorization (if the application involves property and casualty insurance)

The FAIR CREDIT REPORTING ACT establishes what?

Procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used. The law also PROTECT CONSUMERS against the circulation of inaccurate or obsolete personal or financial information.

What must the consent of the official specify?

That it is granted for the purpose of 18 U.S.C. 1033. Anyone convicted of a felony involving dishonesty or breach of trust, who also engages in the business of insurance, will be fined, imprisoned for up to 5 years or both.

If a PRODUCER'S LICENSE HAS BEEN SUSPENDED or REVOKED, the licensee must deliver it to the whom?

The DIRECTOR. Also, that individual cannot receive another license for 1 YEAR.

What happens if the Director determines that an insurer or producer has charged too much for services,?

The director may order the insurer or producer to refund the fee or that part of the fee that the Director determines was excessive. The insurer or insurance producer must pay the costs of the examination from monies deposited with the Director regardless of the findings of the examination.

Who are TITLE INSURANCE AGENTS approved by and when are they approved?

They are approved by the Director after the appropriate application has been completed and fined and all license fees paid.

What do INVESTIGATIVE CONSUMER REPORTS include?

They are similar to consumer reports in that they also provide information on the consumer's character, reputation, and habits.

May SURPLUS LINES INSURANCE be obtained for the purpose of securing premium rates or terms of contract advantages?

NO

Define NEGOTIATE

Negotiate means the act of conferring directly with or offering advice directly to a purchase or prospective purchaser of a particular contract of insurance concerning any of benefits, terms or conditions of the contract if the person engaged in that act either sells insurance or obtains insurance from the insurers for purchasers.

What is PROHIBITED IN ADVERTISING?

To advertise or circulate any materials that are untrue, deceptive or misleading.

Define REBATING

REBATING is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy.

The following acts, performed on behalf of an authorized insurer, are also considered insurance transactions:

1. Making any insurance contract 2. Making any contract of guaranty or suretyship as a vocation (not incidental to any other legitimate business activity) 3. Receiving any application for insurance 4. Receiving any premiums, commissions, membership fees, assessments, dues or other considerations 5. Delivering any contract of insurance to residents of the state 6. Acting as an insurance producer. However, this does not prevent full-time salaraied employees of corporate insureds from acting in the capacity of an insurance manager by placing insurance on behalf of their employer 7. Taking any of the previously mentioned actions in an effort to evade the laws of the state.

Under Arizona Law, it is illegal to make or circulate any estimate, illustration, circular, sales material or statement that:

1. Misrepresents the terms of any policy 2. Makes any false statement as to the dividends - or share of surplus - paid on similar policies 3 Makes any misleading representation as to financial condition of any insurer, or as to the legal reserve system on which any life insurer operates 4. Uses the name or title of a policy - or class of policices - to misrepresent its true nature; 5. Making misrepresentations to policyholders for the purpose of inducing those policyholders to lapse, forfeit, surrender, retain or convert any policy.

In terms of insurance, the term TRANSACT could mean any of the following:

1. Solicitation 2. Preliminary Negotiations 3. Effectuation of a Contract of Insurance 4. Transactions Subsequent to to the effectuation of the Contract

What are the policies concerning REPORT OF ACTIONS and insurance licensing?

1. Within 30 DAYS after the FINAL DISPOSITION OF THE MATTER or after the INITIAL PRETRIAL HEARING DATE, an insurance producer must report to the Director any administrative action or criminal prosecution taken against the producer in another jurisdiction or by another government agency in this state. 2. The report must include a copy of the order or initial complaint, consent to order, the order resulting from the hearing, or other relevant documents.

Define a NONRESIDENT PRODUCER

A person whose home state is not Arizona may be licensed to act in this state as a nonresident producer or broker, without taking a written examination, if all of the following conditions are met: 1. The agent is currently licensed in good standing in his or her current state 2. The applicant otherwise complies with all provisions of the Arizona licensing requirements 3. The state in which the person resides accords the same privilege to residents of Arizona 4. The appropriate official in the other state certifies that the applicant holds a currently valid license as producer or broker and has either passed the written examination or held a license prior to the time such examination was required

What about issuing life or disability policies on a salary savings or payroll deduction plan. Is that illegal?

Another way that rebates may be in effect administered to policyholders is when the insurer saves money by issuing life or disability policies on a salary savings or payroll deduction plan. The reduced rate should be commensurate with the savings made by such a plan.

Which documents will satisfy the documentation proving citizenship or alien status?

Any of the following documents will satisfy this requirement: 1. Arizona Driver License or an Arizona non-operating identification license 2. A driver license issued by a state that verifies lawful presence in the United States 3. A birth certificate issued in any state, territory or possession of the United States, or a U. S. 4. A United States passport or a foreign passport with a US visa 5. An 1-94 form with a photograph 6. A United States citizenship and immigration services employment authorization document or refugee travel document 7. A tribal certificate of Indian Blood 8. A tribal or bureau of Indian affairs affidavit of birth

May licenses by combined when dealing with SURPLUS LINES BROKER?

Anyone licensed as a resident property and casualty producer in Arizona may also be licensed as a resident surplus lines broker if determined to be competent and trustworthy by the Director.

What happens if an INSURER REPRESENTS AN INSURANCE POLICY AS A SHARE STOCK?

If he/she does this or uses names or titles that may represent the true nature of a policy also will be considered false advertising. In addition, a person or an entity cannot use a name that deceptively suggest it is an insurer.

Who issues a SURPLUS LINES BROKER LICENSE?

The director may issue a surplus lines broker license to any business entity licensed as a resident property or casualty producer. In addition, any resident or nonresident licensed insurance producer that maintains an office in this state may be licensed as a MEXICAN INSURANCE SURPLUS LINES BROKER to transact insurance business if the Director determines that the insurance producer is competent and trustworthy.

Define an insurance PRODUECER

1. A person who is licensed to sell, solicit or negotiate insurance. 2. A representative of one or more insurance companies 3. Must be appointed by each company they represent and licensed to sell the insurance company's products. 4. PROPERTY AND CASUALTY producers can usually bind coverage for their clients. 5. LIFE AND HEALTH producers are authorized to solicit, receive, and forwards applications for insurance to their companies, but they generally do not have authority to bind coverage or to alter or modify coverage.

List the PRODUCER REGULATION OPTIONS

1. Sharing Commissions 2. Producer Records 3. Payment of Premiums 4. Signature on Insurance Policy

How many individuals in every office must be licensed that is (are) able to transact surplus lines insurance?

At least one individual in every office that transacts surplus lines insurance must be licenses as -Either an producer authorized for property or casualty insurance or a managing general agent for property or casualty insurance and -A surplus lines

Define licensing in LIFE

Coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income

Define VARIABLE LIFE and VARIABLE ANNUITY PRODUCTS

Coverage provided under a variable life insurance contract or a variable annuity

What if the applicant fails to qualify for a regular title insurance agent's license after having received a temporary license?

If the applicant fails to qualify for a regular title insurance agent's license, a renewal or extension will not be granted.

Define MISREPRESENTATIONS

It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements. Committing this illegal act is called MISREPRESENTATION.

Define PROHIBITED INDUCEMENTS

It is unlawful to pay, offer or accept any of the following as an INDUCEMENT to buy insurance: - any special favor or advantage in dividends or benefits - any stocks, bonds, securities, or accrued dividends or profits - anything of value not specified in the insurance contract

What does FALSE or DECEPTIVE ADVERTISING include?

It specifically includes MISREPRESENTING any of the following: 1. Terms, benefits, conditions, or advantages of any insurance policy; 2. Any dividends to be received from the policy, or previously paid out. 3. Financial condition of any person or the insurance company 4. The true purpose of an assignment or loan against a policy.

Define PERSONAL LINES

Property and casualty insurance coverage that is sold to individuals and families for noncommercial purposes

TRUE or FALSE Any individual or business entity applying for a residential producer insurance license needs to be fingerprinted. The application of a business entity must include the names of all members, officers, and directors of the business entity.

TRUE

TRUE or FALSE A person cannot sell, solicit or negotiate insurance for any class of insurance unless licensed for that line of authority.

TRUE Insurers cannot transact insurance business without a certificate of authority from the Director.

Why do licensing regulations set out the requirements, procedures, and feels relating to the qualification, licensure, and appointment of insurance producers.

The purpose of Arizona insurance licensing laws is to make sure candidates for producer licenses possess knowledge adequate to protect the insurance buying public.

Describe FINGERPRINTING REQUIREMENTS for insurance licensing.

1. In connection with license issuance, renewal, suspension, revocation, merger or acquisition, the Director may require a producer to submit a full set of fingerprints to the Department. 2. The Department will subsequently submit those fingerprints to the Department of Public Safety, who may exchange this information with the FBI. 3. The Director may impose similar requirements upon any new members, directors, officers, or designated producers.

If the insurance institution MAKES A CHANGE to an individual's recorded personal information, the individual must be notified in writing. What other individuals must also be notified?

1. Any person specifically designated by the individual, who has received similar information within the past 2 YEARS, or 2. Any insurance support organization dependent upon this information. These organizations must have received similar information within the past 7 YEARS.

To comply with the telemarketing sales rules, telemarketers must not do any of the following:

1. Call any number on the National Do Not Call Registry or on that seller's Do Not Call list 2. Deny someone a right to be placed on any Do Not Call Registry 3. Call outside permissible calling hours - before 8 am and after 9 pm 4. Abandon calls 5. Fail to transmit caller ID information 6. Threaten or intimidate a consumer or use obscene language 7. Cause any telephone to ring or engage a person in conversation with the intent to annoy, abuse, or harass the person called.

PRODUCERS and INSURERS must also avoid unfair discrimination practices based on the following conditions of the applicant:

1. Hemophilia 2. Genetic Predisposition (unless the applicant's medical history, claims experience, or actuarial appraisal indicates a substantial difference in claims due to the person's condition) 3. Development Delays or Disabilities (unless the applicant's medical history, claims experience, or actuarial appraisal indicates a substantial difference in claims due to the person's condition) 4. Being victims of domestic violence (domestic violence may not factor into an insurer's judgment unless it can be corroborated that the applicant or prospective beneficiary is known on the basis or court or arrest records to have committed acts of domestic violence.

It is a FRAUDULENT PRACTICE and unlawful for a person to KNOWINGLY do any of the following:

1. Make any oral or written statements, including computer generated documents, to or by an insurer, producer or agent of a reinsurer that contain untrue statements of material fact or that fail to state any material fact with respect to any of the following: - an application for the issuance or renewal of an insurance policy -The rating of an insurance policy -A claim for payment or benefit pursuant to an insurance policy -Premiums paid on any insurance policy -Payments made pursuant to the terms of any insurance policy -An application for a certificate of authority -The financial condition of an insurer -The acquisition of an insurer or the concealing of any information concerning any fact material to the acquisition 2. Solicit or accept new or renewal insurance risks by or for any insolvent insurer 3. Conceal or attempt to conceal any records from the department or remove or attempt to remove records from the home office, place of safekeeping or other place of business 4. Divert or attempt or conspire to divert the monies of an insurer, re insurer, entity licensed to transact insurance business in this state or other person in connection with: -The transaction of insurance or reinsurance -The conduct of business activities by any insurer -The formation, acquisition or dissolution of any insurer

Both reports can only be used by someone with a legitimate business purpose - name 3.

1. insurance underwriting 2. employment screening 3. credit transactions.

MAXIMUM PERIOD FOR LICENSE SUSPENSION OR REVOCATION

12 MONTHS

MAXIMUM PERIOD FOR A TEMPORARY LICENSE

180 DAYS

INSURERS AND PRODUCERS MUST KEEP RECORDS OF ALL TRANSACTIONS

3 YEARS

What are the procedures for a BUSINESS NAME CHANGE?

Any insurance producer conducting business under any name other than their legal name must notify the Director. The Director may deny the use of this name if the name 1. Is so similar to the legal name that it would cause confusion 2. Or May mislead the public as to the nature of the business being conducted. If any change is made to this information, THE DIRECTOR MUST BE NOTIFIED WITHIN 30 DAYS.

HOW LONG DOES A LICENSE LAST in the State of Arizona for insurance?

Any license in the state of Arizona remains in effect until it expires, or until it is suspended, revoked or terminated by the Director. The license must be renewed every 4 years as follows: 1. An INDIVIDUAL producer's license expires on the last day of them month of the licensee's birthday. 2. A BUSINESS ENTITY license expires on the last day of the month of the licences issuance or renewal.

Describe the FINES for violations of the CAN-SPAM OPT OUT?

Each violation of the above provisions is subject to fines of up to $16,000. On top of that is a penalty of $250 per each non-compliant email, with a cap of $2 million dollars

Under the FAIR CREDIT REPORTING ACT, if the policy of insurance is declined or modified because of information contained in either a consumer or investigative report, what must happen with the consumer?

THE CONSUMER: 1. Must be advised and provided with the name and address of the reporting agency. 2. HAS THE RIGHT TO KNOW WHAT WAS IN THE REPORT. 3. Also has the right to know the identity of anyone who has received a copy of the report during the past year.

TRUE or FALSE If an individual makes a written request to alter any recorded personal information about that individual, the insurer must take action within 30 DAYS.

TRUE

TRUE or False Anyone that violates the provisions of this section may be assessed a civil penalty of up to $5,000 for each incident.

TRUE

TRUE or FALSE If the Attorney General has reason to believe that a person is engaged in conduct constituting an offense under section 1033, the Attorney General may petition an appropriate United States district court for an order prohibiting that person from engaging in such conduct.

TRUE The court may issue an order prohibiting that person from engaging in such conduct if the court finds that the conduct constitutes such and offense.

Describe what SECTION 1034, CIVIL PENALTIES AND INJUNCTIONS FOR VIOLATIONS OF SECTION 1033 states?

That the Attorney General may bring a CIVIL ACTION in the appropriate US District Court against any person who engages in conduct that is in violation of Section 1033 of not more than $50,000 for each violation, or the amount of compensation the person received as a result of the prohibited conduct, whichever is greater.

What is the TERRORISM RISK INSURANCE PROGRAM RE-AUTHORIZATION ACT OF 2015?

The TRIA of 2002 has been amended several times, and the final amendment is the Terrorism Risk Insurance Program Re-authorization Act of 2015, which has further amended and extended the Terrorism Insurance Program through Dec. 31, 2015, which has further amended and extended the Terrorism Insurance Program through Dec. 31, 2020, and revised several provisions as follows: 1. The insurer deductible was set at 20% of an insurer's direct earned premium of the preceding calendar year and the federal share of compensation was set at 85% of the insured losses that exceed insurer deductibles until Jan 1, 2016. After that, the federal share will be decreased by 1 percentage point per calendar year until it reaches 80% 2. The certification process was changed to requiring the Secretary of Treasury to certify acts of terrorism in CONSULTATION WITH THE SECRETARY OF HOMELAND SECURITY INSTEAD OF THE SECRETARY OF STATE 3. The aggregate industry insured losses resulting from certified acts of terror which will trigger the federal share of compensation under the Program are now specified as follows: 100 million for 2015 120 million for 2016 140 million for 2017 160 million for 2018 180 million for 2019 200 million for 2020 and thereafter 4. The mandatory recoupment of the federal share through policyholder surcharges increased to 140% from 133% 5. Revised requirements for mandatory repayment from the insurers of federal financial assistance provided in connection with all acts of terrorism.

What happens if any insurer believes an ACT OF FRAUD is being committed?

The insurer must file a report with the Director. The Director may investigate any act by way of a fraud unit, which must be established within the Department of Insurance. Other law enforcement officials or courts can be involved if necessary. For purposes of investigation, the Director may request any documents or other information deemed necessary.

What happens to anyone acting as an officer, director, agent or other insurance employee who is convicted of embezzling funds?

They face the aforementioned fines and imprisonment. However, if the embezzlement was in an amount less than $5,000, prison time may be reduced to 1 year.

What do CONSUMER REPORTS include?

They include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.

To keep in compliance with the DO NOT CALL rules, what must organizations do?

They must consult the registry every 31 DAYS. Any phone numbers on the registry must be dropped from the organization's call lists.

What is the purpose of a CERTIFICATE OF AUTHORITY?

They specify what lines of insurance and insurer is authorized to transact. At the insurer's request, the Director may issue a certificate of authority limited to particular types of insurance included within a type of insurance.

What will happen to anyone who VIOLATES A CEASE AND DESIST ORDER?

They will be subject to a suspension or revocation of the license, and civil penalties of up to $10,000 for each violation and up to $50,000 if the violations have occurred frequently enough that they constitute a regular business practice.

What is the NATIONAL ASSOCIATION of REGISTERED AGENTS and BROKERS - NARAB - REFORM?

This title of the Program amends the GRAMM-LEACH-BLILEY ACT to repeal the contingent conditions under which the NARAB may not be established. NARAB is also prohibited from merging with or into any other private or public entity.

TRUE or FALSE After a notice and a hearing, the Director will decided what services are customarily provided in the transaction of insurance.

True

Define a LIFE SETTLEMENT BROKER

1. A person who, for COMPENSATION, solicits, negotiates, or offers to negotiate a life settlement contract. 2. They represent only the policyowners 3. Have a fiduciary duty to the owners to act according to their instructions and in their best interest

What are the REQUIREMENT of a SIGNATURE ON INSURANCE POLICY?

1. Before an insurer issues a policy, the policy must be countersigned by its licensed insurance producer, bail bond agent or managing general agent, as applicable. 2. The COUNTERSIGNATURE may be considered an authorized signature even if it is a facsimile signature or other printed or reproduced signature.

What must the APPLICATION FOR BUSINESS ENTITY include?

It must include the names of all members, officers, and directors.

When does the authority to solicit policies by VENDING MACHINE EXPIRE?

When the producer's authority expires.

Is it ACCEPTABLE TO SHARE COMMISSIONS?

Yes, as long as both producers were licensed in the proper lines at the time of sale.

TRUE or FALSE Anyone who violates the provisions of this regulation may be found guilty of a class 5 felony.

TRUE

Describe the UNFAIR PRACTICES and UNLAWFUL ACTS

1. Insurers and insurance producers may not engage in any trade practice that is defined as, or determined to be, an unfair method of competition or unfair or deceptive act or practice in the business of insurance. 2. It is considered an unfair trade practice to knowingly commit an unfair method of competition or to engage in such actions with enough frequency that the commission of unfair marketing practices indicates a general business practice. 3. If, after hearing, the Department of Insurance determines that a producer or an insurer has committed an unfair trade or competition practice, the Department may issue an order requiring the person to cease and desist from engaging in the method of competition, act, or practice, and/or impose penalties for violation of insurance laws.

What are the STATE REGULATIONS FOR Department of Insurance as far as the DIRECTOR'S GENERAL DUTIES and POWERS?

1. The department of Insurance is administered by the DIRECTOR OF INSURANCE. 2. The director is appointed by and serves at the pleasure of the Governor. 3. The Director regulates insurance companies authorized to do business in this state. The purpose of the examination of insurers' books and records is to ensure that the companies remain solvent and conduct business in compliance with state laws and regulations. 4. The Director may examine any insurer doing business in Arizona as frequently as is necessary. 5. However, each DOMESTIC INSURER must be examined at least once every 5 years.

What is a CERTIFICATE OF AUTHORITY?

It is evidence of an insurer's authority to transact the kind of insurance specified in the certificate

May a producer be exempt from the CONTINUING EDUCATION REQUIREMENTS?

YES, if all of the following apply: 1. Being continuously licensed in Arizona since January 1, 1995 2. Not having held a nonresident insurance producer license in another state at any time since January 1, 1995: and 3. Never having been the subject of a Director's order for a violation of state insurance laws that resulted in license suspension, revocation, or denial.

May temporary licenses be granted to a corporation or limited liability company that is qualified to be licenses as a title agent? If so, how long?

Yes, the Director may grant it. The license will remain in effect for 6 months.

Define licensing in CASUALTY

Coverage against legal liability, including liability for death, injury, disability or damage to real or personal property

Compare OBTAINING A LICENSE to MAINTAINING A LICENSE

OBTAINING A LICENSE includes: 1. Meeting requirements 2. Education and Examination 3. Age and Residency 4. Good Character 5. Application and Fees MAINTAINING A LICENSE includes: 1. Complete continuing education 2. Renewal Fees 3. Current name, and address

WAITING PERIOD TO REAPPLY FOR THE SAME AUTHORITY LICENSE AFTER A LICENSE SURRENDER, SUSPENSION, OR REVOCATION

1 YEAR

CONSUMER REPORTS cannot contain certain types of information. What types would that be?

1. If the report is requested in connection with a life insurance policy or credit transaction of less than $150,000. 2. If the PROHIBITED INFORMATION includes bankruptcies more than 10 years old, civil suits, records of arrest or convictions of crimes, or any other negative information that is more than 7 years old. 3. Ad defined by the Act, NEGATIVE INFORMATION includes information regarding a customer's delinquencies, late payments, insolvency or any other form of default.

How often will the DIRECTOR ASSESS each applicable, domestic insurer up to $1050 for the administration of the fraud unit?

Annually.

What is considered Arizona policy for CLAIMS PAYMENT? Are there any exception to the policy?

Any first party claim not paid within 30 days after the receipt of an acceptable proof of loss by the insurer that contains all information necessary for claim adjudication will be required to pay interest at the legal rate from the date the claim is received by the insurer. This policy does not apply to any of the following claims: 1. Submitted under MEDICARE and MEDICARE SUPPLEMENTS 2. Unpayable due to an absence of a recipient who is legally able to give valid release 3. Submitted to a person who is the processing agent for a foreign insurer 4. Submitted to a person providing an insurance program for retirees 5. Denied, in good faith, 30 days after receiving the proof of loss.

What are the grounds for a CLASS 2 MISDEMEANOR?

Any life insurance producer, examining physician or other person who knowingly makes a false or fraudulent statement on an application for life or disability insurance, or who makes any such statement to obtain a fee, commission, money or benefit is guilty of a CLASS 2 MISDEMEANOR.

What is considered to be UNLAWFUL INSURANCE FRAUD?

Any person engaged in the business of insurance to willfully, and with the intent to deceive, make any oral or written statements that are either false or omit material facts. This includes information and statements made on an application for insurance, renewal of a policy, claims for payment or benefits, premiums paid, and financial condition of an insurer.

How is a RESIDENT SURPLUS LINES BROKER LICENCE assigned?

The Director may issue a resident lines broker license to any business entity that is licensed as a resident property or casualty insurance producer.

Concerning AUTO INSURANCE when can extra fees be charged?

They may charge extra fees, however, for services not customarily provided in the transaction of insurance if the fee is filed with the Director and the following conditions are met: 1. The services performed by the insurer or insurance producer are in excess of those normally performed for insureds. 2. The service charge and the specific services for which the charge is made are disclosed and agreed to in writing by the insured on a form that is approved by the Director. 3. The amount of the service charge is reasonably related to the cost of the service performed.

Do both of these types of reports require that the consumer be advised in writing about the report within 3 days of the date the report was requested?

Unlike consumer reports, the INVESTIGATIVE CONSUMER REPORT cannot be made unless the consumer is advised in writing. The consumers must be advised that they have a right to request additional information concerning the report, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

May the DIRECTOR ISSUE CEASE AND DESIST ORDERS and CIVIL PENALTIES of between $500 and $10,000 for this regulation?

YES

How may the DIRECTOR RENEW A LICENSE?

1. If the license submits a required application and license fee before the license expiration date, the Director may renew a license. 2. A license will automatically EXPIRE AT MIDNIGHT ON THE RENEWAL DATE if the application and the fee are not received on time. 3. Within a year after expiration, qualified producers may renew the license if they pay a renewal fee and late fee of $1000. 4. After 1 year, any application for the same license will be deemed a new application

What is required for a Director to approve the application of a business entity?

1. Pays a fee 2. Acts within the scope of its partnership agreement, articles of incorporation or chartering document 3. Designates an individually licensed insurance producer responsible for the compliance with all state insurance laws. The business entity must have at least one of these insurance producers individually licensed for any applicable lines or insurance in each office or place of business in state.

Before ACTING AS A BROKER, what must a person obtain?

A person must obtain a certificate of authority or license.

Explain what FALSE FINANCIAL STATEMENTS are

FINANCIAL STATEMENTS are those that are intended to deceive public officials or the general public about the financial condition of an insurer. This often occurs when an important fact about the financial status of an insurer is deliberately withheld in order to present the company in a more favorable light.

What should you know about LICENSING?

Insurance professionals must be properly licensed for a specific line authority in order to transact insurance.

Define a TEMPORARY LICENSE as it pertains to insurance

The Director may issue a temporary producer's or broker's license for 180 days without requiring a written examination, in any of the following cases, if necessary, for the continuation of a producers' or broker's existing business. 1. To the surviving spouse, next of kin, or personal representative of a deceased producer or broker 2. To a member or employee of a business entity licensed as a producer, on the death or disability of the entity's designated producer; or 3. To the designee of a licensed producer or broker who enters active service in the armed forces of the United States.

What if a PREMIUM PAYMENT is sent by certified or registered mail>

The date of the registration will be considered the date of payment. If the due date of a premium payment falls on a Saturday, Sunday or LEGAL HOLIDAY, the payment is considered on time if sent on the next business day.

When does a TITLE INSURANCE AGENTS license expire?

These licenses expire at midnight on the last day of the same month 4 YEARS AFTER THE LICENSE WAS ISSUED OR RENEWED unless terminated earlier by the insurer of authority in the agent, or revoked by the Director.

The SIGNATURE REGULATION does not apply to any of the following:

1. Reinsurance of life, disability or title insurance 2. Insurance of the rolling stock, vessels or aircraft of any common carrier in interstate or foreign commerce, or of any vehicle principally garaged and used in another state or covering any liability or other risks incident to the ownership, maintenance or operation of such an item 3. Insurance of property in course of transportation interstate or in foreign trade, or any liability of risk incident regarding this; 4. Insurance of ocean marine risks 5. Policies issued through salaried insurance producers or issued by insurers not using insurance producers in the general solicitation of business. 6. Bid Bonds issued by any surety insurer in connection with any public or private contracts; 7. Policies issued by a vending machine

What are the different TYPES OF LICENSES available under the insurance licensing heading?

A Producer Nonresident Producer Adjusters Life Settlement Broker Business Entities Temporary Vending Machines Surplus Lines Brokers

What are the CONTINUING EDUCATION - CE - RULES that are established to protect the public?

By maintaining high standards of professional competence in the insurance industry, and to maintain and improve the insurance skills and knowledge of licensed producers there are CONTINGENT EDUCATION - CE - RULES established to protect the public: 1. To QUALIFY FOR RENEWAL OF RESIDENCE LICENSE, each residence licensee must complete 48 hours of continuing education before the license expiration date if the license term began on or after January 1, 2014. CE hours MUST INCLUDE 6 HOURS OF ETHICS TRAINING.

An insurance producer may qualify for a license in one or more of the following lines of authority:

LIFE ACCIDENT AND HEALTH OR SICKNESS PROPERTY CASUALTY VARIABLE LIFE AND VARIABLE ANNUITY PRODUCTS PERSONAL LINES CREDIT

TRUE or FALSE Licensees must maintain their own continuing education records until the second renewal date after the period for which the credit hours were earned.

TRUE Approved continuing education providers MUST MAINTAIN RECORDS FOR 5 YEARS.

The PRODUCER'S AUTHORITY TO SOLICIT INSURANCE must displayed on or near the vending machine. Give more details on this

The evidence of authority must specify: 1. name and address of both the insurer and the producer 2. The type of insurance and policy to be sold 3. The machine's identification number

Define BUSINESS ENTITY

This means any corporation, association, partnership, limited liability company, limited partnership or other legal entity, except an individual or sole proprietorship.

Define DEFAMATION

This occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business. This also applies to statements that are MALICIOUSLY CRITICAL of the financial condition of any person or a company.

May SURPLUS LINES INSURANCE be procured from unauthorized insurers?

YES, but only through a licensed SURPLUS LINES BROKER, and if recognized as surplus lines or not obtainable through authorized insurers.

In a Nutshell, what are the RESPONSIBILITIES OF THE DIRECTOR OF INSURANCE?

1. Supervise Insurance Business 2. Licensing 3. Approve Policies and Forms 4. Enforce Insurance Laws and Impose Penalties For Violation

What is the TIME PERIOD FOR SUBMISSION OF THE LICENSE RENEWAL FEE AND FOR COMPLETION FOR ACTIVE MILITARY SERVICE?

1. The time periods for submission of the license renewal fee and for completion of the applicable renewal requirements and CD for a licensee who is deemed inactive will be extended the number of days the licensee is in active military service. 2. A licensee applying for renewal under this section must include, with the renewal application, a COPY OF THE DOCUMENTATION FROM THE ARMED FORCES SHOWING THE PERIOD OF TIME THAT THE LICENSEE WAS IN ACTIVE MILITARY SERVICE. 3. In this case, active military service does not include periodic and routine service as a military reservist.

What are the limitations to an INACTIVE LICENSE?

A licensee whose license is on INACTIVE STATUS: 1. May not sell, or negotiate insurance 2. May receive renewal or other deferred commissions for selling, soliciting or negotiating insurance in this state if he or she held an active license at the time of the sale, solicitation or negotiation.

TRUE of FALSE

A licensing adding surplus lines broker authority to an existing insurance license will be charged half the surplus lines broker license fee if less than 2 years remain in the term of the existing insurance license when the Director receives the application to add surplus lines broker authority.

What are the DIRECTOR'S RITES CONCERNING SUSPENSION OR REVOCATION of insurance licenses?

Upon a written request from a licensed person, the Director may accept the VOLUNTARY SURRENDER of the person's authority to transact one or more lines of insurance or the person's entire license. The person will not be able to reapply for the same authority or license for at least 1 year after the surrender.

Define SELL

attempting to sell insurance or asking or uging a person to apply for a particular kind of insurance from a particular company.

Give details about PRODUCER RECORDS:

1. Every producer or broker, except nonresident licensees, must maintain a place of business in Arizona accessible to the public. 2. The place of business must be where licensee principally conducts transactions under the license. 3. The licenses of the licensee must be prominently displayed in a part of the place of business customarily open to the public. 4. An insurance producer, or a business entity acting as an insurance producer, must keep the usual and customary records of transactions that pertain to their license at the place of business. 5. Records must be kept available for inspection by the Director of Insurance at any business time for 3 years following the date of completion of the transaction. 6. Records, books, and files for all public service corporations, state banks, building and loans associations, trust insurers, and guaranty companies must also be available at any time during business hours to the citizens of the state.

What is the PROCEDURE TO RENEW A NONRESIDENT LICENSE?

A nonresident license producer must submit to the Director proof of having earned the necessary continuing education credit requirements. If a nonresident licensee's resident state does not recognize continuing education credits earned by residents of Arizona, the nonresident licensee must comply with the Arizona CD require,ments. A nonresident licensee whose resident state does recognize credits earned by Arizona residents can satisfy the CE requirements by providing the Director PROOF OF THE RESIDENT STATE'S CONTINUING EDUCATION REQUIREMENTS.

What is the policy concerning SHARING COMMISSIONS?

No insurer doing business in Arizona may pay any commission or other compensation to any person for services as agent in obtaining insurance, except to a licensed agent of the company or to a licensed insurance agency or broker having a copy of the license on file with the insurance company.

Define SURPLUS LINES BROKERS

Unlike a producer, 1. a BROKER REPRESENTS HIS/HER CLIENTS - policyholders - and is not a direct representative of any insurance company. 2. Instead a broker works for his/her clients and will place risks with licensed producers and surplus line brokers. 3. Brokers must have a written agreement with an insured when they receive any fees or compensation for services. 4. Brokers cannot bind coverage.