property and casualty class study guide
certificate of authority June 1
(a licence) is issued to an authorized or admitted insurer/the COMPANY. these must be RENEWED BY the company by ___
speculative risk
* have a possibility of a loss and also the possibility of a gain
morale
** if a person fails to stop at a stop sign, what type of hazard is this?
retention
**deductible falls under what method of handling risk
referral fees
**it is legal to give ________ to UNLICENSED employees
transfer
**purchasing insurance will fall under what method of handling risks
retention
**risk _____ means the individual or business will pay for the loss ifs ti occurs, or a portion of the loss through a deductible. if you dont have car insurance to pay for the damages you cause to another person in an accident, you have retained that risk
transfer
**risk ______ is what happens with insurance. the insurer (insurance company) agrees to pay if an insured (customer) has a loss--> the insured no longer bears that risk. the individual hs a cost in the form of a premium payment.
$200-$500 & 1-2 yrs in prison
**what is the fine for unlicensed activities?
$500
**what is the maximum fine for unlicensed activities?
$200
**what is the minimum fine for unlicensed activity?
employ 5 or more people
**when must workers comp be required?
a licensed producer
**who is it unlawful to pay referral fees to?
legislature
*_______ makes the laws, not the commissioner
hazard
*anything that increases the chances that a loss will occur
direct
*for the indirect to be covered, the _____ peril must be covered, so if you need to stay in a hotel due to flood damage and dont have flood insurance, the hotel cost is not covered
pure risks
*only involve the possibility of experiencing a loss, not a gain; only indurative risk
peril
*the cause of loss (house burns down, the _____ is the fire)
property and casualty agent
*who do you buy workers comp from?
workers compensation
A form of insurance paid by the employer providing cash benefits to workers injured or disabled in the course of employment.
national association of insurance commissioners
An association of insurance commissioners from the fifty U.S. states, the District of Columbia, and the five U.S. territories and possessions, whose purpose is to coordinate insurance regulation activities among the various state insurance departments.
$5000 $1000
DEATH/SURVIVOR BENEFITS up to _______ is provided as a maximum burial allowance and a surviving spouse receives a lump sum benefit of _______
disability 5 day
INCOME BENEFITS, total _____ begin after a ___ waiting period
workers compensation commission
In MS the workers compensation law is administered by ______
prior approval 30
Mississippi is a _______ state which means that rated must be filed with the insurance commissioner. the filing may be considered approved __ days after the date of filing if the commissioner has not disapproved it.
14 days
RETROACTIVE BENEFITS are later paid for the initial days of disability if the disability continues beyond _____
physical
____ hazard are physically identifiable factors that increase the chance of loss. if the tires on a car are slick with a little or no tread, the possibility of a car accident increases. a dead tree in a yard increases the possibility of the tree falling on the house (ex. wet floor)
morale
_____ hazards are a state of mind or carless attitude. an example is the insured carelessly leaving the doors and windows unlocked when not at home or leaving a car running and unlocked while running in the store (ex. leaving door open)
moral
_____ hazards arise from an individuals character; dishonesty that intentionally caucuses a loss (ex. dishonesty)
commission
_____ is given to LICENSED people
agent producer field underwriter
_____, _____, and _____ means a person required to be licensed under the laws of MS to sell, solicit or negotiate insurance
mike Chaney
_______ is the state insurance commissioner and the state marshal. he is also a member of the national association of insurance commissioners
domestic insurer
a company that is incorporated or formed in MS
foreign insurer
a company that is incorporated or formed under the laws of any other state or government. formed outside the state of MS
indirect loss
a consequential loss as the result from a direct loss. examples of this include the loss of rental income due to house fire, which causes a loss of profits for the landlord; this is always consequential of the direct loss
controlled business 35%
a license is not permitted to earn commissions on all business written in any 12 month period in excess of ____ of the aggregate commissions
90 days
a person licensed as an insurance producer in another state who moves to MS must make application within ____ of establishing legal residence to become a resident licensee. No relicensing education or examination will be required of that person to obtain any line of authority previously held in the prior state
30 days
a producer must report to the commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in the state within _____ of the final disposition in the matter
producer
an agent
reciprocal insurer
an incorporated aggregation of persons operating individual and collectively through an attorney in fact to provide reciprocal insurance among themselves
mutual insurance company/mutual insurer/pariticipating company
an incorporated insurer which does not have capital stock. ____ is owned mutually by its policyholders. profits or surplus from operations may be distributed to the policyholders in the form of policy dividends; PARTICIPATING COMPANY
stock insurance company/stock insurer/nonparticipating company
an incorporated insurer which is in business to make a profit. stockholders provide the capital for the company operations and the company is owned by stockholders; NON PARTICIPATING COMPANY
18 years
an individual must be at least ___ years of age to BUY or SELL insurance in MS
admitted or authorized
an insurance company must be licensed before it is authorized to do business in MS. once a license is obtained, the company is considered to be _______ in MS
30 days
an insurer or authorized representative of the insurer that terminates the appointment employment, contract, or other insurance business relationship with a producer must notify the commissioner within ____ following the effective date of termination
you
disability payments pay ____
no, but you must take it within 180 days
do you have to take the insurance exam to be a temporary agent?
affordable
elements of insurable risk: the premium for transferring the risk should be affordable for the average consumer
non catastrophic
elements of insurable risk: the risk must be non catastrophic for the insurance company. national or area disasters such as floods, riots, wars, and earthquakes will often have coverage limitations in insurance policies. these events cause widespread simultaneous losses to many insured properties. the perl of war is excluded from most policies. if the insurer were to cover these types of risk, the risk could be detrimental (or catastrophic) to the insurer
calculable affordable non-catastrophic homogeneous accidental measurable
elements of insurable risks: (6)
example
example for risk, hazard and peril: risk: chance something could happen when driving a car hazard: drinking and driving peril: collision occurring
10 days
hearings on charges: if the commissioner is requesting a hearing with an agent, the commissioner will issue and serve upon the person a statement of charges and a notice of a hearing to be held. the notice will state the time and place for the hearing which must be held not less than ____ days after he date notice is served
4 years elected
how long is the term for the commissioner of insurance? and are they appointed or elected
just know
if your license is revoked in your home state, it is going to be revoked in any other non resident state that you work in
5 or more workers
in MS, insurance or self insurance is compulsory in the public sector, and compulsory for employers in the private sector who employ ________. the law does not apply to the following classifications of EXEMPT EMPLOYMENTS: - PRIVATE EMPLOYERS WHO HAVE FEWER THAN 5 EMPLOYEES - domestic servants - farmers and farm laborers - students working in training programs - INDEPENDENT CONTRACTORS - officers of nonprofit charitable, fraternal, cultural, or religion corporations or associations - handicapped persons working in state sheltered workshop program
sharing
in risk ___, two or more individuals or businesses agree to pay a portion of any loss incurred by any member of the group. stockholders in a corporation share the risk
inactive agent may not solicit receive renewal commissions
individuals whoa re retired, disabled, or has not obtained form the commissioner a current continuous certificate. an inactive agent ______ new business or service existing business, but may ______
state level
insurance is regulated at the ________. state insurance law is referred to as the insurance code. the code and related rules and regulations govern all insurance transactions and activity within the state
rebating
it is illegal for an insurer or agent to make any other insurance contract or agreement than that expressly written in the application and policy (can't bribe ppl to buy from you)
twisting
it is illegal for any insurance company, agency, solicitor or representative to inform any current or prospective policyholder that an insurance company was required by regulation to change a policy form or related material to pressure the policyholder into changing policies (
unfair trade practices
it is illegal to engage in any trade that is considered to BE and unfair method of competition or deceptive act. the following unfair and deceptive practices are prohibited in MS: rebating and twisting
30 days
licenses must inform the commissioner of any change of address or name within the ____ days of the change
alien insurer
means an insurer which is formed outside of the United States. formed outside of the country
unlimited
medical benefits are ______ in MS (workers comp will have to pay medical costs form injury on the hob and there is no limit for example if espestus caused cancer the chemo therapy must be payed up to no limit)
hospital
medical benefits pay the ____
sharing transfer avoidance retention reduction
methods of handling risk: (STARR)
temporary agent license 180
not to exceed _____ days: - to the surviving spouse or court appointed personnel representative of a licensed insurance producer who dies or becomes mentally or physically disabled - to a member or employee of a business entity licensed as an insurance producer upon the death or disability of an individual - to the designee of a licensed insurance producer entering active service in the armed faces of the US - in any other circumstances here the commissioner deems that the public interest will best be served by the issuance of the license
just know
payment of commissions: any insurer who pays commissions for policies written on risks in MS by a person, firm, or corporation that is not licensed in MS is subject to the following penalties: - revocation of authority - imposition of an administrative fine of not more than $5000
just know
payment of commissions: it is legal to pay: - renewals and deferred commissions to people who no longer hold agent licenses - commissions to temporary license applicants - referral fees to unlicensed employees of an agency who refer prospective insureds to the agent or agency
direct loss
physical loss to property with no intervening cause. example of this includes lighting striking a house and an automobile hitting a tree
90 3
revocation of certificate of authority. if a judgement rendered against the company by any court in MS has not been satisfied within __ days after it has become final (the company cannot renew its license until at least _____ years after the date of revocation and then only if the judge has been satisfied
avoidance
risk _____ means eliminating a particular risk by not engaging in a certain activity. for example, an individual who does not drive avoids the risk of inuring someone in an automobile collision and being held liable for those damages
reduction
risk _____ refers to lessening the chance that a loss will occur, or lessening the extent of a loss if it occurs. if a business installs a sprinkler system in its building, this will help educe or eliminate the damage caused by a fire
fired hired
rittle: 30 ______, 15 ______
the commissioner
the ______ can never make or change law, he can only enforce it or make suggestions
department of insurance
the ________ regulates all insurance companies and their agents doing business in MS. they also have the authority to: - grant or withhold certificates of authority, certificates of compliance, and licenses - approve policies, proxies and advertising material - conduct hearings on rates and other matters affecting the regulation of the insurance industry in MS - receive and collect surplus lines premium taxes - receive and examine (at least annually) reports and financial statements from all insurance companies authorized to do business in MS - prepare the commissioners annual reports
Mississippi windstorm underwriting association Hancock harrison Jackson pearl river stone George counties
the association was created to provide an adequate market for wind and hail coverage in the coastal areas of the state. coastal areas include : (6)
66 2/3 aka 66.66%
the benefit about for disability is ______% if wages, subject to maximum and minimum weekly amounts.
commissioner of insurance
the chief officer of the insurance department is the _______ who is elected to a FOUR YEAR term by the people
may 1
the commissioner has to submit a report to the governor on ______ for: - a review of the official acts taken by the commissioner - an evaluation of the condition of insurance companies doing business in MS - a summary of insurers financial reports filed with the commissioner - a list of the licenses issued by the commissioner - a record of the taxes received b y the commissioners office - reccommendations by the commissioner for changes in the laws that affect the department of insurance - ANNUAL REPORT DOESNT INCLUDE COMPLAINTS FILED BY INSURERS
$5000 state treasury
the commissioner may, in lieu of or in addition to suspending or revoking an insurance company certificate, assess an administrative fine of up to _____ per violation. fines are deposited to the ________
$1000
the fine for violating a cease and desist order
$5000
the fine for violation of any provision of the insurance laws of Mississippi for which a different penalty is not specifically provided. in addition, the offender will be guilty of a misdemeanor
law of large numbers
the larger the group, the more accurately losses can be predicted; predictability improves as the numbers in a group increase; the larger the group the more accurate the actuaries will be at predicting
higher lower
the more perils you have covered, the ____ the premium and the fewer perils you have covered, the ____ the premium
15 days
the number of days from the date the agency contract is executed or the first insurance application is submitted the the appointing insurer must file, in an approved format a notice of appointment
risk
the possibility that a loss will occur
Mississippi insurance guaranty association
the purpose of the association is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and avoid financial loss to claimants or policyholders because of the INSOLVENCY of an insurer
450 weeks
the total disability benefits are paid for the duration of the disability, subject to a maximum time limit of _______ and a maximum dollar amount
unlicensed actives
this person may be fined not less than $200 or more than $500, be inprisioned not less than 1 or more than 2 years, or both
physical moral moralw
three types of hazards
12 hours
to renew a producer license which has been in effect 18 months or less, a producer must complete _____ hours of continuing education courses
24 hours
to renew a producer license which has been in effect more than 18 months, a producer must complete ____ hours of continuing education coarse, with 3 of those hours being on the subject of ethics
insurance
transfer of risk from a person or a business to an insurer
insolvent liquidated
two terms that mean the same as bankrupt
policyholder
what is the same term as the insured?
insurance company
what term is the same as an insurer?
producer field underwriter
what two terms are the same as an agent?
2 yrs
you have to renew your license every __ at the end of your birth month, not the day and if you dont renew, you are inactive now