State Laws

Report of Examination

The Commissioner may make a full written report of the examination including only facts obtained from documents examined and sworn testimony of witnesses. This report will be certified by the Commissioner or examiner and will be admissible as evidence in any proceeding brought by the Commissioner against the person examined. The Commissioner must provide a copy of the proposed examination report to the insurer examined at least 20 days before the report is filed. The insurer or person examined may request, in writing, a hearing about the report. The final report will not be filed until such a hearing is held and any modifications are made to the report.

Probationary Licenses

Probationary Licenses The Commissioner may issue a probationary license for 3 to 12 months, subject to revocation for cause without a hearing. The Commissioner may extend the probationary period, or refuse to grant or reinstate a license at the end of a probationary period.

Expiration and Renewal

All resident licenses, with the exception of temporary or probationary licenses, are issued on a biennial basis and license renewals will be due on the last day of the licensee's birth month. Failure to file the required license renewal form with the appropriate fee and evidence of completion of required continuing education by the due date will result in the expiration of the license.

Individual Licenses

An agent is an individual appointed or employed by an insurer who sells, solicits, or negotiates insurance whether in person or by telephone. An agent is considered an individual insurance producer and is required to be licensed for each line of authority to be transacted. Each principal and branch office of a business entity that sells, solicits, or negotiates insurance must obtain an agency license and renew biennially. An agency is subject to all penalties, fines, criminal sanctions and action of authorized agents.

Insurance Transaction

An insurance transaction includes any of the following: Solicitation and inducement Preliminary negotiations Effectuation of an insurance contract Transaction of matters that result from the effectuation of the contract

Defamation

An insurer may not make an oral or written statement which is false or maliciously critical or misrepresentative of the insurer's financial condition with intent to injure any person engaged in the insurance business.

Requirement of Name

An insurer that uses a name that is similar to an already authorized insurer and creates uncertainty or confusion, or uses a name which would deceptively mislead as to the insurer's type of organization may not be authorized to transact insurance.

Correction of Inadequate or Incorrect Accounts

If the Commissioner finds accounts and records to be inadequate or incorrectly kept or posted, the person being examined will have 60 days upon notification to correct the accounting. If the examinee fails to make the corrections, the Commissioner may employ experts to rewrite, post, or balance such records at the expense of such examinee.

Classifications of Insurance

Life, accident, and sickness Property, marine, and transportation Casualty Surety Title Health Maintenance Organization

Limited Licenses

Limited licenses may be issued for: Credit insurance Rental company insurance Portable electronics insurance Travel insurance No prelicensing requirements or examination are required for the issuance of a limited license.

Standard Nonforfeiture Law

No insurer may defer the payment of a cash surrender payment for longer than 6 months.

Which of the following is a requirement that all licensees must meet?

Notify the Commissioner within 30 days of any change in business and residence address. Licensees, both residents and nonresidents, must notify the Commissioner of any change in their business and residence address within 30 days. Applicants for a temporary license, among other license applicants, are exempt from prelicensing and examination. Resident licensees must maintain a business office open to the public within Georgia. CE must be completed prior to license expiration.

Rebating

Rebating is an unfair trade practice and includes knowingly permitting an agreement other than as expressed in the contract and offering anything of value as an inducement to insurance if not specified in the contract, except a rebate approved by the Commissioner.

Examination of Insurers

The Commissioner, or a person authorized by the Commissioner, may conduct an examination of any insurer authorized to do business in this state as often as necessary, but most domestic insurers must be examined at least once every 5 years. The Commissioner may also examine each insurer or rating organization applying for authority to do business in this state. In lieu of conducting an examination of foreign or alien insurers licensed in this state, the Commissioner may accept the examination reports by the insurance departments of such insurer's home or port-of-entry state.

The qualifications for becoming an insurance producer include which of the following?

Applicants for a resident license must reside in Georgia at least half the year or have a business domiciled in the state. To be a resident, one must live in Georgia half the year or have a business located here. Individual licensees must be 18 years of age and are not restricted from having a license based on past service. While fingerprints are required for most applicants, active agents seeking new lines of authority, and those reinstating licenses within 6 months of lapsing them do not need to provide fingerprints.

All of the following statements regarding producer appointments are true, except:

Certificates of Authority for subagents must be renewed biennially. Certificates of Authority for subagents must be renewed no more than once every 3 years.

The Association will not cover:

Claims that are already covered by a like association from another state Policies or portions of policies not guaranteed by an insurer Policies issued by a nonprofit hospital/medical service corporation, HMO, prepaid legal services plan, fraternal benefit society; or Accident and sickness insurance when issued as part of an automobile insurance policy

Change of Address

Every licensed agent, limited subagent, and counselor must have and maintain a place of business in this state, or if a nonresident, a place of business accessible to the public. The place of business must be where the licensee principally conducts insurance transactions. All resident and nonresident licensees must promptly notify the Commissioner in writing within 30 days of any change in the licensee's business address, residence address, and name and address of each insurer or agency the licensee represents.

Restrictions

An insurer that is qualified to transact insurance in Georgia may be authorized to transact any one kind or combination of kinds of insurance except as follows: A reciprocal insurer may not transact life insurance A Lloyd's insurer may not transact life insurance; and A title insurer is authorized to transact only title insurance

Examination of Other Persons

The Commissioner may examine, as often as necessary, the accounts, and records of any insurance agent, solicitor, broker, general agent, adjuster, or insurer representative.

Which of the following statements regarding the temporary insurance license is not correct?

A temporary license is only granted when an agent dies, becomes disabled, or serves in the military. Temporary licenses are granted for an initial term of 6 months. The Commissioner may grant them for the purposes of training, or of either continuing or winding up the business of an agent who has died, become disabled or entered active military service. The Commissioner is required to review the background of an applicant for possible criminal activity. If the Commissioner grants a temporary license for training purposes, he or she does so at an insurer's request. A temporary license allows a licensee to serve existing clients, but does not allow the licensee to sell, solicit or negotiate new contracts.

Language Simplification

All personal homeowners, tenants, and automobile insurance policies, individual life or health insurance policies, certificates of group insurance coverage and coverage booklets provided by insurers and issued or delivered in this state must be written in a simplified form. The information must be divided in logically arranged and captioned sections with readable language that complies with the nationally recognized reading ease standards that may be required by the Commissioner.

Inactive/Nonactive License

An agent's license will be placed on inactive status when he/she no longer has a Certificate of Authority to do business with at least one insurer on file with the Commissioner. When a license is placed on inactive status, the producer will be prohibited from selling, soliciting, or negotiating insurance. The licensee will be required to provide evidence of compliance with the continuing education requirements before the license can become active.

Records Retention

Every agent, counselor, and adjuster must keep a record of all insurance transactions, including: A record of each insurance contract procured or issued with the names of the insurers and insureds The amount of premium paid or to be paid, and a statement of the subject of the insurance The names of any other licensees involved in the transaction and if they received any compensation All records for any transaction must be kept for at least 5 years after the transaction or contract term is completed.

Free Look Period

Georgia law requires all individual life insurance policies and pure endowment or individual annuity contracts to include a 10-day free look, during which the policy or contract may be returned for a full refund. This does not apply to group policies or contracts, or to credit life insurance.

Which of the following individuals is required to hold an insurance license?

Public adjusters are licensed. The other individuals fall into the categories of licensing exceptions noted in the law.

The Commissioner may impose which of the following penalties on any person who violates a cease and desist order following a hearing?

A fine of up to $10,000 per violation. Revocation, as well as the suspension of one's insurance license, is a possible penalty. Also, a $5,000 penalty may be assessed at a hearing for violations committed with knowledge prior to the hearing. As for the issue of probation, that is a civil, not criminal penalty. It extends to the producer's license, not their freedom. The fine for violating a cease and desist order after a hearing is $10,000 per violation.

Insurance Department and Commissioner

The chief officer of Georgia's Department of Insurance is the Insurance Commissioner, who is elected to office for a term of 4 years. The purpose of the department is to promote efficiency in operation and service to the public.

Nonresident License

A nonresident person will receive a nonresident license if all requirements are met. To qualify for issuance of a nonresident license, applicants must: Currently be licensed and in good standing in the person's home stateVerification must be provided to the Commissioner through either the NAIC producer database or an original certification letter from the home state within 90 days of submission Submit the proper request for licensure, a copy of the license application submitted to the home state, and pay the required fees

Unfair Trade Practices

A person transacting insurance business may not engage in an unfair trade practice. With respect to making, publishing, disseminating, circulating, or placing before the public as an advertisement or announcement, the following are considered unfair trade practices:

License Application

An application for an individual and agency license must be filed with the Commissioner and be accompanied by the appropriate fees. The application for an agent's license must state the kinds of insurance proposed to be transacted. The applicant must give permission for a criminal background investigation and submit, at the applicant's expense, electronic fingerprints through a vendor selected by the department. The Commissioner is authorized to obtain conviction data with respect to an applicant for a license. Conviction data received by the Commissioner will be privileged information and will not be public record.

Commissions and Compensation

An insurer or agent may not compensate any person for services as an agent unless that person is duly licensed, except in the case of renewal or deferred compensation to a person who held a license when the compensation was earned. No person other than a duly licensed agent or counselor may accept commission or other valuable compensation from an insurer or duly licensed agency, agent, counselor or subagent. An insurer may pay commissions to a licensed agency in which all employees, directors, and officers who transact insurance are qualified insurance agents. Agents, subagents, and counselors may share commission with a licensed insurance agency.

Liability Limits

The aggregate liability of the Association may not exceed per insured, the lesser of: $300,000 in life insurance benefits, but not more than $100,000 in net cash value, regardless of the number of policies owned $300,000 in health insurance benefits $300,000 for disability insurance $300,000 for LTC insurance $500,000 for basic hospital, medical, and surgical insurance or major medical insurance $300,000 in the present value of annuity benefits, but not more than $250,000 in net cash values for an annuity $5 million with respect to one owner of multiple individual policies of life insurance

Examination Expenses

The insurer or other person so examined will pay all costs of the examination, including actual travel and living expenses.

Georgia Life and Health Guaranty Association

The purpose of the Life and Health Guaranty Association is to protect insureds from the insolvency of an insurance company. The Association consists of all life and health insurers authorized to conduct business. In order to protect the insured in the event of an insurer's solvency, the Association may assess each member insurer in the proportion that the net direct written premiums of such insurer for the year preceding the assessment bears to the net direct written premiums of all member insurers for the year preceding the assessment. It is considered an unfair trade practice to use this membership in any way to influence a prospective buyer, or to attempt to influence the public by advertising the membership.

Churning

the act of illegally misrepresenting an existing policy to induce a policyholder to unnecessarily replace that policy with a new policy from the same insurer for the purpose of earning additional or higher commissions.

Twisting

the act of making a misrepresentation to any policyholder or insured for the purpose of inducing a policyholder to lapse, forfeit, or surrender insurance to purchase a policy with another insurer.

Temporary Licenses

A temporary license may be issued to an applicant in the event of the death of, or the inability to act as an agent by reason of service in the armed forces, illness, disability, or termination of an appointment for the purpose of continuing to service existing insurance policies or wrap up the agent's business affairs. The Commissioner may issue a temporary license to an employee, family member, associate, guardian, receiver, executor, or administrator in the same line of authority held by the agent. A temporary license will authorize the negotiation of renewal policies and receipt and collection of premiums, but does not authorize the holder to sell, solicit, or negotiate new insurance contracts. A temporary license may also be issued to an individual upon request of an insurer for purposes of training the individual to act as an agent. The individual must perform such duties under the supervision of a licensed individual. To be granted a temporary license, the applicant must submit an application and pay the required fees. The application process includes sponsorship by an insurer agreeing to appoint the applicant as a representative of the company. The sponsor must have an outside agency investigate the applicant's general character, including a background check, and recommend the applicant for a license. The applicant is required to submit, at his/her own expense, electronic fingerprints. The application must include the name and license number of the supervising resident agent. A temporary license is valid for 6 months from the original issue date, and renewable for 3 months at a time for a maximum of 15 months from the original issue date. Renewal may be requested by filing an application and paying the required fee. A temporary licensee may be issued an agent license upon the completion of the required prelicensing course and passing an examination.

Fines

The Commissioner may, after a hearing, impose an administrative fine if an insurer, or its representative: Failed to use diligence in processing claims, failed to pay claims in a timely manner, or failed to provide proper notice when required as to the reason the insurer failed to make claim payments Compelled, without just cause, insureds or claimants to accept less than the amount due, or to bring action against an insurer to secure the full amount of the claim or settlement Accepted money or other remuneration for referring automobile or other property repair business, including glass breakage, to a particular repair company. The fine imposed cannot exceed $1,000 for each misconduct resulting in a violation, or $5,000 for each willful misconduct resulting in a violation.

Penalty After a Hearing

The penalties for a violation of a cease and desist order are: A fine of up to $10,000 per violation Suspension or revocation of the person's license if the person knew he/she was in violation Such other relief as is reasonable and appropriate

How many hours of CE would an agent who had been licensed for 10 years need to complete during each biennium?

In order for an insurance license to be renewed, each licensee must complete continuing education (CE) instruction during each biennial renewal period of 24 hours, 3 of which must be in ethics. Licensees who have continuously maintained their license for 20 years or more need only complete 20 hours of CE, 3 of which must be in ethics.

Certificate of Authority

No person may act as an insurer or transact insurance in Georgia unless a Certificate of Authority has been granted by the Commissioner. To qualify for a certificate of authority, an insurer must comply with the provisions of the law as a domestic insurer as one of the following: Incorporated stock or mutual insurer Fraternal benefit society Nonprofit hospital or medical service corporation Lloyd's association; or Reciprocal insurer To qualify for an original certificate of authority to transact one or more classes of insurance, a domestic insurer must possess and maintain a minimum of $1.5 million in capital stock or in surplus. Foreign and alien insurers will only be authorized to transact insurance in this state if additional minimum required reserves are maintained

The Association will pay:

Open claims existing at the time the Association becomes liable For group policies, the Association will pay claims incurred by the next policy renewal date or 45 days, whichever is earlier, but in no event less than 30 days after the Association becomes liable Individual policy claims incurred no less than 30 days after the Association becomes liable

False Financial Statements

The following are considered unfair trade practices: Filing with a public official or making, publishing, or placing before the public any false statement of the financial condition of an insurer with the intent to deceive Making any false entry or willfully omitting a true entry of a material fact in a book, report, or statement pertaining to the business of any insurer with the intent to deceive

Reciprocity

In order to obtain a nonresident license without additional requirements, the person's home state must have reciprocity with Georgia and award nonresident agent licenses to Georgia residents on the same basis. Nonresident agents who move to another state, or resident agents who move to another state from Georgia, must notify the Commissioner within 30 days of change of legal address to maintain a nonresident license. Nonresident licenses are issued on a biennial basis and expire at the end of the licensee's birth month. Prior to expiration, licenses must be renewed and verification that the nonresident's license is still in good standing is required.

Issuance and Display of License

The Commissioner will issue a license to qualified applicants. A license must state all of the following: The licensee's name and address The date of issue, and conditions for expiration or termination The kind(s) of insurance covered (if not an agency license) Any license restrictions Upon request of the licensee, the Commissioner will provide a certificate of licensure which will be suitable for display at the licensee's place of business.

A licensed insurance Counselor:

Advises consumers about their insurance needs for compensation. Unlike agents or producers, who facilitate insurance transactions, a counselor offers advice for compensation. An individual who administers a group plan for an employer is not a licensee.

Misrepresentation

An insurer may not make or issue a false estimate or illustration, misleading statement or misrepresentation of: A policy's terms, benefits, advantages promised, or dividends to be receivedA dividend estimate prepared on a company form that clearly shows that estimated dividends are based on past experience is not considered misrepresentation and false advertising An insurer's financial condition or a life insurer's legal reserve system The name or title of any policy or class of policies

Lapse

An individual whose license lapses while serving in the United States armed forces may be granted a new license if applying within 1 year after his/her service terminates, and no more than 5 years from the date of expiration.

Boycott, Coercion, Intimidation

Entering into any agreement to commit any act of boycott, coercion, or intimidation resulting in restraint of, or monopoly in, insurance business is considered an unfair trade practice and is prohibited.

Insurable Interest

Insurable interest is required when personal insurance is issued, but need not exist at time of loss.

Broad Powers and Duties

The Commissioner enforces and executes the duties imposed by the Insurance Code.. The Commissioner may make reasonable rules and regulations necessary for the administration and enforcement of the Insurance Code. The Commissioner has the power to examine and investigate into the affairs of every person engaged in the insurance business in Georgia, in order to determine whether the person has been or is engaged in any unfair method of competition, or in any unfair or deceptive act or practice prohibited by insurance laws and regulations.Orders and notices from the Commissioner are effective only when they are in writing and signed by the Commissioner's authority. Every order must state the effective date and include the purpose, grounds on which it is based, and provision of the law in which the action is being taken. An order or notice may be served by delivery in person, or by mail, addressed at the principal place of business or last address of record. Any order of the Commissioner issued to multiple recipients may be served by sending it by electronic mail. The Commissioner must have rules or regulations approved by the Attorney General and on public file for at least 10 days before a rule/regulation becomes effective.

Access of Commissioner to Records

Every person being examined must produce and make freely accessible to the Commissioner all records, accounts, documents and files relevant to the examination. The representatives of the person being examined must facilitate such examination and aid the examiners.

Application for Certificate of Authority

To apply for a certificate of authority, an insurer must file an application showing its name, home office location or principal office in the United States if an alien insurer, kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, names of general officers with the number of shares held by each general officer, a copy of its corporate charter, and bylaws. Foreign and alien insurers must provide additional information as determined by the Commissioner. The application must be accompanied by the required fee, which will be returned if the application is denied. The Commissioner has 90 days to approve or disapprove an application. If no action is taken within that time frame, the application is considered approved. The certificate will specify the kinds of insurance the insurer is authorized to transact in Georgia. Certificates of authority expire at Midnight on June 30 of the year following date of issuance or renewal. Renewal forms must be filed by March 1 preceding expiration. Certificates must be renewed annually.

Continuing Education

In order for an insurance license to be renewed, each licensee must complete a minimum of 24 continuing education hours, 3 of which must be completed in Ethics. Resident licensees continually licensed for 20 years or longer must complete a minimum of 20 continuing education hours, of which 3 hours must be in Ethics. Hours may be completed at any time during the current biennial license period, but must be completed prior to the license expiration date.

Counselor's License

A counselor is any individual who engages in the business of counseling, advising, or rendering opinions as to the benefits promised under contract or offered by any insurer regarding the terms, value, effect, advantages, or disadvantages under the contract of insurance. When receiving a fee, commission, or other compensation, the individual may not receive any other compensation from any other source relating to the same transaction. To qualify for a counselor license, the applicant must submit an application, pay the required fees, including the cost of submitting electronic fingerprints for a criminal background check, and file a $5,000 counselor bond with the Commissioner. The applicant must have 5 years of experience as an agent, subagent, or adjuster, or provide evidence of sufficient teaching or educational qualifications or experience which qualifies the applicant to act as a counselor. Unless exempt, the applicant must pass a required counselor examination. A licensed counselor must meet the same continuing education and renewal requirements as a licensed agent. If an insurance agent is also licensed as a counselor, the agent may not receive any compensation from, or charge any other fee to the customer, or receive compensation from the insurer or other third-party for the placement of insurance with that customer unless the agent: Obtained, prior to the insurance transaction, the customer's written consent that the agent will receive such compensation; and Disclosed to the customer the amount of compensation to be received from the insurer for the placement of insurance

Exceptions

A license as an insurance agent is not required of the following: An officer, director, or employee of an insurer or agency that does not sell, solicit, or negotiate insurance and does not receive a commission as long as the activities are either managerial or administrative, or relate to underwriting or providing technical support An employer, association, or officers, directors, employees or trustees engaged in the administration of an employee benefit program or trust plan, as long as no compensation is paid to such persons by the company issuing the contracts Employees of insurers engaged in the inspection, rating, or classification of risks or in the supervision of training agents and not engaged in any insurance transaction A person whose activities are limited to advertising through printed publications or mass media without the intent to solicit or transact insurance A salaried full-time person who counsels or advises an employer relative to the insurance interests of the employer as long as the employee does not sell, solicit, or negotiate insurance or receive a commission An attorney admitted to practice in Georgia, when handling the collections of premiums or advising clients about how insurance is incidental to the practice of law A salaried employee of a credit or character reporting firm, not engaged in the insurance business, but who may report to an insurer A person who administers a group plan for an employer, or is an employee of an insurer, as long as any administrative fee does not exceed 5% of the premiums collected Any person who willfully violates licensing requirements or compensation regulation may be found guilty of a misdemeanor.

Fiduciary Capacity/Commingling

A licensee effecting an insurance contract must report to the insurer, or its agent, the amount of premium charge for each contract. The amount of premium must also be shown in the contract. All premiums are held in a fiduciary capacity, which means that they must be promptly paid to the party entitled to them and may not be commingled with personal funds. Fiduciary capacity does not require a separate bank deposit for each principal, as long as funds for each principal can be determined from the agent's account records. Any willful violation of this code constitutes a misdemeanor unless the amounts involved exceed $500, which constitutes a felony.

False Information and Advertising

A person transacting insurance business may not engage in an unfair trade practice. With respect to making, publishing, disseminating, circulating, or placing before the public as an advertisement or announcement, the following are considered unfair trade practices: False Information and Advertising An individual may not make a statement containing any assertion or representation about the insurance business or any person in the conduct of his/her insurance business, which is untrue, deceptive, or misleading, including: Representing that an insurer or agent is associated with a Medicare program, the Social Security Administration, or that any policy offered for sale has been endorsed or sponsored by the federal or state government Knowingly selling or offering medicare supplement insurance coverage which is not compliant with rules and regulations of this state Representing that an insurer, agent, or policy is endorsed, sponsored by, or associated with any group, association, or organization unless that is the case Direct response advertising, including radio or television, any life insurance policy where the death benefit cannot be truthfully, completely, clearly, and accurately disclosed Implying that life or health insurance coverage is "guaranteed issue" by using the terms "Non-Medical" or "No Medical Exam" when medical questions or other underwriting guidelines must be met as a condition to be insured Advertising a life or health policy when such advertisement has not been approved by the Commissioner Failing to disclose in printed advertising material that medical benefits are calculated based on usual, customary, and reasonable charges Engaging in dishonest, unfair, or deceptive insurance practices in marketing or selling to service members of the United States armed forces

Agent's Certificate of Authority and Appointment

Each authorized insurer must obtain a certificate of authority for each agent (except a surplus line broker) representing that insurer. An application for an agent's certificate of authority must include a written appointment and certificate of the insurer proposed to be represented. The certificate includes information relative to the applicant's character, criminal background, residence, experience, and that the authorized insurer or a sponsoring agent is satisfied that the applicant is trustworthy and qualified to act as its agent in this state. The request for a certificate of authority must be submitted within 15 days of the agent's contract or first insurance application is submitted. A certificate of authority is obtained immediately upon the submission of appointment request to the Commissioner. The certificate of authority for an applicant does not become effective before an initial license is granted by the Commissioner. The insurer is responsible for renewing the agent's certificate of authority annually and for paying appointment and renewal fees. An insurer that terminates an agent's appointment must notify the Commissioner within 30 days of the termination if the reason for the termination may result in suspension or revocation of a license. Upon written request of the Commissioner, the insurer must provide additional documentation pertaining to the termination or activity of the agent. If an agent's certificate of authority is terminated, the insurer must promptly give notice of the termination and effective date to the Commissioner and the agent, where reasonably possible.

Late Renewal Reinstatement

Failure to renew a license by the required filing date will result in a $150 penalty, in addition to required renewal and late fees, payable at the time the licensee applies for a late renewal reinstatement. If a late renewal reinstatement is received MORE THAN 6 months after the expiration date, the licensee will be required to submit electronic fingerprints. Failure to file for late renewal reinstatement prior to 1 year from the license expiration date will require the licensee to reapply for the license and satisfy the prelicensing and examination requirements.

Cease and Desist Orders

If after the hearing, the Commissioner determines that a person has engaged in an unfair method of competition, or an unfair or deceptive act or practice, the Commissioner may issue a cease and desist order requiring such person to refrain from engaging in the method of competition, act or practice. In addition to issuing a cease and desist order, the Commissioner may order any one or more of the following: Assess a penalty of up to $1,000 for each act or violation, or up to $5,000 per violation if the person knew or reasonably should have known he/she was in violation Suspension or revocation of the person's license if the person knew or reasonably should have known he/she was in violation Such other relief as is reasonable and appropriate The Commissioner may revoke the Certificate of Authority, or licenses of any person who fails to comply with a Cease and Desist Order, within 30 days after receipt.

Which of the following statements regarding certificates of authority is correct?

If an insurance company refuses to be examined by the Commissioner, its certificate of authority may be suspended or revoked. An insurer must agree to be examined and regulated by the Commissioner in order to maintain its ability to do business. If an insurer shares ownership with an un-authorized entity, it is liable to have its own certificate of authority revoked; it does not vicariously provide authorization for its unauthorized affiliate. Investigating and adjusting claims do not in themselves constitute transacting insurance business. As for the minimum capital requirement, it is $1.5 million.

Cease and Desist Orders

If it appears that a person has engaged in, is engaging in, or is about to engage in a prohibited act, the Commissioner may issue a cease and desist order if it is in the public's best interest to prohibit that person from continuing such act, practice, or transaction. The order will include a notice of opportunity for a hearing, which must be requested within 10 days of receipt of the order. The order and notice will be delivered by registered or certified mail or overnight mail with a return receipt.If the act, practice, or transaction occurring (or about to occur) constitutes imminent peril to the public health, safety, or welfare, an emergency order will be issued, effective immediately. If the Commissioner has reason to believe a person has violated a provision that is considered a criminal act, notice will be sent to the prosecuting attorney in whose jurisdiction the violation may have occurred. The Commissioner must consider whether the violation was committed willfully. In addition to issuing a cease and desist order, the Commissioner has the authority to: Place the violator on probation for up to 1 year for each act in violation Assess a penalty of up to $2,000 for each act or violation, or up to $5,000 per violation if the person knew or reasonably should have known he/she was in violation

Investigations/Notice of Hearings

If it is determined that regulatory action is appropriate as a result of the examination, the Commissioner may initiate any proceeding or actions as provided by law. With respect to examinations, investigations, or hearings, the Commissioner has the authority to take depositions, subpoena witnesses, administer oaths, examine any individual under oath, and compel the production of records, books, papers, and other documents. Subpoenas will be served in the same manner as if issued by a superior court. Failure to obey a subpoena that has been issued and served to a person required to appear will result in an order by a superior court requiring the individual to comply with the subpoena and to testify. Any person willfully testifying falsely under oath regarding information that is material to an examination, investigation, or hearing will have committed the offense of false swearing. If any person without just cause fails to obey a subpoena (to testify or produce records or documents) or to answer any lawful inquiry, the individual will be guilty of a misdemeanor. The Commissioner will hold a hearing if required by a provision of the law or a written demand made by an aggrieved person. Any demand for a hearing must be held within 30 days after receipt of such demand. In general, the Commissioner must give at least 10 days' advance notice of the time and place of a hearing stating the matters to be considered. The Commissioner will give notice to the persons directly affected by the hearing. If those persons are unknown, notice may be published in a newspaper of general circulation at least 10 days prior to the hearing. The hearing must be held at a place designated by the Commissioner and be open to the public. Before any proposed action is taken, a notice to show cause will state the proposed action to be taken unless such person can show cause as to why the action should not be taken. Any party to the hearing may appear in person and be represented by legal counsel, who may be present to hear and inspect all evidence, to examine witnesses, present evidence, and have the Commissioner issue subpoenas to compel attendance of witnesses and production of evidence. The Commissioner must issue a final order within 30 days after a hearing is concluded.

Misrepresentation in Application

It is an unfair act to fail to require that agents include all material facts relevant to the risk that are known, or should be known by the agent through proper diligence, when completing applications for insurance on behalf of policyholders. This includes encouraging agents to accept applications which contain material misrepresentations or concealments which, if stated, would prevent the policy being issued.

Which of the following actions is not considered to be misrepresentation under law?

Making a false or maliciously critical statement regarding the financial condition of a competitor. All of the other choices misrepresent some aspect of the policy. 'Making a false or maliciously critical statement regarding the financial condition of a competitor' describes a different violation of the law known as Defamation.

Investigation and Hearings

The Commissioner has the power to examine and investigate every person engaged in the insurance business to determine if unfair methods of competition or unfair, deceptive, or prohibited acts have occurred. If after the investigation, it is determined to be in the best interest of the public, the Commissioner will issue and serve a statement of charges and a notice of a hearing to be held at a fixed time and place not less than 15 days after service of the notice.

Which of the following statements regarding the ability of the Insurance Commissioner to examine insurers and other persons is true?

The Commissioner may examine the records of any licensee, as often as needed. The same goes for insurance companies. The 5-year timeframe is a minimum frequency, not a maximum frequency. The Commissioner may examine any authorized insurer in Georgia. The Commissioner has the option to accept a report of the regulator in a foreign insurer's home state. As for the Commissioner's final report after examining an insurer, such a report may only be published after the insurance company has received a copy of the draft. The insurer also has the ability to request a hearing about the report before it is finalized

Discretionary Refusal, Suspension, Revocation and Nonrenewal

The Commissioner may refuse to issue, or, after a hearing, refuse to renew or may revoke or suspend a certificate of authority if the insurer: Violates any insurance provision, law or regulation Knowingly fails to comply with or violates any rule or order of the Commissioner Is found to be in such condition that any further transactions in Georgia are deemed to be hazardous to its policyholders or to the public Compels claimants to accept less than the amount due to them or to bring an action against it to secure full payment Refuses to be examined Fails to pay any final judgment rendered against it in Georgia within 30 days after such judgment becomes final Is under the same general management or ownership as another insurer transacting direct insurance in Georgia without a certificate of authority, unless such company is a permitted surplus line insurer

If an aggrieved person demands a hearing, the Commissioner is obliged to hold one within ________ days, and must give all parties advanced notice of at least ______ days.

The Commissioner must grant a hearing, allowing appeal, or publish an order of action within 30 days. On the other hand, the Commissioner must only provide 10 days advance notice of any hearing that is being held.

Qualifications

The Commissioner will not issue a license to an individual who does not meet the qualifications or requirements as specified in the law. To qualify, an individual applicant must: Be a resident of Georgia, who must reside and be present within the state for at least 6 months of every year, or have a principal place of business in Georgia Be at least 18 years of age Be of good character Successfully complete an approved prelicensing course, which must contain a minimum of 20 hours of instruction per major line of authority. Exceptions to the prelicensing course requirement include applicants who:Apply for a property and casualty license and hold a CPCU, CIC, CISR, or CRM designationApply for a life or health license and hold a CLU or FLMI designationProvide satisfactory evidence indicating successful completion of 2 college or university courses related to insurance in the applicable lines of authority or who hold a degree in insuranceApply for a temporary license or limited lines license. Persons with 3 failed exam attempts must retake the prelicensing course, this time from a different provider, before retesting. Persons with 3 failed exam attempts who took a virtual prelicensing course must retake the course in a live classroom setting before retesting. Pass a required examination for licensure within 12 months of completing the prelicensing course, except for the following:An applicant licensed for the same lines of authority in another state submits an application for a license in this state within 90 days of the cancellation of the previous license will not be required to complete prelicensing education or examination. This exemption only applies if the prior state issues a certification that, at the time of cancellation, the applicant and license were in good standing for the line of authority requested. The same exemption applies if an individual licensed in another state moves to this state and applies within 90 days of establishing legal residence to become a resident licensee. Persons who fail the examination must wait two weeks before their next attempt. Anyone who passes the exam, but does not complete the licensing process within 12 months, must retake the exam.

Exceptions

The following activities are not included within the definition of discrimination or rebating: Adjusting premiums based on loss experience of the previous policy year Donating commissions from public insurance to nonprofits for use in civic enterprises Paying bonuses or abating life insurance or annuity premiums out of surplus accumulated from nonparticipating insurance as long as the activity is fair and equitable to all policyholders Charging lower premiums on life or health insurance for the insurer's employees Charging a reduced rate on industrial policies based on the savings in collection expense created by establishing a payment plan Compensating agents or brokers, or returning funds to participating policyholders, members, or subscribers Conducting promotion programs which offer prizes, goods, wares, store gift cards, gift certificates, sporting event tickets, or merchandise to current or prospective customers as long as the value does not exceed $100 per customer per year and giving away such items is not contingent upon the sale or renewal of a policy

Unfair Discrimination

Unfair discrimination includes: Charging different rates or providing different benefits or dividends to individuals of the same class, same policy amount and equal life expectancy for any life insurance policy or annuity contract Charging different premiums, policy fees or rates to individuals of the same class and essentially the same hazard for any policy of accident or sickness insurance; or Charging different premiums, fees, or rates, to individuals of the same class and property risk (property or casualty insurance) or basing rates solely upon a property's age or geographic location, (unless the rate differential is based upon sound actuarial principles or is related to actual experience) It is an unfair and deceptive act to refuse to insure or continue coverage, limit the amount of kind of coverage available, or charge a different rate for the same coverage based on race, color, or national or ethnic origin. A person found guilty of intentional unfair discrimination is subject to punitive or exemplary damages. An insurer may not deny or refuse to accept an application, refuse to insure, renew, or reissue a policy; cancel, restrict, or terminate coverage; charge a different premium rate for the same coverage, or exclude, limit coverage, or deny a claim by an insured who is or has been a victim of family violence or solely because the individual is blind or partially blind.