VOCAB 5

An insurer misses the deadline to respond to an Examination Request from the Division of Insurance. If this is the company's first violation, it can face a penalty of

$500

What is the maximum a producer may be fined for violating cease and desist order?

$500

Which of the following would NOT be considered an unfair and deceptive practice?

controlled business

A license has met licensing qualifications for life, health, property, and casualty insurance. How many separate licenses will the department of insurance issue?

1

A certificate are proving that an applicant for a license has completed the required pre licensing education is valid for how long?

1 year

When a producer's license is terminated, the producer must remit the license to the commissioner within how many days?

15 days

Colorado law requires resident producers to complete 24 hours of state approved continuing education courses every

2 years

The division of insurance has requested information regarding an insurer's underwriting policies via email. How many days does the insurer have to respond to this request?

20 days

Of the required 50 hours of pre licensing education, what is the minimum number of hours an applicant must complete on the subject of ethics?

3 hours

All licensed producers are required to inform the commissioner in writing of any change of address within how many days of the change?

30 days

Misrepresentation

A false statement or lie that can render the contract void

Certificate Authority

A licensed issued by the Colorado insurance commissioner to insurers wanting to do business in Colorado

Which of the following persons is required to hold a producer license?

A nonresident agent who negotiates insurance contracts

All of the following statements are true regarding producer appointments EXECPT

A producer may only hold an appointment with one insurer

The commissioner may revoke a producer license for all of the following reasons EXECPT

Acting in a fiduciary capacity

Which of the following would NOT be a violation of state insurance regulations?

Agent C uses her license to write only business other than controlled.

Fiduciary Duty

All premiums belonging to the insurers and all unearned premiums belonging to insureds received by an insurance producer must be treated in

All of the following would be considered rebating EXECPT

An agent misrepresents policy benefits to convince a policy owner to replace policies

Every insurer in the state of Colorado is required

Annually basis

Discrimination

Between individuals of the same class with equal life expectancies or by reason of race, nationality, or ethnic group would be considered unfair discrimination.

An insurer may not transact insurance in this state without which of the following?

Certificate of Authority

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

Coercion

An insurance producer just sold an insurance policy to his sister. What kind of business is this?

Controlled

In this state of Colorado, an unfair trade practice of defamation is considered a/an

Misdemeanor

Two individuals are in the same risk and age class; yet, they are charged different rates of their insurance policies due to an insignificant factor. What is this called?

Discrimination

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, company charged him a higher rate for his insurance. This practice is considered

Discrimination

All of the following could be considered rebates if offered to an insured in the sale of insurance EXECPT

Dividend from a mutual insurer

Under Colorado's unfair claims practices regulations, when denying a claim an insurer just do all of the following EXECPT

Pay a claim that occurs after the grace period has ended

According to the Colorado fraud statues, every licensed insurance company doing business in Colorado is required to do all of the following EXECPT

Pay a fee to the state of Colorado to protect the insurer against fraud

Variable Contracts

Producers applying for license qualification to include variable contracts must furnish evidence that they have a current registration with FINRA, and evidence that they have passed the series 6,63, or 7 exams

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchased the insurance policy today

If a company has transacted insurance in this state without a certificate of authority, which of the following is true of its obligations for the policies sold?

The company can still be liable for its policies in any court of this state

In order to facilitate responses to inquiries from the division of insurance, companies must maintain all records for at least

The current calendar year, plus the 2 prior calendar years

Rebating

When producers give or promise anything of value that is not specified in the policy

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

coercion

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

defamation

The commissioner is conducting an examination of a foreign company located outside of Colorado. Who is responsible for the cost of the examination?

foreign company

When the commissioner believes that a person has engaged in an unfair method of competition or an unfair trade practice, before issuing a cease and desist order, the commissioner must

hold a hearing

An insurer who willfully violates a single provision of an unfair trade practice regulation may be fined

$30,000

A producer is required to remit premiums from a trust account to the insurer within how many days of receipt?

45 days

For how many years must a producer keep supporting documentation of his or her continuing education completion?

5 years following license continuation

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

Defamation

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

An insurance producer is prohibited from charging separate fees for any of the following services EXECPT

Financial planning

Financial Statements

Financial reports that summarize the financial condition and operations of a business

Noncompliance with the regulation regarding fees charged by producers may result in which of the following penalties?

Fines and license suspension or revocation

If a person knowingly presents false information on an insurance application and intends to deceive the insurer for financial gain, it is considered to be

Fraud

Colorado statue fraud (fraudulent insurance act)

Fraudulent insurance act is committed if a person knowingly and with intent to defraud presents any written statement in an application for an insurance policy or a claim for payment, knowing that misstatement contains false information concerning any material fact

To obtain a nonresident producer's license in this state, a prospective licensee must

Have a similar license in his or her home state

To be licensed as a resident insurance producer in Colorado, an applicant must meet all of the following requirements EXECPT

Have an associates degree in business and finance

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal

An insurer published intimating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

Any request to modify an insurance license must be submitted to the commissioner

In writing by the licensed producer

Which is the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

In which of the following situation is it illegal to limit coverage based on martial status?

It is never legal to limit confesable bases on martial status

Which of the following is a requirement for an insurance agency transacting insurance in Colorado?

It must obtain a producer license

Controlled business

When producers sell policies on themselves, their family or their coworkers.

If an insurance producer allows his or her license to lapse, within how many months of the due date of the continuation fee may the producer reinstate the license without having to pass a written examination?

Within 12 months

What is a requirement for notifying the commissioner of any change of address?

Within 30 days, in writing

Illegal

it is is illegal to a participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly

How often must insurance companies doing business in Colorado file financial statements with the commissioner?

once a year

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

sexual orientation

Enforcement

the act of making people obey laws and rules

Coercion

the practice of persuading someone to do something by using force or threats

All of the following are true regarding rebates EXECPT

Rebating are allowed if it's in best interest of the client

A producer wants to start using an assumed name for his business. Which of the following is required prior to the use of the name?

Register the name with the commissionwr

Exemptions

An insurance agent license is not required of any officer, director or employee of an insurer or organisations employed by insurers, provided they are not directly or indirectly involved with the actual sale of an insurance and do not receive any commission

All insurance companies doing business in the state of Colorado must file a financial statement with the commissioner

Annually, on or before March 1

In order to get a nonresident license in this state, a producer must

Apply and pay a fee to a nonresident state that reciprocates

Which of the following is a requirement for producers who want to start selling variable life insurance and annuities

Register with FINRA and pass the Series 6 examination

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

Misrepresentation

Which of the following is a specific service for which an insurance producer is NOT allowed to charge a fee to the applicant or policyholder?

Qualified retirement plan design for which the producer receives a commission from the insurer

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

Who is the responsible for covering the expenses associated with the examination of domestic insurers?

The examined insurer

A friend helped an insurance producer sell an insurance policy. The producer can share the commission with the friend if

The friend is licensed in the same line of insurance

Which of the folding accurately describes the ability of a licensed Colorado resident producer to become licensed in other states?

The producer can get a nonresident license in all reciprocal states

If a governmental agency in this state files an administrative action against an insurance license, the report of the action to the commissioner must include all of the following EXECPT

The producers production records for the prior year

Producers will be deemed to be using their license primarily to write controlled business if, during any 12-month period

The total premiums on controlled business exceeds the total premiums on all other business written

If the commissioner believes a producer has committed a violation of an insurance law, the commissioner will hold a hearing. What is the purpose of the hearing?

To allow the aggrieved party to be heard

Believing a producer has violated provisions of the insurance code, the commissioner will schedule a hearing

To allow the producer to show why penalties should not be assessed

A lender is requiring that a borrower purchases an insurance policy through a particular insurer, as a condition to the extension of credit. This is an example of which of the following?

Unfair practice of coercion

Commingling

Illegally mixing deposits or monies, collected from a client, with one's personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days).

Which of the following scenarios would be an example of coercion on the part of a lender?

Requiring the debtor to acquire a policy from a specific producer

All of the following are considered unfair trade practices in the business of insurance EXECPT

Sharing commissions

A producer who is licensed to transact several types of insurance wants to remove a line of authority from his license. What should the producer do?

Submit an appropriate form to the Commissioner and return the license for amendment

All of the following provisions must be included in an insurer's anti-fraud plan EXECPT

Suspensions of producer's licensure