Ch. 1 Insurance Regulation

How many hours of CE must be completed?

24 hrs every 2 years, 3 must be ethics

The commissioner must make a decision on a license application within how may days?

60 days

Defamation

making oral or written statement that is false, malicious, or derogatory regarding financial or personal condition of a person engaged in the business of insurance

Commissioner may order a person to pay how much when they do know about violation?

max of $2500, up to a combined total of $25,000

Commissioner may order a person to pay how much when they do not knowing breaking law

max of $500 for each violation

When a producer makes a mistake, who is held liable for customer?

the insurer

An insurance producer must notify the commissioner of any change in his mailing address or name with in how many days of such change?

within 30 days of name change or address

To appoint a producer as its agent, the appointing issuer must do what 2 things?

1. File notice of appointment on approved form within 15 days form date agency contract was signed or first application submitted 2. Pay required filing fee

If person violates cease and desist order there can be an additional fine of?

$10,000 up to max of $50,000 for each violation

How often can the Commissioner examine books and records of domestic (1) and other insurance companies doing business in the state (2)?

1. once ever 5 years 2. at any time

Who can a producer share commissions with.

Any licensed resident or non resident producer only

Misrepresentation of insurers finances can be punished by.. and for directors and officers of insurers

Fine not exceeding $1000 or imprisonment not exceeding 6 months or both fine not over $100 or imprisonment not exceeding 3 months or both

Do producers need to be a US citizen?

No

The commissioner may waive CE Requirements for what reasons? (4)

Producer cannot complete because: - hardship - military - only licensed to write limited line credit insurance - only licensed to sell travel insurance polices or employed for reasons other than selling polices.

If selling long term care (LTC) what must a producer do for CE

Take CE credits pertaining to LTC

Twisting

The act of inducing a person to drop existing insurance coverage and purchase new insurance with a new producer or company

Within how many days must the files form of a CE activity being completed be filed?

Within 30 days

Any violation of false advertising regarding the identity of the issuer is what criminal penalty

a misdemeanor with a max fine of $500

Discrimination punishment

$500 fine each violation. for officer of producer: misdemeanor and imprisonment for 1 year fine between $50-$500, or both

When appointment is canceled, what is the producer still entitled to?

- can still receive renewal commissions - can still serve existing policy holders cannot take new applications

What must the insurer do to comply with commissioner?

- keep independent file examinations of every producing agent - actuary attesting to loss reserves - semiannually conduct onsite review of underwriting and claims processing

In an emergency license suspension case how long does applicant have to request a hearing and how long does the commissioner have to make decision from hearing

-20 days -normal 30 days

A producer who terminates a producers appointment must inform the commissioner within how many days of the date of termination? Then when must the insurer five notice to producer? How long does the producer have to respond to the notification and send a copy of response to issuer?

1. 30 days of termination 2. within 15 days of notifying commissioner 3. 30 days to send response

How long does the commissioner have to approve the producers appointment and how long to notify if agent is ineligible?

1. 30 days to approve appointment 2. must notify insurer within 5 days of decision

What 2 qualifications must the Commissioner meet?

1. Must be a citizen/tax paying resident of the state 2. Cannot hold stock in any insurer or have direct role in management

A person licensed in another state apply for license in MI would not have to take exam again if: 1. 2.

1. Resident state certifies the applicant is in good standing 2. The application for license in Mi is received within 90 of cancellation of previous license

1. Who is the Commissioner appointed by? 2. For how long of a term? 3. and what must they do upon being appointed?

1. The Governor and approved by state senate 2. 4 year term 3. Post a $50,000 bond

A producer who allows their license to laps may reinstate licence without taking exam if they do so with in how long from the date of lapse?

12 months from date of lapse

If an applicant is denied a license he may submit a written request in within how many days for hearing?

30 days

What type of agreement must a counselor keep and for how long after services have stopped?

Written agreement between client and counselor. Must be kept for 2 years after services stopped

How is twisting and misrepresentation of policy benefits be punished?

a misdemeanor punishable by license revocation of up to 1 year. Also carries maximum fine of $1000 or imprisonment in county jail

Controlled business

an insurance producer places on his own life or property or that of his employee, employer, or business associates. permissible if it does not exceed 15% of total premiums written by a producer in any 12 month period.

Penalties for fraud and conspiring to create fraud

guilty of felony and subject up to 4 years in prison, fine up to $50,000 or both and must pay restitution. imprisonment up to 10 years or fine up to $50,000 or both

Payments of illegal rebates punishment

misdemeanor with max fine of $100 for each violation or imprisonment in the county

90 day grace period

not finishing CE requirement by expiration. Cannot sell products until CE is completed

If claims are not paid on time what must the insurance company do?

the benefits paid shall bear simple interest from a date 60 days after satisfactory proof of loss was received by the insurer at the rate of 12% per annum

When must a resident producer who moves from Michigan to another state file change of addresss

within 30 days