Connecticut Property and Casualty Insurance Insurance Regulation
Commissioner
The head of the State Department of Insurance
Exempt
not subject to an obligation
Cease and desist
to stop or discontinue
Producers who obtain their licenses within the last..
12 months of a biennium are exempt from meeting continuing education requirements for that biennium.
Producers will be given...
30 days notice prior to nonrenewal in which they can furnish proof of compliance to the Commissioner. A producer may not attempt to renew a license unless producer has completed the continuing education requirements.
The reporting agency and users of the information are subject to civil action for failure to comply with the provisions of the fair credit reporting act...
A person who knowingly and willfully obtains information On a consumer from a consumer reporting agency under false pretences may also be fined and/or imprisoned for up to 2 years
Renewal
A producer's license continues in force unless it is suspended, cancelled, or revoked, as long as the producer pays the proper fee and satisfies the continuing education requirements. License will expired every 2 years on the last day of the producer's birth month. Applicants may submit renewals beginning 90 days prior to the license expiration.
Which of the following is a duty of the Commissioner of insurance in this state? a. Amend rules and regulations b. Imprison Insurance Code violators c. Establish insurance rates d. Appoint individual producers
A. amend rules and regulations; the Commissioner may adopt and amend insurance laws and regulations among other duties
The regulation of the insurance industry primarily rests with a. the state b. the NAIC c. private insurers d. the federal government
A. the state; each state is responsible for the conduct of insurance within that state
false advertising
Advertisements cannot include any untrue, deceptive, or misleading statements that apply to the business of insurance or anyone who conducts it.
Fees vs. Commissions
Consultants cannot receive commissions or compensation from any insurer or producer in connection with the sale or writing of any insurance contracts involved with their consulting business. Consultants who violate these provisions can be penalized between $250-$2,500.
The follow are producer licensee eligibility requirements in this state:
Be at least 18 years of age. Have not committed any act that is a ground for denial, suspension, or revocation. Pay the required fees. Have successfully passed the required examination for the lines of authority for which a license is requested.
Certificate of Authority
Before insurance companies and health care centers can do any insurance business within this state, they must obtain a license from the Commissioner. (Certificate of authority)
Section 1034
Civil Penalties and Injunctions for Violations of Section 1033, states that the Attorney General may bring a civil action in the appropriate U.S. district court against any person who engages in conduct that is in violation of Section 1033 of not more that $50,000 for each violation, or the amount of compensation the person received as a result of the prohibited conduct, whichever is greater.
Upon receiving notice of appointment...
Commissioner has 30 days to verify that the producer is eligible for appointment. If determined to be ineligible, Commissioner must notify the insurer no later than 5 days after the determination.
Penalties and Fines
Commissioner may impose a fine up to $5,000 per violation for a producer that UNKNOWINGLY engaged in an unfair method of competition or an unfair or deceptive practice. Cannot exceed $50,000.
Consumer Reports
Include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by reporting agency from employment records, credit reports, and other public sources.
Continuing Education Requirements, Exemptions and Penalties
Continuing education rules 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. Resident producers must meet the continuing education requirements of Connecticut. Nonresident producers may satisfy this requirement by complying with the CE requirements of their home state.
An individual found in violation...
of this regulation will be subject to a fine between $250 and $2,500, imprisonment between 30 and 90 days, or both.
An individual who unknowingly violates the fair credit reporting act...
Is liable in the amount = the loss to the consumer, as well as any reasonable attorney fees incurred in the process
Applicants for a producer license must furnish satisfactory evidence to the Commissioner that they are...
Of good moral character. Financial responsible. Trustworthy and competent.
Reports cannot contain certain types of information if the report is requested in connection with a life insurance policy or credit transaction less than $150000...
Prohibited information includes bankruptcies more than 10 years Old Kama civil suits, records of arrests or convictions of crimes, or any other negative information that is more than 7 years old. Negative information includes information regarding a customer's delinquencies, late payments common insolvency or any other form of default
Investigative Consumer Reports
Provide information on the consumers character, reputation, and habits. The difference is that the information is obtained through investigation and interviews with associates, friends and neighbours of the consumer. These reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested. 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.
An individual who willfully violates this act enough to constitute a general pattern or business practice will be subject...
Subject to a penalty of up to $2500
Under the fair credit reporting act, if a policy of insurance is declined or modified because of the information contained in either consumer or investigative report...
The consumer must be advised and provided with the name and address of the reporting agency. The consumer has the right to know what was in the report. Also has a right to know the identity of anyone who has received a copy of the report during the past year. If consumer challenges any information in the report the reporting agencies required to investigate and amend the report comment if warranted. If 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.
It is considered unlawful insurance fraud for any person engaged in the business of insurance to...
Willfully and with the intent to deceive make any oral or written statement that are either false or emit material facts.
how many continuing education credit hours are producers allowed to carry over from one licensing period to the next? a. 0 b. 2 c. 3 d. 5
a. 0; credit hours may not be carried over to the next 2-year compliance period.
When appointing a producer, an insurer must file a notice of appointment to the Department of Insurance within a. 15 days b 20 days c. 30 days d. 31 days
a. 15 days; if an insurer intends on appointing a producer, they must first notify the Department of Insurance with a notice of appointment. This notice must be sent no later than 15 days from the contract being executed of the first application is submitted to said agent
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a. 5 days b. 7 days c. 10 days d. 3 days
a. 5 days; consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.
What is the maximum amount of controlled business allowed, in relation to the total premiums written to the general public? a. 9 times b. 2 times c. 3 times d. 5 times
a. 9 times; whenever the premiums from these sources of policies exceed 9 times the premiums on policies issued to the general public, the Commissioner will determine that the purpose of the license is to write controlled business and the license will be suspended or non-renewed.
Applicants for a license must furnish satisfactory evidence of all of the following to the Commissioner EXCEPT a. state residency b. good moral character c. financial responsibility d. trustworthiness and competence
a. state residency; resident and nonresident applicants alike must furnish satisfactory evidence of good moral character, financial responsibility, trustworthiness, and competence
A certified insurance consultant was advising his client on benefits and advantages of an insurance policy. His friend, an insurance producer, later sold to policy to the client. As a token of his appreciation for added business, the producer shared part of his commission with the consultant. Which of the following statements is true regarding this scenario? a. the consultant has violated the code provisions for compensation and will have to pay a fine b. the transaction was illegal; the consultant's license will be revoked c. the transaction was legal; consultants ma receive fees for their services and commissions from the sale of the policies they recommend. d. the transaction was legal; as long as the Department of Insurance was notified.
a. the consultant has violated the Code provisions for compensation and will have to pay a fine; consultants who violate provisions of the Insurance Code regarding compensation can be penalized between $250 and $2500
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce a. without receiving written consent from an insurance regulatory authority b. under any circumstances c. unless they have served an appropriate prison sentence d. without receiving written consent from a federal judge.
a. without receiving written consent from an insurance regulatory authority; Title 18, US Code, sections 1033-1034 makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce without receiving written consent from an insurance regulatory authority.
A licensee who negotiates, continues or renews insurance contracts in any unauthorized company and neglects to file the required...
affidavits and statements may be fined for up to $4,000, imprisoned for 6 months, or both. Also applies to a licensee who negotiates such contracts with a suspended license.
An insurer may appoint a producer to...
all or some of the affiliated companies by filing a single appointment request, provided the Commissioner has implemented an electronic system capable of processing the filings and has previously notified insurers that such filings are acceptable.
If the producer knowingly and willingly...
committed these acts, the penalty will be $25,000 per violation with a maximum aggregate amount of $250,000 in any 6-month period.
An insurer must pay an appointment fee and renewal fee for each producer is appoints...
an insurer that appoints a producer to more than one of its affiliates must pay the fee for each company to which the producer is appointed.
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a. revocation of license b. $2500 c. $1000 d. $100 per violation
b. $2500; an individual who willfully violates this Act enough to constitute a general pattern or business practice will be subject to a penalty of up to $2500
How many continuing education hours related to regulations or ethics are producers required to complete per reporting period? a. 2 hours b. 3 hours c. 6 hours d. 10 hours
b. 3 hours; in Connecticut, 3 ce hours must be completed in courses related specifically to state regulations or ethics
The widower of an agent was issued a temporary license 90 days ago to allow time for the sale of the agency. How much longer will this license be valid? a. 10 days b. 90 days c. 180 days d. the temporary license expired
b. 90 days; a temporary license is good for a total of 180 days
In order to get a nonresident license in Connecticut, a producer must do which of the following? a. surrender their license in their state residence b. apply and pay a fee to a nonresident state that reciprocates c. pass the nonresident state exam and satisfy their continuing education requirements d. represent an agency located in Connecticut
b. apply and pay a fee to a nonresident state that reciprocates; a producer may apply for a non resident license by showing that they are in good standing as a producer in their home state and by paying a fee, if the two states reciprocate
All of the following violations may result in an agent's imprisonment EXCEPT a. engaging in the business of insurance after being convicted of breach of trust b. failing to report to the department a criminal prosecution taken against the agent in another jurisdiction c. embezzling funds from the insurer d. knowingly obtaining information about a consumer under false pretenses
b. failing to report to the department a criminal prosecution taken against the agent in another jurisdiction; while the agents are required to notify the department about an administrative action or criminal prosecution taken against them, that act alone will not result in imprisonment. All the others are violations that may be punished by imprisonment
In which of the following situations is it legal to limit coverage based on marital status? a. divorce within the last six months of applying for insurance b. it is never legal to limit coverage based on marital status c. excessive number of divorces, as defined by the Insurance Code d. legal separation during the application process
b. it is never legal to limit coverage based on marital status; availability of insurance benefits or coverage may not be denied based on sex or marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits
A temporary license may be issued without examination to all of the following EXCEPT a. the surviving spouse of a deceased producer b. the spouse of a retired producer c. the legal guardian of a disabled producer d. the designee of a producer entering active service in the US Navy
b. the spouse of a retired producer; there is no provision for a temporary license to be issued to conduct the business of a retired producer or broker
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insured by 10% over the next two years. What term best describes this act? A. unfair discrimination b. errors and omissions c. fraud d. defamation
c. fraud; according to title 18, sections 1033 and 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud. This includes statements made on an application for insurance, renewal of a policy, claims for payment or benefits, premiums paid, and financial condition of an insurer.
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? a. unfair Discrimination b. Defamation c. Illegal d. a legal advertising strategy
c. illegal; it is illegal to participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly.
Which of the following best describes misrepresentation? a. making a maliciously critical statement that is intended to injure another person b. discriminating among individuals of the same insuring class c. issuing sales material with exaggerated statements about policy benefits d. making a deceptive or untrue statement about a person engaged in the insurance business
c. issuing sales material with exaggerated statement about policy benefits; misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, ets. This includes oral statements
Which of the following best describes the unfair trade practice of defamation? a. issuing false advertising material b. refusing to deal with other insurers c. making derogatory oral statements about another insurer's financial condition d. assuming the name and identity of another person
c. making derogatory oral statements about other insurer's financial condition; making oral or written statements directly or indirectly which are derogatory or maliciously critical of another insurer would be an example of the unfair trade practice of defamation
All of the following are unfair claims settlement practices EXCEPT a. failing to adopt and implement reasonable standards for settling claims b. failing to acknowledge pertinent communication pertaining to a claim c. suggesting negotiations in settling the claim d. refusing to pay claims without conducting a reasonable investigation
c. suggesting negotiations in settling the claim; when settling claims, negotiation can come into play.
What is the name of the act that requires insurers to inform applicants when they will be asking for personal information outside of public sources? a. the non disclosure act b. the insurance underwriting regulation act c. the insurance information and privacy protection act d. the fair credit reporting act
c. the insurance information and privacy protection act; the insurance information and privacy protection act requires that, during the course of acquiring information, insurers must follow certain procedures to protect the privacy of applicants. The act guarantees to individuals their rights to privacy as they apply to insurance.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? a. false advertising b. rebating c. twisting d. switching
c. twisting; twisting is a misrepresentation that persuades an insured/owner, to his or her detriment, t cancel, lapse, or switch policies from one to another
What is the maximum monetary per willful violation of unfair trade practices? a. $500 b. $1000 c. $5,000 d. $25,000
d. $25,000; if the producer knowingly and willingly engaged in an unfair method of competition or an unfair or a deceptive practice, the penalty will be $25,000 per violation with a maximum aggregate amount of $250,000 in any 6 month period.
How often must the Commissioner examine all insurers to guard against insurance company insolvency? a. annually b. at least once every 3 years c. at least once every 5 years d. as often as the commissioner deems necessary
d. as often as the Commissioner deems necessary; to further the enforcement of the Insurance Code and to determine the eligibility of any license, the Commissioner may examine the books and records of any insurance company or licensee as often as deemed necessary.
Each insurer's capacity to write new business in the state is limited by its current level of a. stock retention b. producers c. adjusters d. capital and surplus
d. capital and surplus; insurance companies must maintain adequate capital and surplus in relation to the written premium so the Insurance Department may determine their ability to pay claims or return premiums, if necessary.
When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement? a. defamation b. twisting c. rebating d. false financial statement
d. false financial statement; false financial statements are made when insurance companies attempt to hide their financial troubles from the public and government officials
An agent recently was found to be engaging in an unfair business practice before a hearing with the Insurance Commissioner. If the agent was unaware that the practice was unethical, what would the Commissioner probably have done? a. sentenced him to 6 months in prison b. fine him $5000 c. revoke his license d. issued a cease and desist order
d. issued a cease and desist order; if as a result of the hearing, it is determined that the producer was in fact engaged in an unfair or unlawful practice, the Commissioner will issue a cease and desist order commanding the producer to end the practice immediately.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? a. stating that the insurance policy is a share of stock b. exaggerating the benefits provided in the policy c. stating that the competitors will arbitrarily increase their premiums each year d. making comparisons between different policies.
d. making comparisons between different policies; making accurate comparisons of policies is not illegal
Under the Fair Credit Reporting Act, individuals rejected due to information contained in a consumer report a. are entitled to obtain a copy f the repost from the party who ordered it b. must be advised that a copy of the report is available to anyone who requests is c. may sue the reporting agency in order to get inaccurate data corrected d. must be informed of the source of the report
d. must be informed of the source of the report; under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of information contained in a consumer report, the consumer must be advised and provided with the named and address of the reporting agency.
the purpose of insurance regulation is to a. keep producers honest b. make insurance statutes uniform among states c. make insurance companies pay taxes d. promote the public welfare
d. promote the public welfare; the purpose of the Insurance Department is to protect the public's interest in matters concerning insurance.
A producer in Vermont wants to become a producer in Connecticut. The Department will waive certain examination requirements, provided that Vermont would waive these same requirements if a Connecticut procedure sought licensure in Vermont. What term describes this situation? a. non residency b. domicile c. brokerage d. reciprocity
d. reciprocity; reciprocity occurs when the state in which the person resides accords the same privilege to residents of connecticut
The commissioner may...
establish a reasonable schedule of maximum fees which may be charged by producers.
Coercion
forceful act or threat aimed to influence a person to act against his or her will
Commissioner must schedule a hearing...
help within 30 days after the notice is served, unless the parties agree o postpone it.
A license issued to a certified insurance consultant remains...
in force until September 30th of each odd-numbered year unless revoked or suspended sooner.
Rebating
is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy. Both the offer and acceptance are illegal.
Acceptability of a risk
is determined by checking the individual risk against factors directly related to the risk's potential for loss. Underwrter will sometimes request additional information about a particular risk from an outside source. these reports generally fall into 2 categories: Consumer Reports and Investigative Consumer Reports. Both can only be used by someone with a legitimate business purpose.
A company organized as a mutual insurance company...
is required to have a surplus of $3,000,000 for life insurance and $1,000,000 for health
A producer who violates a cease and desist order...
may be fined up to $50,000 per violation
Anyone engaged in the business of insurance whose activities affect interstate Commerce, and who knowingly makes false material statements
may be fined, imprisoned for up to 10 years or both. If the activity jeopardise the security of the accompanied insurer, the punishment can be up to 15 years
Commission
payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium
Producer makes any contract of insurance on behalf of an insurance company that is not licensed to do business in Connecticut...
producer will be personally liable to the insured for the benefits and other aspects of the contract, including the payment of claims.
Coercion is to
require, as a condition to a load, that the applicant purchase insurance from a specific insurer
Anyone acting as an officer, director ,agent, or other insurance employee who is convicted of embezzling funds faces.....
the aformentioned fines and imprisonment. if the embezzlement was in an amount less than $5,000 prison time may be reduced to 1 year
The commissioner will notify the producer of...
the expiration date at least 30 days before the license expires.
federal law makes it illegal for an individual convicted of a crime involving dishonest, breach of trust or a violation of the Violent Crime Control and Law Enforcement Act of 1994...
to work in the business of insurance affecting interstate commerce without receiving a letter of written consent from an insurance registry official (a 1033). Consent of the official must 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 engages in the business of insurance, will be fined, imprisoned for up to five years, or both.
Additional unfair claim settlement practices include:
Failing to maintain complaint handling procedures. Making false or fraudulent statements on or relative to an application for the purpose of obtaining a fee, commission, money or benefits from the insurer. Coercing debtors to contract with a particular insurer, unreasonably disapproval of a policy, requiring the payment of a separate charge, or using or disclosing information to the advantage of the mortgagee, vendor or lender. Refusing to insure or limiting to amount of coverage based on the following: an applicant's physical disability, mental or nervous condition, or intellectual disability, an applicant's blindness or partial blindness, an applicant's exposure to diethylstilbestrol through a female parent, an applicant being a victim of family violence, an applicant's genetic information. Failure to pay claims within 60 days from a paper formatted proof of loss or 20 days following an electronically formatted proof of loss. Failing to pay an amount equal to the settlement amount for any auto claim declared to be a constructive total loss.
Unfair discrimination
In Connecticut this also includes refusing to insure, limiting the amount, extent, or type of coverage, or charging an individual a different rate for the same coverage because of the following: physical disability, mental retardation, blindness or partial blindness, exposure to diethylstilbestrol through a female parent.
Capital and Surplus Requirement
In order for an insurance company to obtain a certificate of authority Connecticut, the company must comply with minimum capital and surplus requirements to write specific lines of insurance. State has established minimum capital and surplus requirements for all lines of insurance, including property, casualty, fidelity, and surety, marine, workers comp, etc.
What are the important rules concerning temporary licenses?
The Commissioner may limit the authority of any temporary licensee in any way deemed necessary to protect insured and the public. The Commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee. The Commissioner may revoke a temporary license if the interest of the insureds or the public is endangered. A temporary license may not continue after the owner of the personal representative disposes of the business.
If after a hearing the Department 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.
A nonresident producer's license may be issued if all of the following conditions are met:
The person is currently licensed as a resident and in good standing in the person's home state. The person has submitted the proper request for licensure and has paid the required fees. The person has submitted to the commissioner the application for licensure that the person submitted to the commissioner the application for licensure that the person submitted to their home state or a completed uniform application. The person's home state awards nonresident producer licenses to residents of this state on the same basis (the states have reciprocity).
Inducement
an offer that attempts to influence the other party
Resident Producers
and insurance producer is appointed by an insurer to act on the insurer's behalf. An insurance producer may not act as agent of an insurance company unless the producer becomes appointed by the insurer.
The Commissioner may examine the books and records of...
any insurance company or licensee as often as deemed necessary, but at least once every 5 years.
Insurers and insurance producers may not engage in...
any trade practice that is considered an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.
Temporary insurance producer licenses...
can be issued under special circumstances. Expire after 180 days unless the temporary producer passes a license examination.
Insurance companies and producers...
cannot pay a commission, service fee, brokerage, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in this state if the person is required to be licensed but is not.
producers cannot have any right to...
compensation, other than the commissions deductible from premiums on insurance policies, from any insured or prospective insured unless the compensation is based upon a written memorandum, signed by the party to be charged.
If after a hearing the Commissioner...
determines that the person has engaged in an unfair method of competition or an unfair/deceptive act or practice, they can issue a cease and desist order. Legally requires the person to stop engaging in the acts, methods, or practices that violate the Insurer Code.
Insurers are required to...
disclose to applicants the nature of information that they will seek from any entity other than the applicant directly or from public records. No special notice is required if the insurer's underwriting decision will be based solely on information gathered from public records.
Fair Credit Reporting Act
established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used. Also protects consumers against the circulation of inaccurate or obsolete personal or financial information.
Anyone who obtains information concerning an individual from an insurance institution or agent under false pretenses....
may be fined up to $20,000
An insurer or producer found guilty of twisting
may be fined up to $5,000, imprisoned for up to 30 days, or both
A nonresident producer who moves to this state from another state...
must file an Change of Address from to the Department of Insurance no later than 3 days after the change of legal residence occurs. A nonresident producer who moves to Connecticut does not need to submit any applications or pay any fees.
Applicants from other states....
must first obtain a resident license in their home state and then apply for a nonresident license in Connecticut
Applicants...
must pay to the Commissioner a license fee of $50 for each license issued. The Commissioner must also receive a nonrefundable fee for administering examinations (right now it is $15 for insurance producers).
Insurance professionals must be...
properly licensed for a specific line of authority in order to transact insurance. Purpose is to ensure that a producer meets educational and ethical standards required to fulfill producer's responsibilities to the insurer and to the public. Set out the requirements, procedures, and fees relating to the qualification, licensure, and appointment of insurance producers.
If upon investigation of a report concerning a failure to remit premiums...
the Commissioner determines a producer as received premiums from insureds and has failed to remit them to the proper company, the Commissioner may hold a hearing and suspend or revoke the license of the producer.
In Connecticut, whenever the premiums from controlled business policies exceed 9 times the premiums on policies issued to the general public...
the commissioner will determine that the purpose of the license is to write controlled business, and the producer license will be suspended or nonrenewed.
If a producer fails to satisfy the continuing education by the last day of the two year period...
the license will nit be renewed
The Commissioner may suspend or revoke...
the person's license and/or order restitution of any sums shown to have been obtained in violation of the unfair trade practices provisions.
Instructors earn...
the same number of credit hours for instructing as the students receive for successfully completing the course.
representing an insurance policy as a share of stock, or using names or titles that may misrepresent the...
true nature of a policy also will be considered false advertising.
The following CE requirements apply to resident producers in this state:
A minimum of 24 hours of continuing education credits every two years. Three of these house must be completed in courses related specifically to state regulations or ethics. A minimum of six credit hours must be completed for each line of authority. Property and Casualty or Personal Lines producers must complete a one-time three hour course on Federal Flood requirements. Credit hours may not be carried over to the next two year compliance period
Controlled business
Is any coverage written on a producer's own life, health or property, and/or that of the producer's immediate family or business associates. Licensee is not allowed to collect commissions on controlled business above the state-specified limit. Most states will not issue a license if it is determined that the primary purpose of the license is to write controlled business.
Defamation
occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business. Also applies to statements that are maliciously critical of the financial condition or any person or a company.
A producer cannot transact insurance...
with or by any insurance company that does not hold a valid certificate of authority. Any person who violates this statute may be subject to a maximum fine of $2,000, imprisonment for up to 6 months, or both.
Misrepresentation
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, payment of dividends, etc. This also refers to oral statements. (this is misrepresentation)
A refusal, limitation or rate can be justified if
it's based on sound actuarial principles or is related to actual or reasonably anticipated experience.
Home State
A state in which an insurer is organized and has its main place of business
Renewal or other deferred commissions...
may be paid to a person for selling, soliciting, or negotiating insurance in this state if the person was licensed at that time
Unfair claim settlement practices occur when someone consistently commits any of the following:
Advertising that misrepresents the benefits, advantages, conditions, terms, dividends, financial conditions, or premium rate of a policy. Defamation of another insurer by means of making, publishing or circulating false, maliciously critical, or derogatory statements regarding the other insurer's financial condition. Committing any act of boycott, coercion or intimidation resulting in unreasonable restraint or monopoly in the insurance business. Publishing, disseminating, or circulating false financial statements in an intent to deceive. Misrepresenting pretinent facts or insurance policy provisions relating to coverages. Failing to address issues related to claims within a reasonable time after proof of loss statements have been completed. Not attempting in good faith to effectuatte prompt, fair, and equitable settlements of claims in which liability has become reasonably clear. Compelling insureds to institue litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insured. Attempting to settle a claim for less that the amount to which a reasonable person would have believed they are entitled by reference to a written or printed advertising material accompanying or made part of an application. Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured. Making claims payments to insureds or beneficiaries not accompanied by statements setting forth the coverage under which the payment are being made. Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information. Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage. Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation the the facts or applicable law for denial of a claim or for the offer of a compromise settlement. Using, as a basis for sash settlement with a first party automobile insurance claimant, an amount which is less than the insurer would pay if repairs were made, unless such amount is agreed to by the insured or provided for by the insurance policy.
Each insurance company authorized to do business in Connecticut must report the following to the Commissioner
Failure on the part of an insurance producer to remit premiums for policies or endorsements issued to insureds within 30 days following the due date of the account of the producer with the company, its state agent, or managing general agent. Whenever a check issued by the producer to the company or residual market mechanism is retuned for insufficient funds and remains outstanding, 15 days following receipt of the return.
Insurance Information and Privacy Protection Act
requires that during the course of acquiring information, insurers must follow certain procedures to protect the privacy of applicants. Guarantees to individuals their rights to privacy as they apply to insurance.
Failure to Maintain Complaint Records
Insurance companies are required to maintain a complete record of all complaints received since the date of its last examination. Companies are required to record the total number of complaints, their classification by the line of insurance, the nature of each complaint, the disposition of the complaint, and the amount of time that it took to process each one.
The Commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer's license, may levy a civil penalty, or may take any combination of such actions, for any one or more of the following reasons:
Providing incorrect, misleading, incomplete or materially untrue information in the application for licensure. Violating any insurance law, or violating any insurance regulation, subpoena or order of the Commissioner or of another state's Commissioner. Obtaining or attempting to obtain a license through misrepresentation or fraud. Improperly withholding, misappropriating or converting any monies or property received in the course of the business of insurance. Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance. Having been convicted of a felony. Having admitted or been found to have committed any insurance unfair trade practice or fraud. Using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustwothiness or financial irresponsibility in the conduct of the business of insurance. Having an insurance producer license suspended or revoked in any state, province, district or territory. Forging another's name to an application for insurance, or to any document related to an insurance transaction. Improperly using notes or any other reference material to complete an insurance license examination. Knowingly accept insurance business from an individual who is not licensed. Failing to comply with an administrative or court order imposing a child support obligation. Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.
Rebates may include but are not limited to
Rebates of premiums payable on the policy Special favors or services Advantages in the dividends or other benefits Stocks, bonds, securities, and their dividends or profits.
Duties of the commissioner include:
See that all laws regarding insurance companies and health care centers are faithfully executed. Administer and enforce the provisions of the Insurance Code. Recommend to the General Assembly changes which, in their opinion, should be made in the laws relating to insurance. In addition to the specific regulations that the Commissioner is required to adopt , adopt further regulations that are reasonable and necessary in order to implement the provisions of the Insurance Code. Develop a program of periodic review in order to ensure compliance by the Insurance Department with the minimum standards established by the NAIC. Establish a program to reduce costs and increase efficiency through the use of electronic methods to transmit documents, including policy form and rate fillings.
False or deceptive advertising specifically includes misrepresenting of any of the following:
Terms, benefits, conditions, or advantages of any insurance policy. Any dividends to be received from the policy, or previously paid out. Financial condition of any person or the insurance company. The true purpose of an assignment or loan against a policy.
To be issued the Commissioner must decide that the temporary license is necessary or the servicing of an insurance business in the following cases:
To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled. The license would allow adequate time for the sale of the insurance business owned by the producer, for the recover or return of the producer to the business, or to provide for the training and licensing of ner personnel to operate the producer's business. To a member or employee of a business entity licensed as an insurance producer upon the death of an individual designated in the business entity application or license. To the designee of a licensed insurance producer entering active service in the US armed forces. In any other circumstances where the Commissioner deems that the public interest will be best served by the issuance of the license.
injunction
a court issued order to stop committing an act or violation
statute
a formal written law enacted by legislature; insurance statutes can be found in the stat Insurance Code
Twisting
a misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades and insured/owner, to his or her detriment, to cancel, lapse, switch policies, or take out a policy with another insurer.
Nonresident Producers
a person whose home state is not Connecticut may be licensed to transact insurance in this state as a nonresident producer.
Licensees must notify the Commissioner in writing...
about change in name, employer, business, or residence address within 30 days.
Persons cannot...
accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, or negotiating insurance in this state if the person is required to be licensed but is not
Insurance commissioner is...
appointed by the Governor of Connecticut and cannot be a director, officer, or agent of an insurance company.
Producers licensed only in credit insurance or travel accident and travel baggage insurance...
are also exempt from the 24-hour CE requirement.
Producers licensed in another reciprocal state...
are exempt
Producers licensed in Connecticut...
are not entitled to time extensions for their CE requirements, except for reasons due to military service.
False financial statements
are those that are intended to deceive public officials or the general public about the financial condition of an insurer
Certified insurance consultant
can examine insurance and annuity contracts and make recommendations for a fee. Contract must be in writing and executed in duplicate, by the person receiving the consultant's services. One of the copies must be kept by the person when they sign it. Contract must specify the fees that the consultant is charging.
an insurer (think company) or insurance producer (think what your trying to become) may pay or assign...
commissions, service fees, brokerages, or other valuable consideration to an insurance agency or to a persons who do not sell, solicit, or negotiate insurance in this state, unless the payment would violate state law.
Boycott, coercion, or intimidation
its illegal to be involved in any activity of boycott, coercion, or intimidation that is intend to restrict fair trade or to create a monopoly. Include unfair behavior that influences clients, and competing agents and brokers.
Any individual or business entity may apply...
to the Commissioner for an insurance license.
Reporting of Actions
if an administrative action is taken against a producer, the producer must notify the Commissioner no later than 30 days after the final disposition of the matter. The report must include a copy of the order, consent to order, or other relevant legal documents. No more than 30 days after the initial pretrial hearing date, a producer must report to the Commissioner any criminal prosecution taken against the producer in any jurisdiction. Report must include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.
Hearings
if the Commissioner suspects that an insurer or its agent has committed a violation or is engaged in an unfair trade practice, the Commissioner may issue a statement of chargers, and hold a hearing for any purpose deemed necessary
An insurance company must meet the following requirements to obtain and retain its license:
its surplus funds must bear a reasonable relationship to its liabilities based upon the type, volume, and nature of insurance business transacted. Risk-based capital related to its total adjusted capital must be adequate for the types of business transacted.
It is considered an unfair trade practice to...
knowingly commit an unfair method of competition or engage in such actions with enough frequency that the commission of unfair marketing practices indicates a general business practice.
Each application...
must be signed by the applicant if the application is for an individual, a licensed officer if for a corporation, a licensed partner if for a partnership, and a licensed principal, if the application is for any other applicant.
A producer who has allowed their license to lapse may...
reinstate the license no later than 12 months after the due date of the renewal fee, without being required to pass a written examination. Payments after the due date, a penalty in the amount of double the unpaid renewal fee will be required. ($100 due, but with a late fee it would be $200)
The Commissioner has the authority...
to conduct investigations as often as they deem necessary. The Commissioner or their authorized representative may issue subpoenas, administer oaths, compel testimony, order the production of books, records, papers and documents, and examine books and records. If any person refuses to allow the examination of books and records, to appear, to testify or to produce any book, record, paper or document when so ordered, a judge of the Superior Court may make such order as appropriate.
To appoint an insurance producer as its agent, the insurer must file a notice of appointment with the Insurance Department...
within 15 days of when the agency contract is executed or the first insurance application is submitted to the insurer by that producer.
Applicants who live and work in Connecticut...
would apply for a resident license.