Florida Statutes, Rules, and Regulations Common to All Lines

In the state of Florida, it is illegal for a licensees commissions from controlled business to exceed what percentage of the total in a given year?

50%

What are the most common penalties for violations of insurance statutes ?

A cease and desist order, a fine, and license suspension or revocation

Most HMOs operate through what type of system?

A group enrollment system either at their place of employment or as a member of an association

Who is an insurance agent?

A person authorized to sell, solicit and negotiate insurance contracts

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

A person who negotiates insurance contracts

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 entities must approve all Medicare supplement advertisements?

Insurance Commissioner or Director

Who is responsible for the contents of insurance advertisements?

Insurance company

Which of the following is the closest term to an authorized insurer?

Admitted Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.

What type of licensee represents the insurance company?

Agent

Who must be a member of insurance guaranty associations?

All insurers authorized to write insurance within a state

Who is considered a nonresident agent?

An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

Authorized or admitted

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized or admitted

What type of licensee represents the insured?

Broker

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

Cease and desist order

What document is required for an insurance company to transact insurance?

Certificate Authority

What term is used for replacing insurance policies for the sole purpose of making commissions?

Churning

What are the producers required to do in order to renew their license?

Complete continuing education hours and pay a renewal fee

A 70-year-old individual who bought a Part B Medicare policy 2 months ago just began kidney dialysis treatments this week. The individual is now applying for a Medicare supplement policy, which would begin in 8 months. Which of the following could the insurer do to avoid paying for the dialysis?

Declare a pre-existing condition

If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

Defamation

Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination

Which of the following best describes an insurance company that has been formed under the laws of this state?

Domestic

Insurers are classified according to their domicile. What are the three types of insurers?

Domestic, foreign, alien

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate?

Every company is required to establish marketing procedures.

No insurance policy form can be issued, delivered or used in this state unless it has been

Filed with and approved by the Office of Insurance Regulation

For what reason can a temporary license be issued?

For continuation of business in case the licensed producer dies or becomes disabled

An agent in charge of an agency must hold which of the following licenses?

General lines

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity

I'm general, who can be excluded from producer licensing and examination requirements?

Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical)

Who is controlled business?

Insurance on the producers own life or property, or the lives or property of the producers family or business associates

In the agent/insurer relationship, who is considered the principal?

Insurer

The Office of Insurance Regulation is responsible for all of the following insurer activities EXCEPT

Issue of securities

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

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

Misrepresentation

All of the following are required provisions in all individual health insurance policies delivered in the state EXCEPT

Misstatement of age

In a long-term care policy, pre-existing condition limitations

Must appear as a separate paragraph and be clearly labeled.

Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?

No, advertising of the existence of the guaranty association for the purposes of solicitation and sale of insurance policies by insurers is an illegal business practice.

Before starting operations as an HMO, the organization must meet which of the following requirements?

Obtain a certificate of authority from the Insurance Department, obtain a valid Health Care Provider Certificate from the Department of Health and Rehabilitative Service, and make a deposit of $10,000 to the Rehabilitation Administration Expense Fund

All of the following would be considered an insurance transaction EXCEPT

Obtaining an insurance license

When does Medicare cover nursing home care?

Only if it is part of treatment for a covered illness or injury

Who may share in the commission from the sale of a life insurance policy?

Only producers properly licensed for the type of insurance transaction

Which of the following factors would be an underwriting consideration for a small employer carrier?

Percentage of participation by the employees

A long-term care shoppers guide must be presented at what point?

Prior to the time of application

Who can usually be granted a temporary license?

Producer's spouse or designee in case the licensed producer dies or becomes disabled

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

Rebating

Which of the following is NOT specifically prohibited by state law as an unfair trade practice?

Reducing premiums paid by the employers group insurance based on loss experience

An agent's appointment has been denied. Which of the following is true?

State taxes may be refunded upon a written request.

Who owns stock companies?

Stockholders

Which of the following may NOT be included in an insurance company's advertisement?

That it's policies are covered by a state Guaranty Association

Who must be notified of a producer's change of address?

The Department of Insurance (Commissioner/Director/Superintendent)

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

The aggregate amount of premiums due

Who is responsible for the costs associated with the examination of insurers?

The insurer who is being examined

In accordance with the Code of Ethics, agents must provide a completed application to

The prospective insured and the insurer

An insured under a group health plan has a dependent child who has an intellectual disability. When the child was enrolled in the insureds policy, the insurer offered coverage at a much higher rate for other dependents. Which of the following is true?

This is considered an illegal discrimination

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in this state

What is the purpose of a cease and desist order?

To prevent a producer or insurer from further violating laws for transacting insurance

What is the purpose of insurance guaranty associations?

To protect policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers

What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

Twisting

When is controlled business legal?

When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)

When can the Commissioner or Director examine insurers?

Whenever deemed necessary, but at least once every few years (please check your state regulations for specific time requirement)

When are HMOs required to file a report of the activities with the Department of Financial Services?

Within 3 months of the end of each fiscal year

All of the following are basic types of health insurance plans EXCEPT

Workers compensation