Insurance Regulation

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500, this is the fine for someone who willfully violates the Fair Credit Reporting Act.

The maximum fine for a Cease and Desist Order is?

$5,000 is the maximum penalty for violating a cease and desist order, which is given out by the Superintendent.

If a person has been found liable for a civil penalty in a hearing, that ruling can be entered as a judgment and enforced after:

120 DAYS; once a person has been found liable for a civil penalty, that determination may be entered 120 DAYS later as a judgment and enforced without court proceedings.

How many days does a licensee have to deliver information requested by the Superintendent of Financial Services?

15 DAYS; a licensee must submit requested information to the Superintendent within 15 days.

To hold an insurance license, how old must you be?

18 years of age

Investigative Consumer Reports must notify the insurer within how many days will the report be obtained?

3 DAYS

Within have many days does a licensee have to notify the Superintendent of a change in address?

30 DAYS

A candidate for a life and health agent license would need to complete how many hours of relicensing education:

40 Hours; single lines of authority require a minimum of 20 hours of relicensing education, combination licenses require a minimum of 40 hours.

If a consumer requests additional information concerning an investigative consumer report, how much time does the insurer or reporting agency have to comply?

5 DAYS

Misrepresentation

A false statement or lie that can render the contract void.

An independent Adjuster may include which of the following things:

A frim who acts on behalf of the insurer

Who will share in the commission of a Life Insurance Policy?

A licensed life insurance agent of the same insurer involved with the sale of the transaction; ONLY someone involved in the actual transaction may share in the commission.

All of the following would terminate an agents appointment except:

A new Superintendent put into office would not terminate an agents appointment.

Insurance Producer

A person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance

Which of the following individual's must pass the written examination to be licensed as an insurance agent?

A producer previously licensed in New Jersey who is applying for NYS license 120 days after becoming a resident of the state.

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

A salaried employee who advertises and solicits insurance; once there is a solicitation a producer license is required.

In this state, a temporary license may be issued for any of the following reasons except:

A temporary license is not available for an agents retirement.

Investigative Consumer Report in Insurance:

An extensive report that includes information on an individual's character, general reputation, personal characteristics, and mode of living.

Independent Adjuster

An independent claim representative who handles claims for insurers for a fee.

Which of the following is NOT considered an insurance producer?

An insurer officer, officers are NOT required to be licensed.

Fraternal Benefit Society

An organization formed to provide insurance benefits for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government.

Who is required to hold a producer license?

Any person who negotiates insurance contracts

An Insurance Broker's license can be issued to:

Any person, firm, or corporation who solicits, negotiates, or obtains insurance for an insured in exchange for a commission.

Agents must submit a license renewal application within how many days?

At least 60 days before the license expires.

If the Superintendent finds a licensee in volition of an unfair method or practice, he or she will issue a:

Cease and Desist Order; which is telling the licensee to stop any suspicious and illegal activities.

Before an agent can transact business in NY, every insurer, fraternal benefit society or HMO must file with the superintendent which of the following?

Certificate of Appointment; this is to ensure they are trustworthy and competent

Which of the following reports will provide the underwriter with the information about an insurance applicants credit?

Consumer Reports; they include written and oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reported or other public sources.

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, the company charged him a higher rate for his insurance. This practice is considered

Discrimination; this would be considered an unfair trade practice because permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer except:

Disputes concerning consumer report information; negative information would be considered customer delinquencies, late payments, insolvency or any other form of default.

If an agent fails to promptly remit the premiums collected from the insured to the insurer, the agent may be found guilty of:

Embezzlement; taking money belonging to someone else. This will cause the revocation of your license and criminal penalties will be imposed.

How often must a licensed agent renew their license?

Every Two Years; The licenses of all insurance agents born in odd numbered years will expire on their birthdays in odd years and even for even years.

Premiums (insurance)

Fees that insured parties pay insurers for coverage against losses

At a hearing, a person can do all of the following except:

File for dismissal of charges; this cannot be done

Intentionally misrepresenting or concealing a material fact to induce an insurance company to make a contract is known as:

Fraud

If an insured false reports a theft of a valuable item in order to collect payments from the insurance policy. This is an example of:

Fraud; attempting to collect money by falsifying a claim is a criminal act.

Before an order by the Superintendent can be considered effective, it must be:

In writing and then signed by the Superintendent; unless it is in writing and signed by the Super it is not considered valid or considered in effect.

Which entities protect policyowners, insured's, and beneficiaries under insurance contracts when insurers fail to preform contractual obligations due to financial impairment?

Insurance Guaranty Association, protects us under life insurance policies, annuity contracts, and supplemental contracts.

The Superintendent has the power to do all of the following except:

Issue a license to someone under the age of 18 years old.

Which of the following is NOT true concerning the purpose of the Insurance Fraud Prevention Act?

It helps insurers to not sell policies to those applicants that are considered to be a high risk.

Is it legal to limit coverage based on martial status?

It is never legal to limit coverage based on marital status.

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report:

Must be informed of the source of the report; they must be provided with the name and address of the reporting agency.

If an agent has changed his address, what must the agent do to comply with the regulation for change of address?

Notify the department within 30 days

Civil Penalty

Occurs when person violates license requirements; ex: practicing without a valid license

insurance fraud

Occurs when someone intentionally deceives another about an insurance matter to receive money or other benefits not rightfully theirs.

If an Insurance Agents is born in 1983 and he obtained his NY Insurance License in 2014. When will this agents license expire?

On the agent's birthday every odd-numbered years. If the question said 1984 then it would be on the agent's birthday every even numbered years.

According to New York Law, hearing ordered by the Superintendent must be:

Open to the Public; unless the Superintendent feels a private hearing is in the publics best interest.

An agent offers a prospective client two tickets to a Yankees baseball game with the condition that the client will purchase a family life insurance policy. This practice is known as:

Rebating; offering any consideration not specified in the policy is the unfair trade practice of rebating

An agent in another state wants to become an agent in NY. The other state gives the same privilege's to NY agents wanting to be licensed in the state as it does its own agents. NY therefore, extends the privilege's of its agents to the prospective agent to the other state. What is this called?

Reciprocity; it occurs when the state in which a person lives in sets the same privilege's to residents in NYS.

What does the Federal Credit Reporting Act do?

Regulates Consumer Reports

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must:

Respond to the consumers complaint, and if necessary reinvestigate the report

Every single insurance company must file annually with the office of the superintendent to show that they are:

Solvent

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

Which of the following for obtaining a insurance license is false in the State of NY?

The applicant needs to have two letters of recommendation stating they are trustworthy, reliable and have a good reputation.

A spouse was granted a temporary license for her deceased husbands agency on March 1. On May 1 she processed an application for life insurance on a new applicant. Which of the following is true?

The application was processed without a valid license. A temporary license may only be used to service, NOT solicit, negotiate, or procure new business.

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer associates, friends, and neighbors to provide the data reports.

The agent represents?

The insurer NOT the insured

The Superintendent may refuse to issue a license in all the following situations except:

The person is from another state; the Superintendent may refuse a license ONLY if the license is not trustworthy or has not complied with any of the prerequisites.

For a non-resident license to become a resident producer in New York, the licensee must:

They must apply within 90 days of becoming a legal resident.

What are the continuing education requirements for licensed agents in the state of NY?

To renew a license any resident must complete 15 hours of approved instruction every two years.

Why can a temporary license be issued?

To service existing business; NOT to solicit, negotiate, or procure new business.

Insurance Fraud Prevention Act

intended to permit the Superintendent and The Department to utilize their expertise to discover fraud.

What is the Superintendent in Insurance?

is a chief executive of a state insurance department. This person runs the department and is the primary leader of agencies tasked with upholding the insurance laws of the state. Their main role involves protecting consumers, discovering and prosecuting cases of fraud, and deterring it.

What does solvency mean?

to properly manage the risk that it underwrites so that it is always able to make payments to policyholders.

solict

to seek, to ask for

unfair trade practices

trading practices which derive a gain at the expense of the competition