Insurance Regulation

An incorporated insurance company with its capital divided into shares is the definition of:

A stock company. A stock company is owned by its stockholders.

Should an agent or adjuster have a change of address, the obligation to notify the state insurance dept. lies with:

The licensee. The person who holds the license is responsible to report the change of address to the state insurance dept.

An act of terrorism must be "certified" to be such an act by:

The Secretary of Treasury in concurrence with the Secretary of State, and the Attorney General of the U.S. certifies an act of terrorism.

Although their liability is clear, B.B.S. Insurance Company routinely delays all claim payments for 90 days, and in doing so:

They are guilty of an unfair claim settlement practice.

All of the following events are considered acts of terrorism except: A. Acts of riot and civil commotion; B. Acts considered dangerous to human life, property or infrastructure; C. Acts resulting in damage within or outside the United States; D. Acts committed by an individual or individuals acting on behalf of any foreign person or foreign interest.

A. Acts of riot and civil commotion are not covered under this at. These perils are covered under most property insurance contracts.

None of the following can be covered by the Federal Terrorism Act Insurance Program except: A. Most commercial property and casualty risks; B. Federal crop insurance; C. Personal insurance policies; D. Health and life insurance policies.

A. The act does not apply to federal crop insurance, personal insurance policies or life and health policies.

Which of the following would be considered an Unfair Trade Practice? Twisting? Rebating? Coercion? or All?

All of these are considered to be a violation of the unfair trade practices.

All of the following are considered acts of rebating except: A. An agent provides an all-expenses paid cruise to a client and his wife in exchange for writing the coverage on his national chain of restaurants; B. An agent sends holiday greeting cards to all the clients on his mailing list; C. An adjuster receives a monthly check from an auto body repair shop for recommending the repair shop to clients who have a claim; D. All of these situations are considered acts of rebating.

B. Greeting cards do not constitute a form of rebating. They are not something of commercial value.

The responsibility to regulate the insurance industry belongs to:

Both federal & state government

The department of insurance has been advised that an agent is guilty of an insurance code violation. The commissioner/department will:

Call for a hearing. Usually, the ins. commissioner/director will first call for a hearing to review all sides of the alleged infraction.

In order to be certified as an act of terrorism under the Federal Terrorism Act, property and casualty losses must exceed _________ in the aggregate: A. $500,000 ; B. $1,000,000 ; C. $3,000,000 ; D. $5,000,000

D. $5,000,000 in damages is the threshold for the act to apply.

Which of the following would be considered unfair or deceptive acts by an adjuster? A. Requesting that a first party claimant sign a release that extends beyond the subject matter which gave rise to the claim payment, B. Advising the claimant that their rights may be impaired if a form of release is not completed within a specified period of time unless for the purpose of notification of statute of limitations; C. Issuing a check or draft, in partial settlement of a loss or claim under specific coverage that contains language that releases the insurer or its insured from its total liability; D. All of the above.

D. All of these are considered to be unfair claim practices.

Which of the following is NOT considered to be an unfair claims practice? A. Misrepresenting pertinent facts or uninsured policy provisions relating to coverages at issue? B. Refusing to pay claims without conducting a reasonable investigation based upon all available information, C. Attempting to settle claims on the basis of an application that was altered without notice to or the knowledge of the insured, D. Failing to honor an uncovered claim.

D. Declining to pay a claim that is not covered is not considered to be an unfair claims practice act. However, not responding promptly in the claim investigation is a violation.

No act will be certified by the Secretary as an act of terrorism under the Federal Terrorism Act if: A. The act is not committed as part of the course of war declared by Congress; B. The act is one of terrorism as defined by the Act; C. The losses that occur relate to commercial property risks; D. The losses that occur relate to life insurance.

D. Life insurance losses are not covered by the act.

An insurance company that is formed and domiciled under the laws of a particular state is an example of a(n):

Domestic Insurer

The responsibility of the federal government in regulating the insurance industry is limited to:

Fair labor standards and anti-trust matters

An insurer that distributes a statement that misrepresents the benefits, advantages, conditions, or terms of any insurance policy would be guilty of:

Misrepresentation and False Advertising.

Which of the following is a requirement for obtaining an agent's or adjuster's license?

Must satisfy the insurance department that you are TRUSTWORTHY.

The unethical act of persuading a policyowner to drop a policy solely for the purpose of selling another policy is known as:

TWISTING--making unfair or inaccurate comparisons to induce a person to drop their current coverage.

An insurer that refuses to pay claims without conducting a reasonable investigation based upon all available information is guilty of:

Unfair claim settlement practices. Conducting a prompt, reasonable and thorough investigation is a requirement. If not conducted in this manner, it is considered a violation of the unfair claim practices.