Insurance Regulation

Individuals may qualify for their producer license if they?

* Are 18 years or older *Can read and write english *Maintain a business or legal address in PA *Complete a 24 hr. self-study or classroom pre-licensing education course *Submit fingerprints for a criminal background check *Have a professional competence, general fitness, and integrity of character *Pass the appropriate exam

Insurance department may fine, revoke, suspend or nonrenew a producer's license unon the finding of any of the following violations

*Acting as a producer without a license *Advertising as a producer for an unauthorized company *Soliciting as a producer for an unauthorized company *Soliciting for fictitious or dead companies *Transacting business with an unlicensed producer *Larceny by producers *Fiduciary Capacity of producers *Twisting, rebates and inducements *Misrepresentation of terms of policies and future dividends. All considered Misdemeanor stentenced to pay a fine of not more than $5,000 for each and every violation. at discretion of court not more than six months in county jail or both.

Non-selling activites Include

*Discussing insurance in general *Receiving request for coverage for transmittal to a certified producer *Assissting with the completion of applications on the agency premises *Passing on insurance inquiries of a particular nature tot he certified producer. *Receiving payments delivered to teh agency premises for coverage and issuing receipts on behalf of the producer or agency *Arranging or making meeting appointments for a certified producer *Collecting expiration data information from clients and potential clients.

Examination Waivers for the mandatory pre-licensing education requirement and state licensing examination.

*Waver of the property and casualty examination is granted for individuals that hold the Chartered Property Casualty Underwriter and Certified insurance Counselor *Nonresident applicant *Temproary Licensee

Individuals that pass their state licensing exam have?

1 year from the date of the exam to have their producer license issued.

Individuals the complete pre-licensing educatoin have?

1 year to pass their state licensing exam

Insurers are required to Acknowledge receipt of a claim (unless payment is made) , Provide claim forms and reasonable assistance within...

10 working days.

Insurers are required to Respond to a insurance department inquiry, and Accept or denial of claim after proof of loss is executed within...

15 working days

Insurers are required to Complete a claim investigation after notification within...

30 working days

It a producer fails to complete there CE classes they will have?

60 days to complete their CE and there will be no lapse in licensure. After 60 days the producer will ahve up to one year form the date of his or her license renewal to complete CE, however, there will be a lapse in licensure. if you dont complete in a year your have to retake test.

Fiduciary Capacity

All producers responsivle for all funds received or collected.

Judicial Review

Any person aggrieved by the determination of an order may appeal to the Commonwealth within 30 days after the inssurance of the order.

Continuing Education Requirements

Effective June 4, 2003, Producers must complete 24-credit hours of continuing education for license renewal every 2 years. Producers who sell flood insurance has to have 3 of thier 24 hour CE credits be for flood.

Misrepresentations

False statements that are relied upon as being truthful. Includes: Twisting, False Advertising, Illegal Inducement.

Insurance Commissioner

Has the statutory responsibility to regulate the industry in the public's interest. They insurance department is administrated by the insurance commissioner. There responsibilities: staff the department, appoint deputies, conduct investigations, hold hearings, and issue fines, and the suspension or revocation of certificates or licenses.

Injunction

If the alleged violator fails to comply with the order, and injunction may be filed with the Commonwealth Court of PA in the County in which the violation occurred.

Twisting

Illegal practive of misrepresenting policy provisions, or the making of incomplete comparisons as an iducement to terminate, lapse, forfeit or surrender one's policy for another of similar risks.

Cease and Desist Orders

Insurance department may issure a cease and desist order requiring the person or insurer to stop the activity in question.

Producers that maintain a bank account on premiums received.

Must keep insurance premiums separate from personal monies and shall, at all times keep a complete and accurate accounting

Unfair Insurance Practices Act of 1974

Regulate trade practices in the buseinss of insurance by defining proces in the state that constitute unfair methods of competition or unfair or deceptive acts or practices.

Uniformity of Licenses

Partnerships and corporation, including their qualifying active officers or qualifying active partners are required to be uniformly licensed with their respective organization. A "qualifying active officer" or qualifying active partner" is the individual that holds a current producer license for the line of authority for which the corporation or partnership is applying

fee arrangement

Producers representing a consumer in a fee arrangement must execute a written agreement wiht the consumer prior to acting on his or her behalf

PA Property and Casualty Insurance Guranty Association Act

Provides a means of covering Claims for certain property and casualty insurance polices. for individuals that are insured or claimants with admitted or authorized carriers that subsequently become insolvent. Coverage is provided up to $300,000 per covered claimant and $10,000 per policy for a covered claim for the return of unearned premium.

Producers that operate under an "account current system"

Shall at all times, maintain a balance at least equal to the net balance of premiums collected and unpaid to companies

Rate Regulation

performed by the commissioner through detailed rate reviews. Policy forms require prior approval before their introduction to the public.

False Advertising

Using media wiht deliberate deceit to defraud.

Brokers

When a producer is representing the insured they are acting as Brokers

Fictitious or Assumed Name

Will issue a license to individuals trading under a fictitous or assumed name. As long as individuals making application in these instances must file the certificate with the Department of State and attach a copy of that certificate to the license application.

Producers are prohibited from comingling insurance premiums collected from applicants with personal monies without...

the expressed written consent of each insurer.

Name Restrictions

will not issue a license if only the initials of the applicant's given name are used. Shall contain at least one full given name. An abbreviated given name or a substitution for a true given name shall not be accepted. Must Notify Insurance Department of any legal name change within 30 days.

Agency Appointments

written agreements between teh producer and teh insurance company under which the producer agrees to solicit, negotiate, and service insurance policies for compensation.

Illegal Inducement

any illegal act or activity that may induce or cause an individual to enter into an insurance contract.

Defamation of Insurer

defaming of an insurance Company by making false or derogatory statements as to the company's financial position.

Purpose of Licensing

ensure high standards of service to the insuring public of this commonwealth.

Boycott and Coercion

entering into an agreement to commit an act of boycott, coercion, or intimidation resulting in or tending to result in teh unreasonable restraint of trade or monopoly in the business of insurance.

Fair Credit Reporting Act

established to protect consumers form unfair and inaccurate information contained in the files of credit reporting agencies.

Rebating

illegal practive of a producer giving back to the insured monies or any form of consideration as an inducement to purchase insurance.

Producer License

is issued to individuals who sell insurance to the public. Commonly acts as representative of insurer.

Company Solvency

is required while conducting business in the state. This includes the requirements to apply and be approved as a licensed insurer and to provide detailed information on insurer operations and financial stability.

Temporary License

issued on a temporary basis to individuals with out the requirement for examination. Occurs upon death or incompetency of a producer, but can occur when individuals are serving in the armed services. issued for a period not exceeding 180 days.

Nonresident Producer License

issued to a non resident when the non resident producer want to sell insurance and collect commission in PA. A nonresident producer is one that has neither a business nor a legal address in the commonwealth of PA.

Managers and Exclusive General Agents License

issued to producers that conduct insurer type activites such as underwriting, policy issuance, and claims settlement. General have specialized expertise

Any Change, Sale or Dissolution of an Agency, Legal Name Change on License, Change of Residence or Business, or Criminal Conduct

must notify the insurance department of change within 30 days.