Last chapter: insurance regulation
What is the civil penalty for the first violation of the Pennsylvania insurance fraud prevention act?
$5,000 and increasing by 5,000 till hit 15,000
Maintaining a license requirement
- Continuing education for 2 years - Renewal Fees - Name/address change responsibility within 30 days - Reinstatement within 12 months if needed
What does the department of insurance do?
- controls and supervises insurance businesses - enforce insurance laws - issues licenses and certificates of authority - approves policy forms - conducts examinations, investigations, & hearings - Impose penalties
What are the commissioner of insurance duties?
- supervise insurance business - monitor licensing - Approve policies and forms - Enforce insurance laws and impose penalties - Conduct examinations, investigations, and hearings
Insurance Guaranty Association
-nonprofit legal entity -protects insureds against insolvent insurers -funded by member insurers -pays up to specified limits
How long can revocation last?
1 year
Licenses must make a report of any action taken against them in another jurisdiction within how many days?
30
How long do you have to report negligence actions to the department of insurance?
30 days
For how long must a company maintain a complete file of all advertisements used?
4 years
For the purpose of examination by the department, insurers must keep a record of all financial files for at least
5 years
How often are examinations required from the department of insurance?
5 years
Misrepresentation
A false, distorted or deceptive statements
Which of the following would be required to be licensed as an insurance producer?
A salaried employee who advertises and solicits insurance
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
What are the most common penalties for violations of insurance statues?
Cease & desist., fines, suspension or revocation
A state issued document empowering an insurance company to become an admitted insurer is called what?
Certificate of authority
All of the following violations may result in an agent's imprisonment EXCEPT
Failing to report to department a criminal prosecution
Which of the following entities established the do not call registry
Federal Trade Commission
What is the penalty for activities that affect interstate commerce making fraudulent statements?
Fine and imprisonment to 10-15 years
An insurance company ushers it's new policy holders that the premium cost will not increase for. At least five years. However, due to increasing financial strain, they plan to raise the premium cost for all insurance by 10% over the next two years. What term best describes this act?
Fraud
What is the difference between fraud and false/fraudulent statements?
Fraud is misinterpretation of a material fact made knowingly & false/fraudulent statements is knowingly making false or oral statements pertaining to any aspects of insurance or insurers
In general who can be excluded from producer licensing and examination requirements?
Insurance company officers, directors, or anyone not transacting insurance or receive commission
What is controlled business
Insurance on the producer's own life or property, or the lives or property of the producer's family or business associates
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
Misinterpretation
Twisting
Misleading Comparisions to get one to cancel or switch
A producer has become disabled. In order to keep his business going want me to producers designee do?
Obtain a temporary license
Rebating
Offering benefits or services not specified in the policy
Types of Liscenses
Producer/agent who represents the insurance company not the clients. Business Entity: must list at least 1 person Non- Resident License Temporary: Head of department of insurance 180 days
All of the following are requirements for producer license renewal EXCEPT
Renewal examination
All of the following are unfair claims settlement practices EXCEPT - Refusing to pay claims w/o conducting a reasonable investigation - Suggesting negotiations in settling claim - Failing to adopt and implement reasonable standards for settling claims - Failing to ackknowledge pertinent communication to a claim
Suggesting negotiations in settling claim
What act created a federal program that would share the risk of loss from potential terrorist attacks with the insurance industry?
TRIA
False Advertising
The deliberate use of false statements or deception in advertising.
Who pays for the examination under the department of insurance when the time is needed?
The insurers
What type of misinterpretation persuades an insured to their 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)
Unfair discrimination
discrimination of rate, premiums, or benefits
How often must the commissioner examine rating organizations?
every 5 years
Producers represent who?
insurers
Defamation
maliciously critical statements about a person or company