MS Casualty Insurance laws

what is the purpose of a cease and desist order?

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

which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse or switch policies from one to another?

twisting

when would a misrepresentation on an insurance application be considered fraud?

when it is intentional and material

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 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

what are producers required to do in order to renew their license?

complete continuing education hours and pay a renewal fee

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

defamation

what is controlled business

insurance on the producer's own life or property, or the lives/property of the producer's family or business associates

maximum fine for violating state insurance laws

$5,000

if a producer's appointment is denied by the commissioner, when must the commissioner notify the appointing agency by?

5 days

what is the maximum fine for attempting to obtain a license through fraud or misrepresentation?

$1,000 per violation of licensing laws

insurers are classified according to their domicile. what are the 3 types of insurers?

-domestic -foreign -alien

authorized/admitted insurer

-those who meet the state's financial requirements and are approved to transact business in the state -considered a legal insurer

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

certificate of authority

who owns stock companies?

stockholders

a resident of another state that moves to MS has _____ days after establishing residency to apply for licensure without taking an exam

90 days

who is an insurance agent?

a person authorized to sell, solicit and negotiate insurance contracts

a state-issued document empowering an insurance company to become an admitted insurer is called what?

certificate of authority

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

purpose of insurance regulation

protect the public's interest in matters concerning insurance

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)

an agents acts in fiduciary capacity, which means

it is based upon trust and confidence, when handling the financial affairs of their customers, including the handling of premiums

between how many days can you request a hearing after receiving a cease and desist order?

10-30 days

2 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

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

$2,500

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

-cease and desist order -fine -license suspension or revocation

the commissioner must be notified of new producer appointment within:

15 days

assuming it is not denied, within how many days can an insurer begin using the premium rate that they filed with the Commissioner?

31 days

what is the highest percentage of controlled business that a licensed agent is allowed to write?

35% of aggregate premium in any 24 months

an example of an insurance adjuster would be

a person who investigates claims arising under insurance contracts for fee or commission

how is the commissioner of insurance selected in MS

elected by the public for a 4 year term in the same election in which other state officials are chosen

MS Windstorm Underwriting Association

ensures that the state has adequate market for hail coverage and other property insurance to stimulate orderly growth and development in the coast area

the requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?

fiduciary

what type of insurer is formed under the laws of another state?

foreign

commingling

it is illegal for insurance producers to commingle premiums collected from the applicants with their own personal funds

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

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

who may share in the commission from the sale of an insurance policy?

only producers properly licensed for the type of insurance transaction

insurable property (MWUA)

real property (and its contents) at a fixed location in the coast area

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

under the FCRA, if the consumer challenges the accuracy of the information contained in their report, the reporting agency must:

respond to the consumer's complaint

what type of licensee represents the insurance company?

the agent

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

the department of insurance (commissioner/director/superintendent)

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

the insurer who is being examined

how is the MS state rating bureau funded?

through annual assessment of its members

to whom may a certificate of authority be issued?

to an insurer authorized to transact business in this state

what is the purpose of the insurance guaranty association

to protect policyowners against insurer insolvency

when can the commissioner or director examine insurers?

whenever deemed necessary, but at least once every few years

in general, who can be excluded from producer licensing and examination requirements?

-insurance company officers -directors -any other employees who do not transact insurance and who do not receive commissions for their services

what should be included in an insurance company's advertisement?

-their policies' limitations or exclusions -the name of a specific agent -an identification of a limited policy as a limited policy

if an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered:

-unfair trade practice -because making any statement that an insurer's policies are guaranteed by the existence of the insurance guaranty association

how long can a temporary license be issued?

180 days

within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

in response to a notice of cancellation, the named insured requests reasoning behind the decision. how soon must the insurer respond?

5 days after the request