P&C Chapter 5 - Missouri Statutes, Rules and Regulations Common to All Lines

Rules related to MPCIGA that don't apply

-Life, annuity, accident, health, or disability Insurance -Mortgage guarantee, financial guarantee, or other forms of insurance offering protection against investment risk -Fidelity insurance bonds, or any other funding obligations -any insurance protecting the interest of a customer, arising out of a credit-debtor transaction -Insurance of warranties or service contracts -Title insurance -Ocean Marine Insurance -Any transaction between a person and insurer that involves the transfer pf investment/credit risk unaccompanied by the transfer of insurance risk -The portion of any insurance provided by an government

Limitations for coverage provided by guarantee association

-No coverage for a claim by/against an insured who, at the time of insurer's insolvency, has a net worth of $25,000,000 or more -No return of unearned premiums in excess of $25,000 per policy -A max of $300,000 for all covered claims These are limitations of what?

Director to suspend, revoke, deny, or cancel and insurance producer license

1) Intentionally providing incorrect, misleading, incomplete, or false information in license application 2) Violating any insurance laws, regulations, subpoena, or order of Director or another insurance commissioner in another state 3) obtaining license through material misrepresentation or fraud 4) improperly withholding, misappropriating, converting, any money or property received in the course of doing business 5) Intentionally misrepresenting the terms of an actual or proposed insurance contract of application for insurance 6)Having been convicted of a felony or crime involving moral turpitude 7) Caught committing insurance unfair trade or practice fraud 8) Using fraudulent, coercive, or dishonest practice or being incompetent, untrustworthiness, or financial irresponsibility in conduct of business 9) Having an insurance producer license denied, suspended, or revoked 10) Signing name of another to an application for insurance or any related document to insurance transaction 11) Improperly using notes or any other reference material during insurance exams 12) Acting as an insurance producer without a license 13) Failing to comply with administrative/court order imposing a child support obligation 14) Failing to comply with administrative/court order directing payment of state/federal income tax All these may cause what to happen?

A Person to become a licensed surplus line broker

1) Pay initial fee of $100 to Director 2) Submit a completed license application on an approved form 3) Pass a qualifying exam The are requirements for what?

Nonresident who wants to become licensed in MO

1) Person is currently licensed as a resident and in good standing in home state 2) Person has submitted proper request for licensure and has paid fees prescribed by Director 3) Person has submitted the application for licensure to Director that was submitted to home state 4) State that the person resides accords the same privilege to residents of MO All these are requirements of whom?

Director's Powers

1) Regulate the internal affairs of the Department of Insurance. 2) Prescribe forms and procedures to be followed in proceedings before the Department 3) Aid in the interpretation of any state insurance law 4) Withdraw/amend any rules and regulations

Director to waive CE requirements

1) Serious physical injury/illness 2) Active duty in military for extended period 3) Residence outside US 4) Licensee is at least 70 years of age Reasons for what?

False Advertising

1) Terms/benefits/conditions/advantages of an insurance policy. 2) Any dividends to be received from policy or previously paid out. 3) Financial conditions of any person or insurance company 4) The true purpose of any assignment or loan against a policy These are all examples that can be misrepresented by what?

Cease and Desist Order

A demand of a person to stop committing an action that is in violation of a provision

Producer

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

Missouri Property and Casualty Insurance Guarantee Association (MPCIGA)

An association of all insurance companies. All insurers should be members. Members pay assessments that provide benefits and limited coverage to insureds whose insurance companies are insolvent and not able to meet financial obligations to their insureds. Coverage provided by the association contains limitations

Rebating

Any inducement offered to the insured in sale of insurance products that is not specified in the Policy. Both the offering and acceptance of this are illegal.

Fiduciary (capacity)

Any person who is appointed/acts as a producer for an insurance company in MO, and who collects money from any source as a producer, will be responsible for all funds in a WHAT capacity?

Qualifications to obtain a license

Be at least 18 years old, file application with Director, Pay $100 license fee, pass each exam, haven't commited any act that is grounds for license denial, suspension, or revocation. These are qualifications for what?

Director of Insurance

Chief officer of the Department of Insurance and Professional Registration. Appointed by the governor with consent of Senate, and holds office concurrently with the Governor until a successor is appointed. Cannot be an officer, agent, or employee of an insurance company except as a policy holder. Must be a citizen of Missouri and have experience in insurance.

No. A Level 2 violation, $1000 fine for each act with a max of $50,000

Does each act as part of a trade practice constitute a separate violation? What is the penalty for a illegal trade practice?

5 days

How long does a producer have to retrieve records of an insured after the Director requests it?

2 years

How long is a producer license issued for?

3 years and have them available for inspection within 5 days

How long must producers maintain records for each individual insured and have them available for inspection of Director?

16 hours every 2 years

How many credit hours of continuing education must an insurance producer complete every how many years?

3 hours

How many credit hours of the 16 continuing education hours must be related to ethics, state laws, and producer duties?

30 days (and in writing)

How many days after the application does the insurer have to notify the insured that they do not have coverage?

30 days

How many days does an insurance producer have to report to the Director any administrative action taken against the producer in another jurisdiction or by another government agency?

30 days

How many days does the producer have to notify the director of a change of address?

30 days

How many days must all premiums associate with personal insurance policies must be remitted?

$100. (Also need a licensed individual insurance producer to be responsible for entity's compliance with the insurance law, rules, and regulations. Director must find that neither the entity nor officers have committed any act that would be grounds for denial/revocation.

How much does a business need to pay to receive a business entity producer license?

Anualy and $500

How often must a surplus line broker license be renewed and how much does it cost?

Biennially (every 2 years) and $100

How often must an insurance license be renewed and how much does it cost?

Every 5 years (but may conduct as often as necessary)

How often must the Director or a designated examiner conduct a financial examination of any domestic insurance company?

12 months and $25 (plus the $100 biennial fee)

If a license expires, how long does a producer have to reinstate the same license without passing an exam and how much is the late renewal penalty fee?

30 days

In how many days after a licensed producer has completed its hours must a provider of CE courses provide certification of completion to the Director?

Surplus Lines

Insurance that isn't available in the regular market place from admitted insurers. Usually involves high risk people and placed with nonadmitted insurers who specialize in offering insurance to high risk market

authorized/admitted

Insurers who meet the state's financial requirements and are approved to do business in he state are considered what?

Boycott, Coercion, Intimidation

It is illegal to be involved in these acts that is intended to restrict fair trade or to create a monopoly. Includes unfair trade behavior that influences clients and competing agents and brokers

Illegal Inducement

It is illegal to pay/offer/accept any of these: any special favors/advantages in dividends or benefits, any stock/bonds/securities/accrued dividends/profits, or anything of value not specified in the insurance contract. They are all examples of what?

Rebates

Rebates of premium payable on the policy, special favors or services, advantages in dividends or other benefits, and stock, bonds, securities, and other dividends or profits are all examples of what?

Surplus Line Brokers

Someone who holds a valid and current (blank) license issued by MO Department of Insurance. They are not admitted, but most states require they be on the state's "approval" list.

Duties of the Director

Supervise insurance business, licensing, approve policies and forms, enforce insurance law and impose penalties for violations, and conduct exams, investigations, and hearings

Defamation of Insurer

This occurs when a statement is made that is intended to injure a person in insurance business. Also applies to statements that are maliciously critical of the financial conditions of any person or company

Purpose of Licensing

To ensure that a producer meets educational and ethical standards required to fulfill a producer's responsibilities to the insurer and public is purpose of?

Purpose of examination of records

To ensure that the companies remain solvent and conduct business or insurance in compliance with state laws and regulations pertaining to licensing, policy forms, rates, claims, and market conduct.

Workers Compensations account, auto insurance account, missouri mutual and extended missouri mutual insurance company account, and an account for all other insurance.

What are the four separate accounts the guarantee association is divided into?

Fine up to $100,000, imprisonment up to 10 years, suspension of license, or all three

What are the potential punishments for willfully violating provisions of the Director's cease and desist order after it becomes final?

Person will be fined up to $1000 for each violation (not to exceed $100,000 in a 12 month period) and/or have their license suspended

What happens after a hearing if the Director determines a person is guilty of unfair methods of competition, deceptive acts, or prohibited practices?

1 year

What is the max extension of CE compliance period?

Violation, hearing, cease and desist order, other penalties

What is the order of violations and penalties?

Ethics, state laws, and producer duties

What subjects must 3 of the 16 continuing education credit hours be related to?

The insurance company being examined

Who is responsible for the fees of a financial examination?