PreLicense Insurance Flash Texas
TDI may fine or penalize agents or companies that:
1. Delay payment of claims 2. Misrepresent policies. 3. Fail to provide required discounts to policy holders 4. Engage in unfair or unlawful practices
Who does TDI license?
1. Insurance companies 2. Agents 3. Third-Party Administrators 4. HMOs 5. Premium finance companies 6. Continuing care retirement communities 7. Insurance Adjustors 8. Public insurance adjusters
What does the Texas Department Of Insurance do?
1. Issues certificates of authority to insurers wishing to market insurance products in Texas. 2. Oversees the marketing practices and solvency of the insurers that are authorized to do business in the State of Texas. 3. Establishes products standards, including required and prohibited provisions in insurance contracts. 4. Licenses producers to sell insurance products 5. Conducts investigations to determine if there have been violations of insurance law 6. Makes reasonable rules and regulations necessary to implement Texas insurance laws 7. Takes legal action to enforce the law, including issuing cease and desist orders and imposing penalties on violators.
The Texas Department of Insurance regulates the state's insurance industry. Which of the following is not one of TDIs responsibilities?
1. Licensing Producers 2. Overseeing the marketing practices of insurers 3. Issuing certificates of authority to insurers. 4. Imposing civil and criminal penalties on producers who violate the state's insurance laws.
KLM Insurance has a policy of promptly responding to policyholder communications regarding claims. That means it probably responds within how many days?
15 days
An agent must conduct how much business not related to his family or employee?
25% Of total sales must come from other sources other than family.
Gwen knows that there is a limit to the amount of insurance she can place on herself and her family each year. How much business must she place with persons outside her family and business associates? 25 percent of the number of contracts sold each year 50 percent of the first year premium 25 percent of the total premium volume 50 percent of the annual premium
25% of the total premium volume
How often must TDI inspect insurers and can they inspect before that period?
5 years and they can inspect whenever needed.
When must the penalty be paid and what happens if it is not?
A producer has 30 days to pay the fee or have it referred to the states attorney general for enforcement measures.
What are the different requirements for renewing a license in long-term care?
A producer must be licensed to sell life, accident and health insurance. Must complete a long term care partnership certification course of 8 hours. Complete 4 hours of CE No grace period if CE is not done $50 fine for every hour
Who is not an agent?
A regular salaried officer or employee of an insurer, HMO or of another agent who devotes substantially all of his time to activities other than soliciting applications. an employer or an employer's officer who administers an employee benefits plan that uses insurance, annuities or HMO memberships, provided the person is not directly compensated by the insurer or HMO; a bank or bank employee that collects insurance premiums on behalf of a depositor; and a person who provides administrative, management, or health care services to a health maintenance organization and whose only compensation is a percentage of the revenues, net income, or profit of the health maintenance organization.
Misrepresentation
A statement regarding the terms of a policy, its benefits or its dividends, which is untrue, deceptive or misleading
What is unlawful inducement?
Advertisement may not state or imply a good, service or other valuables that is not EXPRESSLY contained in the terms of the policy. An advertisement MAY include an incentive to inquire about a policy as long as no purchase is needed.
Which of the following statements about using testimonials or endorsements by a third party in insurance advertisements is correct? Advertisements containing testimonials or endorsements by third parties must first be approved by the Texas Department of Insurance. Advertisements must state whether a person is being paid for endorsing the insurance product. Testimonials and endorsements generally cannot be used in advertisements. An advertisement can state or imply that the state or federal government endorses its insurance policies.
Advertisements must state whether a person is being paid for endorsing the insurance product.
If your producers license application has been denied or revoked when may you reapply?
After the 5th anniversary of the effective date of the denial or revocation or the date of a final court order affirming the denial or revocation if judicial review was sought.
What are disparagements?
An ad may not unfairly disparage competitors, their policies, services or business methods. You can not make untrue statements about competitors.
What records must a producer maintain?
An agent must maintain all insurance records, including all records relating to customer complaints, separate from the records of any other business in which the agent may be engaged
When can you renew an agents license?
An agent whose license has expired for 90 days or less may renew that license by filing a renewal application and paying the renewal fee of $50 plus an additional fee of half of the renewal fee (or $75 in total). An agent whose license has been expired for more than 90 days but less than one year may not renew the license, but may obtain a new license without taking the applicable examination by filing a new application and paying the renewal fee of $50 plus an additional fee of half of the renewal fee. An agent whose license has been expired for one year or more may not renew the license. He or she may obtain a new license by complying with the requirements for obtaining a new license, including passing the licensing examination
A life and health insurance counselor may offer advice regarding?
An analysis of the policy, plan, or contract terms, conditions, benefits, coverage, or premiums The advisability of accepting, rejecting, changing or surrendering a contract.
False Information and Advertising
An announcement or advertisement to the public which is untrue, deceptive or misleading statement.
According to the Consumer Information Privacy regulation, an insurer must provide a notice to a consumer before disclosing any personal information. Which of the following is NOT required to appear in the notice? an explanation of the penalties for failing to protect a consumer's personal health and financial information identification of the types of information the insurer collects and discloses a statement that the consumer can opt out of having his or her information disclosed to third parties identification of the types of third parties to which it discloses this information
An explanation of the penalties for failing to protect a consumer's personal health and financial informationreport the information in writing to the Texas Department of Insurance within 30 days.
Jessica applied for a life and health insurance agent license on March 1, 2009. The Texas Department of Insurance issued her license four weeks later on April 1. Unless she timely submits a renewal application and renewal fee, Jessica's license will expire on April 1, 2011. April 1, 2010. March 1, 2011. March 1, 2010.
April 1, 2011
What is an examination of records?
At any time, TDI may ask an insurer or agent for information about its financial condition or any matter involving its business transactions. The insurer or agent is required to reply within 10 days.
What is the required notice for TDI to modify or revoke a Certificate of Authority?
At least 10 days notice.
Larry, Brian, Susan, and Jennifer just started working for AllPro Insurance Company in Texas. Based on their job descriptions below, which of them is NOT an agent? 4.Jennifer, who advertises insurance policies for AllPro 1. Susan, who collects insurance premiums for AllPro 2.Larry, who receives insurance applications from the public 3.Brian, who is a vice president in AllPro's human resources department and does not receive commissions
Brian the vice present in HR
How do you renew an agents license?
By submitting a renewal application and paying the renewal fee of $50 and completion of 30 hours of CE
How long must an agent keep records for CE
CE records must be kept for 4 years unless otherwise directed by TDI
Wanda suggests to a client that his credit rating might suffer if he does not purchase a life insurance contract from her. This is an unfair trade practice known as coercion rebating twisting. defamation
Coercion
When is an unfair comparison made?
Comparing term to whole life etc. An ad that compares polices must display.... "The description of [the other insurance company's name] policy was not furnished by [the other insurance company's name]. If there are questions regarding the illustration, please contact a representative of [the other insurance company's name]."
What are the requirements for agents selling Medicare related products?
Complete an 8 hour certification course that covers product suitability; and fraudulent and unfair trade practices in the sale of these products 4 hours of CE during each license term.
Boycott, coercion or intimidation
Conduct aimed at restraining or monopolizing the business of insurance.
Raphael is an agent for ABC Insurers and refers a prospective client to Dana, an agent at XYZ Insurers. Which of the following statements about commissions in this case is correct? It is illegal for Dana to share her commission with Raphael. Dana can legally share her commission with Raphael under Texas law. Dana will be engaged in controlled business if she shares her commissions with Raphael. It is considered rebating for Dana to share her commission with Raphael.
Dana can legally share her commission with Raphael under Texas law.
An insurer may voluntarily deposit funds with TDI as a condition to transacting business in Texas if it is required to do so in its home state.
Deposits for Protection of Insured and Creditors
An unlicensed person may refer business to an agent but may not
Discuss policy terms or conditions with the customer or potential customer
What happens when a written complaint is filed with TDI?
Each party is notified unless an undercover mission is taking place. Notification must be made once a quarter.
Ella is an agent for State Industry Insurance Company in Texas. After meeting with several family members, she learns that they would like to buy some life and health insurance contracts from her company. Which of the following statements is correct? Ella will not be engaged in controlled business if she gets at least 50 percent of her total business from non-family members. Ella can sell insurance to her family members provided at least 25 percent of the total volume of her premiums comes from non-family members. Another agent from her company must be involved in the sale in order to prevent it from being considered controlled business. Ella cannot sell any policies to her own family because it is considered controlled business.
Ella can sell insurance to her family members provided at least 25% of the total volume of her premiums comes from non-family members
Who must get an independent financial audit and how often? When is it due?
Every insurer and HMO must receive an independent financial audit once a year and submit the report to the commissioner by June 30th
Which of the following does not constitute an unfair claims settlement practice in Texas? Failing to respond to a claim promptly. Denying liability when the policy calls for payment of the claim. Failing to pay a claim for which the insurer's liability is uncertain. Routinely denying claims as a matter of company policy.
Failing to pay a claim for which the insurer's liability is uncertain.
False Financial Statements
Filing, publishing or otherwise providing the public or public official with false financial statements for the purpose of deceit is prohibited
Insurance Fraud Regulation
If fraud is suspected it must be reported to TDI within 30 days.
How can a nonresident be a producer in Texas?
If the person's home state offers reciprocal licensing for Texas producers and they must submit their certificate of authorization as well as the fees for the Texas based license.
Who is life, accident, health and Hospital service insurance Guaranty Association?
In Texas when insurers experience financial difficulties HHSIGA will cover the shortfalls.
Selling insurance without a license. Filing illegal claims misrepresenting insurance policies and coverages for financial gain.
Insurance Fraud
Which of the following is true about the Consumer Information Privacy regulation? It allows consumers to refuse to have their information disclosed to third parties. It prohibits the transfer of personal financial information to third parties. It prohibits an insurer from requesting financial information from an applicant. It applies to medical information only.
It allows consumers to refuse to have their information shared with 3rd parties.
Alicia, Dave, Michelle, and Sean are licensed agents in Texas. Which of them is NOT required to notify the Texas Department of Insurance about the events listed below within 30 days? Michelle, who now only works part-time as an agent Alicia, who moved to a new address in Texas Dave, who was convicted of felony robbery Sean, whose nonresident license in Oklahoma was suspended by that state's insurance department
Michelle, who now only works part-time as an agent.
What must testimonials include?
Must genuinely reflect the endorser's current personal opinions and experience with the insurer or its products. Must disclose any financial or proprietary interests the endorser has with the insurer Must disclose any affiliations If the endorsement is paid must include paid endorsement notification. Cannot promise future policy outcomes for that third party or others.
If a nonresident does not have a current license how may they be a producer in the state of Texas?
Must submit criminal history records along with a completed license application and fees. They must also take the Texas licensing examination
Janet has been continuously licensed as an agent in Texas for the past 25 years. Her friend, Steven, is a nonresident licensee in Texas and every year completes his state's continuing education requirements. When they ask you for advice on meeting the Texas continuing education requirements, you inform them that only Janet must complete Texas's continuing education requirements. only Steven must complete Texas's continuing education requirements. neither Steven nor Janet needs to comply with Texas's continuing education requirements. both Steven and Janet must comply with Texas's continuing education requirements.
Neither Steven nor Janet needs to comply the CE requirements of Texas
Harry meant to complete his CE courses on time but was just too busy to do it. How long of an extension is available to Harry to make up the missing credits?
None
An agent must notify TDI of the following changes within 30 days?
Of a change in his or her mailing address if he or she is convicted of a felony; or of an administrative action taken against him or her by a financial or insurance regulator of this state, another state, or the United States.if he or she is convicted of a felony; or of an administrative action taken against him or her by a financial or insurance regulator of this state, another state, or the United States.
When does an agents license expire?
On the second anniversary of the date the license was issued.
What are the requirements for agents selling annuities?
Producers must keep records of the information collected from the consumer and other information for 5 years. Must complete a 4 hour certification course on annuity products per year Must follow the rules of conduct as set by the Financial Industry Regulatory Authority (FINRA)
By December 31 every year (or asap) TDI will compute the reinsurance reserve necessary for all risks that an authorized health insurer is covering in the state. Does not apply to life insurance companies.
Reinsurance reserves
A person who determines a fraudulent insurance act has been or is about to occur must do what?
Report the suspicion to TDI or other Authorized Governmental Agency within 30 days.
TDI's Insurance Fraud Unit investigates insurance fraud. Examples include:
Selling insurance without a license Filing illegal claims Misrepresenting insurance policies and coverages for financial gain
Samantha has a life insurance license in Missouri and wants to sell life insurance part-time in Texas. Which of the following describes what she can or cannot do given her licenses? She can sell in Texas using her Missouri license. She cannot sell in Texas unless she establishes a residence here. She must submit a letter of certification and an application. She will then have the same rights and privileges as a resident license holder under the principle of reciprocity. She must work full-time as an agent in Texas for Texas to grant a license to her.
She must submit a letter of certification and an application. She will then have the same rights and privileges as a resident license holder under the principle of reciprocity.
What can a person NOT do if they do not have a producers license?
Solicit the sale of an insurance policy Take an application for an insurance policy Assist an insurer in transacting insurance business.
Consumer Information Privacy Regulation
Texas has issued regulations pursuant to this act that require each licensee of the Department of Insurance to provide notice to consumers (e.g. applicants for insurance) and customers (e.g. policyholders and beneficiaries) about its privacy policies and practices. The notice must be written in clear, nonlegal language that is easy to understand; describe the conditions under which a licensee may disclose nonpublic personal health information (such as an individual's medical history or a record of payments for medical care) and nonpublic personal financial information (such as income, account balances, loan payment or credit history, or other financial data that might be submitted on an insurance or other financial application) about individuals to affiliates and nonaffiliated third parties; and provide methods for individuals to opt out and prevent a licensee from disclosing that information.
If a person engages in ANY of this behavior then they are a : 1. Solicits insurance 2. Receives or transmits ( other than on the person's own behalf) insurance or policy to or from that insurer 3. Advertises for insurance 4. Receives, collects, or transmits an insurance premium 5. Takes any other action in the making of an insurance contract that is not on their behalf.
That person is an agent.
If a producer becomes disabled they may notify TDI and request?
That their license be placed on disability probation until they recover. Requirements may include making periodic reports to TDI; satisfactorily completing a course of study; paying costs, including reasonable attorney's fees and other expenses; submitting to a psychological evaluation, counseling, and treatment; undergoing a drug and alcohol abuse evaluation, counseling, and treatment; abstaining from alcohol or drugs; attending meetings of Alcoholics Anonymous, Narcotics Anonymous, or similar support groups; submitting to periodic random urine testing to screen for drug and alcohol abuse; and complying with any other probation condition that the department considers appropriate.
Superior Insurance Company receives a claim and proof of loss from an insured on April 1. It investigates the claim on April 5 and determines that the claim is a valid one by April 12. The insured submits additional information in support of the claim on May 1. On which date did Superior first become obligated to settle the claim?
The claim was determined to valid on April 12th which is when they became obligated to settle the debt.
An insurer's record of complaints must include all of the following information EXCEPT: The commissions paid on policies for which complaints were received The time spent processing each complaint A classification of complaints by line of insurance The total number of complaints received
The commissions paid on policies for which complaints were received
Why would a name not be approved?
The name is the same as, closely resembles, or implies affiliation with or sponsorship by a federal state, local government authority or program The name fails to state clearly that the applicant or licensee is an insurance agent or the name suggest that the agent is involved in a business other than insurance, has special expertise in areas other than insurance or that the agent represents a public interest organization.
What must a Certificate of Authority contain?
The specific kinds of insurance authorized.
What does TDI do to insure the Insurer is sound? How do they inform citizens?
They financial monitor the insurer. TDI publishes company profiles that show a company's complaint record and other useful information, including enforcement actions taken against the company and company history.
How does a health insurance counselor get paid?
They may accept either a commission or fee but not both.
How do you become exempt from TDI CE requirements
To be exempt you must of been an agent for 20 years.
What is twisting?
When an agent makes a misrepresentation to a policyholder for the purpose of inducing the policyholder to lapse, forfeit, or surrender an existing policy and replace it with another.
When does unfair discrimination occur?
When insured of the same class and risk, or life expectancy are charged different premiums, or provided with different dividends or benefits
When is a temporary agent license appropriate?
When you intend to apply for the license. This avoids having to take the test for 90 days however the temporary license may not be renewed.
Can a license be issued to a business entities?
Yes
Rebates and inducements
You are prohibited from bribing the customer however a gift of less than $25 is acceptable.
Defamation of Insurer
You can't talk crap about others in the business
Who does not need a separate life and health insurance counselor licenses?
a licensed agent for a life insurance company a licensed attorney at law a licensed public accountant a regular salaried officer or employee of an authorized insurer an officer or employee of a bank or trust company who does not receive compensation from a source other than the bank an employer, an employer's officer or employee, or a trustee of an employee benefit plan
How much continuing education is required?
agents and life and health insurance counselors must receive credit for at least 30 hours of continuing education (CE) in each two year renewal cycle, or 15 hours of continuing education annually. If the agent holds more than one license for which continuing education is required, he or she is not required to complete more than 15 continuing education hours annually. Courses must be approved or certified by TDI. Only 15 of the hours may be self-study, and two must be in ethics. (Holders of limited lines and county mutual licenses must complete ten hours every two years with two hours of ethics. Only five hours may be self-study.) It is the licensee's responsibility to retain certificates of course completion in case of audit.
What are the licensing requirements for an individual producer?
be at least 18 years of age; have passed the licensing examination within the past 12 months - this examination must cover: the type of insurance contracts for which the individual seeks a license, Texas insurance law, and the ethical obligations and duties of an agent (not required for licenses expired for more than 90 days but less than one year, nonresidents of reciprocal states and persons holding a CLU designation); have not committed an act for which a license may be denied; and have submitted the application, appropriate fees (license fee of $50 and an appointment fee for each appointment by an insurer), and any other information required by the department including a complete set of fingerprints. Appointments are processed through the National Insurance Producers Registry (NIPR) Gateway. NIPR is an affiliate of the National Association of Insurance Commissioners (NAIC). Using an NIPR Gateway transaction, companies may appoint agents electronically for a specific state, or record the appointment transaction in many states at the same time. TDI may not deny a license application solely on the ground that the applicant will act only part- time as an agent. An individual who wishes to sell variable life and annuity products, which are regarded as securities, must also hold a valid FINRA Series 6 or Series 7 license.
What does TDI consider when looking at a producers fitness for a license?
committed an offense involving fraud, dishonesty, or deceit; violated the state or federal insurance or securities laws concerning the sale of insurance; committed a felony of an immoral nature or a breach of a fiduciary duty; committed criminal homicide, felonious assault, arson, robbery, burglary, or theft; made, delivered, or possessed, with intent to make or deliver, controlled substances or dangerous drugs; committed an offense against public order and decency; committed an act of domestic violence; engaged in stalking.
Steven was having lunch with a group of agents when he made some false statements about a competitor's financial condition in order to hurt their reputation. In this case, Steven has committed false information. misrepresentation. defamation. unfair discrimination.
defamation
What are the penalties for violating code or commissioner's order?
deny an application for an original license; suspend a license for up to one year; revoke or deny renewal of a license; place on probation a person whose license has been suspended; require the license holder to make restitution; assess an administrative penalty; reprimand a license holder; issue an order to cease and desist from the activity that violates the code or an order of the commissioner, or activity that fails to obey an order of the commissioner; or any combination of these sanctions.
Unfair practices can be grouped into what categories?
failure to respond to a claim promptly or failing to respond at all; misrepresenting the terms of the policy so as to deny liability when in fact the policy calls for payment of the claim; stalling or unreasonably denying claims so regularly that the insurer is a frequent subject of complaints or lawsuits.
What is the false use of statistics
falsely advertising time within claims are paid, the dollar amount of claims paid, the number of claims paid, the number of people insured. Source of statistic must be disclosed as well as the date. Statistic cannot be more than 5 years old unless it is the most recent.
Life and health insurance counselors must pass an examination that includes:
fundamentals of life and health insurance group life insurance, pensions, and health insurance law, trusts, and taxation finance and economics business insurance and estate planning
When will TDI deny a license renewal/application?
has willfully violated an insurance law of this state; has intentionally made a material misstatement in his license application; has obtained or attempted to obtain a license by fraud or misrepresentation; has misappropriated, converted to the applicant's or license holder's own use, or illegally withheld money belonging to an insurer, HMO, insured, enrollee, or beneficiary; has engaged in fraudulent or dishonest acts or practices; has materially misrepresented the terms and conditions of an insurance policy or HMO contract; has made misrepresentations or incomplete comparisons regarding the terms or conditions of an insurance or annuity contract, or HMO membership to induce the owner of the contract or membership to forfeit or surrender the contract or membership or allow it to lapse for the purpose of replacing the contract or membership with another (known as twisting); has been convicted of a felony; has offered or given a rebate of an insurance premium or commission to an insured or enrollee; is engaged in controlled business; that is he or she is not actively engaged in soliciting or writing insurance for the public generally and obtained or attempted to obtain a license, for the purpose of soliciting, negotiating, or procuring an insurance or annuity contract or membership covering: the applicant or license holder; a member of the applicant's or license holder's family; or a business associate of the applicant or license holder.
An insurer most provide notice to a consumer before any info in disclosed. That notice must include:
identify the types of information the financial institution collects and discloses; state that the licensee discloses or reserves the right to disclose nonpublic personal financial information about its consumers to a nonaffiliated third party; identify the types of third parties to which it discloses this information; inform the consumer that he or she has the right to opt out of that disclosure; and provide a reasonable means by which the consumer may exercise the opt out right, which might include a reply form, an e-mail address, or a toll-free number. Requiring the individual to initiate the process by writing a letter is not a reasonable means.
If an agent uses an assumed name to conduct business that name cannot:
imply that the agent is an insurer, motor club, hospital service plan, HMO, prepaid legal service, continuing care retirement community or any other entity entitled to engage in insurance activities
False information and Advertising applies to:
in a newspaper, magazine, or other publication; in a notice, circular, pamphlet, letter, or poster; over a radio or television station; through the Internet; or in any other manner.
When are emergency cease and desist orders issued?
insurer or person engaged in the business of insurance is committing a fraudulent or unfair act, is unlicensed, is in a hazardous financial condition that would jeopardize the ability to pay claims, or is acting in a manner that will or could cause immediate danger to the public safety that cannot be repaired or rectified This order becomes final after 31 days unless the person request a hearing.
The following acts by an insurer constitutes unfair claim settlement practices.
knowingly misrepresenting to a claimant pertinent facts or policy provisions relating to the coverage at issue; failing to adopt and implement reasonable standards for the prompt investigation of claims arising under the insurer's policies; not attempting in good faith to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear; compelling a policyholder to institute a suit to recover an amount due under a policy by offering substantially less than the amount ultimately recovered in a suit brought by that policyholder; compelling a policyholder to let the insurer examine his or her federal income tax records as a condition for settling a claim; unreasonably refusing or delaying an offer of settlement under applicable first-party coverage on the basis that other coverage may be available or that third parties are responsible in law for damages suffered; attempting to settle a claim for less than the amount to which a reasonable person would have believed he or she was entitled by reference to an advertisement; undertaking to enforce a full and final release from a policyholder when, in fact, only a partial payment has been made; failing to establish proper controls to make certain that agents deliver funds due under policy provisions relative to cancellation of coverage within a reasonable time after such coverages are terminated; refusing to pay claims without conducting a reasonable investigation based upon all available information; Failing to promptly: provide claim forms, when these forms are a requirement for settling a claim; settle claims where liability has become reasonably clear under one portion of the policy in order to influence settlement under other portions of the policy coverage; provide the policyholder with a reasonable explanation of the basis under the contract and the law for denial of a claim or for the offer of a compromise settlement; respond to a request by a claimant for personal contact about or review of the claim; affirm or deny coverage of a claim to a policyholder within a reasonable time; acknowledge pertinent communications relating to a claim arising under the insurer's policy. (An acknowledgment within 15 business days is presumed to be reasonably prompt.) failing to maintain a record of complaints.
If a producer is terminated they
must notify TDI immediately including the cause, date.
Texas law says that is is not a rebate or discrimination when?
pay a bonus to a life insurance or life annuity policyholder out of surplus accumulated from nonparticipating insurance policies; pay an allowance to an industrial debit policyholder who has continuously made premium payments directly to the insurer's office, where that allowance represents the saving in collection expenses; readjust the rate of premium retroactively for a group insurance policy based on the loss or expense experience at the end of a policy year; or waive surrender charges under a life annuity contract when the contract holder exchanges that contract for another annuity contract issued by the same insurer.
An agent who is not appointed by an insurer may refer an insurance application to an agent who is appointed by the insurer and can
prepare the application, collect and remit the premium to the appointed agent, and deliver the policy to the insured. They must disclose to the insured that he or she is not authorized to bind coverage on behalf of the insurer.
A license must be issued in the agents
real name
Jack, an insurance agent, offers free season football tickets to anyone who buys a life insurance policy from him. This sales practice is called replacement. disparagement. twisting. rebating.
rebating
Temporary license holders can not
receive a commission on a sale made to a person who has a family, employment, or business relationship with that TLH. No commission may be paid on the sale of a contract of insurance or membership covering the TLH, his relative, or anyone who has been his employee during the preceding 6 months.
An agent who receives a commission or other compensation for the service as an agent cannot
receive an additional fee for those services rendered unless the payment is for tax, finance charge, policy fee, inspection fee or membership fee or service fee. If compensation is received from the insuree then commission cannot be paid unless: obtain the customer's written or recorded and dated acknowledgement that the agent will receive the compensation; and describe the methods used to determine the amount of compensation to be paid.
What are unfair discrimination examples?
refuses to insure, refuses to renew a policy, or limits the amount or extent of coverage available to a person; charges a different premium rate for the same coverage solely because of a physical or mental impairment, unless the insurer does so on the basis of sound actuarial principles; or refuses to insure, refuses to renew a policy, limits the amount or extent of coverage available to a person, or charges a different premium rate for the same coverage solely because a person is blind or partially blind.
How is an administrative penalty determined?
the seriousness of the violation; the hazard or potential hazard created to the health, safety, or economic welfare of the public; the economic harm to the public interest or public confidence caused by the violation; the history of previous violations; the amount necessary to deter a future violation; efforts to correct the violation; and whether the violation was intentional.
A record of complaints must contain
the total number of complaints; the classification of complaints by line of insurance; the nature of each complaint; the disposition of the complaints; and the time spent processing each complaint.
Harvey and Jim want to set up an insurance partnership that would advertise and place insurance. They both will sell policies in the partnership. How many licenses are required?
three licenses—one for each partner and one for the partnership
When must you be licensed as a life agent?
transacts life insurance, including endowment benefits and annuities, accidental death or dismemberment insurance, or disability income insurance; is an agent for an industrial life insurance company that issues only weekly premium life insurance on a debit basis; writes fixed or variable annuity contracts or variable life policies; writes for a stipulated premium insurer only insurance greater than $15,000 on any one life; or writes any kind of insurance for which the commissioner requires a license.
