2023 State Insurance Statutes, Rules, and Regulations
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 insurer
Authorized or admitted
If an insurer holds a Certificate of Authority, it is known as what type of insurer?
Cease and desist order
If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued? 31 days.
false or fraudulent statements
Knowingly making false oral or written statements pertaining to any aspects of insurance or insurers
lines of authority
Life Accident and health or sickness
The Oklahoma Automobile Insurance Plan (OAIP)
Provides auto insurance to eligible private passenger and commercial risks who are unable to obtain coverage in the voluntary market.
Reporting of Actions to DOI
Report administrative actions taken against a producer within 30 days Provide required documentation if charged with criminal conduct
Transacting Insurance
The solicitation, inducement and preliminary negotiations affecting a contract of insurance, and the subsequent business pertaining to carrying out the terms of the contract.
If a surplus lines broker wants to transact insurance in Oklahoma
They must be licensed in that line of authority in accordance with OK laws
What is the purpose of a cease and desist order?
To prevent a producer or insurer from further violating laws for transacting insurance. 31 days.
To an insurer authorized to transact business in this state.
To whom may a certificate of authority be issued?
Discrimination
Two 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? Race, sing/married, disabled, gender, etc
What are the CE requirements to maintain a license?
Usually 24 hours of CE per 2 two year licensing period but varies by state.
25,000/50,000
What are the minimum required limits of liability for bodily injuries for UIM coverage in oklahoma?
A cease and desist order, a fine, and license suspension or revocation
What are the most common penalties for violations of insurance statutes?
Certificate of Authority
What document is required for an insurance company to transact insurance?
Foreign
What type of insurer is formed under the laws of another state?
The Agent
What type of licensee represents the insurance company?
When the aggregate amount of commissions from controlled business is under 25%
When is controlled business legal?
When it is intentional and material
When would a misrepresentation on an insurance application be considered fraud?
When can the Commissioner or Director examine insurers?
Whenever necessary, at least once every few years (state specific requirements)
Twisting
Which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another? misleading comparison of policies
The insurance company, not the customer
Who does the agent represent?
A person authorized to sell, solicit, and negotiate insurance contracts.
Who is an insurance agent?
The insurer who is being examined
Who is responsible for the costs associated with the examination of insurers?
Consumer Reports
Written and /or oral statements regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.
Licensed before you make the sale
You cannot sell or receive commissions unless you are what?
Statute
a formal written law enacted by legislature; insurance statutes can be found in the state Insurance Code
Reciprocity
a mutual interchange of rights and privileges. reciprocity between states means fewer licensing exams.
Hearing
advanced notice of hearing, hearing held promptly, aggrieved party has a chance to be heard
The CSR must
always identify themselves as a CSR that has been appointed by the producer
Inducement
an offer that attempts to influence the other party
Fraud
any misrepresentation of material fact, made knowingly with the intent to deceive; an act of deceit or cheating
3 hours on ethics
certain CE requirement
Business Entity License
corporation/association/partnership must have a designated agent
Coercion
forceful act or threat aimed to influence a person to act against his or her will
30 days
must file a change of address and provide certification from the new resident state.
Change of address within oklahoma
must notify within 30 days or $50 fine. (also email address and name change.)
Insurance Guaranty Association
non profit legal entity protects insureds against insolvent insurers funded by member insurers pays up to specified limits
Mutual Insurance Companies
nonprofit corporations owned by the policyowners (participating policies)
Exempt
not subject to a duty or obligation
Stock Insurance Companies
owned by stock holders who purchase shares of stock as an investment (non participating policies)
participating policy
policyowners are entitled to dividends, which, in the case of mutual companies, are a return of excess premiums are therefore nontaxable. dividends are not guaranteed.
Disclosure
revealed information to help someone make an intelligent and educated decision
Limited Lines Producer
sells, solicits, and negotiates limited lines insurance, which includes vending machines, crop insurance, and other types of insurance approved by the Commissioner
What is the Department of Insurance (DOI) NOT responsible for?
set premium rates or establish fines and penalties.
Surplus lines insurance
surplus lines are types of insurance not readily available in the state (Kevin Durant's right arm)
If you commit a violation, you are referred to as what at the hearing?
the aggrieved party
For good cause
the commissioner may grant an extension of time for completing the CE requirement. 12 months only.
Insurance Commissioner
the insurance commissioner does not legislate, only enacts laws
In this state a person cannot transact insurance for any class or classes of insurance unless...
the person is licensed for that line of authority in accordance with law
Domestic insurer
transacts insurance in the domicile state
nonparticipating policy
typically issued by stock companies, do not allow policyowners to participate in dividends or electing the board of directors
insolvent
unable to meet financial obligations
Temporary License
valid for 180 days; issued to maintain the existing business.
A participating insurance policy will pay...
Dividends to the owner based upon actual mortality cost, interest earned and costs.
Insurers are classified according to their domicile. What are the three types of insurers?
Domestic, Foreign, and alien
Defamation
If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?
2 hours on state and federal legislative updates
2 hour CE requirement
90 days
How long you have to file for a resident license after moving to Oklahoma
The maximum monetary penalty for violating dishonesty or breach of trust requirement is (if you somehow get licensed as a felon)
$10,000
The penalty for violating a cease and desist is
$100 to $1000
Other penalties from the Commission
-based on state statutes -license denial/suspension/revocation -prescribe certain conditions to met -require satisfactory completion of additional education -fines
total CE requirement
24 hours
Producers are required to renew their license every...
24 months
How long do you have to notify the DOI of an address or name change?
30 days
A cease and desist order is final after how many days?
31 days
Certificate of Authority
A state-issued document empowering an insurance company to become and admitted insurer is called what?
30 days
How many days does an insurer have to respond to a written communication from a claimant?
Rebating
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? offering benefits or services not specified in the policy
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. Not renewable.
Foreign insurer
An insurer that is domiciled in one state and transacts insurance in another.
10 days
Any licensee who moves out of Oklahoma, must return the license to the Commissioner no later than how many days after moving?
Unlawful Insurance Fraud
Any person engaged in the business of insurance to willfully, with the intent to deceive, make any oral or written statement that contains either false statements or omissions of material fact.
The aggrieved party has the right to...
Contest and request a hearing
What are producers required to do in order to renew their license?
Continuing education, renewal fee
What is the DOI responsible for?
Control and supervise Enforce insurance laws issue licenses and certificates of authority approve policy forms conduct examinations, investigations, and hearings impose penalties
If you commit a violation
DOI immediately issues cease and desist order. The DOI will issue a statement of charges.
The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?
Fiduciary
If fraud &/or false statements affect interstate commerce
Harsh penalties. Fine, imprisonment of 10-15 years.
In general, who can be excluded from producer licensing and examination requirements?
Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical).
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
Alien insurer
Is domiciled in one country and transacts insurance in another
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
Misrepresentation
Unfair Trade Practices
Misrepresentation False Advertising Rebating Twisting Defamation Unfair Discrimination
Misrepresentation
Misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This includes oral statements.
3 hours
Of the 24 hours of CE required, how many hours must be an ethics class?
Who may share in the commission from the sale of an insurance policy?
Only producers properly licensed for the type of insurance transaction
Investigative consumer reports
Similar to consumer report, primary difference is that the information is obtained through an investigation and interview with the associates, friends and neighbors of the consumer
Conservator
State appointed to step in to the day to day management of a bankrupt insurance company
Who owns stock companies?
Stockholders
5 years or whenever deemed necessary
The Commissioner has a duty to examine each domestic insurer admitted to transact insurance in Oklahoma at least once every
Election
The Commissioner is placed in office by
Who must be notified of a producer's change of address?
The Department of Insurance (Commissioner/Director/Superintendent)
You cannot make a sales point out of what?
The IGA. illegal to advertise association protection when selling insurance products.
Where do insolvent insurer's go to get the money to pay claims?
The Insurance Guaranty Association.
Where do the fines that the DOI levies come from?
The State Statutes
Commissioner
The head of the State Department of Insurance