Arkansas Statutes, Rules, and Regs for Life and Health Insurance

Defamation

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

Authorized or admitted

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?

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?

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

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

Insurer

In the agent/insurer relationship, who is considered the principal?

Domestic, foreign, alien

Insurers are classified according to their domicile. What are the three types of insurers?

Misrepresentation

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?

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?

Complete continuing education hours and pay a renewal fee

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

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?

Misrepresentation

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

180 days

What is the maximum period for a temporary license in this state?

To prevent a producer or insurer from further violating laws or transacting insurance

What is the purpose of a cease and desist order?

To protect policy owners, insureds and beneficiaries from financial losses caused by insolvent insurers

What is the purpose of insurance guaranty associations?

Broker

What type of licensee represent the insured?

The agent

What type of licensee represents the insurance company?

Twisting

What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

Whenever deemed necessary, but at least once every few years

When can the Commissioner or Director examine insurers?

When the commissions from controlled business do not exceed the aggregate commissions on all the other businesses

When is controlled business legal?

Producer's spouse or designee in case the licensed producer dies or becomes disabled

Who can usually be granted a temporary license?

A person authorized to sell, solicit and negotiate insurance contracts

Who is an insurance agent?

Agent who resides and is licensed in another state, but who is authorized to transact insurance in this state

Who is considered a nonresident agent?

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

Who is controlled business?

The insurance company

Who is responsible for the contents of insurance advertisements?

The insurer who is being examined

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

Only producers properly licensed for the type of insurance transaction

Who may share in the commission from the sale of a life insurance policy?

All insurers authorized to write insurance within a state

Who must be a member of insurance guaranty associations?

The Department of Insurance

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

Stockholders

Who owns stock companies?

For continuation of business in case the licensed producer dies or becomes disabled

For what reason can a temporary license be issued?

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?

No, it is an illegal business practice

Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?