Casualty - NC Statutes and Regulations for Casualty Insurance

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

A cease-and-desist order

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

A cease-and-desist order, a fine, and license suspension or revocation

Who is an insurance agent?

A personal authorized to sell, solicit, and negotiate insurance contracts

Who is considered a nonresident agent?

An agent who resides and is licensed in another state, but who is authorized to transact insurance in the state

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

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

Certificate of Authority

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

Certificate of Authority

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

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?

Discrimination

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

Domestic, foreign, and alien

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

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

Insurance company officers, directs, 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

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

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

Only producers properly licensed for the type of insurance transaction

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

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

The Department of Insurance (Commissioner/Director/Superintendent)

What type of licensee represents the insurance company?

The agent

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

The insurer who is being examined

Who owns stock companies?

The shareholders

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in the state

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 insured application be considered fraud?

When it is intentional and material

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)

When can the Commissioner or Director examine insurers?

Whenever deemed necessary, but at least once every few years (check for NC)