Ch 26: FL laws and rules pertinent to life and health insurance

Transacting is basically

Anything that needs to be done during the purchase process of an insurance product

Impaired insurer

Deemed by the department to be potentially unable to fulfill its contractual obligations, may be repaired (not insolvent)

Who will be appointed as the liquidator or rehabilitation of an insolvents insurer?

Department of financial services

If a governmental agency takes administrative action against an licensed/agency, they must submit s copy of the order and other relevant documents to the _ within _

Department within 30 days after the final disposition

The OIR must examine each domestic insurer _, and if the domestic company has had a certificate of authority less than _ then the OIR will examine _

Each domestic insurer at least once every five years, if less than three years then examined at least once a year

Administered is another word for

Enforced

A licensee licensed for 25 years or more and is a CLU or CPCU or has a bachelors in risk management must only complete

A minimum of 5 hours of elective continuing education courses every 2 years

Alternative compensations must be based on a _ and kept for _

Written contract signed by both parties and kept by the licensed agent for 3 years

Defamation is any _ statement that _

Written or oral statement that is false and maliciously critical of or so derogatory toward any person and is intended to injure such a person

All lines adjuster

Represents the insurer during the settlement of claims, determines the amount payable under a contract

Willful violation of the insurance code is a

Second degree misdemeanor

Commissions under excess or rejected business are paid to the agent under a

Single case agreement

Telling the applicant that a specific product is required by law when it isn't is an example of

Sliding

Department of financial services employed actuaries must be members of the

Society of actuaries of the casualty actuary society

Transacting includes

Solicitation to purchase insurance (asking for the sale), preliminary negotiations toward the sale of insurance (the application, medical exam, quoting a premium, receipts, etc), effectuation of a contract of insurance (issuing a contract after underwriting), and transaction of matters subsequent to effectuation of a contract (deliver of policy, free look, additional receipts/disclosures)

Public adjuster or third party claimant

Someone other than a licensed attorney who represents the individual insured that helps negotiate the settlement of claims that are covered by an insurance contract

The agencies of state government involved in the regulation of the insurance industry in the state of Florida are

State congress, Department of financial services and the office of insurance regulation

A division of accounting and auditing (BUREAU OF UNCLAIMED PROPERTY) is directly overseen by the

Chief financial officer

Insurance laws in Florida are administered by the

Chief financial officer, commissioner of the OIR, and the financial services commission

A court injunction is issued by the

Circuit court (NOT THE OFR)

The OIR is an office within the

DFS (department of financial services)

The office of insurance regulation is responsible for all activities pertaining to the

Regulation of insurers and other risk bearing entities

An advertisement that is an invitation to a contract must disclose provisions relating to

Renewability, termination, and modification of benefits, losses covered, or premiums

An insurer can't give more than _ for the purpose of advertising

$25 (value)

The total assessments of a member insurer will be an average of

1% of premiums received over each of the most recent three years

Within _ days after terminating the appointment of an appointee, the entity must file

30 days, written notice with the department including the reasons and facts involved in the termination

If _ goes by without appointment, you must start the whole process over

4 years (48 months)

All advertisements must be available on file for

4 years or until the next examination of the insurer, whichever is longer

The health license is

40 hours

The life including variable annuities and contracts license is

40 hours

Rebating records need to be kept for

5 years

The health and life license including variable annuities and contracts is

60 hours

The term agent can include _, but does not include _

A general lined agent, life, health, or title agent, does not include any customer or service representatives

The OIR is also responsible for

Approving policy rates and forms, market conduct examinations (audits), and overseeing agencies and investigating violations

An appointing entity can terminate its appointment of an appointee

At any time, with at least 60 days advance written notice

Insurance agency

Business location where someone is engaging in any activity that by law may be performed only by a licensed insurance agent

The OIR can withdraw a previous approval for

Cause

The OIR is run by the

Commissioner (often called the insurance commissioner)

The head of the office of financial regulation is the

Commissioner of the office of financial regulation

The insurance industry is overseen by both the

Commissioner of the office of insurance regulation and the chief financial officer of the department of financial services

An agent legally represents the

Insurance company, not the consumer

The office of financial regulation included a bureau of financial investigations that

Investigated suspected wrongdoing, inside and outside of Florida

Writing as much non controlled business as controlled business _ a violation of the insurance code

Is NOT

It is not a violation of the Florida insurance code to divide commission on a life insurance policy with another agent who

Is licensed and appointed to sell the same line of insurance

An appointment always expires on the

Last day of your birth month

The department will be appointed as the

Liquidator or rehabilitation involving a domestic insurer

Agency refers to

Location, not the agent or adjuster themselves

Can't refuse or raise rates based on the fact that an insured has

Made claims relating to physical or mental abuse

If an agency is owned by a single licensed agent who does business in their own home and the person doesn't employ other licensees is

Not required to have an insurance agency license

An insurer must file copies of all rating forms with the _, and will not be allowed to issue or renew any policies until this is done

OIR

When insurance is state regulated, this means that it is regulated by the

OIR (office of insurance regulation)

All forms must be filed with the _ at least _ before delivery to a customer

OIR, 30 days

The department does not endorse any

Professional designation (any words or job title that indicates licensee has special knowledge or training required for the license held)

The insurance guarantee fund is meant to

Protect policy owners and consumers in the event that the insurer becomes insolvent

If an agent is charged with a felony, the department may

Temporarily suspend the agents license until the agent is convicted or adjudication is withheld

Advertising to the general public with a physical address that suggests that insurance may be purchased by anyone at that physical address requires

The location to be a licensed and appointed agency location

Rebate schedules for the most recent _ must be kept by _

The most recent five years and their effective dates by the agency

You can have your license suspended, revoked, application denied, or refusal of appointment if you

Violate any code or law provisions, engage in twisting, willfully over insure any risk, being charged with a felony, failure to notify department within 30 days of felony charge, failure to comply with child support

Controlled business

When an agent sells insurance policies on themselves and others with whom the agent has financial likeness

An unaffiliated agent's fee must be

Established in writing and signed by both parties

The position of chief financial officer is an

Independently elected state office

Every agent or agency should keep records pertaining to premium payments for at least

3 years after the payment

The liability of the guaranty fund shall not exceed

100,000 in net surrender and net cash withdrawal values for life insurance, 250,000 in net cash surrender and net cash withdrawal values for deferred annuity contracts, 300,000 for all benefits including cash values with respect to one life

There are _ directly overseen by the CFO

15 divisions and offices

Appointments have to be renewed every

2 years

Continuing education requirements need to be completed every

2 years

Insurance companies have _ to respond to the departments once a consumer complaint has been filed

20 days

A licensee must complete _ of continuing education after the first 6 years of licensure

20 hours, 5 of which must be in law and ethics (basically 15 hours since 5 hours are in law and ethics)

A licensee must complete _ of continuing education during the first 6 years of licensure

24 hours, 5 of which must be in law and ethics (basically 19 hours since 5 hours are in law and ethics)

Subsequent appointments (any appointment after the initial appointment) is good for

24 months

Initial appointments are good for_, depending on_

24-36 months, depending on when appointment was made in relation to your birth month

Producers must maintain records of insurance transactions pertaining to premium payments for at least

3 years

Unaffiliated agent

A self appointed agent, someone does not and may not have a current affiliation with an insurer or an agency

Florida resident property and casualty agents may use their residence as an insurance office if

A separate room is used for the office, the room is easily accessible to the public, the existence is suitably advertised

During an investigation, the Office of financial regulation has the power to

Administer oaths and affirmations, take testimony and depositions, and issue subpoenas to require people to appear before the office at a specific time and place and to bring evidence for inspection

During an examination or investigation the department can (basically act as an attorney)

Administer oaths, examine witnesses, receive evidence, subpoena witnesses, compel attendance and testimony, and require by subpoena evidence related to inquiry

Office of financial regulation has the power to

Agency actions (penalties), issue cease and desist orders, seek court injunctions, and investigate within or outside of florida

Sliding (unfair trade act)

Agent adds additional coverages (ancillary coverage) that brought additional cost to the policy without being honest about doing so

The identity of an insurance company must be stated in _ the insurers advertisements

All, must not be the company's trade or patent company name

Both the office of financial regulation and the office of insurance regulation can act as

An attorney in an investigation or examination

Agents must notify the department of _ within _

Any change of contact information within 30 days

Certification

Any designation that indicated or implied that any individual or organization meets certain established criteria beyond criteria required for the license held

The guaranty board of directors must have

At least five but not more than nine member insurers serving on the board (at least one must be a domestic insurer)

To offer insurance products in Florida, a company must get a

Certificate of authority from the OIR (regardless of where the company is domiciled)

The DFS is headed by the

Chief Financial Officer (CFO)

An unaffiliated agent can't receive

Commissions from any insurance companies whose products the agent is compacting or recommending

Policy owners have the right to

Competitive pricing to get the best value, obtain comprehensive coverage, accurate fair and balances info about the policy in marketing materials, a financially stable insurer, a competent and honest producer, understandable language in a policy, insurer that helps prevent losses and quickly delivers claims, a balanced and positive regulation by the department, commission, and office

Insurance agencies can have a third party

Complete, sign and submit the licensing application on the agency's behalf, but the agency is still responsible for all information (misrepresentations) on the application

Unaffiliated agents are basically

Consultants ("personal shopper")

The office of financial regulation (OFR) is an office within the

Department of financial services (DFS)

The department of financial services and respective offices have the powers and duties to

Enforce the insurance code, conduct any investigation to determine if someone has violated the code, powers and authority may be expressed or implied in the insurance code, department may employ actuaries

Excess or rejected business is governed by Florida's

Exchange of business law

Anyone who engages in insurance activities without a certificate of authority commits a

Felony of the third degree

The Department of Financial Services deals with

Financial institutions like banks, credit unions and the securities industry

The commissioner of the office of insurance regulation is not included in the

Financial services commission (governor, CFO, attorney general, and commissioner of agriculture)

Applicants may not take an examination for a license type more than

Five times in a 12 month period

The office of insurance regulations major responsibilities are

Licensing of insurance companies, establishing financial requirements of insurance companies, policing against unauthorized insurance practices, regulation of policy forms and provision rates (although direct rate regulation is not applicable to life insurance), assisting in the rehabilitation or liquidation of insolvent insurers

If the unauthorized insurer fails to pay in full or in part of a claim, then the _ is liable for _

Person who knew or reasonably should have known that the contract was entered illegally is liable for the full amount of the claim not paid

The financial services commission is composed of the

Governor, the chief financial officer, the attorney general, and the commissioner of agriculture

Will the annual premium required for a 3% reserve interest assumption be greater or smaller than for a 3 1/2% reserve interest assumption?

Greater (because the more interest the company is making from investments, the less of a premium the company would charge)

If domestic insurer is impaired, the association may

Guarantee or reinsure any or all of the covered policies of the impaired insurer, and loan money to the impaired insurer if it is approved by the insurer and the OIR

If an agent pleads _ they must notify the department in writing within _

Guilty or no contest to a felony (crime punishable by imprisonment of 1 year or more), must notify in writing within 30 days of entering plea

The department or OIR can conduct a hearing whenever they

Have reason to believe that anyone has engaged in any unfair method of competition or deceptive act

The chief financial officer is the

Head of the department of financial services and a member of the financial services commission

The association maintains three separate accounts (for each type of company it guarantees)

Health insurance account, life insurance account, and annuity account

Excess or rejected business

If an agent's one company rejects the applicant then the agent can write business to another company that they aren't otherwise appointed

If the office of financial regulation finds that the conduct in question is likely to cause _ then they may issue an _ that remains in effect for _

Insolvency our substantial loss of assets, may issue an emergency cease and desist order that remains in effect for 90 days

An agency is not an

Insurer or an adjuster

Insolvent insurer

Insurer that an order of liquidation with a finding of insolvency has been entered against by a court of competent jurisdiction

Controlled business must be

Less than or equal to an agent's amount of public business

The guaranty association is never liable for any

Penalties or interest

Advertisements do not include

Material used for training and employee/agent education, internal communications within an insurers organization, individual communications of a personal nature with current policy holders, negotiations of a group blanket contract

Violation of a cease and desist order may result in a

Maximum fine of 50,000 and/or a suspension or relocation of persons certificate of authority or license

All insurers doing business in Florida have to be

Members of the guarantee fund and pay assessments to the guarantee fund

Anyone who willfully obstructs an investigation is guilty of a

Misdemeanor

The offenses of twisting and churning are punishable as a

Misdemeanor of the first degree, and result in fines not greater than 5,000 for each non willful violation and 75,000 for each willful violation

What professional organizations code of ethics has been incorporated into Florida insurance law?

National association of insurance and financial advisors (NAIFA)

Does notice have to be given to the department of insurance regarding rebating?

No

Does the agent have to notify the department of a change of their company?

No

Is direct rate regulation by the OIR applicable to life insurance?

No

Can an emergency cease and desist order be issued by the office of financial regulation if a subpoenaed person doesn't appear in court?

No (a warrant or court order would be issued for the person)

Is the beneficiary listed in the buyers guide?

No because it's subject to change

Three important rules for rebating

No discriminating, current rebate schedule must be posted in prominent view at producers place of business, the most recent five years rebate schedules must be kept on hand at the agency

Is rebating covered under the unfair trade practices act?

No, because it's not illegal

Is the office of financial regulation involved in the administration of insurance?

No, it regulated banks and financial institutions

Unauthorized companies, companies without a certificate of approval, are also called

Non admitted, non licensed, unapproved

The Florida life and health insurance guaranty association is a

Nonprofit legal entity

The office of financial regulations purpose is to

Provide for the safe conduct of financial institutions, maintain public confidence in financial institutions, preserve the financial institution system in Florida, protect interests of depositors and creditors of financial institutions

A licensed health agent can receive commissions at rates other than what the insurer has filed with the OIR if agent is

Providing advice, counsel, or recommendations

A person may not publish any advertisement that uses the existence of the insurance guaranty fund for the

Purpose of solicitation

Some specific duties of the office of insurance regulation include

Rate making supervision, policy forms approval, market conduct investigation, issuing insurer certificates of authority, assessing insurer insolvency, regulating viatical settlements, regulating premium financial arrangements, administrative supervision

Rebates are allowed when

Rebate is available to all insureds in the same class, rebate follows rebating schedule filed by the agent with the insurer issuing the policy, rebating is uniformly applied to all insureds who purchase the same policy, rebate schedule is visibly displayed in public view of agents business place, no discrimination, and records must be kept for 5 years by agency

The Chief Financial Officer administers

Regulation of insurance agents (licensing), insurance fraud, and insurance consumer protection

Members can only be

Reimbursed for expenses, cannot gain any compensations

An examination is not necessary for a

Renewal of appointment of agent, applicant for a temporary license, applicant for a license who has a chartered life underwriter (CLU) designation and has been in the insurance industry within the last four years, applicant who has a CPCU (chartered property casualty underwriter) designation and is applying for license as a general or personal lines agent or all lines adjuster, applicant applying for a nonresident license

The same agent can be in charge of

Several locations of the agency

Controlled business examples would be selling to:

The agent themselves, their family, officers directors stockholders partners or employees of a business they are engaged in or a member of their family is engaged in, debtors of a firm, association, or corporation of which the agent is an officer, director, stockholder, or employee

Who is charged with rehabilitating or liquidating insurers where necessary?

The department of financial services (or possible the office of insurance regulation)

An ad on the radio that mentions a physical location or hanging a sign in ones front laws would require

The location to be a licensed and appointed agency location (because these are considered advertisements to the public)

The guaranty fund does not apply in cases where

The portion of a (variable life insurance contract or variable annuity) contract not guaranteed by an insurer, fraternal benefit societies, health maintenance, dental service plan, Medicare part c or d benefits

Foreign insurers in other states are examined by

Their home states, and they must submit a report of their recent examinations to the OIR

Willfully submitting fraudulent signatures is a

Third degree felony

Agent must notify department of a guilty or no contest plea regardless of

Whether a judgement of conviction has been entered by the court

All proof of loss paperwork must display a disclosure that states that

Willfully submitting fraudulent signatures is a third degree felony

Failing to affirm or deny partial or full coverage of claims upon the written request of the insured within _ after _

Within 30 days after proof of loss statements have been completed

Twisting

inappropriate replacement of another company's insurance policy using misleading representations to induce a person to lapse, surrender, terminate, convert, or take out a policy with another insurer