Chapter 1 - INSURANCE REGULATIONS

The Director must be bonded with a surety bond equal to ___.

$50,000

To maintain a license, a producer must complete at least ___ of continuing insurance education every ___ years.

To maintain a license, a producer must complete at least 24 HOURS of continuing insurance education every 2 years.

1What are the minimum requirements to become a licensed producer in South Carolina?

-be at least 18 years old -be of good moral character -not have been convicted of a felony or crime involving dishonesty, fraud, breech of fiduciary duties, etc. -pay the required licensing fees -pass the state exam for the lines of authority for which the application is made.

What documentation is requested by the SC Department of Insurance to process your application?

-take and pass the state exam -acquire the criminal background checks (FBI & SLED) by getting fingerprinted -apply for your license and pay the required fees

How long is your Exam Status Report good for?

1 year

A person charged with violating the insurance laws is entitled to a ___ and at least ___ advance notice of the hearing.

A person charged with violating the insurance laws is entitled to a ___ and at least ___ advance notice of the hearing.

A producer must notify the Department of any change in legal name or ___ within ___ of the change.

A producer must notify the Department of any change in legal name or ___ within ___ of the change.

A temporary producer's license is valid for ___ and requires no examination.

A temporary producer's license is valid for 180 DAYS and requires no examination.

How long is your insurance license valid for?

An indefinite period of time, unless it's revoked or suspended. In order to continue a license, producer must: -renew the license by the last day of the producer's birth month -satisfying the continuing education requirements -pay the required fee for renewal

Under what circumstance may a producer share a commission?

An insurer or producer may pay a commission, fee, or other consideration to a person for selling, soliciting, or negotiating an insurance contract in South Carolina if the person has a license to transact insurance in the same licensed line of authority. Similarly, a person may not accept a commission, fee, or other consideration for selling, soliciting, or negotiating insurance in South Carolina if that person does not have a license to transact insurance in the licensed line of authority.

How does a Producer become an Agent?

By getting appointed by insurance carriers

If you misrepresent information to the public via any form of media this is ___

FALSE ADVERTISING

Which insurers must be examined by the SC Director of Insurance?

Insurers domiciled in South Carolina

Licenses can be suspended for up to ___ years.

Licenses can be suspended for up to 2 years.

If you attempt to replace an existing policy by lying to your customer, this is called ___

Misrepresentation

Persons who wish to sell Long Term Care Insurance must complete a training course of at least ___ hours and attend a __ hour refresher course every ___ years.

Persons who wish to sell Long Term Care Insurance must complete a training course of at least 8 hours and attend a 4 hour refresher course every 2 years.

Producers must maintain records of every insurance transaction for ___ and the Director may examine them ___.

Producers must maintain records of every insurance transaction for AT LEAST 5 YEARS FROM THE LAST DATE OF CONTACT SHOWING THE NUMBER, DATE, TERM, AMOUNT INSURED, PREMIUMS AND THE PERSON TO WHOM ISSUED OF EVERY POLICY OR CERTIFICATE OF RENEWAL and the Director may examine them ANYTIME.

What method does the Director of Insurance use to prevent a producer from performing certain acts associated with the business of insurance?

Records Maintenance (IDK IF THIS RIGHT)

What is primary purpose of the Insurance Fraud Act?

South Carolina enacted the Omnibus Insurance Fraud and Reporting Immunity Act to address the problem of insurance fraud in the state. The act does so by -Detecting insurance fraud; -Encouraging reporting with immunity -Setting penalties for insurance fraud; and -Requiring full restitution for victims of insurance fraud. Effective July 1, 2021, insurance fraud enforcement was transferred to the SC DOI under a Memorandum of Understanding (MOU) with the SCDOI, the Attorney General and SLED. Under the MOU, the SCDOI will investigate and prosecute fraud in the insurance industry using SLED agents. Indictments will be presented to the Attorney General's Office for approval and the Attorney General retains authority for prosecuting insurance fraud.

The Director can examine the books and records of an insurer as often ___, but must do so at least ___ every ___ years

The Director can examine the books and records of an insurer as often AS NECESSARY, but must do so at least ONCE every FIVE years

When an insurer terminates a producer's appointment, the insurer must notify the Department of Insurance ___ of the termination, and the agent within ___.

When an insurer terminates a producer's appointment, the insurer must notify the Department of Insurance WITHIN 30 DAYS of the termination, and the agent within 15 DAYS.

Describe how the Director of Insurance gets the job:

While in some states, the Chief Insurance Officer of the state is called the director or commissioner they are essentially the same. They are in charge of all of the insurance related activities of their state. Some states elect the Chief Insurance Officer. In South Carolina, the position is: -Appointed by the Governor, -With the advice and consent of the Senate, -A full time paid position, -With No Set Term, -And serves at the Governors pleasure, -With the power of a Circuit Court Judge. -The state pays for a $50,000 Surety Bond

When does the producer get an opportunity to reply to their appointment being terminated?

Within 30 days after receiving the original or additional notification

Who does a Broker represent?

insured

Name the 3 types of Individual Licenses issued by the Director

1. Producer An insurance producer must be licensed in a particular line of authority by the Director of Insurance before performing acts that constitute the transaction of insurance, including: -Selling, soliciting, or negotiating insurance for an insurer; -Taking an insurance application or delivering an insurance policy; -Advertising for insurance applications or policies; -Receiving or delivering insurance policies; or -Performing any other acts involved in making an insurance contract for or with an insurer. In South Carolina, the producer license is issued for an indefinite term, however it must be renewed on a Biennial basis by the last day of the birth month, on an even or odd year basis, depending on the year in which the producer was born. Producers must also comply with the Continuing Education requirements and complete an OnLine License Renewal Application and pay the Renewal Fee on or before the Compliance Deadline. 2. Nonresident A person who is not a resident of South Carolina may be licensed as an insurance producer in South Carolina if: -The person is a licensed producer in good standing in his or her home state; -The person applies for licensure and pays the required fees at NIPR.com; -The person provides the Director with an original Uniform Application; and -The person's home state grants nonresident producer licenses to South Carolina residents on the same basis. This is known as a Reciprocal Agreement. A nonresident producer who moves from one state to another, or from another state to South Carolina, must file with the Director a change of address within 30 days of moving. *Fingerprints are not required for Non-residents. 3. Temporary A person can obtain a temporary insurance producer's license that is valid for up to 180 days. No examination is required. A temporary license can be granted to: -The spouse or court-appointed personal representative of a licensed producer who dies or is mentally or physically disabled, in order to sell the producer's insurance business or allow enough time for the producer (if merely disabled) to recover and return to the business, or to allow enough time to train people to run the producer's business; -A member or employee of an agency that is licensed as an insurance producer; -A person designated by a licensed producer who is entering active service in the US armed forces; or -other circumstances deemed necessary by the DOI -A Temporary license will not to be issued for the purpose of Continuing Education The Director may limit the lines of authority for a temporary license for the purpose of protecting the public. The Director may suspend or revoke the Temporary license if the public is endangered by the actions of person holding a temporary license. Once the business is disposed of, the Temporary License must be terminated.

If you fail to fulfill the CE requirements when due and your license lapses, what are the requirements for reinstatement?

A producer whose license lapses for failure to satisfy the continuing education requirements may reinstate the license within 6 months if he or she fulfills the continuing education requirements and pays the fee for reinstatement. Failure to reinstate the license within this period requires the person to apply for a new license, which includes a new set of fingerprints and background check as well.