Chapter 10 - Insurance Regulation

home office

insurer's headquarters, principal place of business

motor carrier act of 1980

the act sets out the minimum financial responsibility requirements for for-hire interstate carriers and all carriers of hazardous property

coercion

to require, as a condition to a loan, that the applicant purchase insurance from a specific insurer

calls from or on behalf of organizations which have established a business relationship with the consumer, calls for which the consumer has given prior written permission, calls not commercial or that do not inlcude unsolicited advertisements and calls by or on behalf of tax-exempt nonprofit organizations

what are some exceptions to the do no call registry

investigative consumer reports

similar to consumer reports, but the information is obtained through an investigation and interviews with associates, friends and neighbors of the consumer

the gramm-leach-bliley act

stipulates that in general, an insurance company may not disclose nonpublic personal information to a nonaffiliated third party

cease and desist

to stop or discontinue

general property policy form

used for other residential (more than 4 units) and nonresidential structures and their contents ($250,000 for building and $100,000 for personal property for residential , and $500,000 for building and $500,000 for business property for nonresidential)

residential condominium building association policy (RCBAP)

used for residential condominium building associations to cover the entire building under one policy, including all units, improvements within the units, and personal property owned in common

dwelling policy form

used to insure residential structures and their contents. coverage provides up to $250,000 in building coverage and $100,000 for personal property

insurance, floodplain management, and floodplain mapping

what 3 components are in the NFIP program

single family structures, 1-4 family structures, condominium units, manufactured mobile/trailer home, townhouse/rowhouse structures, and timeshares

what are eligible structures of a dwelling

the insurance company clearly and conspicuously discloses to the consumer in writing that information may be disclosed to a third party, the consumer is given the opportunity, before the time that information is initially disclosed, to direct that information not be disclosed to the third party, or the consumer is given an explanation of how the consumer can exercise a nondisclosure option

what are exceptions for gramm-leach-bliley act

when the customer relationship is established, and before disclosing protected information

what are the 2 disclosures required for gramm-leach-bliley act

$100 million for 2015, $120 million for 2016, $140 million for 2017, $160 million for 2018, $180 million for 2019, and $200 million for 202 and thereafter

what are the aggregate industry insured losses specifications

to ensure that a producer meets educational and ethical standards required to fulfill producer's responsibilities to the insurer and to the public

what is the purpose of licensing

30 day waiting period from the time of the application and premium payment

what is the waiting period up purchase of a flood policy

the privacy disclosure and have the right to opt out or chose not to have their private information shared with other parties

what must the customer receive annually

90 days before expiration

when does the renewal window begin

by the last day of the producers birth month

when must the renewal be completed

landslides, backup of sewers unrelated to a flood, windblown rain, snow, or sleet, flooding that is within the insured's control

which losses do not meet the definition of flood or are excluded from coverage

business entity

a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity

statute

a formal written law enacted by legislature, insurance statutes can be found in the state insurance code

flood

a general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area, or of 2 or more properties

twisting

a misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades an insured, owner, to his or her detriment, to cancel, lapse, switch policies, or take out a policy with another insurer

reciprocity

a mutual interchange of rights and privileges

domicile(for insurers)

a state in which an insurer is organized and has its main place of business

model bulletin

an expedited filing form intended to help state insurance regulators advise insurers about regulatory requirements related to providing terrorism insurance under the revised program

inducement

an offer that attempts to influence the other party

up to $5,000

if the producer continues to use the name for 10 or more days after being notified by the commissioner to stop using the unapproved name, what is the fine

within 15 days

if the termination is due to the producer engaging in fraudulent activity

within 30 days

if there are changes to the licensee's residential, mailing, business, or e-mail address or phone number, how soon must they notify the commissioner

commissioner

the head of the State Department of Insurance

false financial statements

those that are intended to deceive public officials or the general public about the financial condition of an insurer

overflow of inland or tidal waters, unusual and rapid accumulation or runoff of surface waters from any source, mudflow (a river of liquid and flowing mud on surfaces of normally dry land) and collapse or collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above

what can cause floods

a producer is 65 years old, or older, and has at least 15 years of experiences as a licensed producer, and who is either no longer actively engaged in the insurance business or who represents a licensed insurer in this state, a producer who is currently serving a term as a member of the legislature, nonresident producers who have met CE requirements in their home state, and individuals renewing their resident producer licenses for the first time after initial issuance

which producers may be exempt from CE requirements

The Commissioner of Insurance

who is responsible for making sure that the provisions of the Louisiana Insurace Code are enforced properly

within 60 days

how long does a person have to report insurance fraud if suspected

180 days

how long does a temporary producer's license last

4 years

how long is the commissioner elected for

within 1 year from the date of revocation or within 5 years from date of the final court order if judicial review of revocation is sought

how long must a producer wait to reapply if the license has been revoked

5 years or until the commissioners next examination whichever is later

how long should books, records, documents, accounts, and vouchers be kept

at least every 5 years

how often can the Commissioner examine insurers for solvency and compliance

every 2 years

how often do producers need to submit a license renewal

every 31 days

how often must the organizations consult the do not call registry

advised in writing within 3 days of the date of the report request

how should the consumer be notified of an investigative consumer report

within 30 days of the demand

how soon does a hearing need to be conducted

to require the secretary of the treasury to certify acts of terrorism in consultation with the secretary of homeland security instead of the secretary of state

how was the certification process was changed-

within 30 days

if an insurer terminates a producers appointment, how long must the commissioner be notified

must be in writing

if the commissioner suspends or revokes a license, how is the producer notified

consumer reports

include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources

prohibited information

includes bankruptcies more than 10 years old, civil suits, records of arrest or convictions of crimes, or any other negative information that is more than 7 years old

producers

individuals or business entities that are licensed to sell, solicit, or negotiate insurance, they represent their respective insurance companies, not the customers

must complete a one-time 4 hour training course

individuals producers engaged in the sale of any annuity products

nonresident producer license

individuals who do not reside in Louisiana

negative information

information regarding a customer's delinquencies, late payments, insolvency or any other form of default

controlled business

insurance that covers the producer or the producers immediate family or employer

authorized insurer

insurer who has received a certificate of authority from the department of insurance to transact insurance in this state

misrepresentation

issuing, publishing, or circulating any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payments of dividends

commission

payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium

terrorism risk insurance act

requires that all commercial insurers offer insurance coverage for acts of terrorism

flood disaster protection act of 1973 mandates

flood insurance is required to certain flood-prone areas as a condition for receiving loans through, or backed by, the federal government, and property owners who fail to purchase flood insurance within 1 year after it becomes available will no be eligible for full disaster relief funding, the amount of disaster relief will be reduced by the amount of insurance that could have been purchased

within 30 days

how long after a conviction in district court, must a producer report the conviction to the Commissioner and provide a copy of the bill of information or indictment

if the licensed has been lapsed for more than 2 years

how long after a license is expired will a producer has to reapply for a new license

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

moral turpitude

conduct that is contrary to community standards of justice, honesty, or good morals

the act must be violent or dangerous to human life, property, or infrastructure, the act must have resulted in damage within the United States, to an air carrier as defined in the US code, to a US flag vessel or other vessel based principally in the US and insured under the US regulation, or on the premises of any US mission, the act must have been committed by someone as part of an effort to coerce the US civilian population, the influence US policy, or to affect the conduct of the US governments by coercion or the act must produce property and casualty insurance losses in excess of a specified amount

act of terrorism must have the following characteristics

national do not call registry

allows consumers to include their telephone numbers on the list to which solicitation calls cannot be made by telemarketers

national association of registered agents and brokers (narab) reform

amends the gramm-leach-bliley act to repeal the contingent conditions under which the NARAB may not be established (also prohibited from merging with or into any other private or public entity)

rebating

any inducement offered to the insured in the sale of insurance products that is not specified in the policy

an act of terrorism was redefined to eliminate the requirement that the individual or individuals committing a terrorist act be acting on behalf of a foreign person or interest, the terrorism risk insurance program was extended through 2014, the secretary of the treasury was required to notify congress within 15 days of an act of terrorism for which the secretary estimates a loss of more than $100 billion, devise a way to determine the pro rata share of insured losses that exceed $10 billion and report to congress on the process used, insurers were required to disclosure to policyholders the $100 billion cap on their liability, and deadlines for the collection of terrorism loss-risk-spreading premium were established

what are the amendments made by the reauthorization act of 2007

all insurance producers in Louisiana must complete 24 hours of approved continued education or instruction self-study prior to each license renewal , at least 3 hours must be on ethics, 3 credit CE hours on flood insurance, up to 10 hours of excess CE credits lines of health and accident, property, casualty or personal lines

what are the continuing education requirements

an eligible structure must have 2 solid walls and a roof, be principally above ground, and not entirely over water

what are the guidelines to be eligible for the flood program

up to $250,000 times the number of units in the building for building coverage, and up to $100,000 in personal property per building

what are the limits of coverage for RCBAP

currently licensed as a resident and is in good standing in his/her home state, has requested a license and has paid the licensing fees, has provided the commissioner with either a uniform application or the same licence application that was submitted to his/her home state, and the producer's home state awards nonresident producer licenses to residents of Louisiana on the same basis (known as reciprocity)

what are the qualifications needed for a non resident to receive his/her license

at least 18 years of age, resides in the state or maintains his/her principal place of business in the state, has not committed any act that is a ground for denial, suspension, or revocation, has a completed a pre licensing course of study for the lines of authority for which the person has applied, has paid the designated licensing fees, and submitted an application fulfill fingerprinting requirements, and has successfully passed the examinations for the lines of authority for which the person has applied

what are the requirements for an individual producer license

call any number on the national do not call registry or on that sellers do not call list, deny someone a right to be placed on any do not call registry, call outside permissible calling hours (before 8am and after 9pm), abandon calls, fail to transmit caller ID information, threaten or intimidate a consumer or use obscene language, or cause any telephone to ring or engage a person in conversation with the intent to annoy, abuse, or harass the person called

what are the telemarketing sales rules that telemarketers must not do

the federal share will be decreased by 1 percentage point per calendar year until it reaches 80%

what changes were made to deductibles after Jan 1, 2016

increased to 140% from 133%

what did the mandatory recoupment of the federal share through policyholder surcharges

rebates of premiums payable on the policy, special favors or services, advantages in the dividends or other benefits and stocks, bonds, securities and their dividends or profits

what do rebates sometimes include

exceeded 25%

what excess number do they look for over a 12 month period

you can be examined more frequently- every 6 months for the first 3 year and once a year for 4 through 6

what if you are newer insurer

the name of the parties to the contract, and the name of the insurer, the subject of the insurance and risks insured against, the time the insurance take effect and is expected to terminate, a statement of the premium, and the premium rate if other than life, annuity, health, or title insurance, and the conditions pertaining to the insurance

what information must be clearly identified in the policy

writing controlled business

what is it is illegal to use a producer's license for the sole purpose of

conducting legal hearings regarding suspected violation of the insurance code, issuing cease and desist orders, examining insurers for solvency, and issuing, renewing, suspending, and revoking licenses

what is the Commissioner of Insurance in charge of

$250

what is the fine for a producer using a name that has not been approved

between $2,000 and $50,000, and or imprisonments for a maximum of 3 years and they will revoke or suspend your license

what is the fine for conducting business in Louisiana without the proper license and accepting money or commissions

up to $5,000

what is the fine for destroying any records without authority

subject to a fine,imprisonment for up to 10 years or both

what is the fine for knowingly making false material statements

between $1,000 adn $5,000 and or imprisoned for a maximum of 2 years and their license will be suspended or revoked

what is the fine for violating the state statutes pertaining to sharing of commissions

at least $100 and no more than $2,000 at the discretion of the court

what is the fine if a person fails to obey the Commissioner's subpoena or fails to produce records as required

the punishment can be up to 15 years

what is the fine if the activity jeopardized the security of the accompanied insurer

$25 if the application is received after the stated deadline

what is the late fee that may be charged

up to $2,500

what is the penalty for an individual who willfully violates the fair credit reporting act

civil penalty of not more than $50,000 for each violation or the amount of compensation the person received as a result of the prohibited conduct - whichever is greater

what is the penalty for violating Section 1033

$50 per violation

what is the penalty if you do not file the change in time