Chapter 9: Insurance Regulation

Which of the following individuals must pass the written examination to be licensed as an insurance agent?

A producer previously licensed in New Jersey who is applying for a New York license 120 days after becoming a resident of this state

If an agent fails to promptly remit the premiums collected from the insured to the insurer, the agent may be found guilty of which of the following?

Embezzlement

For the protection of public interest, the Superintendent may examine the books and records of any of the following EXCEPT

Policyowners.

In this state, a temporary license may be issued for all of the following reasons EXCEPT

An agent's retirement. A temporary license is not available for an agent's retirement.

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

If a certificate of appointment is terminated, a statement must be filed with the Superintendent within

30 days

An independent adjuster may include which of the following?

A firm who acts on behalf of the insurer

All of the following are reasons to terminate an agent's certificate of appointment EXCEPT

An agent becomes disabled and is unable to complete his duties for the duration of the disability

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

Which of the following would NOT be considered an insurance producer?

An insurer's officer

Which of the following acts committed by an agent would be sufficient violation to warrant revocation or suspension of the agent's license?

Forgery

What are the continuing education requirements for licensed insurance agents in the state of New York?

15 hours of approved instruction every 2 years To renew a license, any resident or nonresident agent must complete 15 hours of instruction by an approved provider of continuing education biennially (every 2 years).

Which of the following is NOT a justifiable reason for the Superintendent to revoke, suspend, or refuse to renew a license?

A licensee does not sell enough policies to reach his financial goals.

If an individual's license has been revoked, how soon can he or she obtain a new license?

After 1 year of the revocation

The continuing education (CE) requirement in this state:

Consists of completing 15 hours of continuing education each biennium.

Which of the following is an approved written document that identifies procedures in place to keep the insurer's Information System safe?

Cybersecurity Policy

If an insurance company wishes to order a consumer report

Ancestry

All of the following events will terminate an agents appointment EXCEPT

A new Superintendent is put into office

Which of the following terms describes making false statements about the financial condition of any insurer that is intended to injure any person engaged in the business of insurance?

Defamation

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation.

Which of the following is NOT a qualification for licensing as an insurance producer in this state?

Have a letter of recommendation attesting to the applicant's trustworthiness

An insurance broker's license may be issued to

A person, firm or corporation. An insurance broker is any person, firm, association or corporation who solicits, negotiates or obtains insurance for an insured (other than him or herself) in exchange for a commission.

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.

All of the following are true about the Insurance Frauds Prevention Act EXCEPT

Every insurer must file a fraud prevention plan within 150 days. Every insurer must file a fraud prevention plan within 120 days.

All agents, brokers, and reinsurance intermediaries have a/an

Fiduciary responsibility to their clients.

Can the Superintendent investigate fraudulent claims if they occurred outside of the resident's state according to the Insurance Fraud Prevention Act?

Yes. The Superintendent has the power to make an investigation within this state or outside of the state. If the insurance frauds bureau has reason to believe that a person is engaged or is about to engage in a fraudulent act, the Superintendent has the power to make an investigation within this state or outside of the state.

Which of the following would NOT be a violation of state insurance regulations?

Agent C uses her license to write only business other than controlled.

An insurance broker's license may be issued to

A person, firm or corporation

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice.

Every insurance company in the new york must file annually with the office of the Superintendent to show that it is

Solvent

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association It is illegal for insurers to state that their policies are guaranteed by the existence of a Guaranty Association.

Who does the agent represent?

The insurer

The Superintendent may refuse to renew a license if a licensee is receiving more than 10% of the aggregate commissions from controlled business in how many months?

12 An insurance license is not intended to be used to earn commissions on personal insurance needs, or those of family members, business associates, etc. The Insurance Code limits the amount of controlled business that may be written.

The Superintendent will not renew an agent or broker's license upon finding that the license has been used to write controlled business. Which of the following would be a violation of controlled business practices?

15% of the agent's annual commission is from business sold to the agent's family.

How long does a licensee have to notify the Superintendent of a change of address?

30 days

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

In order for a nonresident licensee to become a resident producer in New York, the licensee must

Apply within 90 days of becoming a resident.

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle Discriminating between individuals of the same class with equal life expectancies, or by reason of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also not allowed to cancel individual coverage due to a change in marital status. Discriminating in benefits based on the insured's habits and lifestyle (such as smoking or dangerous hobbies) is acceptable.

According to new york law, hearings ordered by the superintendent must be

Open to the public

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine instability?

Sexual orientation

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.

Which of the following is NOT a prerequisite for an insurance license in New York?

Be at least 21 years of age

An agent has recently changed his email address. What must the agent do to comply with the regulation for change of address?

Inform the Department within 30 days The Department of Financial Services must be notified within 30 days of any change of address: residence, business or email.

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.

Agent A offers a prospective client two tickets to a Yankees baseball game with the condition that the client will purchase a family life insurance policy. This practice is known as

Rebating Offering any consideration not specified in the policy is the unfair trade practice of rebating.

How often must an insurance agent licensed in the state of New York renew the license?

Every 2 years Insurance agent's license expires every 2 years. The licenses of all insurance agents born in odd numbered years will expire on their birthdays in odd numbered years. The licenses of all insurance agents born in even numbered years will expire on their birthdays in even numbered years.

The Superintendent may refuse to issue a license in all of the following situations EXCEPT if the proposed licensee

Is from another state. The Superintendent may refuse to issue any insurance agent's license if the proposed licensee is found to be not trustworthy and competent, or has not complied with any prerequisites.

Which of the following would NOT be considered an improper claims practice?

Denying a claim after proof of loss statements are completed and submitted by insureds.

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?

Guaranty Associations are created to protect policyowners, insureds, and beneficiaries under life insurance policies, health insurance policies, annuity contracts, and supplemental contracts when insurers fail to perform contractual obligations due to financial impairment.

How long does a licensee have to deliver information requested by the superintendent of financial services?

15days

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status.

For which of the following reasons can a temporary license be issued?

To service the existing business

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

An insurance agent was born in 1983. He obtained his New York insurance license in 2014. When will the agent's license expire?

On an agent's birthday every odd numbered year