Colorado Life and Health Specifics (Ch.8)
How often must insurance companies in Colorado file a financial state with the commissioner
Annually by March 1st of each year.
Variable Contracts:
Applicants for a variable products license must obtain authority to write life insurance. Must also provide evidence that they have passed the appropriate FINRA registration exam and are currently registered w/ a FINRA member broker or dealer firm.
Notification of Termination of Appointment:
An insurer musty notify the Commissioner within 30 days of terminating a producer's appointment for cause. The producer must be given a copy of the termination notice within 15 days after the Commissioner is notified. The producer has 30 days to file comments about the termination with the Commissioner
How often must Certificate of Authority be renewed?
Annually
How many credit hours of continuing education must a producer complete every license renewal period?
24
A producer or business entity must report to the Commissioner if it is the subject of Any administrative action by another jurisdiction within how long?
30 days after the matter has become final or disposed Criminal prosecution in any jurisdiction within 30 days after the initial pretrial hearing date.
How long must producers retain documents on of course completion?
5 years following license continuation
In addition to, or in lieu of, termination of, termination of a license,....
A civil penalty can be imposed not to exceed $3,000 power violation.
Failure to provide a complete and accurate response to a Division inquiry, failure to request an extension for a specified period, or failure to provide a complete and accurate response to a Division inquiry when an extension is not granted may result in:
A civil penalty of $500 for an initial violation, and may be increased up to a maximum penalty of $5,000 for each subsequent violation.
The definition of a Colorado producer includes:
A person who solicits or negotiates membership enrollments in a health care plan
What is a Producer?
A person who solicits, negotiates, effects, procures, delivers, renews, continues, or binds policies of insurance for risks residing, located, or to be performed din this state. The producer represents the insurance company, not the insured or beneficiary
Appointments by Insurer:
A producer must be appointed by at least 1 insurer to transact insurance. A producer can be appointed by more than 1 insurer, but the appointment must be in place at the time the business is placed. The appointment may be terminated by the producer, insurer, or commissioner
Components of the legal responsibility of maintaining an insurance license:
A producer must inform the commissioner of any change in address within 30 days An insurer must notify the Commissioner within 30 days of terminating a producer's appointment The producer must be given a copy of the termination within 15 days of the commissioner's notification, but has 30 days to file comments about that termination with the commissioner.
Registration of Assumed Names:
A producer must register any assumed name with the commissioner PRIOR to its first use and musty notify the Commissioner PRIOR to any change and before discontinuing its use.
Immunity:
A producer, insurer, or authorized representative who compiles information and makes available to the Commissioner or law enforcement agency will not be subject to civil liabilities that arise from the result of any information that leads to the termination of a producer.
What must a producer do if changing addresses?
All producer licensees must notify the Commissioner in writing of any change of address within 30 days after the change.
Pre-licensing Education requirements:
Applicants must complete at least 50 hours of approved education in each line of authority in which they seek licensure. This includes 3 hours pertaining specifically to insurance industry ethics.
The request for an extension of time from the Division shall:
Be made no later than 5:00 PM Mountain Time on the business day prior to the response due date Include a specific period of time for the extension State in detail the reasons necessitating the extension
How often must licenses be renewed?
Biennially (every 2 years) by the last day of the producers's birth month. Will be notified 90 days before the renewal is due.
It is illegal for any individual or entity to transact insurance, including forwarding surname contracts, on behalf of an unauthorized insurance entity. Violation of this statue constitutes what?
Class I misdemeanor w/ a minimum sentence of 6 months in jail and/or a $500 fine and a maximum sentence of 18 months in jail and/or a $5,000 fine.
What can producers receive in terms of compensation for soliciting, procuring, or servicing policies:
Commissions from an insurer
How to satisfy Pre-licensing education?
Completion of course(s) with courses totaling 50 hours per line.
Obtaining an insurance license for the sole purpose of writing insurance on the life or property of one's employer constitutes what?
Controlled business
Casualty: Line of authority
Coverage against legal liability, including death, injury, disability, or damage to real or personal property
Personal Lines: Line of authority
Coverage for noncommercial property and casualty losses sold to individuals and families
Accident and Health: line of authority
Coverage for sickness, bodily injury, or accidental death and dismemberment that may include disability income
Property: Line of authority
Coverage for the direct or consequential loss or damage of property of any kind
Life: line of Authority
Coverage on human lives that may include benefits of endowment, annuities, accidental death or dismemberment and disability income
Variable Life and Variable Annuity Products: Line of authority
Coverage provided under such contracts
A license is deemed to be used for the purpose of writing controlled business if:
During any 12 month period, the total premiums on controlled business exceed the total premiums on all other insurance sold by the producer. Controlled business may be written on up to 50% of a producer's premiums during any 12 month period.
What is Coercion
Entering into action resulting in an unreasonable restraint of, or monopoly in, the insurance business Coercing a debtor into acquiring required insurance through a particular insurer, group, agent, or broker Unreasonably disapproving a policy that provides required coverage Requiring a borrower, mortgagors, purchaser, insurer, broker, or agent to pay a handling or replacement charge on a policy required to secure a loan on real property
The commissioner can refuse, suspend, revoke, or non-renew a license if the licensee has committed any of the following:
Failed to pay child support Had a license suspended or revoked in another state Cheated on an insurance examination
Commissioner's duties are:
Filing and safeguarding all books and papers required by law Issuing certificates of Authority to insurance companies that have compiled with Colorado's laws. Require all authorized insurers to keep books, records, accounts, and vouchers to verify annual statements to determine solvency Issuing, denying, revoking, or suspending licenses or Certificates of Authority as required by Colorado's law Supervise the business of insurance in a manner that is in the best interest of the general public and to protect policyholders Transmitting all fees, surcharges, costs, taxes, penalties, and fines collected by the Division of Insurance to the Department of the Treasury Enforcing state insurance laws Conducting investigations and hearings to determine if anyone involved in the insurance business has engaged in any unfair method of competition, unfair or deceptive act or trade practice, or has violated the insurance laws in Colorado Est. Effective procedures for examining the activities, operations, financial conditions and affairs of anyone transacting insurance, as determined by the general assembly Examining the financial condition and affairs of authorized insurers whenever it's necessary, but no less than once every 5 years. Managing insolvency procedures Ensuring that rates are adequate, as opposed to being excessive, inadequate, or unfairly discriminatory.
Punishment of defamation
Fine up to $500, imprisonment for up to 12 months, or both.
How must a Cease and Desist Order be Delivered
First- class certified mail
The commissioner
Has the power to administer the insurance laws of the state.
An Examination
Is a formal or informal financial or market conduct assessment or investigation conducted by the commissioner to determine compliance with Colorado Insurance laws. Can be done as frequently as deemed appropriate Must be conducted not less frequently than once every 5 years.
A person who knowingly testifies falsely to any matter related to an investigation, examination, or inquiry is guilt of a misdemeanor and, upon conviction, will be:
Punished by a fine up to $5,000 and/or Imprisoned in the county jail up to 3 months.
The commissioner will issue a producer license to an individual who:
Is at least 18 years of age Is competent, trustworthy, and of good moral character and business reputation Is a resident of Colorado, or a state for which Colorado grants nonresident licenses Completes the required pre-licensing education requirements Passes the state insurance licensing examination as a resident licensee Pays the required license fee Has not committed an act that is ground for license refusal, suspension, or revocation If a nonresident, submits a letter of Certification issued within the previous 90 days from his/her home state's insurance regulatory authority with the application of license.
Violating a Cease and Desist Order
Is punishable by a fine of up to %500 per violation of an individual or up to $10,000 per violation of an insurer and/ or license suspension or revocation.
Controlled business
Is the act of obtaining insurance on the life or property of one's own self, spouse, or employer.
Replacement is an existing policy or contract that will be:
Lapsed, forfeited, surrendered, or terminated Converted to reduced paid-up insurance, continued as extended term, or reduced in value Amended with a reduction in benefits or term Reissued with a reduced cash value Subjected to borrowing all or part of the cash value
What is Misrepresentation
Making a statement that is false/ misleading: About a policy, its dividends, or its share of surplus receivable, or paid in the past About a person's financial condition or a life insurer's legal reserve system
Defamation
Making, publishing, or circulating any written or verbal statement that is false, maliciously critical, or derogatory to the financial condition of any insurance company with the intention to cause injury to that company.
How many hours of CE can carry over to the next renewal period
Maximum of 12 hours; any carryover hours must have been earned in the 120 days prior to the license continuation date.
The license must include:
Name, address, and personal identification number of the licensee Date of issuance General conditions relative to expiration or cancellation Lines of insurance covered by the license Trade name under which the licensee transacts business Any other information deemed necessary by the Commissioner
Payment and acceptance of commissions/ fees:
No individual or entity can pay commission or other valuable consideration to any person not licenses as a producer. Producers are prohibited form charging fees, in addition to commissions, for overhead expenses associated with soliciting, procuring, or servicing policies.
Concerning license suspension and revocation, the Commissioner can take all of the following actions:
Notify the producer of any license suspension, revocation, or termination Notify the NAIC of any license suspension, revocation, or termination Notify the Attorney General or District Attorney of Criminal violations of insurance code.
Do Not Call List
Numbers on Colorado's No Call List must be removed from insurers' telemarketing lists at least once every 30 days.
No person may request or require that an applicant submit to an HIV related test without:
Obtaining the applicants prior written informed consent Explaining the use of test results and to whom the test results may be disclosed Providing the applicant with printed factual information the causes, symptoms and transmission of AIDS and what a person should do if the results of the HIV related test is positive.
Rebates
Offering or giving any premium discount, credit, service, advantage, favor, or anything of value that is not specified in the policy. Q
Hearings
Persons may be required to appear and show cause as to why the Commissioner should not refuse, suspend, revoke, or continue such person's license.
Every licensed insurer doing business in Colorado must prepare, implement, and maintain and insurance anti-fraud plan outline specific procedure to:
Prevent, detect, and investigate fraud Educate employees about fraud detection and the company's anti-fraud plan Provide for hiring or contacting fraud investigator(s) Report fraud to law enforcement and regulatory entities
Continuing Education (CE)
Producers must complete up to 24 hours of approved continuing education courses within 24 months of their license renewal date. At least 3 of the CE hours must cover ethics At least 18 hours must be in the line(s) for which the producer is license. Producers sell property or personal lines insurance must complete 3 hours of continuing education on homeowners insurance coverage First time licenses have until their 2nd continuation to comply, and then must fulfill requirements biennially.
Potential Penalties after a hearing:
Provide the findings in writing and issue a Cease and Desist Order Impose a civil fine up to $3,000 per unintentional violation and up to a maximum of $30,000 for all unintentional violations. Fines for knowing violations are $30,000 per violation and have a maximum of $750,000 Suspend or revoke a license, if the licensee knew or should have know a violation was being committed Order payment of a claim not paid b/c of the violation, unless a civil action concerning the claim is pending. *** judgement may be appealed and subject to judicial review by the court of appeals***
With respect to a producer's fiduciary responsibilities and duties, the agent must do all of the following:
Remit premiums received to the insurer on or before the due date, or within 45 days if there is no due date Account for any collected premiums within 45 days after the policy due date or within 90 days after receipt Remit to the insured any unearned premiums received from the insurer within 30 days, or within 45 days of cancellation
A producer must do what in regards of Fiduciary/ Commingling:
Remit premiums received, less commissions, to the insurer on or before the policy due date or, if there is no due date, within 45 days after receipt Account for any collected premiums within 45 days after the policy due date or within 90 days after receipts Remit unearned premiums received from insurers to the insured, or credit the premiums to the insured's account, as soon as possible but within 30 days. If coverage is cancelled, premiums must be remitted to the insured within 45 days after the effective date of cancellation Promptly notify the commissioner in writing if he/she failed to remit premiums as required by law
If a license is suspended, revoked, terminated, discontinued, or no renewed, the Commissioner will:
Require surrender of the license and order it to be returned promptly to the commissioner by personal delivery or by certified or registered mail within 15 days of such action.
Requirements for licensure include:
Residency in Colorado Residency in a state to which Colorado grants nonresident licenses Passing the state licensing examination
How long should Records and Data for how long?
Shall be maintained for the current calendar year plus 2 prior calendar years.
How long are pre-licensing certificates of completion valid for?
Shall be valid for a period of 1 year from the date of completion
Confidentiality:
The commissioner is authorized to use these documents, materials, or other information to aid in the investigation and further any legal action taken against a producer. All information received must be kept confidential and no parties with access to this information can be required to testify in any private civil action concerning the confidential information.
If, after a hearing, the commissioner determines that an emergency cease and desist order has been violated, the commissioner may impose what?
They may impose a civil penalty of $25,000 per violation and order complete restitution to all parties affected
Denying health coverage solely because the insured uses a motorcycle, is an example of what type of unfair trade practice?
Unfair discrimination
Each of the following are an example of boycott, coercion, or intimidation:
Unreasonably disapproving a policy that provides requisite coverage Coercing a debtor into getting requisite insurance through a particular agent Requiring a mortgager to pay a handling charge on a policy required to secure a loan.
An insurer failing to pay a first-party property and casualty claim within 60 days will be fined:
Up to $20, for a claim of $100 or less 8% of the annual interest on the claim, from receipt to payment, for a claim exceeding $100 If the commissioner deems an additional fine appropriate, a fine of $100 per day for each day payments were delayed more than 60 days can be charged. \
Every individual or business entity must provide a complete and accurate response to an Examination Request/ Comment. Form or examination Request/Memo Form within how long?
Within 10 calendar days from the date on the form.
Every individual or business entity must provide a complete and accurate response to any inquiry from the Division within how long?
Within 20 calendar days from the date of the inquiry.
