Colorado Statutes, Rules and regulations Common to All Lines

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of?

When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating

All of the following are unfair claims settlement practices except

When settling claims, negotiation can come into play

To obtain a nonresident producer's license in this state, a prospective licensee must?

Only similar licenses are issued to nonresident producers wanting to do business in colorado.

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

The purpose of a license is to primarily write business other then controlled business(agent who

IN insurance, producers are permitted to share or split commissions, providing that?

they must be properly licensed for that line of insurance

For how many years musta producer keep supporting documentation of his or her continuing education completion?

It is the responsibility of the producer to maintain records sufficient to document successful completion of 24 credit hrs on a biennial basis. Supporting documentation must be maintained by the producer for 5 yrs following license continuation nd must be available for audit by the division of insurance or the continuing education administrator

A producer wants to start using an assumed name for his business. Which of the following is required prior to the use of the name?

Any insurance producer using an assumed name under which the insurance producer conducts business must register the name w the insurance commissioner prior to using the assumed name

In the state of colorado, an unfair trade practice of defamation is considered a /an?

Any person in violation of the provision on defamation is guilty of a misdemeanor and will be punished by a fine up to $500 or by imprisonment in the county jail up to 1 yr, or by both

Regarding investigations of insurers, the colorado commissioner of insurance may?

Commissioner may conduct investigations and subpoena witnesses whenever he/she deems necessary

the division of insurance has requested information regarding an insurers underwriting polices via email. How many days does the insurer have to respond to this request?

Companies have 20 calendar days to respond to any the division of insurance inquiry sent in any matter other than an examination request/comment form or examination request/memo form

An insurer receives an Examination request form dated june 2 from the division of insurance. The insurer must respond by?

Companies must respond to an examination request/comment form or examination request/memo form within 10 calendar days from the date on the form

A lender is requiring that a borrower purchases an insurance policy through a particular insurer, as a condition to the extension of credit. This is an example of which of the following

Debtors cannot be told to purchase credit insurance from any particular person or entity

Which of the following scenarios would be an example of coercion on the part of a lender

Debtors cannot be told to purchase credit insurance from any particular person or entity. This is known as an unfair practice of coercion

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

Defamation is making statements that are false as to the financial condition of any insurer and which are calculated to injure any person engaged in the business of insurance(Defamation)

All of the following could be considered rebates if offered to an insured in the sale of insurance except

Dividends paid to policyholders of a mutual insurer are not considered to be rebate bc the policy specifies that they might be paid(dividends from a mutual insurer)

every insurer in the state of colorado is required to prepare, implement and maintain an insurance anti-fraud plan. In addition, a summary of the company's anti - fraud efforts must be submitted to the commissioner on?

Every license insurance company doing business in this state must include as part of its annual report, a summary of its anti-fraud efforts

Which of the following persons is required to hold a producer license

Persons who perform clerical tasks that are not related to soliciting or negotiating insurance contracts are not required to be licensed( a person who negotiates insurance contracts

An insurance producer is prohibited from charging separate fees for any of the following series except?

Producers are prohibited from charging separate fees in addition to those contemplated in the rate filling. Insurance producers may charge fees for specific services which are beyond the scope of services pertaining to insurance policies, including risk management services, financial planning, investment counseling, and similar(financial planning)

How often must the commissioner examine all insurers to guard against insurance company insolvency?

The commissioner may conduct an examination or investigation of any company or person as often as deemed appropriate, but at least once every 5 yrs

an insurer misses the deadline to respond to an examination request from the division of insurance. If this is the company's first violation, it can face a penalty of ?

Faces a $500 civil penalty for the initial violation. Fines may reach up to $5,000 for subsequent violations

When a producers license is terminated, the producer must remit he license to the commissioner within how many days?

If a producer's license has been suspended, revoked, or terminated for any reason, it must be surrendered or returned to the commissioner within 15 days

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of?

This is an example of the illegal practice of coercion

An insurance producer must renew his or her license by which of the following dates

To renew a license, the producer must pay a renewal fee due by the last day of the producers birth month every other year(every 2 yrs)

According to agency law, the producer always represents the

Under agency law the producer legally represents the insurance company with which they are contracted

Which o the following is a producers fiduciary duty

Handling premiums and insurers unearned refunds

How is the commissioner selected for the office?

The commissioner is appointed by the governor, subject to confirmation of the appointment by the senate

Within how many days are insurers required to notify the commissioner that a producer's employment has been terminated?

The commissioner must be notified within 30 days following the effective date of the termination

In order to get a nonresident license in this state, a producer must?

A producer may apply for a nonresident license by showing that they are in good standing as a producer in their home state and by paying fee, if the wo states reciprocate.( apply and pay a fee to a nonresident state that reciprocate)

All of the following statements are true regarding producer appointments except

A producer may hold just one appointment and be known as a captive agent or can represent multiple insurers, therefore holding multiple appointments. A producer must hold at minimum one appointment, but may hold as many as he or she would like

The commissioner may revoke a producer license for all of the following reasons except?

Acting in a fiduciary capacity is a producers responsibility. All of the other answers are examples of violations that may result in license suspension, revocation, or refusal

All insurance companies doing business in the state of colorado must file a financial statement with the commissioner?

All insurance companies doing business in this state will make and file with the commissioner a financial statement annually, on or before march 1

The mixing of premiums belonging to the insurer or the insured w the producers personal funds not related to the business is called?

Commingling

Which of the following is not a penalty for violating provisions of the Insurance code?

In addition to suspension of an insurance producer license, any person who violates any provision of the insurance code may be subject to a civil penalty(monetary fine), or an order to pay for contractual obligations(imprisonment)

According to the colorado fraud statutes, every licensed insurance company doing business in colorado is required to do all of the following except

Insurers are not required to pay any fees to the state of colorado to protect the insurer against fraud. They are, however, required to prepare and follow an anti-fraud plan, which includes reporting fraud and protecting consumers from fraudulent activities

An insurer with their home office in another state may do business in colorado if?

Insurers with home office in another state may conduct business in colorado as long as the insurance commissioner grants them a certificate of authority. They will then become a foreign insurer (one admitted to do business in colorado, but based in another state)

an insurer with their home office in another state may do business in colorado if?

Insurers with home office in another state may conduct business in colorado as long as the insurance commissioner grants them a certificate of authority. they will then become a foreign insurer

When the commissioner believes that a person has engaged in an unfair method of competition or an unfair trade practice, before issuing a cease and desist order, the commissioner must?

Is commissioner suspects that an insurer or its agent committed a violation or is engaged in an unfair trade practice, the commissioner may issue a statement of chargers and hold a hearing for any purpose deemed necessary.(hold a hearing)

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

It is illegal to participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly(illegal)

Which of the following best describes a misrepresentation?

Misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of divides, etc. This includes oral statements.(issuing sales material w exaggerated statements about policy benefits)

The requirement that producers must account for all insurance funds collected, and not commingle hose funds w their own is known as?

Money collected w respect to an insurance transaction must be held in a position of trust by the producer or broker

The requirement that producers must account for all insurance funds collected, and not commingle those funds with their own is known as?

Money collected with respect to an insurance transaction must be held in a position of trust by the producer or broker(fiduciary responsibilities)

Noncompliance w the regulation regarding fees charged by producers may result in which of the following penalties?

Noncompliance may result, after proper notice and hearing, in any of the sanctions made available by colorado statutes. These sanctions include the imposition of fines and/or suspension/revocation of the producer's license

the commissioner has all of the following duties except?

State legislature writes and adopts the law. The commissioner is empowered to regulate and enforce the laws(writing insurance laws)

The commissioner is conducting an examination of a foreign company located outside of colorado. Who is responsible for the cost of the examination?

The costs of the financial examination of foreign companies made outside of colorado must be paid by the company examined and must include the expanses of the commissioner(the foreign company)

Which type of insurers will be held liable for their actions in court

The failure of a company transacting insurance business in colorado in to obtain a certificate of authority will not impair the validity of any act or contract of such company and shall not prevent such company from defending any action in any court of this state(all companies authorized and unauthorized)

What is the maximum a producer may be fined or violating a cease and desist order?

The max fine for a producer who has violated a cease and desist order of the commissioner is $500

After a client signs a disclosure statement, the producer must keep a copy of the statement for at least?

The producer must retain a copy of the disclosure statement for at least 3 years after the completion of the services. A copy must be made available to the commissioner upon request

An insurance producer just sold an insurance policy to his sister. What kind of business is this ?

When producers sell policies on themselves, their family, or their coworkers, this is called controlled business. Controlled business is legal as long as premiums paid on these policies do not exceed the premiums that the producer writes for other business

Under colorados unfair claims practice regulations, when denying a claim an insurer must do all of the following except?

a claim that occurs during a grace period of a policy is covered, the insurer will simply deduct owed from the claim and pay the rest up to a limit, if one is indicated on the policy. Once the grace period ends, a policy expires and no further claims are valid

Producers who wish to sell variable life insurance n this state must be reigistered w the entity?

producers applying for license qualification to include variable contracts must furnish evidence that they have a current registration w the financial industry regulatory authority(FINRA) and evidence that they have passed the series 6. 63, or 7 exams

All of the following are considered to misuses of fiduciary funds except?

producers who act in an agency capacity are required to maintain a separate trust account for premiums. Any inters earned in a trust account belongs to the producer. Trust accounts may not be used as a personal asset or as collateral for a loan to a producer, operating expenses may not be paid out of the trust account. Producers must remit a return premium to an insured within 30 days after the producer received it from the insurer

What is the max, civil penalty per violation if an unauthorized entity violates the commissioners cease and desist order?

the following actions against an unauthorized insurer that violated a cease and desist order: impose a civil penalty $25,000 per violation, or direct the entity o make complete restitution to all parties affected by the violation or both

The regulation of the insurance industry primarily rests with?

Each state is responsible for the conduct of insurance within that state(The state)

Which of the following would be an example of coercion on the part of a lender?

debtors cannot be told to purchase credit insurance from any particular person or entity.

a producers license has been suspended for noncompliance w continuing education requirements. What is the producer's duty regarding the license

if a producer's license has been suspended, revoked, or terminated for any reason, it must be surrendered or returned to the commissioner within 15 days

In order to facilitate responses to inquires from the division of insurance, companies must maintain all records for at least?

insurance companies must maintain all books, document, and other business records for the current calendar year plus 2 prior calendar years unless a longer time period is specified by other laws

Of the required 50 hrs of prelicensing education, what is the minimum number of hours an applicant must complete on he subject of ethics?

A least 3 hrs will pertain specifically to insurance industry ethics

How often must insurance companies doing business in colorado file financial statements w the commissioner

All insurance companies doing business in this state will make and file with the commissioner a financial statement annually, on or before march 1

Who is responsible for covering the expenses associated with the examination of domestic insurers?

All reasonable expenses and charges associated w the examination must be paid directly by the examinee to the examiner

The governor has asked the commissioner to examine an insurance company after a group of insureds has filed several complaints against the company. Who will pay for this examination?

All reasonable expenses and charges associated w the examination must be paid directly by the examinee to the examiner, regardless of the reason for the examination(insurance company)

What is the minimum age for producer licensing in this state

An applicant for a producer license must be at least 18 years of age

To be licensed as a resident insurance producer in colorado, an applicant must meet all of the following requirements except?

An applicant must be at east 18 yrs old, a resident of the state, and be found financially responsible, trustworthy etc.(have an associates in business and finance)

Which of the following is a requirement for an insurance agency transacting insurance in colorado?

An insurance agency or business, entity acting as an insurance producer must obtain an insurance producer license

An insurer misses the deadline to respond to an examination request from the division of insurance. If this is the company's first violation, it can face a penalty of?

An insurer who fails to respond to a division of insurance inquiry by the deadline faces a $500 civil penalty for the initial violation. Fines may reach up to $5,000 for subsequent violations

All insurers that terminate employment with a producer are required to notify the commissioner within how many days following he effective date of the termination

the commissioner will be notified within 30 days following the effective date of the termination

If a company has transacted insurance in this state without a certificate of authority, which of the following is true of its obligations for the policies sold?

the failure of a company transacting insurance business in colorado to obtain a certificate of authority will not impair the validity of any act or contract of such company and shall not prevent such company from defending any action in any court of this state