DE Insurance Code - Life Producer Study Guide 2017
Every applicant for a license as an insurance producer for the line of variable annuity must hold a
license as a life insurance agent and must be registered with the National Association of Security Dealers.
Limited Representative Does not require
professional competency for an insurance agent or insurance broker's license.
A vacancy in the office of DE Commissioner shall be filled by appointment by
the Governor of Delaware
The insurance commissioner may impose a penalty of not more than how much for each act of insurance fraud
$10,000 for each act of insurance fraud.
Any person in the process of forming an insurance company but not yet have solicitation permit that is caught advertising or soliciting, or accepting funds or memberships will be subject to:
$10,000 or imprisonment for not more than 10 years, or both.
In addition to or in lieu of any applicable denial, suspension or revocation of a license, a person may, after hearing, be subject to a fine of not less than
$200 and not more than $20,000 for each such violation
Each Mutual Benefit Association before receiving a certificate of authority shall deposit with the Commissioner a guaranty fund of
$25,000 in cash.
A certificate for a group long-term care insurance policy, delivered or issued in this State, shall include what 3 things...
(1) A description of the principal benefits and coverage provided in the policy; (2) A statement of the principal exclusions, reductions and limitations contained in the policy; and (3) A statement that the group master policy determines governing contractual provisions.
No insurer shall request or require that an applicant submit to an HIV test unless the insurer first
(1) Obtains written consent; (2) Reveals the use to which the results may be put and whom results may be disclosed (3) Provides the applicant with written information such as sanctioned brochure "HIV and AIDS" published by the American Red Cross
[Employee Groups] A policy may be issued to an employer, in which the employer shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer. This is possible as long as:
(1) The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof. The policy may provide that the term "employees" shall include retired employees, former employees and directors of a corporate employer. The policy may provide that the term "employee" does not include farm laborers employed in agriculture. (2) The premium for the policy shall be paid either from the employer's funds or from funds contributed by the insured employees, or from both. (3) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
Viatical settlement contract
1. A "viator" or the insured receives, on the date of the premium finance loan, a guarantee of a future settlement value of the policy. 2. The viator or the insured agrees on the date of the premium finance loan to sell the policy or part of its death benefit on a date after the issuance of the policy.
Prohibited provisions for Life Insurance
1. A provision where the policy will take effect more than 1 year before the original application for the insurance was made 2. A provision for any mode of settlement of less value than the amount insured under the policy. 3. A provision to the effect that the agent soliciting the insurance is the agent of the person insured under the policy or making the acts or representations of such agent binding upon the person so insured under the policy.
6 prohibited policy plans
1. Attaching an extra, unwarranted plan to any insurance policy that accumulates cash over a period of years and pays out to any group of members or policyholders. 2. Referring to any policy as being "registered" with any agency of this state. The only valid use of that word is in reference to being registered as a security under state or federal law. 3. a policy that takes the proceeds from any policy and deposits them in special funds or segregated accounts or invested anywhere at all. 4. Any policy that uses a mathematical algorithm to group policyholders together. 5. Any policy that would provide benefits to one policy holder if another policy holder's policy has lapsed or is terminated. 6. Reference to premiums as deposits
What are Standard Nonforfeiture values for Life Insurance?
1. In the event of default of any premium payment, the company will grant not later than 60 days after premium due date, a paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits. 2. Upon surrender of the policy within 60 days of the due date of a premium in default, after premiums have been paid for 3 full years, the company will pay a cash surrender value as specified in DE Insurance Code 3. The insured/policyowner's specified choice for nonforfeiture benefit will become active unless that person chooses a different option within the 60 day period. 4. Within 30 days after any policy anniversary or completion of all premium payments, the insurer will pay a cash surrender value of a specified value. 5. All mortality tables, interest rates used to calculate cash surrender values and nonforfeiture benefits shall be provided to ensure there is no indebtedness to the company 6. A legal notice that the cash surrender values and paid-up nonforfeiture benefits available under the policy are not less than that of the minimum required by law. As well as a complete explanation for all calculations.
What are the four types of Term Policies?
1. Renewable 2. Convertible 3. Level 4. Decreasing
What are the 4 main benefits of Life Insurance?
1. Replace income you would have earned for your family after you are gone. 2. Take care of debts that your family could face or be left with 3. Pay any estate taxes your heirs might face 4. Achieve other financial goals - such as paying for education
What are the duties of DE Insurance Fraud Prevention Bureau?
1. To initiate independent inquiries 2. To review reports or complaints 3. To conduct independent examinations of insurance fraud 4. To enforce Title 21 by confiscating license plates of uninsured motorists.
How long do you have to request a hearing if your license is non-renewed or revoked?
10 days
Regarding Group Long Term Care Insurance, Prior to advertising, marketing or offering such policy within this State, each association or the insurer of such association, shall file evidence with the Commissioner that the association has at the outset a minimum of
100 persons who've been active for 1 year
Any minor not less than ?, with the consent of parent, may apply for annuities and life insurance?
15 years of age.
The Commissioner shall furnish a copy of the examination report to the person examined not less than
20 days prior to filing the copy with the department of insurance
If a copy of the application is requested by the applicant, the insurer has how long to comply?
30 days
What is the grace period number of days you need to remember as a life producer?
30 days, for individual life policies. 31 day (or a month) for group life policies. A full month for annuities
Viatical settlement providers must retain copies of all documents for ? years
5 years
Under Standard Nonforfeiture Law, the company reserves the right to defer the payment of any cash surrender value for a period of
6 months
What are the numbers of days to remember for Standard Nonforfeiture Values for Life Insurance?
60 DAYS. Unless the Standard Nonforfeiture question is about policy anniversary/completion of all premiums/payment of cash surrender value. Then 30 days.
Any application/request for a Commissioner to examine a potential violation or egregious act must be filed within how many days of person knew or reasonably knowing about such act, threatened act, failure, report, rule, regulation or order.
90 days
Variable Life Permanent Life Insurance offers
A death benefit and a cash value portion that is invested in stocks. Cash value and death benefit may decrease if investments don't do well.
Whole Life Permanent Life Insurance offers a
A death benefit with a cash value portion. The death benefit remains unchanged and the savings account grows based on dividends from the insurance company
Coverage of Dependents in Group Life Policies
A group life insurance policy may be extended to insure the employees or members with respect to their family members or dependents as long as: (1) The premium for the insurance shall be paid either from funds contributed by the employer, union, association or other person to whom the policy has been issued, or from funds contributed by the covered person, or from both. Policies where employers pay all premiums must cover all eligible employees. (2) An insurer may exclude or limit the coverage on any family member or dependent as to whom evidence of individual insurability is not satisfactory to the insurer. (3) The amounts of insurance for any covered spouse or dependent child under policies issued on a group basis may, if requested by the policyholder, be limited to a percentage of the amount of insurance for which the employee or member is insured.
Annuity
A level stream of cash flows for a fixed period of time. Dependent on the continuance of human life. Not tax exempt. Popular for income during retirement.
Surplus Lines Broker
A licensee of the department who acts or aids in any manner in negotiating contracts of insurance with an insurance company not licensed to transact business in this state.
Fraternal Representative
A licensee of the department who is appointed or authorized to act in a society of fraternal organization in the solicitation, negotiation, procurement, or making of a life insurance accident, and health insurance or annuity contract.
Any resident licensee who writes flood insurance under the National Flood Insurance Program shall be required to complete
A two (2) hour continuing education course related to flood insurance under the National Flood Insurance Program as part of the twenty-one (21) general credit hours necessary to maintain a Delaware resident license.
Expressed Authority
Actually stated authority granted by the principal to the agent either orally or in writing
No person forming or proposing to form an insurer, Shall in this state:
Advertise or offer for sale any securities or solicit or receive any funds, subscriptions, applications or membership except as authorized by a currently effective permit ("solicitation permit") issued by the Commissioner.
No long-term care insurance policy may be cancelled, nonrenewed or otherwise terminated on the grounds of the
Age or the deterioration of the mental or physical health of the insured individual or certificate holder
Waiver of Premium Provision
Allows for the waiver of premium payments in the event of the total disability of the insured
Premium finance agreement
An agreement by which an insured promises to pay an insurance premium financing company the amount advanced or to be advanced under the agreement, to an insurer for payment of premiums on an insurance contract, together, with a service charge.
Funding Agreement
An agreement for an insurer to accept and accumulate funds and to make 1 or more payments at future dates.
Market Conduct Examination
An examination conducted by DE state's insurance department to evaluate the practices and operations of an insurer. This examination aims to establish the insurer's authority to conduct business in that state.
Churning
An illegal practice where insurance agents unnecessarily replace existing life insurance for the purpose of earning additional (higher) first year commissions.
Stock Insurers
An incorporated insurer with its capital divided into shares and owned by its stockholders.
Managing General Agent
An individual appointed by insurer to solicit applications from agents for insurance contracts, or to negotiate insurance contracts on behalf of insurer.
Agency vs Individual Licensee
An individual license would most likely leave you as an insurance producer. To become an insurance agent, you must be appointed as an agent by the insurer and the insurer must inform the commissioner. Insurance Agents are appointed to sell and solicit and issue conditional receipts with insurance. Producers are legally not appointed and not allowed to do any of those things.
Equity security
An investment in stock issued by another company.
Fraternal benefit societies
An organization of people who usually share a common ethnic, religious, or vocational affiliation. This type of society may provide insurance to its members. Fraternal insurers are primarily life insurance providers, and many are church related.
Reciprocal insurance
An unincorporated association of subscribing members who exchange contracts of indemnity with each other.
Insurable Interest
Any actual, lawful and substantial economic interest in the safety or preservation of the subjection of the insurance free from loss, destruction or pecuniary damage or impairment. Can boil down to affection between individuals.
What is Reinsurance?
Any authorized insurer may reinsure all or any part of An individual risk or of a particular class of risks in any other insurer or accept such reinsurance from any other insurer.
What is insurance fraud in a nutshell
Any conspiracy to present false or deceitful information in the reception or issuance of an insurance policy.
Risk retention group
Any corporation or other limited liability association whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members
Limited Line Credit Insurance
Any form of insurance that is offered in connection with an extension of credit
Rebating
Any inducement offered in the sale of insurance products that is not specified in the policy.
Reinsurance intermediary-broker
Any person, other than an officer or employee of the insurer, or entity who solicits, negotiates or places reinsurance surrenders for an insurer.
A life insurer may lend to its policyholder as collateral security how much?
Any sum not exceeding the cash surrender value of the policy
No alteration of an insurance application shall be made by anyone other than the ___________, without his/her consent. Changes must be initialed by ________.
Applicant. Changes must be initialed by applicant
The DE Insurance Commissioner must conduct an examination of Life Producers at a minimum
At a minimum every 5 years
During the payout period of a variable annuity, the amount of each income payment to you may be set
At the beginning or may change from payout to payout with the value of the investments in the separate account
Insurable Interest must exist in the individual insured
At the time of application
What are debtors?
Borrowers of money, for which payment is arranged through a lease or credit transaction
If a referral for a customer of insurance is given on a nominal, 1 time basis and fixed in amount,
Compensation may be provided.
A policy of insurance issued to a risk retention group or any member of that group shall not be required to be
Countersigned
Uniform Business Entity Application
Current version of the application for resident and non resident business entities provided by NAIC
Universal or adjustable Permanent Life Insurance, With this type, you may be able to increase the
Death benefit well after you have purchased the policy if you pass a medical exam. The cash value portion of this policy earns interest. If the cash value portion grows enough, it can be used to reduce or pay your premiums
In Decreasing Term, The death benefit
Decreases over the policy term, while the premium varies.
What is the name of the agency tasked with insurance fraud in Delaware?
Delaware Insurance Fraud Prevention Bureau
Discrimination based upon genetics is prohibited in all Health policies except in which two?
Disability or Long Term Care Insurance
Raising of Premiums, or Refusal to issue or renew otherwise do business with a victim of abuse (domestic or otherwise) based upon that fact - is prohibited or not prohibited. Why? What about Firefighters and Ambulance Personnel?
Discrimination against victims of abuse is strictly not allowed in the DE Life and Health insurance business. The same applies to firefighters and ambulance personnel, or anyone in line of duty.
The Delaware Commissioner's main office to conduct hearings is in
Dover, but they may conduct hearings anywhere.
Annual Statement
Due on or before March 1st (when certificate of authority continuation fee is also required) from all authorized insurers. A full and true statement of it's financial condition, transactions and affairs as of December 31st preceding.
What is the purpose of continuing education?
Ensure the maintenance or improvement of a licensee's insurance skills or knowledge.
Delaware Insurance Guaranty Association Act
Ensures the payment of covered claims under certain policies avoiding delay in payment, and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer. The association assists in the detection and prevention of insurer insolvencies and will assess the cost of such protection among insurers
Insurable interest exists in what capacities
Every individual has an insurable interest in the life body and health of him or herself. An individual has insurable interest in the life body and health of another, if: 1. Related closely by blood and affection 2. A substantial economic interest in the life, body and health of another 3. An employer providing benefits to it's employees has an insurable interest in all of it's employees. 4. Business Partnerships 5. Trustees of a trust has insurable interest in the individual that made the trust. 6. A person obligated to make a payment on the death of an individual.
Apparent Authority
Exists where a principals actions could result in a third party (as a reasonable person) believing the agent had authority even where it may not be expressed or implied
Licenses issued will remain in effect unless revoked or suspended, as long as:
Fees set forth are paid and continuing education requirements are met.
Records shall be retained and available for inspection by the Commissioner.
For a period of 3 years
The premium for the group policy shall be paid by whom.
From the employee or employer, or both.
Annuities are most often used for
Future retirement income
Net premium
Gross premium minus any returned premiums.
What are the general lines of insurance?
Health insurance, Medicare supplement insurance and long-term care insurance, Property Insurance, Surety, Marine/Transportation insurance
The Commissioner shall issue certificates of authority under
His or her seal of office, showing the date of actual issuance, the kinds of insurance the insurer is authorized to transact in this State, and such other matters as the Commissioner deems necessary
Internal Review Process
IRP. Means the procedure for an internal review of an adverse determination (benefit denial)
No insurer shall retain any risk on any 1 subject of insurance
In an amount exceeding 10% of its surplus to policyholders.
The commissioner shall conduct each examination in what manner and take what preliminary step?
In an expeditious, fair, and impartial manner. They will also serve an examination warrant to all parties at least 20 days in advance.
The commissioner is always immune from liability as long as conduct and statements were made
In good faith.
An annuity is a contract in which an insurance company agrees to make a series of
Income payments in return for premiums that an investor has paid.
Credit life insurance
Insurance on a debtor in connection with a specific loan or credit transaction, to provide for satisfaction of a debt, in whole or in part, upon the death of an insured debtor
No security or investment, other than (real estate), shall be eligible for acquisition, unless it is
Interest bearing or interest accruing or entitled to dividends or is otherwise income earning, is not then in default in any respect, and the insurer is entitled to receive for its exclusive account and benefit the interest or income accruing thereon.
Variable-universal Permanent Life Insurance Combines the
Investment aspect of a variable policy with the ability to adjust premiums and the death benefit of a universal policy
An insurer shall not make any investment or loan (other than policy loans or annuity contract loans of a life insurer) unless...
It is authorized or approved by the insurer's board of directors or by a committee charged with supervision of investments and loans.
Suitability
It's the process of assuring that clients buy a life insurance or annuity product for the appropriate reasons. That means they fully understand its features, benefits, conditions, and limitations.
The Secretary of the Department of Human Resources
Legal agent for the State and shall be empowered to enter into the contract for group life insurance with any insurance carrier designated by the State Employee Benefits Committee
If an insurer fires an agent, they must
Let the commissioner formally know otherwise the agent can continue selling insurance
A broker's license may be issued for
Life Insurance and General Lines
For State employees, The state may pay part of the premiums or charges for..
Life insurance premiums for group life insurance contracts. The expenditure of funds of the State shall not be considered compensation paid to employee.
You can renew most term insurance policies for one or more terms, even if your health has changed. Each time you renew the policy for a new term, premiums...
May be higher
Binding Coverage
Means that coverage is in place, although a policy has yet to be issued. Often, binding takes place through a verbal agreement, in person or over the telephone.
No individual policy, contract or certificate of health insurance which provides medical coverage for a child and which covers a child who resides in this State, or is delivered or issued for delivery within the State, shall limit...
Medical insurance coverage for any child referred by the Division of Family Services or law enforcement agency for suspected child abuse or neglect, including requiring any referral by a primary physician.
What is the free look period?
New life insurance policies have a "free look" period of 10 days after you receive the actual policy forms, a time during which you can cancel the policy and get a full refund with no penalty. If you replace one life insurance policy with another, the free look period is 20 days.
Consultants may accept what fees?
No consultant may accept any fee aside from what is agreed upon expressly between the client and the consultant in advance.
The commissioner shall give a copy of the report to the person examined
Not less than 20 days prior to filing the same copy in the Department
What is the process for notifying an insured of a cancellation due to nonpayment of life insurance premiums?
Notice will be in writing, delivered or mailed to the policyholder at their last known address, will state the effective date of cancellation, and shall be accompanied by a written explanation for the cancellation. Records of this shall be retained for no less than 1 year.
A business entity acting as an insurance producer, adjuster or appraiser is required to
Obtain a license using the Uniform Business Entity Application.
Although issued and delivered to the insurer, the certificate of authority at all times shall be the property
Of the state.
Dividends payable from state group life insurance may be used to
Offset any contribution made by the State in the form of money or administrative costs
Continuing education requirements for limited representatives shall include
Only those lines for which the limited representative is certified.
Convertible Term Insurance Allows you to convert your term policy into a
Permanent policy without submitting medical or other information
A certificate of insurance is not a
Policy of insurance and does not affirmatively or negatively amend, extend, or alter the coverage afforded by the policy to which the certificate of insurance makes reference.
Errors and Omissions Insurance
Policy which covers a licensee's unintentional errors in documentation
No long-term care insurance policy or certificate shall exclude coverage for a loss or confinement which is the result of a
Pre-existing condition (Given the condition is older than 6 months)
Discrimination of blindness or deafness in Accident & Sickness insurance is
Prohibited.
Delaware Nonadmitted Insurer Act
Provides authority for the Delaware Insurance Commissioner to enter into an interstate cooperative agreement with a nonadmitted insurer if doing so is in the best interests of this State.
Implied Authority
Reasonable, necessary and/or customary authority principal intends an agent to have in order to carry out expressed authority.
If an insurer fails to comply with any lawful order of the commissioner, the commissioner may
Revoke license and levy a fine of $5,000 or less.
Ordinary or straight Permanent life insurance offers a
Set annual premium and set death benefit that will never change
No person that communicates data to the Commissioner during the course of an examination
Shall incur any penalty as long as statements were not made to deceive.
Discrimination against individuals over 65 years of age in Health insurance is
Strictly prohibited.
Renewable Term insurance Allows you to renew your policy at the end of the term without
Submitting Medical Information
Publicized Founded Complaints
The Department shall make available to the public: 1. The details of each placed complaint and the actions taken by the Insurance Department in response, with the identify of the complaining party kept confidential. 2. Statistical information regarding the number of founded complaints against each insurer licensed to do business in the State of Delaware, including information permitting consumers to assess such statistics in the context of the total amount of business done in the state by each insurer.
Proof of Loss Provision
The Proof of loss provision means that the insured must supply the insurer with some evidence that that the loss actually occurred and to what extent. The claimant has 90 days to supply the proof, if reasonably possible.
Controlled Business
The amount of insurance sold by an insurance provider to family and friends. In some states, a limit is placed on this type of business.
What are the general powers and duties of the DE State Insurance Commissioner?
The commissioner is the chief officer of the Delaware Department of Insurance, the agency responsible for regulating and supervising the operations of the state's insurance industry. Besides its regulatory duties, the Department of Insurance investigates insurance fraud complaints, provides consumers with consulting services and arbitrates disputes between companies and consumers.
When a claim arises under a contract on account of death prior to expiration of grace period before the overdue payment is made, the amount of such payments, with interest, may be deducted from...
The face value (payout amount)
The insurance commissioner may require any documents reasonably necessary to verify
The information contained in an application
For the investment of life insurance funds, for the common benefit of the holders of it's "registered" policies and bonds heretofore issued
The insurance commissioner will need the security deposited with him/her, so they can hold on to it.
Every insurance policy shall be executed in the name of and on behalf of
The insurer or an entity authorized by the insurer.
What information is contained on a person's license to sell insurance?
The licensee's name, address and personal identification number, and the date of issuance, the lines of authority, the expiration date and any other information the commissioner deems necessary.
If not so continued by the insurer, its certificate of authority shall expire as of midnight of
The next May 31st.
The expense of examination of an insurer or of any person shall be paid by
The person examined
What is Standard Nonforfeiture Law?
The primary purpose of the Standard Nonforfeiture Law is to mandate minimum nonforfeiture values that maintain equity between those policyholders who surrender and those policyholders who keep their insurance in force.
Surplus lines broker.
The term "surplus lines broker" means an individual, firm, or corporation which is licensed in this State to sell insurance in this state with nonlicensed insurers.
Are banks allowed to act as insurance agents?
They need a license, and in some cases an actual insurance agent present at the time of sale.
Twisting
To make or issue any statement misrepresenting or making incomplete comparisons as to the terms, conditions or benefits in any policy for the purpose of inducing a policyowner to forfeit, lapse, or surrender
Who is the insurance commissioner of Delaware as of 2017?
Trinidad Navarro
Resident licensees required to fulfill continuing education requirements shall complete
Twenty-four (24) credit hours of Department approved education subjects, three (3) of which shall be in ethics subjects during each biennium reporting period. If the resident producer holds a health license and solicits LTC policies, the producer must complete at least three (3) hours of training in Delaware LTC insurance.
Coercion of Debtors
Unfair practice. This is basically when a creditor (insurer) requires a debtor to negotiate their policy or renewal through a pre-selected insurer or group of insurers.
How many employees are eligible for insurance under employee group policy?
When none of the premium's funding is derived from employee contribution, they must insure all employees except those that refuse.
No insurance policy or application form shall be delivered unless the form has been filed with whom in how many days in advance of delivery.
With the commissioner 30 days in advance of any such delivery.
Arbitration decisions shall be rendered
Within 45 days of the Commissioner's receipt of arbitration request
Mutual benefit association
a corporation or entity which has no divisible or issuable stock (captial stock), and which issues certificates of membership providing for payment of benefits in case of sickness, disability or death of it's members and which accumulates funds by the collection of fees or dues from its members, at either stated or irregular intervals, with which to pay membership liabilities found on certificates and with which to pay administrative expenses. Different than Fraternal Benefit Societies.
Medicare supplement policy
a group or individual policy of accident and sickness insurance which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare.
Captive insurance company
an insurance company that is wholly owned and controlled by its insureds; it's primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits.
Long-term care insurance
any insurance policy/rider offered or designed to provide coverage for not less than 12 consecutive months for 1 or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, provided in a setting other than an acute care unit of a hospital. LTC Insurance includes group and individual annuities which supplement long-term care insurance.
Level Term Allows you to lock in a
fixed premium for the term of the policy, while the death benefit remains the same
Title insurance
insurance of owners of property or others having an interest against loss by defective titles or invalidity or adverse claim to title.
No person, association or other entity shall act as a workers' compensation self-insurance group unless
it has been issued a certificate of authority by the Commissioner.
A certificate of insurance shall not confer to any person
new or additional rights beyond what the referenced policy of insurance expressly provides.
No insurer may issue or deliver a long-term care insurance policy in this State unless the insurer offers to the applicant the option to purchase a policy that provides for
nonforfeiture benefits
Not later than 30 days from the first day of operating as a viatical settlement broker, the life insurance producer shall
notify the Commissioner
With an immediate annuity, income payments start no later than
one year after you pay the premium
Because of its limited nature, the premiums for term insurance are
smaller than permanent insurance, meaning you get more insurance protection for your premium dollar
The State Employee Benefits Committee shall be empowered to adopt rules and regulations which it deems necessary for the administration of
the State's Group Life Insurance Plan
If a person is hesitant to testify to the Commissioner because the nature of his/her statements may incriminate them,
they may be granted immunity from the Commissioner.
An insurer shall not invest in:
(1) Corporate obligations (2) Bonds, notes or other evidences of indebtedness secured by second mortgages or deeds of trust (3) Participations; (4) Secured obligations of institutions (5) Production payments There are exceptions and others to this but look for these on the test.
Continuance of a certificate of authority by the insurer each year is completed by
(1) Payment on or before March 1 of the continuation fee (2) Due filing by the insurer of its annual statement on or before March 1 for the next year (3) Payment by the insurer of premium taxes with respect to the previous year.
The Commissioner may place any individual on probation for a period of no more than
1 Year.
Suspension of an insurer's certificate of authority shall be for such period as the Commissioner specifies in the order of suspension, but not to exceed
1 year
A license as an insurance producer is not required of whom
1. An employee of an insurer or producer, provided that employee does not receive any commission on policies. 2. The employees activities are executive or administrative and are only indirectly related to the sale of insurance products. 3. Activities relate to underwriting or the officer is acting in the capacity of a special agent. 4. A person who secures and furnishes info for group life insurance, administratively, and without compensation. 5. A full time employee who counsels or advises his or her employer about insurance interests provided that employee does not sell insurance or receive commission.
A limited lines producer may qualify for licensing for the following lines of authority
1. Credit Insurance Lines 2. Life insurance or annuity products used solely to fund a pre-arranged funeral 3. Travel Insurance 4. Bail agent 5. Automobile Club 6. Any other limited line expressed under state law
What are all 7 classes of Group Life Insurance?
1. Employee Groups 2. Debtor Groups 3. Labor union Groups 4. Trustee Groups 5. Association Groups 6. Credit Union Groups 7. Discretionary Groups
What are all 6 standard provisions for annuities?
1. Grace Period (1 month, but not less than 30 days) 2. Incontestability 3. Entire Contract 4. Misstatement of Age or Sex 5. Dividends 6. Reinstatement
What are all 16 standard provisions for group life insurance?
1. Grace Period (31 days) 2. Incontestability 3. Application; Statements deemed representations 4. Insurability 5. Misstatement of Age 6. Payment of Benefits 7. Certificate 8. Conversion on Termination of Eligibility 9. Conversion on termination of policy 10. Death pending conversion 11. Disability Provision 12. Information to Debtors 13. Notice as to Conversion Right 14. Adjustment of Premium 15. Application of dividends 16. Notification for cancellation
What are all 13 DE Prohibited Unfair Claim Settlement Practices?
1. Misrepresentation of facts or policy provisions 2. Failure to acknowledge and respond to claims within 15 working days 3. Failing to implement prompt investigation of claims within 10 working days upon notice of loss. 4. Refusing to pay claims without conducting an investigation when one is required. 5. Failing to affirm or deny coverage or advise the client in writing within 30 days of proof of loss. 6. Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims in which liability has become clear. 7. Driving insureds to legal litigation by offering them far less than is reasonable for the settlement of their claim. 8. Attempting to settle a claim for less than the amount referenced by advertising material attached to an application. 9. Attempting to settle claims on the basis of an application which was altered without notice or knowledge of insured. 10. Making claims payments to insured or beneficiaries without a statement setting forth the coverage under which payment has been made. 11. Delaying the investigation or payment of claims by requiring an insured, claimant of physician to submit a preliminary claim report and then subsequently a formal proof of loss form, both of which contain substantially the same information. 12. Failing to promptly settle claims for any reason related to an insurer's strategic interests as a business. 13. Failure to provide a prompt explanation as for the reason of insurer's inability to settle a claim or denial of such. Such explanation may be given verbally but when given, must be documented in the claims file.
What are all 13 standard provisions for individual life insurance?
1. Payment of Premiums 2. Grace Period (30 days) 3. Entire Contract 4. Incontestability 5. Misstatement of Age 6. Dividends 7. Policy Loan 8. Table of Installments 9. Reinstatement 10. Payment of Claims 11. Beneficiary; Industrial Policies 12. Title 13. Excluded or Restricted Coverage
What are all types of persons required to be licensed
1. Producer 2. Agent (same as producers, just must be appointed) 3. Broker (brokers license for general lines of authority) 4. Consultant
What are the main reasons that your license can be denied, nonrenewed or revoked?
1. Providing incorrect, misleading, incomplete or materially untrue info. 2. Violating any insurance laws 3. Obtaining a license through misrep. or fraud 4. Improperly misappropriating money 5. Being denied revoked or suspended in another state 6. Failing to comply with a child support obligation 7. Failing to pay state income tax. 8. Failing to reply to inquiries from the Department of Insurance within 21 days.
An individual licensee who fails to timely renew and, as a result, allows his or her license to lapse may reapply for the same license without the necessity of passing a written examination within
12 months.
Insurers that appoint an agent need to provide a notice of appointment within
15 days to the Insurance Commissioner
The Commissioner may issue a temporary license for a period not to exceed
180 days
No person shall fail to provide responses to inquiries from the Department of insurance regarding denial of claims, cancellation; nonrenewal or refusal of benefits with how many days?
21 days (Chapter 23, 26)
For continuing education, Each licensee shall retain each original course completion certificate for a period of how long? How long would a licensee have to produce records if requested?
3 years to retain. 30 days to produce
A licensee shall report any criminal prosecution of him/herself to the Insurance Commissioner within
30 days
An insurer that terminates the appointment or employment of an agent shall provide a notice of termination within
30 days
Licensees shall inform the Insurance Commissioner by any means acceptable of a legal name change or change of physical mailing address or electronic mail address within
30 days of the change
How Long is the DE Insurance Commissioner's term? Who are they commissioned by? What date does the commissioner assume office?
4 years and shall be commissioned by the Governor. Commissioner assumes office on the 1st Tuesday of January after election.
Insurance producers in other states that move to Delaware generally have how long to apply for license without requiring prelicensing education or examination.
90 days
Legal Actions Provision
No legal action shall occur prior to 60 days after proof of loss has been furnished. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished.
Port-of-Entry for Foreign Insurance Companies
A U.S. branch using this State as a state of entry to transact insurance in the United States
Adverse Determination
A benefit denial, reduction, or termination, a denial of certification or both.
All premiums, return premiums or other funds received in any manner by a licensee or a surplus lines broker shall be held in
A fiduciary capacity and shall be account for by such licensee or broker.
Interim Agent
A licensee of the department who is qualified in all respects as an agent except as to experience, education, and training.
Third-party administrator
A person, firm or entity who underwrites, collects charges or premiums, approves, denies, adjusts or settles claims for residents of this State, in connection with health coverage by an insurer.
Accredited State
A state in which the insurance department or regulatory agency has qualified as meeting the minimum financial regulatory standards promulgated and established from time to time by the National Association of Insurance Commissioners (NAIC)
Use of credit scoring is permitted as long as
Fairly meticulous "notice of adverse action" is provided to the insured and all record keeping standards are met. However, use of Credit Scoring is still listed under unfair practices.
An insurance agent may qualify for licensing for the following lines of authority
Life Insurance, Variable Annuity/Life, Health insurance, Medicare supplement insurance and long-term care insurance, Title Insurance, Property Insurance, Surety, Marine/Transportation insurance, General Lines (all of the above except life, variable annuity and title insurance.
The examiner in charge shall file with the Department a verified written report of examination under oath.
No later than 60 days following the completion of the examination, along with a notice that allows for rebuttals within 30 days to any findings in the report
Balance Billing
a health-care provider's demand that a patient pay a greater amount for a given service than the amount the individual's insurer has paid or will pay for the service.
Delaware Fee Schedule for Insurer's Certificate of Authority
a. For filing application for initial certificate of authority $1,000 b. Issuance of certificate of authority $150 c. Annual continuation $150 d. Reinstatement $150 e. Amendment to include or delete lines of authority $150
Mutual Insurers
an incorporated insurer without capital stock and the governing body of which is elected by its policyholders
