Indiana Laws and Department Rules Common to All Lines of Insurance
Every company possessing a certificate of authority must notify the Commissioner of the election or appointments of every new director or principal officer within: A: 10 days B: 30 days C: 60 days D: 90 days
B: 30 days Every company possessing a certificate of authority must notify the Commissioner of the election or appointment of every new director or principal officer within 30 days.
A licensed producer must inform the Commissioner of a change of name within: A: 2 weeks B: 30 days C: 90 days D: 1 year
B: 30 days Licensees must inform the Commissioner of a change of their residential or business address, legal name, or email address within 30 days of the change.
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment losses or claims. The company is guilty of: A: Concealment B: Unfair claim practice C: Rebating D: Misrepresentation
D: Misrepresentation Issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal.
A business entity may be licensed as an insurance producer if A: A business entity is in good standing with the Commissioner of Insurance B: All employees of the business entity are licensed as insurance producers C: An employee who holds a producer's license as insurance producers D: A business entity is a brokerage firm
C: An employee who holds a producer's license as insurance producers The Commissioner will approve a business entity's license if the required fees are paid and the business entity has designated an individual producer to be responsible for the compliance with the insurance laws and rules in Indiana.
When producers change the address of their residence or office, the Insurance Department must be notified within: A: 10 days B: 31 days C: 30 days D: 60 days
C: 30 days Producers have 30 days to notify the Insurance Department when they have changed their residential or business address, legal name, or email address.
Which of the following is NOT correct regarding examination of companies? A: All domestic companies are subject to fiscal examination B: The Commissioner must examine all alien companies C: The Commissioner may examine a company doing business in this state at any time D: The Commissioner may waive examination of foreign companies under certain circumstances
B: The Commissioner must examine all alien companies Under certain circumstances, the Commissioner may waive examination of foreign and alien companies; however, all domestic companies are subject to examination at any time (but at least every 5 years).
Which of the following would be considered an unfair claims settlement practice? A: Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered B: Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim C: Requesting the insured swear under oath concerning the facts of the claim D: Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation
A: Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered This act is a violation as defined in the Unfair Settlement Practices.
If a company transacts business of insurance without a certificate of authority, what is the maximum penalty that can be charged to the director of that company? A: Civil penalty of $25,000 B: $20,000 fine and a jail sentence up to 1 year C: $50,000 fine or the amount of commissions made, whichever is greater D: Up to $100,000 in fines
A: Civil penalty of $25,000 If a company transacts any business of insurance without a certificate, or if it transacts insurance business not specified in the company's certificate of authority, the Commissioner may impose a maximum civil penalty of $25,000 on the director or officer responsible.
Which of the following is true regarding a temporary insurance producer's license? A: It may not exceed 180 days B: It is available to individuals in the process of completing their prelicensing requirements C: It allows a resident to do business temporarily in another state D: It requires passing a limited examination
A: It may not exceed 180 days A temporary insurance producer's license is valid for 180 days, and it could only be issued in certain circumstances if the Commissioner determines that it's in the public interest.
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? A: Only written statements can be considered fraud B: Omissions of material fact on insurance application are fraud C: False statements about financial condition of an insurer are unlawful D: Statements made with the intent to deceive are unlawful
A: Only written statements can be considered fraud According to Title 18, Sections 1033 & 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud.
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 A: Rebating B: Coercion C: Twisting D: Controlled business
A: Rebating When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating.
All of the following may be exempt from the whole or part of the Indiana licensing examination EXCEPT A: A person selling credit life and credit health insurance B: A candidate applying for a surplus lines producer license C: A Chartered Life Underwriter for a Life license D: A resident producer in another state under certain conditions
B: A candidate applying for a surplus lines producer license Unless they are exempt under Indiana regulations, residents must pass a written examination when applying for an insurance producer, consultant or surplus line producer licenses. A CLU applying for a life insurance producer's license will only be required to take the Indiana law portion of the exam.
Which of the following types of license is most suitable for an individual or corporation that, for compensation, acts or aids in any manner in soliciting applications for a policy of insurance on behalf of an insurance company admitted to do business in Indiana? A: Limited insurance producer B: Insurance producer C: Insurance consultant D: Surplus lines insurance producer
B: Insurance producer You may not hold a producer's license and a consultant's license at the same time, but a producer can sell advice for a fee under certain circumstances.
In which of the following situations is it legal to limit coverage based on marital status? A: Divorce within the last six months of applying for insurance B: It is never legal to limit coverage based on marital status C: Excessive number of divorces, as defined by the Insurance Code D: Legal separation during the application process
B: It is never legal to limit coverage based on marital status Availability of insurance benefits or coverage may not be denied based on sex or marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits.
If you are found guilty of violating the Producer Licensing Law, you may be subject to any of the following penalties EXCEPT: A: The Commissioner may order you to male a monetary restitution B: The Commissioner may send you to jail for up to 1 year C: The Commissioner may fine you up to $10,000 D: The Commissioner may revoke your license
B: The Commissioner may send you to jail for up to 1 year If a producer is found guilty of violating the Producer Licensing Law, he/she may be order to make monetary restitution or pay a civil fine between $50 and $10,000. The producer's license may also be revoked or suspended. The Commissioner, however, cannot send producers to jail; that would be up to a judge.
Any licensed person whose activities affect interstate commerce and who is knowingly makes false statements related to the business of insurance may be imprisoned for up to: A: 3 years B: 5 years C: 10 years D: 12 years
C: 10 years Anyone engaged in the business of insurance whose activities affect interstate commerce, and who knowingly makes false material statements may be fined, imprisoned for up to 10 years or both. If the activity jeopardized the security of the accompanied insurer, the punishment can be up to 15 years.
The Commissioner last examined an insurance company in 2015. When is the next latest date for the Commissioner to examine the same company? A: 2016 B: 2018 C: 2020 D: 2025
C: 2020 The Commissioner may conduct an examination of any insurance company as often as the Commissioner deems appropriate. An examination of every insurer licensed in Indiana must be conducted at least once every 5 years.
Within how many days after the initial pretrial hearing date must an insurance producer report criminal prosecution of the producer to the Commissioner? A: 7 days B: 15 days C: 30 days D: 60 days
C: 30 days In response to any administrative action or criminal prosecution, producers must report to the Commissioner of Insurance of said action no later than 30 days from the initial pretrial hearing date.
All of the following may be exempt from the whole or part of the Indiana licensing examination EXCEPT: A: A resident producer in another state under certain conditions B: A person selling credit life and credit health insurance C: A candidate applying for surplus lines producer license D: A Chartered Life Underwriter apply for a Life license
C: A candidate applying for surplus lines producer license Unless they are exempt under Indiana regulations, residents must pass a written examination when applying for an insurance producer, consultant or surplus line producer licenses. A CLU applying for a life insurance producer's license will only be required to take the Indiana law portion of the exam.
Which of the following will be EXEMPT from continuing education requirements? A: A producer who is licensed in more than one line of authority B: An attorney in good standing C: A limited lines credit producer D: A 65 year old insurance producer who has been licensed for over 20 years
C: A limited lines credit producer From the options above, only a limited lines credit producer will be exempt from CE requirements.
Which of the following is NOT true regarding a business entity? A: IT must have a designated individual producer to be responsible for the business entity's compliance with the insurance laws. B: Business entities may act as insurance producers C: Business entity does not need an insurance license. D: It may be licensed as an insurance producer
C: Business entity does not need an insurance license.
Which of the following represents controlled business? A: Writing policies for friends and friends' families B: Writing policies for anyone C: Writing policies for oneself and one's family D: Writing policies for other insurance agents
C: Writing policies for oneself and one's family Controlled business is defined as insurance written on the interests of the licensee him or herself, the licensee's immediate family, or the licensee's employer.
A new insurance company wants to begin conducting insurance in Indiana, What will it need to receive before it can legally open for business? A: Commissioner's Certificate B: Governor's Statement of Approval C: Title of Incorporation D: Certificate of Authority
D: Certificate of Authority When an insurance company has proven that it is compliant with Indiana insurance laws, the Insurance Commissioner can issue a certificate of authority so the company can start conducting business. It is illegal for an insurance company to transact insurance without this certificate.
What authority is responsible for examining the operations of insurance companies in this state? A: The Governor B: The NAIC C: The Insurance Guaranty Association D: The Commissioner
D: The Commissioner The Commissioner may conduct an examination of any insurance company as often as the Commissioner deems appropriate. An examination of every insurer licensed in Indiana must be conducted at least once every 5 years.
In Indiana all of the following may act as insurance consultants EXCEPT A: A licensed insurance producer B: A trust officer of a bank acting in the normal course of his duties C: An individual who holds both the producer's and consultant license D: An attorney action within his professional capacity
C: An individual who holds both the producer's and consultant license The Insurance Code allows certain professionals, acting within the scope of their profession, to advise their clients on matters of insurance without holding an insurance license. While a producer may act as a consultant, he/she may not, however, hold both licenses at the same time.
Which of the following best describes an insurance company that has been formed under the laws of this state? A: Alien B: Foreign C: Domestic D: Sovereign
C: Domestic A company is domestic when doing business within the state in which it is incorporated.
For how long is an insurances producer's license valid? A: For 10 years B: For as long as the producer is in good standing C: For as long as the fees are paid and the education requirements are met by the due date D: For 4 years
C: For as long as the fees are paid and the education requirements are met by the due date An insurance producer's license remains in effect unless it is revoked or suspended, as long as the renewal fee is paid and the educational requirements are met by the due date.
Which of the following types of licenses is most suitable for an individual or corporation who, for a fee, offers advice concerning insurance contracts? A: Temporary producer B: Insurance producer C: Insurance consultant D: Surplus lines insurance producer
C: Insurance consultant An insurance consultant license allows the licensee, for a fee, to advise clients on insurance contracts.
Which of the following conditions is NOT necessary for becoming a non-resident producer in Indiana? A: Being licensed as a resident producer B: Paying appropriate fees C: Passing the proper examination D: Being a resident producer in good standing in the home state
C: Passing the proper examination To become a non-resident producer in Indiana, one must be a licensed resident producer in good standing in one's home state, and submit appropriate application and fees. No additional prelicensing education or examinations are required as long as the two states have reciprocity.
Insurance producers who willfully violate the Indiana Insurance Code are committing a Class A misdemeanor. What is the maximum punishment they be subjected to? A: A one-year jail sentence and a fine not to exceed $3,000 B: A fine up to $25,000 C: Up to 365 days in jail D: Maximum of 30 days of jail time
C: Up to 365 days in jail Class A misdemeanor is punishable by up to one year in jail and a fine not to exceed $5,000.
Which of the following would be considered an unfair claims settlement practice? A: Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim B: Requesting the insured swear under oath concerning the facts of the claim C: Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation D: Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
D: Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered This act is a violation as defined in the Unfair Settlement Practices.
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: A: Misrepresentation B: Discrimination C: Nothing, unless the remarks were in writing D: Defamation
D: Defamation A producer or broker who makes oral or written statements intended to injure another producer or insurer is guilty of the unfair trade practice of defamation.
A producer licensed in another state wants to become a non-resident producer in Indiana. The other state gives the same privileges to Indiana producers as it does to its own producers. Indiana, therefore, extends the licensing privileges to the prospective producer of the other state. What is this called? A: Fair exchange B: Residency privilege C: Uniform application D: Reciprocity
D: Reciprocity "Reciprocity" occurs when the state in which the person resides accords the same privilege to residents of Indiana.
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? A: Omissions of material fact on insurance application are fraud B: False statements about financial condition of an insurer are unlawful C: Statements made with the intent to deceive are unlawful D: Only written statements can be considered fraud
D: Only written statements can be considered fraud According to Title 18, Sections 1033 & 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud.
If an insurer becomes insolvent, which of the following would pay benefits to policyholders? A: The NAIC B: The state Department of Insurance C: The Federal Reserve Fund D: The Guaranty Association
D: The Guaranty Association All admitted insurers must be a member of the Insurance Guaranty Association as a condition of their license. The Insurance Guaranty Association is in existence to protect policyowners and beneficiaries against losses caused by the insolvency of an insurance company.
What is the purpose of the Insurance Guaranty Association? A: To protect insurance companies against insurance fraud B: To provide double indemnity for the insured's loss C: To prevent unfair trade practices D: To protect policy owners against insurer insolvency
D: To protect policy owners against insurer insolvency The Insurance Guaranty Association was created to protect policyowners and beneficiaries against losses caused by the insolvency of an insurance company.