Insurance Regulation

Within how many days must a producer respond to an inquiry from the Commissioner?

30 days

What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act?

$5,000

Terrorism Risk Insurance Program Reauthorization Act of 2015 has extended the TRIA to the year

2020.

According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls?

8am until 9pm

Who is responsible for paying producer appointment fees?

A fee of $15 will be billed to the insurer annually for each producer appointed during the previous year.

Which of the following is an example of a producer's fiduciary responsibilities?

A producer promptly forwarding premiums to the insurance company

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report

How often must the Commissioner examine rating organizations?

Every 5 years

What was created to keep telemarketers from calling consumers who do not wish contacted?

National Do Not Call Registry

All of the following are penalties a producer may face for violating the insurance laws of this state EXCEPT

Re-examination.

An insurance application cannot ask about which of the following information about an applicant?

Sexual orientation

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

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

Without receiving written consent from an insurance regulatory authority.

If another governmental agency takes legal action against a licensee, whose responsibility is it to report the action?

licensee

A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license?

reach out to commissioner

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

Coercion.

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

Fair Credit Reporting Act

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

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

Defamation.

In which of the following situations would punishment include imprisonment?

Omission of a material fact with intent to embezzle funds

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT

Disputes regarding consumer report information.

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Fraud

All of the following are licensing requirements for a business entity, EXCEPT

Having all employees complete continuing education courses once every 2 years. When applying for insurance producer licenses, business entities must have at least 1 designated licensee, in good standing with the Department; apply for licensure in the same lines of authority held by the designated licensees; have not committed any prohibited acts; be owned, operated, and managed by persons possessing general fitness, competence, and reliability; and pay all applicable fees.

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?

Illegal

When a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. Without testing, she could qualify for a temporary license for a maximum period of

180 days.

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?

Only written statements can be considered fraud.

Which of the following statements is INCORRECT?

A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.

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

Discriminating in benefits and coverages based on the insured's habits and lifestyle

Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is associated with this?

fiduciary

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years.

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days?

30

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

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

A person who negotiates insurance contracts

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

A salaried employee who advertises and solicits insurance

An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces?

A third degree misdemeanor and a $1,000 fine

Which of the following authorities is authorized to issue a temporary insurance producer's license?

Commissioner

All continuing education programs and courses must be approved by

Commissioner.

If an insurer appoints a producer, which authority must be notified?

Department of Insurance

Which of the following authorities monitors the financial strength of insurers?

Department of Insurance

Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance?

If a consumer does not sign and return the notice of disclosure within 30 days

Which of the following does a producer NOT have the authority to do?

Issue policies

ABC Insurance Company wishes to begin transacting business in Pennsylvania. Before it can do so, it must do which of the following?

Obtain a certificate of authority

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client.

Insurance producers that do not have company appointments are considered a/an

Representative of the consumer.

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint.

If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?

The change must be reported to the Commissioner.

Consumer Reports include written and/or oral information regarding a consumer's

credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.

Which of the following regulatory authorities participated in creating the National Do Not Call Registry?

FTC

If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?

90

A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT

Be responsible for at least 25% of total commissions collected by the office that he or she manages.

Which of the following would NOT be considered an unfair and deceptive practice?

Controlled business

When the Commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would order the person to stop

Cease and Desist Order

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

Twisting

Which of the following is the term used when a person in a fiduciary position has used assets in manner for which they were not intended such as the wrongful taking or use of money belonging to another?

Misappropriation of funds

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report.

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination.

All of the following violations may result in an agent's imprisonment EXCEPT

Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction.

Which of the following is an example of an unfair claims settlement practice?

Failure to promptly settle a claim when liability has been clearly established

All of the following are licensing requirements for a business entity, EXCEPT

Having all employees complete continuing education courses once every 2 years.

Which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant?

Producer