Insurance Regulation

Civil penalty for each intentional violation of insurance laws regarding unfair methods of competition

$5,000

Aggregate penalties for intentional violations within 6 months

$50,000

License fee for resident insurance producers

$55

Individuals applying for insurance producer licenses must....

-Be at least 18 -Have not committed any prohibited act -Satisfy the pre-examination requirements, including 3 hours of ethics -Pass the insurance producer licensing exam -Pay all applicable fees -Possess general fitness, competence, and reliability

When applying for insurance producer licenses, business entities must

-Have one or more designated licensees, in good standing with the Department -Apply for licensure in the same lines 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 -Pay all applicable fees -Meet any other criteria established by the Department

Insurers must maintain all of their insurance advertisements on file for

4 years

Insurance companies must notify the Commissioner when there is any material change in their ownership, control, surplus or solvency

5 days

Commissioner will examine each insurer

5 years, or as often as necessary

Notice should be given to Third-Party claimants within

60 days

After moving to Pennsylvania for nonresident to become licensed as a resident

90 days

Statute

A formal written law enacted by the legislature, insurance statutes can be found in the state Insurance Code

Advertising

Covers a wide scope of communication, from publishing an ad in a newspaper or magazine, to broadcasting a commercial on television or the Internet

Do Not Call Registry (8 a.m. and 9 p.m.)

Created by the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) which allows consumers to include their phone numbers on a list to which solicitation calls cannot be made by telemarketers

Rebating

Defined as any inducement offered to the insured in the sale of insurance that is not specified in the policy

Fair Credit Reporting Act

Ensures that records are confidential, accurate, relevant, and properly used and also protects consumers against the circulation of inaccurate or obsolete personal or financial information

Notice of Appointment

Every insurer must notify the Insurance Department of all appointments and terminations of appointments of producers in the format and within the time frame specified by the Commissioner

Embezzlement

Failure to submit funds appropriately

Misappropriation of Funds

The term used when a person in a fiduciary position has used funds in a manner for which they were not intended, such as the wrongful taking or use of money belonging to another.

Insolvent

Unable to meet financial obligations

Violations and Penalties

Violation, Hearing, Cease and Desist, Other Penalties

Consumer Reports

Written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources

Insurers are forbidden from negotiating directly with claimants who are not represented

by an attorney

Gramm-Leach-Bliley Act

requires financial institutions to ensure the security and confidentiality of customer data

Cease and Desist

to stop or discontinue

Civil penalty for each unintentional violation of insurance laws regarding unfair methods of competition

$1,000

The insurer must send written notice to the claimant in a third party liability claim upon payment of more than

$1,000

Aggregate penalties for unintentional violations within 6 months

$10,000

Fine per day for failure to correct any violation

$100

License fee for nonresident insurance producers

$110

Lapsed license fee

$165

To report action taken against producer in another jurisdiction or charges of criminal conduct

30 days

Waiting period before rate filings go into effect

30 days

To reinstate a lapsed license with current effective date

1 year

Hearing on rate filing after insurer is informed of disapproval

10 days

Written notice of hearing for a person suspected of prohibited behavior

10 days

After receiving notification of a claim, Insurers must provide the necessary claims forms within

10 working days

Insurers must acknowledge the receipts of claims or any other pertinent communication within

10 working days

If the insurer needs more time in the decision process of a claim, notice should be provided within

15 days

Insurers should accept or deny any claims within

15 days

To correct the violation if a person failed to respond to the Department's inquiry

15 days

If licensee fails to reply to inquiry, the Department will send a notice specifying the violation and give the licensee the ability to correct the violation within

15 days and $100 per day per violation

Insurers must respond to inquiries from the Department within

15 working days

Age requirement for resident producer license

18 y/o

Temporary producer's license valid without written examination

180 days

Advertisements, after approval, may be used for

2 years

License renewal period

2 years

Continuing education required every 2 years

24 hours

Continuing education that may be carried to the next renewal period

24 hours

Ethics education included in prelicensing education requirements

3 hours

Rating organization licenses which are done by the Commissioner remain in effect for

3 years

Change of address for producers licensed in Pennsylvania must be provided to the Department in writing within

30 days

Financial institutions are prohibited from sharing insurance coverage information with a third party for the purpose of selling or soliciting UNLESS notice is given, and the customer does not sign and return a form within

30 days

For Commissioner to approve or disapprove changes to a form

30 days

Insurers must complete investigations related to claims within

30 days

Insurers must file all mail-order solicitations with the Department prior to their first publication within

30 days

Licensees are required to provide a written response to a Department's inquiry within

30 days

Notice should be given to First-Party claimants within

30 days

To notify the Department of changes of address

30 days

To provide a response to the Departments inquiry

30 days

Reporting of Actions

A licensee must report any administrative action taken against him in another jurisdiction or state within 30 days of the final disposition of the matter. If charged, licensee must provide proper documents to the Department within 30 days

Exclusive General Agent

A licensee which has been granted sole authority to act directly or indirectly as an insurance producer for a domestic insurer with respect to a specific portion of the insurer's business or within a specific territory, has the authority to bind coverage on behalf of the insurer and either separately or together with affiliates or subproducers

Twisting

A misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades an insured/owner, to his or her detriment, to cancel, lapse, switch policies, or take out a policy with another insurer

Reciprocity/Reciprocal

A mutual interchange of rights and privileges

Manager

A person that negotiates and binds ceding reinsurance contracts on behalf of a domestic insurer or manages all or part of the insurance business of an insurer and does not act as an agent for that insurer

Producer

A person who sells, solicits or negotiates contracts of insurance

Line of Authority

A type of insurance a producer or a business entity is authorized to transact

Unfair Discrimination

Adjusting rates, premiums, or policy benefits for persons within the same class or with the same life expectancy is illegal

Fiduciary Responsibility

Agent/producer who handles the funds of the insured and the insurer

Assumed Names

An insurance producer license issued by the Department will only be issued in the name of the applicant or business entity. If a licensee is doing business under a fictitious name other than the name appearing on the producer license, the licensee is required to notify the Commissioner in writing prior to use of the fictitious name

Representative of the Insurer

An insurance producer may not act on behalf of an insurer unless the insurance producer is appointed by the insurer

Inducement

An offer that attempts to influence the other party

A Surrender Comparison Index Disclosure must be given to all:

Applicants for a life insurance policy

ALL FORMS, including changes to previously approved forms, must be filed for approval within 30 days to the

Commissioner

Coercion

Forceful act or threat aimed to influence a person to act against his or her will

Companies must keep records of complaints for at least:

Four years

Commissioner

Head of the state Department of Insurance. Appointed by the Governor with consent of the Senate and holds office for 4 years, until a successor is appointed and qualified

False Advertising

Inclusion of any untrue, deceptive, or misleading statements that apply to business of insurance or anyone who conducts it.

Investigative Consumer Reports

Information obtained through an investigation and interviews with associates, friends and neighbors of the consumer

Aggrieved

Injured party; someone entitled to begin a lawsuit or request a hearing

Commissioner Duties

Licensing insurance producers and companies, and approving, administering, or contracting the administration of the prelicensing education courses, insurance producer licensing examinations, and CE programs

Violation of Fiduciary Responsibility

Misdemeanor and subject to fine of $5,000 for each violation or 6 months of imprisonment

Violations of Policy Rates and Forms

Misdemeanor charges and fine up to $500

Defamation

Occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business and also apply to statements that are maliciously critical of the financial condition of any person or a company

Commission

Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium

Fiduciary

Someone in a position of trust

Home Office (Domicile)

State in which an insurer is ogranized and has its main place of business

The Commissioner may impose the following additional charges of violating Policies

Suspend the license of the offending person Refuse to issue a new license to this person for 1 year Issue a fine of up to $1000 for each violation

Misrepresentation

issuing, publishing, or circulating any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc.