Insurance Regulation
Once a policy is issued with illustrations,
Insurers must provide each policyowner with an annual report on the status of the policy
Commissioner decides to suspend or revoke a license,
Licensee must be notified in writing
Change of Name/Address
Licensee must notify the Commissioner of any changes to their residence, mailing, business, email, or phone within 30 days, Failure to comply results in a 50$ fine per violation
Continuing Education (CE) Requirements
Louisiana Insurance Producers must complete 24 hours of approved continuous education, with 3 hours being on ethics. Property Producers need 3 hours of Flood Insurance Education.
Annual Statements are due on
March 1st
Quarterly reports are due on
May, August and November 15th.
The Commissioner may require temp. licensees to be
Monitored by a sponsor and may revoke the license at any time. License automatically expires when owner disposes of business.
If producer license has been revoked,
Producer may file again within 1 year, or 5 years from final court order.
Reporting of Actions
Producer must report to Commissioner any administrative action that was taken against them within 30 days of the final disposition.
Renewal
Producers need to submit a license renewal application every 2 years and must be completed by last day of producer's birth month; Renewal window begins 90 days before expiration.
Temporary Liscenses
Provided under certain conditions; last for approx. 180 days.
Unfair Discrimination
Rates, premiums and/or policy benefits for persons within the same class/life expectancy is illegal.
Producers who allow their license to lapse may
Reinstate the same license within 2 years, upon fulfilling education requirements through date of reinstatement and paying all overdue fees.
Coercion
Requirements (as conditions of loans) that the applicant purchase insurance from a specific insurer.
Commissioner of Insurance
Responsible for making sure that the provisions for the Louisiana Insurance Code are enforced properly. Helps protect public welfare.
Domicile (For Insurers)
State in which insurers are organized and has its main place of business.
Hearings
Statement of charges; for any purpose deemed;must be conducted within 30 days. If failure to produce records, person will be fined between 100$ and 2,000$ at court's discretion.
Temp. Licenses are issued to
Surviving Spouse, next of kin or employee; Member or employee of a business entity licensed as an insurance producer, upon death/disability of the individual designated in business entity application or license; designee of licensed producer entering U.S armed Forces, or any person deemed fit by commissioner.
If a person working for an insurer does not receive any commissions, compensation or fees for insurance transactions
That person is not required to hold an insurance license.
Licensing Regulations
sets out the requirements, procedures and fees relating to the qualification, licensure and appointment of insurance producers.
Commissioner is elected to a
term of 4 years
Purpose of licensing is to ensure
that a producers meets educational and ethical standards required to fulfill producer's responsibilities to the insurer and to the public.
An insurance producer cannot legally act as an insurer unless
the insurance producer becomes an appointed agent of that insurer.
Louisiana law requires every life and health insurance policy
to contain a clear and conspicous disclaimer on its face
Commissioner may deny licenses or Certificate of Authority
when the applicant has been convicted of felony.
Company Officers, Directors, Employees do what dutites
1. perform executive, administrative, managerial or clerical activities that are not directly related to the sale 2. function that relates to underwriting, loss control 3. acting in the capacity of a special agent/agency supervisor assisting licensed producers
Individual Producer's License Qualifications
18 years of age, resides in the state or maintains their principal place of business, has not committed acts ground for denial, suspension, or revocation, completed pre-licensing course, Paid Licensing Fees, Fingerprinting, and passed the exams required from the lines of authority.
Fraudlent Insurance acts
Commited by a person who has intention to defraud does: 1. false statements 2. acceptances of new/renewal insurance risks 3. removes/conceal the assets from insurance dept. 4. supplies false/fraudlent material information pertaining to any documents.
Illustrations Nust Needs
Name and buisness address of insurer and producer, Name, Age, sex of proposed insured, underwriting/rating classification upon based illustration, Generic name of Policy, product name, form number, Initial Death Benefit, and Dividend Option election/application of non-guaranteed elements (If applicable)
Certificate of Authority
Obtained before an insurance company can transact insurance; indicates Commissioner has examined the business, discovering financial stability and organization via insurance code.
Inducement
Offer that attempts to influence the other party
Defamation
Oral/written statement that is made intentionally to injure a person engaged in insurance business; Maliciously critical.
Commission
Payment ot the agent by the insurance company for placing insurance (Usually a percertage of policy premium)
Free-Look Period
Policyowner has the right to receive an unconditional refund of all premiums paid within 30 days.
Cease and Desist
To stop or discontinue
Illustration Provisions do not apply to
Variable Life, Individual/Group Annuity contracts, Credit Life, Individual Life policies with death benefits below 10,000$
Unfair Claims Settlement Practices
When something is committed frequently enough to indicate a general business practice (Long list varying from misrepresentation to failing to provide a reasonable explanation).
Consumer Reports
Writtnen/Oral information regarding the consumers credit, character, reputation or habits collected by a reporting agency from employment records, credit reports, and other public sources
In order to transact insurance in Louisiana, you would need
a proper license for the specific line of authority. (unless you don't receive commission)
Insurer can use Martial Status as
a way to define eligibility for dependent benefits. this also helps control excess insurance.
Rebating
any inducement offer to insured in the sale of insurance products that is not specified in policy; i.e Rebates on premiums payable, special favors/services, advantages to dividends, Stocks, bonds, securities and dividends of profits.
It is an unfair trade practice to make
any statements that an insurer's policies are guaranteed by the existence of the Insurance Guaranty Association.
Commissioner can examine insurers for solvency/compliance
as frequently as needed; but at least once every 5 years.
It is illegal to use a producer's license to
be used for the sole purpose of controlled business.
Up to 10 hours of CE credits can be?
carried forward to next renewal period for producers licensed in any combonation of the lines of life, health, accident, property, casualty, or personal lines.
No Insurance Company/agent may pay a
commission, service fee or other valuable consideration to a person for selling, soliciting, or negotiating insurance in state if they are not properly licensed.
People that do not require an insurance license:
company officers, directors, employees
Replacing Insurer
company that issues the new policy
Moral Turpitude
conduct that is contrary to community standards of justice, honest or good morals.
Replacement of Limited Benefit Policies
deliberately use misrepresentations or false statements to convince a customer replace policy.
Foreign and alien insurers
do not have to be examined by the commissioner, instead must provide an examination report on the company prepared by Insurance department of State of Domicile/Port-of-Entry, provided that proper protocol is followed.
Replacing insurer must maintain evidence that all requriements were met
during the policy replacement for at least 5 years. (until next scheduled examination)
Continuing Education (CE)
established to protect public by maintaining high standards of professional competence in the insurance industry and to maintain and improve the insurance skills and knowledge of licensed producers.
Non-resident producer license
for individuals that don't reside in respective state.
Commissioner, upon receiving producer appointment,
has 30 days to make sure that the producer is suitable for the appointment; if in-eligible, 15 days notification period to insurer.
Violations of Regulations
if caught, you will be subject to fines between 1,000$ and 5,000$ and/or imprisonment up to 2 years
False advertising
illegal to circulate/advertise and materials that are untrue, deceptive, or misleading.
Advertising
insurers in LA must maintain at its home or principal office a complete file containing a copy of every advert for 4 years until next scheduled examination of insurer.
False Financial Statements
intended to deceive public officials/general public about financial condition as an insurer.
Boycott, Coercion, and Intimidation
intended to restrict fair trade or to create a monopoly; affects everybody.
Producers and business entities that transact insurance in Louisiana but are not properly licensed in this state will be
liable for the full amount of any loss that is covered by the contracts that they issue.
Privacy of the consumer's financial information
made in order to protect consumers personal financial records.
Individual producers that are engaged in the sale of any annuity products
must complete a one-time, 4-hour training course. THIS is seperate/distinct from CE requirements of a licensee and applies to both resident and non-resident.
if a person suspects fraud being commited,
must report the fraud to Department's Insurance Fraud division within 60 days.
Fair Credit Reporting Act
procedures for Consumer-Reports Agencies must follow to ensure records are confidential, relevant and properly used; protects consumers against inaccurate information.
Assumed names
producer doing any other buisness under any name other than their legal name have to legally notify the commissioner prior to using assumed name. Failure to comply will be subject to be fined approx. 250$.
If producer continues to use the name for more than 10 days after being notified by commissioner to stop
producer will be subject to another fine worth approx. 5,000$.
Expiration
producer's license remains in effect unless it is revoked, suspended or non-renewed as long as producer satisfies conduct, completes continuing education requirements, and pays required fees.
If producer commits another violation after license reissue,
producer's license will be revoked for up to 5 years.
Producers are required to retain a copy of this agreement for
3 years after the completion of services.
Reciprocity
A mutual interchange of rights and privileges
Business entities are able to
Act as producers, providing that they get producer's licenses.
Annual Reports
Insurers must file with Commissioner with annual and quartely reports of financial conditions and transactions.
If the producer that they were acting illegally,m
Amounts increase to 25,000$ per violation with a max of 250,000$ for all violations that occur within a 6 month period.
State of Domicile
Any insurer that is organized in another state and admitted to do business in the state may become a domestic insurer; must also require the principal place of business in state.
Replacement
Any transaction in whic new life insurance or a new annuity is purchased, with existing life insurance/annuties being terminated, reinssued with reduced cash value, coverted to paid up insurance, amended, or used as a financed purchase.
Producer Appointment
Appointing insurer must file a notice of appointment within 15 days from executed agency contract; responsible for paying producer appointment fees.
Unfair Financial Planning Practices
Cannot sell financial planning services with disclosing insurance salesperson information, and that a commission will be recieved in addition to fees for financial planning.
Specific disclosures of advertisments
Clearly identify an insurer, include life insurance/annuitiy if indicating life insurance/annuity, cite sources used, clearly states policy issuance may depend on health questions if certain terms are used, non-level premiums prices must be shown, Testimonials must be genuine and must be stated as paid endorsement if done, Targeting students must not indicate endorsement by college.
Ceast and Desist Order
Commissioner issued, specifies that practice in violation and legally requires the person to stop commiting it. If failure to comply, Fines and suspensions of licenses may occur.
Existing Insurer
Company whose policy is being replaced
Business Entity
Corporation, Associations, partnership, limited liability partnership or other legal entity.
Non-resident producer license Qualifications
Currently licensed as a resident and is in good standing with their home state, has requested license and paid the fees, provided commissioner with either uniform application or same application submitted in home state, Producer's Home State awards non-resident producer licenses to residents of LA on same basis.
A change of address that occurs when a non-resident moves from one state to another must be
Filed with a change of address from and provide certification from New Resident State within 30 days.
In addition to Cease and Desist, Suspended/revoked License, Commissioner may
Fine a producer no more than 1,000$ for every violation, max of 25,000$.
Statute
Formal Wrriten law enacted by legislature; can be found in state insurance code
Life and Health Guaranty Association
Formed to protect policyowners, insured, beneficiaries, and anoyone entitled to payments under insurance policies; Funded through its members.
Shared Commission
If caught sharing commissions, you may be fined from 1000$ to 5000$ and/or imprisoned for a max. of 2 years. License will also be suspended.
Payment to Unlicensed entities
If caught transacting with businesses that are unlicensed, you may be subject to fines between 2,000$ to 50,000$ and/or imprisonment for approx. 3 years. Licenses may also be revoked/suspended
Inactivity due to Extenuating Circumstances/Military Services
If producer is unable to comply with license renewal procedures due to these stances, they may request a waiver for said procedures.
Misrepresentation
Illegal to issue, publish or circulate any illustrations or sales materials that is false, misleading or deceptive as to policy benefits/Terms.
Policy Forms
Includes 1. Names of the parties of the contract 2. Name of Insurer 3. Subject of the insurance and risks insured against 4. Time for insurance to take effect and terminate. 5. Statement of Premium, and premium rate (if other than Life, Annuity, health, or title 6. Conditions pertaining to insurance.
Producers
Individuals or Business Entities that are licensed to sell, solicit or negotiate insurance; Represent Insurance Companies.
Investigative Consumer Reports
Information is obtained through interviews with associates, friends and neighbors of the consumers. Consumer must be advised in writing about said report within 3 days of report request. Consumer can also request additional information, which CR must provide within 5 days.
Controlled Business
Insurance that covers the producer or the producer's immediate family/employer.
Authorized Insurer
Insurer who has recieved the certificate of Authority from the department of insurance to transact insurance in this state
Home Office
Insurer's headquarters, principal place of business.
Refusing to Insure
Insurers cannot refuse insurance or limit coverage based on sex, marital status, race, religion, or national origin.
Commissioner
The head of the state department of insurance
All Adverts must
must be clearly identifiable as advertisements, must be accurate and not misleading in form or content.