Missouri Property and Casualty State Laws
Proof of financial responsibility means
$25,000 bodily injury from any one person. $50,000 bodily injury to two or more persons in any one accident. $10,000 property damage.
Guaranty Fund generally provides coverage for resident and nonresident policy holders up to the following amounts:
$300,000 for the death benefit under a life insurance policy. $300,000 for a property or casualty insurance claim. $100,000 for the cash value of an annuity or life policy. $100,000 for unpaid health insurance claims;
The Director may grant a waiver of the mandatory continuing education requirement for _______ for any of the following reasons:
1 year. Serious physical injury or illness. Active duty in the armed services for an extended period of time. Residence outside the United States. The licensee is at least 70 years of age
FAIR Plan offers coverage for
1-4 family dwelling and personal property up to $200,000, commercial property (including 5 family and larger dwellings), business property, farm property and personal property up to $1 million. Crime coverage ($10,000 residential; $15,000 commercial) CRIME IS A RIDER Basic coverage
Any company or individual being examined must provide any requested records within ___ days.
10
written notice must be given for non renewal or cancellation of a Missouri Homeowner policy
10 days for cancellation due to nonpayment of premium. 30 days for cancellation or nonrenewal. The notice must clearly state the reason for cancellation or nonrenewal. The notice shall state the insurer's actual reason for proposing the action. The cancellation notice must state that the insured may be eligible for insurance through the Missouri FAIR Plan.
A Producer who voluntarily relinquishes a license by allowing the license to expire has ___________ from the due date of the renewal fee to reinstate the license without examination.
12 months
After passing the exam, one must apply for a license within
12 months
The Director must give ____ days written notice of hearings regarding rule changes
15
The person is entitled to a public hearing before the Director if a request for a hearing is made in writing to the Director within _____ days.
15
Continuing education ___ hours for Property & Casualty; ___ hours for Life, or Health, or both; ___ hours for a combination of Property and Casualty with Life or Health; ___ hours must cover Missouri law, ethics, and Producer obligations to the Department.
16 hours for Property & Casualty; 16 hours for Life, or Health, or both; 16 hours for a combination of Property and Casualty with Life or Health; 3 hours must cover Missouri law, ethics, and Producer obligations to the Department.
Before approving a Producer application, the Director must verify that the individual
18 years of age, has paid a license fee of $100, has not committed any act that is a ground for denial, suspension or revocation, has passed the appropriate licensing exams
standard fire insurance policy for use in Missouri is declared by the legislature to be the
1943 New York Standard Fire Insurance Policy. And must be used unless the director says otherwise and the policy is at least as favorable
A Producer must pay a renewal fee for each license every
2 years
Every Producer must complete Continuing Education courses every
2 years
How long does a producers license last?
2 years
The business entity must notify the Director of termination of a Producer within ____
20 days
If the Director fails to act on an application with ______________, the application will be deemed approved, unless the applicant has indicated a conviction for a felony or a crime involving moral turpitude
25 working days
Either the Producer or the Insurer must maintain a complete set of transaction records for _________ after policy termination.
3 years
A Producer has only __________ to appeal the suspension, revocation, or nonrenewal
30 days
A Producer must report to the Director within _______ any criminal prosecution for a felony
30 days
If an insurer terminates a Producer's appointment, it must notify the Director within __________ and explain reasons for the termination.
30 days
Insurance Producers must submit premium payments to the Insurer within ________ (unless the parties agree otherwise in writing).
30 days
Producers must notify the Director of an address change within
30 days.
The insurer must register the appointment in the Insurer's "register of appointed Producers" within
30 days.
After taking an application, the Producer must give the applicant written notice within _____: of what?
30 days: If the Producer is unable to secure coverage. If the insurer denies coverage. If coverage has been obtained.
The Director's records of disciplinary action against a Producer must be expunged after ___ years if the action resulted in a penalty of ____ or less
5 200
Within ___ business days after the inspection, a copy of the completed inspection report will be sent promptly to FAIR's Facility. Is the applicant given a copy of inspection report?
5, only on request
The Director must approve or reject any form or rate filing within____ days
60
An individual licensed as a Producer in another state who moves to this state must make application within _________ days of establishing legal residence
90 days
The Director may issue a temporary Producer license to the following persons for _____ days without requiring an examination:
90 days surviving spouse or court-appointed personal representative of a licensed insurance Producer who dies or becomes mentally or physically disabled. To a member or employee of a business entity licensed as an insurance Producer. To the designee of a licensed insurance Producer entering active service in the armed forces of the United States.
A Producer is "_____________" by the Director of Insurance, but after licensing the Producer is "_________" by an insurer(s); the Producer will be "________" by the insurer(s).
A Producer is "licensed" by the Director of Insurance, but after licensing the Producer is "hired" by an insurer(s); the Producer will be "appointed" by the insurer(s).
Proof of financial responsibility may be given by
A certificate of insurance from an Insurance Company. $60,000 surety bond. $60,000 cash deposit and get certificate of deposit submitted to the State Treasurer. Certificate of self-insurance issued by the Director of Revenue showing that you have enough money to pay auto accident claims. A religious group with 25 or more members if the group prohibits buying insurance. Any person or business with more than 25 motor vehicles.
___________________ may split a commission with any property or casualty Producer. Surplus Lines Brokers don't represent any particular insurance companies and thus do not have appointments.
A surplus lines broker
________________________________________ is required to sell property or casualty insurance through a non-admitted insurer.
A surplus lines broker license Surplus lines brokers must pass an examination
Each web site or home page of insurance Producers or insurance companies must contain:
An address and telephone number; and A list of the states in which they are authorized
The following are Unfair Trade Practices
Boycotting in any insurance transaction. *Defamation*, which is making false statements about the financial condition of any *insurer*. Failure to maintain complaint handling procedures. False advertising. False statements made to any public official. Misrepresentations of any insurance policy. *Rebating*, which is paying an inducement (such as stock) to any person to purchase insurance. Unfair discrimination, which is charging different rates or terms for persons of the same risk class. Using a senior-specific certification or professional designation that may mislead a senior client to believe that the Producer has special certification or training in advising seniors (60 or over). Discriminating solely because of age, race, accestory...
commission will be paid to the licensed Producer designated
By applicant
All Insurers doing business in Missouri must obtain a
Certificate of Authority from the Director. Failure to do so is a felony.
The Director may suspend or revoke a Producer license for:
Convicted of a felony or crime involving moral turpitude. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, Untrustworthiness or financial irresponsibility. Having an insurance Producer license, or its equivalent, denied, suspended or revoked in any other state. Didn't pay child support, didn't pay income taxes
It is considered to be discriminatory in Missouri to
Deny maternity benefits to insureds purchasing an individual health policy when comparable family coverage contracts offer maternity benefits. Treat complications of pregnancy differently from any other illness or sickness under a health policy
Each Insurer must file all policies, applications, endorsements, and rates for the
Director's approval.
An insurance license is NOT required to
Dispense brochures and other general information so long as there is no conversation relating to the terms of an insurance contract. Receive and record information from a policyholder to give to an insurance Producer for review and response.
FAIR
Fair Access to Insurance Requirements-provides property insurance as a "last resort" for people unable to obtain property insurance. insures higher risk properties and usually charges a higher premium than normal. Paid out ACV not replacement cost. Can inspect every 5 years. Cant deny coverage because of area. Policies are issued for 1 year
Cancellation of FAIR insurance
Fair will provide written notice of cancellation, 10 days notice will be given for nonpayment of premium, 30 days notice will be given if FAIR has other reasons
The Director may issue a
Fine of up to $1,000 for each unintentional violation, but not to exceed $100,000 in any 12 month period. Fine of up to $25,000 for a flagrantly intentional violation, not to exceed $250,000 in any 12 month period. Order of forfeiture of up to $100 for each intentional violation of the insurance laws. License suspension or revocation.
What does a person in missouri need to get a license and has a suspended one?
Get proof of insurance
if your license has been suspended for failing to meet the financial responsibility requirement they must
Get relicensed and file proof of insurance with the Director of Revenue for 3 years. This is done by a SR-22 filling form that gets signed by insurance company to notify director or revenue that vehicle is insured
"financial responsibility" is required for all auto except:
Government vehicles. Tractors and other vehicles only incidentally operated on public roads. Motorized bicycles
Director of the Department of Insurance is appointed by
Governor, with the advice and consent of the senate.
All property insurers in Missouri are required to be part of
Joint Reinsurance Association" that will pay claims if premiums paid to FAIR are not adequate. If an insurer receives 17% of the dwelling premiums in the normal market, it will be responsible for paying 17% of FAIR's losses.
The person may be represented by a __________ at the hearing.
Lawyer
Bank or trust companies selling insurance products must employ
Licensed products
The two Missouri Guaranty Associations protect Insureds if an insurance company becomes insolvent
Life Health Guaranty Association and Property Casualty Guaranty Association.
Missouri requires the following to be licensed
Life and Annuity Producer (and Variable Life or Annuity Producer); • Accident and Health Producer (Health); • Property Producer; • Casualty Producer; • Personal Lines Producer; • Prepaid Legal Producer; • Limited Lines Credit Producer (no exam required); • Crop Producer; • Limited Lines Travel Producer (no exam required); • Limited Lines Surety Producer; • Title Producer; • Surplus Lines Broker; and • Public Adjuster.
NAIC's suggested 1976 Nationwide Marine Definition specifying that Inland Marine policies may be used to cover:
Marine transportation (transportation on lakes, rivers, and canals), Imports, Exports, Domestic Shipments, Bridges, tunnels and other instrumentalities of transportation and communication, including piers, wharves, docks, slips, dry docks and marine railways, pipelines, power and communication transmission lines, radio and television equipment, Personal property floaters, Commercial property floaters. NOT HOMES even on the beach
If a Financial Planner (etc.) also has a Producer license, the Financial Planner must
Must tell client about the conflict of interest, keep records of financial planning fee in writing for 3 years
e Director of Revenue must furnish each self-insured an insurance identification card containing
Name of the self-insured. The word "self-insured" THIS CARD MUST BE CARRIED IN THE SELF-INSURED MOTOR VEHICLE FOR PRODUCTION UPON DEMAND
Can the insurer ask if the applicant has been denied or cancelled in past?
No
The transaction records which must be maintained by either the Producer or the Insurer must include:
Policy applications, declaration pages, endorsements, riders, or binders associated with the policy. Any written correspondence concerning the policy. Any policy claim documents. Any premium receipts or documents associated with premium payments
The Director can only be involved with an insurance company as a
Policy holder
The Producer license must contain the:
Producer's name, address, and identification number, The date of issuance, The lines of authority, The license expiration date NOT phone number or years of experience
Director has full power and authority to
Regulate the Department of Insurance, Interpret laws, Examine records of insurer, examine the insurer's records every 5 years, determine solvency, Bring suit in Circuit Court to enjoin any illegal act, enforce compliance with the laws, administratively subpoena documents and witnesses in any investigation
Who may examine the affairs of any person or organization involved in an insurance transaction?
The Director or the Chief Examiner
A Producer cannot obtain a loan from a client unless
The client is in the business of providing loans (banker). There is an insurable interest relationship between the client and the Producer (a loan from a family member is permitted).
A nonresident may receive a nonresident Producer license without taking the licensing examination if
The person is currently licensed and is in good standing in the home state. The home state will reciprocate by giving nonresident Producer licenses to Missouri Producers. The nonresident Producer has satisfied the continuing education requirements of the person's home state.
The following do not take the exam and do not get an appointment letter
Third Party Administrators (administrators) who manage health plans, and Adjusters (who represent an insurance company).
Binder premium charge
Used if a binder is not replaced by a policy. A binder premium charge must be made which does not exceed the pro rata amount of premium which would have been applicable had a policy been issued. not required if the charge is $20 or less.
FAIR Plan excludes the following properties
Vacant property (Property that is essentially unoccupied (70% commercial, 50% dwelling). Property that is in a severe state of disrepair or in a state of poor housekeeping. Property with unrepaired damage from prior losses. Property where the applicant has had an unsatisfactory loss history. Property in violation of law or public policy. Property with unsafe heating or wiring. Farm equipment, crops, or livestock (but farm buildings are covered)
FAIR will assign each Producer an ________________________ for ____________________. Commissions under the FAIR program are:
account number for paying commissions. 12% for new business and 10% for renewal business. 14% for new crime policies, 12% for crime renewals.
Neither the Producer nor a member of the Producer's immediate family may be a beneficiary or acquire any ownership interest in client's policy unless
an insurable interest relationship exists (such as with a spouse or other family member)
When a policy is issued to replace a binder, the Insurer must
back-date coverage to the date the binder became effective.
A Producer's license must be renewed
biennially on the anniversary date of issuance.
The company's register of appointed Producers must be open to examination
by the Director. (Usually done electronically)
The Director may issue __________________________ to any insurance company or person violating the law.
cease and desist orders
The following business entities may obtain a Producer's license
corporation, partnership, limited liability company, limited liability partnership, limited partnership. NOT sole proprietorship
Deemer Provision
coverage will be "deemed" effective 20 days after application if: application includes the estimated annual premium payment. Fair Facility does not respond to the application by offering or denying coverage within the 20 day period.
If a member insurer is broke, the Guaranty Association may The Guaranty Association will not pay claims for
guarantee the impaired insurer's debts, loan money to the impaired insurer, provide the money to pay the claims. a nonresident policy holder where the debt is covered by a Guaranty Association in the Insured's home state.
The County Circuit Court may
hold the person in contempt; order the person to appear before the Director; order the person to testify; order the production of records; grant injunctive relief; or impose a civil penalty of up to $50,000 for each violation
If it is the Insurer's responsibility to maintain these records, this must be specified
in a written document, a copy of which must be retained by the Producer.
Premium cash payment premium receipt must bear the words "Receipt" or "Premium Receipt" and must include the following:
insurance Producer must give a written receipt must be signed by the Producer and given to the client. Copy of the premium receipt must be kept by the Producer. The name of the insured/ insurer. The date. The amount of the cash payment. The policy number or description of the policy or a comment that a policy/insurer has not yet been selected. The signature of either the Producer or the Producer's employee with written authorization to accept premiums.
Each Insurer must provide Insureds with an ______ _________ card containing
insurance identification. name of Insured. name and address of the Insurer, policy number, effective dates of the policy, including month, day and year, description of the Insured motor vehicle, including year and make or at least five digits of the autos ID number or the word "Fleet" if the insurance policy covers five or more motor vehicles. "THIS CARD MUST BE CARRIED IN THE INSURED MOTOR VEHICLE FOR PRODUCTION UPON DEMAND."
A producer's appointment letter may be revoked by the
insurer
If we make a false statement or false entry in the books then:
is a level four violation which allows the Director to impose a civil order to pay $10,000 per violation, up to an aggregate civil penalty of $250,000 per annum (year) for multiple violations. is a class D felony for which the court must order the Department to revoke the offender's license or company's certificate of authority
Guaranty Associations can
make assessments
Can producers make binders for the FAIR plan?
no, any applicant can request an inspection by FAIR's inspection bureau
All Missouri property insurers agree to
participate in the Plan. pay a proportional assessment if the FAIR Plans premiums are insufficient to pay claims and expenses. undertake a continuing public education program to assure that the FAIR Plan receives adequate public attention
Insurers must keep records of
policies for 2 years, claims for 3 years, complaints for 3 years
The following courses will not be approved by the Director for continuing education
prospecting, motivation, sales. marketing techniques, psychology, recruiting. office skills or management training
If a motor vehicle owner has not maintained financial responsibility, the Director of Revenue must
provide 33 days written notice, and then suspend the owner's driver's license privilege
The Director must give _______________ before suspending, revoking, or refusing to issue or renew a license.
public notice
Cant use a binder to. time limit of binder?
put in place of policy to lower price. has no time limit
The Director may order
restitution from the "Consumer Restitution Fund" established to distribute to aggrieved consumers funds obtained through the Director's enforcement proceedings.
All premiums received by a Producer must be kept in a
separate checking account (called a trust, escrow, or fiduciary account) separate from the office or personal savings or checking accounts. The Producer is not required to have a separate trust account for each client.
Homeowner insurer cant refuse to write policy because:
solely discrimination (but can if its actuarially sound if sex, age, living area), solely because another insurer has denied them coverage
If a person does not testify or otherwise comply with the Director's subpoena, the Director may
suspend or revoke the producer's license or company's certificate of authority. Apply to the *County Circuit Court* to enforce compliance with the subpoena.
An Insurer cannot use a "retrospective commission contract" under which
the Insurer receives an agreed portion of its earned premium free from any obligation to pay claims. the Producer is required to pay all claims and keep as a commission only the net funds not paid as claims.
It is illegal for a Producer to charge a fee to a client unless:
the Producer and client have a written agreement clearly specifying the details of the extra charge
Copies of all Producer's commission agreements must be kept by both
the insurance company and the Producer for three 3 years.
National Association of Insurance Commissioners (NAIC)
writes rules and statutes for legeslature