State laws , rules, and regulations

the violation of a cease and desist order may result in a fine of ?

10,000

If an agent changes his residence address, within how many days must the agent notify the commissioner of the changes ?

30 days

an insurance agent has received a request for a hearing from the commissioner . within how many days must the hearing be held ?

30 days

how soon from the reinstatement of a health insurance policy would a loss be covered ?

10 days

agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period ?

5 years

Who is an insurance agent?

A person authorized to sell, solicit and negotiate insurance contracts

An agent is acting ethically in all of the following situations EXCEPT A. Working within the conditions of his/her contract. B. Representing the insurer, not the insured. C.Always representing the insured. D. Keeping customers' best interests in mind.

Always representing the insured

who is considered a nonresident agent?

An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state

what is controlled business?

Insurance on the producer's own life or property, or the lives or property of the producer's family or business associates

Who can usually be granted a temporary license?

Producer's spouse or designee in case the licensed producer dies or becomes disabled

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in this state

what is the purpose of a cease and desist order?

To prevent a producer or insurer from further violating laws for transacting insurance

insurer or agents soliciting partnership policies must provide each prospective applicant with all of the following Except ? A. a statement that the insured does not automatically qualify for medicare part A B. a partnership program notice C. a partnership disclosure notice D. a statement that the insured does not automatically qualify for medicaid

a statement that the insured does not automatically qualify for medicare part A

Who must be a member of insurance guaranty associations ?

all insurers authorized to write insurance within a state

Who must be a member of insurance guaranty associations?

all insurers authorized to write insurance within the state

What type of licensee represents the insured?

broker

In general, who can be excluded from producer licensing and examination requirements?

insurance company officers, directors or any other employees who do not transact insurance and do not receive commissions for their services (usually their responsibilities include administrative, or clerical )

any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as ... ?

rebating

Who owns stock companies?

stockholders

What type of licensee represents the insurance company?

the agent

if the insurance premium is paid by the policy owner to the agent, and the agent fails to remit that premium to the insurer , which of the following statement is true ?

the policy will not lapse since payment to the agent is the same as a payment to the insurer

When can the Commissioner or Director examine insurers?

whenever deemed necessary, but at least once every few years (please check your state regulations for specific time requirement )

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

authorized insurer

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

authorized or admitted

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

cease and desit order

what document is required for an insurance company to transact insurance ?

certificate of authority

which of the following entities has the power to issue certificates of authority ?

commissioner of insurance

in any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the ?

company

How is the commissioner of insurance selected to be the chief officer of the department of insurance ?

elected to office

who can an agent license be issued to ?

only to individuals

if the commissioner is not able to serve due to disability, resignation , or death, what will happen ?

the chief deputy commissioner will serve as the commissioner until the next season

discriminating in benefits and coverages based on the insured's habits and lifestyle will Not be considered .. ?

unfair discrimination by insurers

Insurers are classified according to their domicile. What are the three types of insurers?

domestic, foreign and alien

When is controlled business legal?

When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)

what are the most common penalties for violations of insurance statutes ?

a cease and desist order, a fine, and license suspension or revocation

who is required to hold a producer license ?

a person who negotiates insurance contracts

what is required to be licensed as an insurance provider ?

a salaried employee who advertises and solicits insurance

If an insurance company makes a statement that its policies are guaranteed by the existence of the insurance guaranty association, that would be considered ? A. an unfair trade practice B. a misrepresentation C. a required disclosure D. a legal representation of the association

an unfair trade practice

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

authorized or admitted

what term describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance ?

defamation

in the agent/insurer relationship, who is considered the principal ?

insurer

what are producers required to do in order to renew their license ?

complete continuing education hours and pay a renewal fee

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

twisting

insurers or agents soliciting partnership policies must provide each prospective applicant with all of the following except ? A. a partnership disclosure notice B. a statement that the insured does not automatically qualify for medicaid C. a statement that the insured does not automatically qualify for medicare part A D. a partnership program notice

a statement that the insured does not automatically qualify for medicare part a

what is considered twisting ?

explaining to client the advantage of permanent insurance over term and suggesting changing policies

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. what best describes this act?

illegal under any circumstances

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

misrepresentation

which of the following types of agent authority is also called " perceived authority " A. express B.implied C.Fiduciary D. Apparent

apparent

two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. what is this called ?

discrimination

all of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A. an offer to share in commissions generated by the sale B.dividends from a mutual insurer C. an offer of employment D. stocks , securities, or bonds

dividends from a mutual insurer

the authority granted to an agent through the agent's contract is referred to as ?

express authority

An insurance company is domiciled in Montana and transacts insurance in Wyoming. which term best describes the insurer's classification in Wyoming ?

foreign

on its advertisement, a company claims that it has funds in its possession that are, in fact , not available for the payment of losses or claims. what is the company guilty of ?

misrepresentation

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

mutual

if an insured's cognitive impairment results in the lapse of a long term care policy, how long from the policy lapse may the insured request reinstatement ?

5 months

what are producers required to do in order to renew their license?

complete continuing education hours and pay a renewal fee

which of the following would not be considered an unfair and deceptive practice ? A. controlled business B. rebating C.defamation D. Misrepresentation

controlled business

If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

defamation

Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?

no, advertising of the existence of the guaranty associations for the purpose of solicitation and sale of insurance policies by insurers is an illegal business practice

on a participating insurance policy issued by a mutual insurance company , dividends paid to policyholders are ?

not taxable since the its treats them as a return of a portion of the premium paid

Who may share in the commission from the sale of a life insurance policy?

only producers properly licensed for the type of insurance transaction

all of the following are true regarding rebates Except ? A. rebates are only allowed specifically stated in the policy B.rebating can be anything of economic value, given as an inducement to buy C. dividends are not considered to be rebates D. rebates are allowed if it's in the best interest of the client

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

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?

rebating

a nonresident agent is allowed to conduct insurance transaction in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as an ?

reciprocity agreement

a nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as .. ?

reciprocity agreement

Who must be notified of a producer's change of address?

the department of insurance (commissioner, director, superintendent)

who is responsible for the contents of insurance advertisements?

the insurance company

who is responsible for the costs associated with the examination of insurers ?

the insurer who is being examined

An outline of coverage must be given to the applicant for a long term care policy no later than ?

the time of initial solicitation

An outline of coverage must be given to the applicant for a long term policy no later than what ?

the time of initial solicitation

what is the purpose of insurance guaranty association?

to protect policyowners , insureds and beneficiaries from financial losses caused by insolvent insurers

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of ?

twisting