Chapter 10

what is a foreign insurer?

An insurer with a home office in another state

Which type of agent authority is also called "perceived authority"

Apparent

What Documentation grants Express authority to an agent?

Agent's Contract with the Principal

What position is responsible solely for offering advice on insurance policies (for a fee)?

Counselor

the term "conservation effort" deals with

Discouraging policyholders from dropping existing policies

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 know as a

Reciprocity agreement

When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy until the conclusion of the next regular examination by the Insurance Department or for

3 years

What is defined as the illegal act to replace insurance policies of for the sole Purpose of making commissions?

Churning

_______________ occurs when an oral or written statement is made that is intended to Injure a person's reputation, engaged in the insurance business

Defamation

When a policy is being replaced the replacing company notifies the

Replacement company

What is illegal for insurers to State in their insurance company advertisement? - The name of a specific agent -The policies limitations or exclusions -That its policies are covered by a state Guaranty Association

That its policies are covered by a state Guaranty Association

If policy owners repeatedly replace policies form the same agent, this is most likely evidence that

the agent know that replacement was intended in connection with the sale and intentionally violated the replacement regulation

How long is the Commissioner term of office?

4 years

An agent must be a resident of the state and be present in the state for how many months of each year?

6 months

Which of the following will NOT be considered Unfair Discrimination by isurers?

Discriminating in benefits and coverages based on the insured's Habits and Lifestyle

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

5 years

A producer who fails o segregate premium monies form his own personal funds is guilty of

Commingling

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

What day do certificates of authority expire in Georgia?

June 30 of the year following issuance

What is the definition of Fiduciary Responsibility?

Promptly fowarding premiums to the insurance company

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

dividends from a mutual insurer

An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held?

30 days

Which of the following would NOT be considered a misrepresentation on the part of the insurer?

Backdating policies to secure a lower premium for the insured

Which of the following are the authorities an agent can hold? -express and implied -apparent and allowed -authorized and admitted

Express and Implied

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

Which of the following is NOT true regarding a certificate of authority?

it is insured to group insurance participants

An insurance agents responsibilities include all of the following EXECPT?

represent the client (the agent represents the insurer)

Producers will be deemed (considered) to be using their license primarily to write Controlled Business if , during any 12-month period,

the total premiums on Controlled business EXCEED the total premiums on all other business written

What is the maximum period of time a temporary license can be in force?

6 months

Which type of policies must provide for newborns, from the moment of birth, with all health insurance benefits applicable to children until 31 days?

Both individual and group accident and sickness

A child as adopted on may 1 of this year. When will her health benefits go into effect?

May 1 of this year

6 Classes of insurance in Georgia

1. Life, accident, and sickness 2. property, marine, and transportation 3. Casualty 4. Surety 5. Title 6. Health Maintenance Organizations

Acts considered Transacting Insurance in Georgia

1. Solicitation and inducement 2. Preliminary Insurance Negotiations 3. Effectuation (execution) of insurance contracts 4. Transaction of matters arising out of the effectuation of insurance contacts

An insurance producer just sold an insurance policy to his sister. what kind of Business is this?

Controlled Business ( included also is themselves, family, or coworkers)

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

Rebating. (When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating.)

The duties of an agent where a replacement is involved include all of the following EXCEPT? -Leaving a copy or original of all solicitation material used for presentation to the applicant -Submitting to the replacing insurer a copy of all soliciting material. -Submitting to the replacing insurer statement signed by the applicant as to whether or not he has existing life insurance, -Splitting the commission with the agent who originally sold the police being replaced.

Splitting the commission with the agent who originally sold the police being replaced.

IN state of Georgia Claims forms- must be furnished within ________ working days Time of payment of claims- within ______ working days Legal action - no sooner than _______ days , no later than ____years after proof of loss

claim forms: 10 days time of payment : 30 days legal action: no sooner than 30 days, no later than 3 years

a qualified long-erm care insurance policy must provide compound annual inflation protection to an insured who is _______ years old

60

Agent training requirements -be licensed and appointed agent - completed an ____ hour rating - completed ongoing ____ hours trying very 24 months

8 hour training 4 hour training even 24 months

After an insurer has filed an application for a certificate of authority, how many Days Commissioner have to approve the application?

90 days

An agent commingled $300 of insurance premiums collected with new application with his personal funds. The agent could be found guilty of a

Misdemeanor (Greater than $500 would be a felony)

All of the following statements regarding continuing education requirements in this state are true EXCEPT -ethics education is required every licensing period -excess hours may be carried over to the next licensing period -producers may repeat the same course to meet the required Continuing Education hours for a licensing period -Continuing Education (CE) hours must be completed every 2 years by the last day of the producers birth month

Producers may repeat the same course to meet the required CE houses for a licensing period

When does an agents license expire? When does a producers license expire?

every 2 years----Every 2 years on the last day of the producers birth month

Existing insurers must provide policyowners with a policy summary for the existing life insurance within how many days of receiving the written communication and replacement?

10 days

Insurers or agents soliciting partnership policies provide each prospective applicant with all of the following EXCEPT - a partnership program notice -a partnership disclosure notice - a statement that the insured does not automatically qualify for Medicaid - A statement that the insured does not automatically qualify for Medicare part A

A statement that the insured does not automatically qualify for Medicare part A

Which of the following terms will be permissible (allowed) in describing a life insurance policy in company advertisements? -risk free plan -investment plan -retirement plan -variable plan

variable plan

Medicare Supplements specifically exclude all of the following EXCEPT - Medicare Advantage plans - Outpatient prescription drugs - Any Health Care Prepayment plan providing benefits related to social security - Surgical expenses of persons eligible for Medicare.

Surgical expenses of persons eligible for Medicare.

The violations 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 change?

30 days

An agent is acting ethically in all of the following situations EXCEPT 1) Working within the conditions of his/her contract. 2) Representing the insurer, not the insured. 3) Always representing the insured. 4) Keeping customers' best interests in mind.

Always representing the insured.

If an insurance premium is paid by the policy owner to the agent, and the agent fails to remit (send) that premium to the insurer, which is true?

The policy will Not lapse since the payment to the agent is same same as a payment to the insurer.

What is an example of producers fiduciary duty?

The trust that a client places in the producer in regard to handling premiums

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. (Twisting is a misrepresentation that Persuades an insured or a policyowner, to his or her detriment, to Cancel, Lapse, or Switch policies.)

Which of the following is NOT considered a misrepresentation? -stating that the competitors will arbitrarily increase their premiums each year -making comparisons between different policies -stating that the policy is a share of stock -exaggerating the benefits provided int he policy

making comparisons between different policies

The authority granted to an agent through the agents contract is referred to as

Express Authority

During a sales presentation a producer intentionally makes a statement which may Mislead the insurance applicant. This describes

Misrepresentation

A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. The legal action must be brought a) Only within 60 days. b) Within 2 years. c) Within 3 years. d) Immediately.

c) Within 3 years. Some states require a provision limiting the time parameters in which a claimant may seek recovery from an insurer under a policy. Gerogia requires legal actions to be brought forth no sooner than 60 days and no later than 3 years after proof of loss.