Combo with "Selected Florida Statues and Rules *Unit 17* Quiz" and 5 others
What are the rules that allow for state regulation of MEWAs?
Special rules allow for state regulation of MEWAs that are employee welfare benefit plans and meet the ERISA definition: 1) If fully insured, the MEWA remains subject to state regulation; 2) If not fully insured, the MEWA is subject to all state insurance laws not inconsistent with ERISA; or 3) A MEWA that is not an employee benefit plan is subject to state insurance regulation.
What role does state regulation play in a legitimate ERISA plan?
State insurance regulation does still apply to an insurer that may be financially responsible for the payment of claims and any forms utilized in an insured ERISA plan
What role does state regulation play in a legitimate ERISA plan?
State insurance regulation does still apply to an insurer that may be financially responsible for the payment of claims and any forms utilized in an insured ERISA plan.
What is the common note of most codes of ethics?
The common note of most codes of ethics developed by professionals is the spirit of placing the interest of others before the interest of self. While the insurance industry demands a certain level of skill, an agent will become professional by acting in a professional manner.
What are "unfair claim settlement practices"?
Attempting to settle claims on the basis of an application or material document which was altered without notice to or knowledge or consent of the insured or a material misrepresentation for the purpose of settlement of a claim on less favorable terms.
What is meant by the term "department"?
"Department" means the Department of Financial Services.
What is meant by the term "domestic insurer"?
One who formed their company within the state of Florida
What are the limits on lines and products the customer representative may handle?
" 1) A Customer representative may handle insurance business the specific supervising insurance agent is appointed to handle, or authorized to handle under exchange of business laws, or Joint Underwriting Associations, or Workers' Compensation Insurance Plan rules and contracts; 2) If the supervising agent is a surplus lines agent, the customer representative may perform duties regarding any property, casualty, health, or surety coverages which the supervising agent could place with a surplus lines insurer; 3) A customer representative license does not grant any authority to transact life insurance or annuity business. "
Who may appoint a customer representative?
" 1) A person holding a Florida resident general lines agent license (2-20); 2) A general lines insurance agency; (only an agency where the "primary agent" holds a Florida resident general lines license); or 3) A surplus lines agent who is not a managing general agent. "
What are the exceptions to the law requiring a Certificate at Authority?
" 1) Investigation, settlement or litigation of claims for an insurer previously authorized in this state does not require a Certificate; 2) Insurance transactions covering objects or persons outside of Florida and lawfully solicited written or delivered outside of Florida do not require a Certificate; 3) Insurance transactions written under the Surplus Lines Laws do not require a Certificate; 4) Reinsurance transactions do not require a Certificate; 5) Life, health or annuity policies remaining in force for residents in Florida after an insurer has withdrawn from this state do not require a Certificate; 6) Investment by a foreign insurer in real estate or securities secured by real estate does not require a Certificate; 7) Hospital professional, hospital liability, and hospital general liability insurance issued by a captive insurance company does not require a Certificate provided they meet several requirements. "
What are the requirements for an individual licensed in good standing in another state to obtain a Florida resident agent license?
" 1) The individual must become a resident of this state; 2) The individual must have been licensed in another state for a minimum of 1 year immediately preceding the date the individual became a resident of this state; and 3) The individual shall submit a completed application to the department within 90 days after the date the individual became a resident of this state, along with payment of the applicable fees and submission of certain documents. "
What are a customer representative's powers?
" A customer representative's powers are as follows: 1) A customer representative's license may not cover life insurance or any kind of insurance for which the appointing agent or appointing agency is not licensed; 2) A customer representative may engage in transacting insurance with customers; 3) A customer representative must be a salaried employee at the agent or agency; his compensation cannot include commissions and cannot be primarily based on the production of applications, insurance, or premium; 4) A customer representative may not engage in transacting insurance outside the office of his or her appointing agent or agency; and 5) All business transact by a customer representative shall be in the name of the agent or agency by which he or she is appointed. "
What are the limits of the customer representative's authority?
" A duly licensed and appointed customer service representative may: a) Take insurance applications; b) Give quotations; c) Interpret policies; d) Explain procedures; e) Give insurance advice; f) Solicit new customers at the agent's office or by telephone; g) Bind new or additional coverages; h) Perform preliminary work to assist in processing a claim although a customer representative cannot make or signed the actual substantive determination of the amount of a claim or issue or sign claims checks or drafts; and i) Any other function consistent with assisting agents; j) All applications and/or binders initiated by the customer representative must be co-signed by the designated supervising agent; k) A customer representative may not solicit or conduct sales work outside of the agent's office; l) A customer representative can at the agent's principal place of business conduct customer representative work that assists or supports other agents; and m) A customer represented must identify himself as a customer representative working for the named agent. "
What is meant by the term "foreign insurer"?
" A foreign insurer is one who formed their company in any other state (other than Florida) but within the United States, its territories or possessions. "
What are Florida's continuing education requirements for customer representatives and limited customer representatives?
" A licensee who holds a license as a customer representative, limited customer representative, administrative agent, title agent, solicitor, motor vehicle physical damage and mechanical breakdown insurance agent, crop or hail and multiple-peril crop insurance agent, or as an industrial fire insurance or burglary insurance agent and who is not licensed as a life or health insurance agent is required to complete to 10 hours of continuing education courses every two years. "
What is the law regarding premiums held as "trust funds"?
" All premiums and other funds belonging to insurers or others received by an agent, customer representative, solicitor, or adjusters are "trust" funds received in a fiduciary capacity. The agent must keep the funds belonging to any insurer whom the agent is not appointed for, in a separate account so as to allow the Department to audit such funds. The licensee must keep books, accounts, and records in accordance with this statute. The licensee must keep the records for a period of three years after payment; the records can be kept on a computer or on photographic reproductions. "
When may an agent share commission?
" An agent may divide or share in commissions with his or her employed solicitors and with other agents appointed and licensed to write the same kind or kinds of insurance. A resident agent and a non-resident agent may divide commissions on kinds of insurance for which both are appointed and licensed. A licensee cannot share commission with any corporation unless such corporation is an insurance agency. "
What are the requirements for agent's records?
" An agent must maintain in his office records of policies, daily reports, applications, change endorsements or documents or initialed by the insured concerning such policies. These documents must be readily accessible by electronic or photographic means. "
What is the penalty for not notifying the Department of a change of name or residence address?
" An agent who fails to notify the department within the required time period will be charged with a fine of up to $250 for the first offense and, for subsequent offenses, a fine of not less than $500 or suspension or revocation of the license. "
What are the penalties for diverting or misappropriating "trust funds"?
" An agent, customer representative, solicitor, or adjuster who diverts or misappropriates such funds may be held responsible as follows: 1) If the diverted or misappropriated funds are $300 or less, the licensee can be charged with a first-degree misdemeanor; 2) If the diverted or misappropriated funds are $300 or more but less than $20,000, the licensee can be charged with a third-degree felony; 3) If the diverted or misappropriated funds are $20,000 or more but less than $100,000, the licensee can be charged with a second-degree felony; or 4) If the diverted or misappropriated funds are $100,000 or more, the licensee can be charged with a first-degree felony. "
How are appointments handled by insurers?
" An in insurer submits a monthly appointment form to the Department; all appointments must be submitted to the Department within 45 days of the appointment. The appointment of a licensee continues until suspended, revoked, or otherwise terminated. The insurer renews the appointment in the licensee's birth month every 24 months. An insurer must appoint each agent. If an insurer does not appoint an agent within a 24-month period, the agent's license will expire. "
What are Florida's continuing education requirements for a person with a life or health license and a property, casualty, surety, or surplus lines insurance license?
" Any person with a life or health license and a property, casualty, surety, or surplus lines insurance license must complete the continuing education requirements with one-half of the total hours required in property, casualty, surety, or surplus lines and one-half of the total hours required in life and health. "
What is meant by the term "brokering agent"?
" Brokering agent" means an originating general agent placing business with the company with which he or she is not appointed. The insurer assigns a unique brokering agent's register number to each agent not appointed with the insurer but furnished with the insurer's forms, coverage documents, binders, applications, and other incidental supplies. "
Define "churning."
" Churning is the practice whereby policy values in existing life insurance policies or annuity contracts are utilized to purchase other insurance policies or annuity contracts with the same insurer for the purpose of earning an additional premiums, fees, commissions, or other compensation; Churning by any insurer or an agent is an unfair method of competition and an unfair or deceptive act or practice. "
What is meant by the term "defamation"?
" Defamation includes knowingly making, publishing, disseminating, or circulating directly or indirectly including aiding, abetting, or encouraging the making of any oral or written statement or any pamphlet circular articles or literature which is falsely or maliciously critical of any person and which is circulated to injure such person. "
What lines of insurance are general lines agent qualified to write?
" Except for limited lines licenses, a general lines agent or customer representative qualifies for all property, marine, casualty, and surety lines except bail bonds. The license of a general lines agent may also cover health insurance if health insurance is included in the agent's appointment by an insurer where the licensee is also appointed as an agent for property, casualty or surety insurance. "
Define "false claims or obtaining or retaining money dishonestly."
" False claims or obtaining or retaining money dishonestly includes: 1) Any agent, adjuster, or other person who represents to any insurer a false claim for payment, knowing the claim to be false; or 2) Any agent, solicitor, collector, or other person who represents any insurer who secures cash advances by false statements or fails to turnover or satisfactorily account for all collections is guilty of a second-degree misdemeanor. "
What is the requirement for an agent who receives administrative action in any state?
" Florida Statute requires all agents to notify the Department of Insurance within 30 days of any insurance administrative action taken against the agent in any state relating to the sale of securities, or activity involving fraud, dishonesty, trustworthiness, or breach of a fiduciary duty including a copy of the order, consent to order, or other relevant legal documents. "
What are conditions under which a licensee can rebate?
" Florida law allows a licensee to rebate or give the back a portion of their income or commission from policies written under certain circumstances: 1) The rebate must be available to all insureds in the same actuarial class; 2) A schedule filed by the agent with the insurer must be followed; 3) This rebate schedule must be uniformly applied (same percentage given to each insured) to all insureds who purchase the same policy through the agent for the same amount of insurance; 4) Rebates are not to be given to an insured if the insurer prohibits its agents from rebating commissions; 5) The percentage of the rebate or whether a rebate is available cannot be based upon age, sex, place of residence, race, nationality, ethnic origin, marital status, occupation of the insured or location of the risk; 6) The agent must maintain a copy of our rebate schedules for five years; 7) No discrimination is allowed for rebates; 8) No rebate may be given that is not reflected on the rebates scheduled; and 9) No rebate maybe granted based upon the purchase or failure of the insured or applicant to purchase collateral business. "
What are the Florida rules for an application?
" Florida rules require an application to have the name of the insurer legibly typed or printed on the first page of the application form at the time coverage is bound or premium is quoted. Further the application must disclose the name and license identification number of the agent legibly, printed, stamped, or handwritten. Upon completion of the application, a copy must be provided to the perspective and insured. "
What are the Florida statutes on countersignature of policies?
" Florida statute requires any property, casualty or surety policy written for a Florida resident or located or to be performed in the state be signed by a licensed appointed Florida agent. If a policy is combined with property or risk located outside the state, the policy must be countersigned by a licensed appointed Florida agent. "
Define "free" insurance.
" Free insurance is prohibited including advertising, offering or providing free insurance as an inducement to the purchase or sale of real or personal property or of services directly or indirectly connected with such real or personal property; Free insurance is defined as: 1) Insurance for which no identifiable and additional charges are made to the purchaser of such real property, personal property or services; or 2) Insurance for which an identifiable or additional charge is made in an amount less than the cost of such insurance. "
What does the term "twisting" mean?
" Twisting includes knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent omission of any insurance policy for the purpose of inducing a person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or conferred any insurance policy or to take at out a policy of insurance with another insurer. "
What are conditions or actions, which may require an agency to obtain a license in the agency name?
" If a majority owner, partner, manager, director, officer, or other person who manages or controls the agency has: 1) Been found guilty of, or has pleaded guilty or nolo contendere to, a felony in this state or any other state relating to the business of insurance or to an insurance agency, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the cases; or 2) Employed any individual in a managerial capacity or in a capacity dealing with the public who is under an order of revocation or suspension issued by the department; or 3) Operated the agency or permitted the agency to be operated in violation of s. 626.747; or 4) With frequency as to have made the operation of the agency hazardous to the insurance-buying public a) Solicited or handled controlled business; b) misappropriated, converted, or unlawfully withheld moneys belonging to insurers, insureds, beneficiaries, or others and received in the conduct of business under the license; c) unlawfully rebated, attempted to unlawfully rebate, or unlawfully divided or offered to divide commissions with another; d) Misrepresented any insurance policy or annuity contract, or used deception with regard to any policy or contract, done either in person or by any form of dissemination of information or advertising; e) violated any provision of this code or any other law applicable to the business of insurance in the course of dealing under the license; f) violated any lawful order or rule of the department; g) failed or refused, upon demand, to pay over to any insurer he or she represents or has represented any money coming into his or her hands belonging to the insurer; h) violated the provision against twisting as defined in s. 626.9541(1)(l); i) in the conduct of business, engaged in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter; j) willfully over insured any property insurance risk; k) engaged in fraudulent or dishonest practices in the conduct of business arising out of activities related to insurance or the insurance agency; l) demonstrated lack of fitness or trustworthiness to engage in the business of insurance arising out of activities related to insurance or the insurance agency; m) authorized or knowingly allowed individuals to transact insurance who were not then licensed as required by this code; or 5)employed any person who within the preceding 3 years has had his or her relationship with an agency terminated in accordance with paragraph (d); or 6) Willfully circumvented the requirements or prohibitions of this code. "
What are the penalties for representing or aiding an unauthorized insurer?
" If an unauthorized insurer fails to pay in full or in part any claim or loss within the provisions of any insurance contract which is entered into in violation of this section, any person who knew or reasonably should have known that such contract was entered into in violation of this section and who solicited, negotiated, took application for, or effectuated such insurance contract is liable to the insured for the full amount of the claim or loss not paid. Further penalties for representing an unauthorized insurer include commission of a felony of the third degree. Any person who commits a subsequent violation of this section commits a felony of the second degree. "
What is meant by the term "misrepresentation and false advertising of insurance policies"?
" Misrepresentation and false advertising of insurance policies includes knowingly making, issuing, circulating any estimate, illustration, circular, statement, sales representation, omission, or comparison which: 1) Misrepresents the benefits, advantages, conditions, or terms of any insurance policy; 2) Misrepresents the dividends or shares of the surplus to be received on any insurance policy; 3) Makes any false or misleading statements as to the dividends or share of surplus previously paid on any insurance policy; 4) Is misleading or is a misrepresentation of the financial condition of any person including misleading or misrepresenting the legal reserve system under which a life insurer operates; 5) Is a misrepresentation for the purpose of the inducing the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy; 6) Is the misrepresentation for the purpose of effecting a privilege or assignment of, or receiving a loan against any insurance policy; or 7) Misrepresenting any insurance policy as being shares of stock or ownership interest in a company. "
What is included in "misrepresentation of insurance applications"?
" Misrepresentation of insurance applications includes: 1) Knowingly making a false or fraudulent written or oral statement or representation on or relative to any application or negotiation for insurance policy for the purpose of obtaining a fee, commission, or any other benefit; or 2) Knowingly making a material omission in the comparison of a life, health, or a Medicare supplement insurance replacement policy including the existence of a pre-existing condition clause in the replacement policy. "
What are the requirements for an agent whose appointment has expired?
" Once an agent's appointment has expired, the agent cannot engage in any activity requiring an appointment. If a carrier does not appoint an agent within 48 months, the agent's license will expire. The agent must then apply for a new license subject to all the requirements of a new licensee. "
What is representing or aiding an unauthorized insurer?
" Representing or aiding an unauthorized insurer includes: 1) solicitation, negotiation, procurement, or effectuation of insurance or annuity contracts, or renewals thereof; 2) dissemination of information as to coverage or rates; 3) forwarding of applications; 4) delivery of policies or contracts; 5) inspection of risks; 6) fixing of rates; 7) investigation or adjustment of claims or losses; or 8) collection or forwarding of premiums. "
Define "sliding"?
" Sliding is representing to the applicant in conjunction with the purchase of motor vehicle insurance that a specific ancillary coverage or product is required when said coverage or product is not required. "
What is meant by the prohibition against soliciting, accepting new or renewal insurance risk by insolvent or impaired insurers?
" Soliciting or accepting new or renewal insurance risk by insolvent or impaired insurers is prohibited. Whether or not delinquency proceedings as to the insurer have been or are to be initiated but while such insolvency or impairment exists, no director or officer of any insurer, except with written permission of the Department, is allowed to permit the insurer to accept or solicit new or renewal insurance risk. Any person violating this statute is guilty of a third degree felony. "
What are conditions under which the Department has a discretionary obligation to deny an application or suspend, revoke, or refuse to renew or continue the license or appointment of any applicant or licensee?
" The Department has a discretionary right to deny an application or suspend, revoke, or refuse to renew or continue the license or appointment of any applicant or licensee based on several grounds: 1) Any cause for issuance of the license or appointment which could have been refused and had it existed and the Department known of the cause; 2) Violation of any provision or any other a law applicable to the business of insurance; 3) Violation of any lawful order or rule of the Department; 4) Failure or refusal to pay any insurer money belonging to the insurer; 5) Violation of the provision against twisting (misrepresenting the benefits, advantages, conditions or terms of any insurance policy); 6) Engaging in unfair methods of competition or unfair or deceptive acts or practices as prohibited under part X of the statutes; 7) Willful over-insurance of any property or health insurance risk; 8) Having been found guilty or having pleaded guilty or nolo contendere to a felony or crime punishable by imprisonment of one year or more without regard to whether a judgment or conviction has been entered by the court; 9) If a life agent, violation of the code of ethics; 10) Cheating on an examination required for licensure or violating test center or examination procedures published orally, in writing, or electronically at the test site by authorized representatives; 11) Failure to notify in writing within 30 days after having been found guilty or having pleaded guilty or nolo contendere to a felony or crime punishable by imprisonment of one year or more without regard to whether a judgment of conviction has been entered by the court; or 12) Knowingly aiding, assisting, procuring, advising, or abetting any person in the violation of a provision of the insurance code or any other rule of the Department. "
What are conditions under which the Department has a mandatory obligation to deny an application or suspend, revoke, or refuse to renew or continue the license or appointment of any applicant or licensee?
" The Department has a mandatory right to deny an application or suspend, revoke, or refuse to renew or continue the license or appointment of any applicant or licensee based on several grounds: 1) Lack of one or more qualifications for the license or appointment; 2) Material misstatement, misrepresentation, or fraud in obtaining the license or appointment; 3) Failure to pass the licensed exam; 4) Willful misuse of the license; 5) Willful misrepresentation or willful deception of any insurance policy or annuity contract either in person, by any information or by advertising; 6)Material misrepresentation to an insured or other interested party of the terms and coverages of the insurance contract with the intent of settlement of a claim for loss or damage on less favorable terms than those provided or contemplated by the contract; 7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance; 8)Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the business of insurance; 9) Fraudulent or dishonest practices in the conduct the insurance business; 10) Misappropriation, conversion, or unlawful withholding of money belonging to insureds or insurers or beneficiaries received in the conduct of insurance business; 11) Unlawful rebating or unlawful dividing or offering to divide commission with another; 12) Obtaining a license for the purpose of soliciting or handling "controlled business" (insurance written for the licensee's own interest or the interest of the licensee's family or of any firm, corporation, or association with which the licensee is associated, directly or indirectly, or which the licensee has a interest in other than the insurance itself); 13) Willful failure to comply with or willful violation of any order or rule of the Department; 14) Having been found guilty or having pleaded guilty or nolo contendere to a felony or crime punishable by imprisonment of one year or more without regard to whether a judgment of conviction has been entered by the court; or 15) Fraudulent or dishonest practiced in submitting an application for worker's compensation which contains false or misleading information on employee payroll for classifications for the purpose of avoiding or reducing the amount of premium. "
What are the requirements for knowledge, experience or instruction?
" The Department requires, during the four years immediately preceding the date the application for license is filed, that the applicant has the following knowledge, experience, or instruction (a person with a CPCU designation is exempt from these requirements): 1) Taught or successfully completed classroom courses (including 3 hours of ethics) in insurance at a school, college or extension division approved by the Department; 2) Completed a correspondent course in insurance (including 3 hours of ethics) satisfactory to the department regularly offered by an accredited institution of higher learning and has had at least six months of responsible duties as a substantially full-time bona fide employ in all lines of property and casualty insurance (a limited lines license does not require the six months experience)(an affidavit from the employer stating the applicant's experience is required); 3) Without the educational requirement, completed at least one year in responsible insurance duties as a substantially full-time bona fide employee in all lines of property and casualty insurance; or 4) Been an employee of the Department within 90 days of applying for the exam; or 5) Classroom and correspondence courses must include instruction on the subject matter of unauthorized entities engaging in the business of insurance. The scope of the topic of unauthorized entities shall include the Florida Nonprofit Multiple-Employer Welfare Arrangement Act and the Employee Retirement Income Security Act as it relates to the provision of health insurance by employers and the regulation thereof. "
What are the requirements for a customer representative's license?
" The Department shall not license any individual found to be untrustworthy or incompetent. In addition, qualifications for a customer representative's license included: 1) The application is a natural person; 2) The applicant is a bona fide resident of this state and will actually reside in the state at least six months of the year; a new resident who has been licensed in another state may qualify if the applicant furnishes a letter of clearance stating that former licenses have been canceled or change to a non-resident basis with the former state; 3) The applicant is a resident of another state sharing a common boundary with this state and has been employed in this state for a period of not less than six months by a Florida general lines agent; 4) Within two years preceding the day the applicant filed for a license, the applicant must complete a course in insurance or has had at least six months experience in responsible insurance duties as a substantial full-time employee; 5) The license is not being sought for the purpose of writing or handling "controlled business"; 6) The applicant will be employed by only one agent or agency in the agency and will appoint one designated agent within the agency who will supervise the work out the applicant and his or her conduct in the insurance business; the applicant must spend all of his or her business time in the employment of the agent or agency and be domiciled in the office of the appointing agent; and 7) The applicant must pass any required examination required. "
What are the requirements for a general lines agent's license?
" The Department shall not license any individual found to be untrustworthy or incompetent. In addition, qualifications for a general lines agent's license included: 1) The applicant must be a natural person at least 18 years at age; 2) The applicant must be a bona fide resident at this state; a new resident who has been licensed in another state may qualify if the applicant furnishes a letter of clearance stating that the former licenses have been canceled or change to a non-resident basis with the former state; 3) The applicant's place the business must be located in this state and he or she will be actively engaged in the business of insurance with a location which is identifiable by and accessible to the public; 4) The license being sought cannot be for the purpose of writing or handling "controlled business"; 5) The applicant must be qualified as to knowledge, experience or instruction in the business of insurance; 6) The application may not be a service representative, in managing general agent, or a special agent or similar service representative of a health insurer which transacts property, casualty, or surety business (there is an exception for an officer or director of a corporate insurer to be licensed as a local resident agent); and 7) The applicant must have passed any required examination or license. "
What are the statutes prohibiting unlicensed transactions?
" The statute prohibits an individual unless licensed as a general lines agent to: (1) Solicit insurance or procure applications therefore; (2) Receive or issue a receipt for any money on account of or for any insurer, or receive or issue a receipt for money from other persons to be transmitted to any insurer for a policy, contract, or certificate of insurance or any renewal thereof, even though the policy, certificate, or contract is not signed by him or her as agent or representative of the insurer; (3) Directly or indirectly represent himself or herself to be an agent of any insurer or as an agent, to collect or forward any insurance premium, or to solicit, negotiate, effect, procure, receive, deliver, or forward, directly or indirectly, any insurance contract or renewal thereof or any endorsement relating to an insurance contract, or attempt to effect the same, of property or insurable business activities or interests; (4) Engage or hold himself or herself out as engaging in the business of analyzing or abstracting insurance policies or of counseling or advising or giving opinions, other than as a licensed attorney at law, relative to insurance or insurance contracts, for fee, commission, or other compensation, other than as a salaried bona fide full-time employee so counseling and advising his or her employer relative to the insurance interests of the employer and of the subsidiaries or business affiliates of the employer; (5) In any way, directly or indirectly, make or cause to be made, or attempt to make, any contract of insurance for or on account of any insurer; (6) Solicit, negotiate, or in any way, directly or indirectly, effect insurance contracts, if a member of a partnership or association, or a stockholder, officer, or agent of a corporation which holds an agency appointment from any insurer; or (7) Receive or transmit applications for suretyship, or receive for delivery bonds founded on applications forwarded from this state, or otherwise procure suretyship to be effected by a surety insurer upon the bonds of persons in this state or upon bonds given to persons in this state. "
What is meant by the term "unfair discrimination"?
" Unfair discrimination includes: 1) Knowingly making or permitting any unfair discrimination of the rates charged for any life insurance or annuity contract, in the dividends or other benefits payable from any policy, or in any other of the terms and conditions of such contract; or 2) Knowingly making or permitting any unfair discrimination between individuals of the same actuarial class in the amount of premium, policy fees, or rates charged for any accident, disability, or health insurance or in the benefits payable. "
Define "agent."
"Agent" means a general lines agent, life agent, health agent, or title agent, or all such agents, as indicated by context. The term "agent" includes an insurance producer or producer, but does not include a customer representative, limited customer representative, or service representative.
Define "appointment."
"Appointment" means the authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf of an insurer or employer.
Why are "Association Plans" not exempt from state regulation?
"Association Plans" are not exempt from state regulation as 1) there is no employer-employee relationship (usually the relationship is a member and the association); and 2) the "association plan" must be fully insured so the insurer is subject to state regulation.
Define "personal lines agent."
"Personal lines agent" means a general lines agent who only transacts property and casualty insurance sold to individuals and families for noncommercial purposes.
Define "self-insurance".
"Self-insurance" includes any plan established by an entity that is not an insurer with the intent of indemnifying an employee or their beneficiary for benefits in the event of sickness, accident, disability or death.
The Department of Financial Services may, at its discretion, issue a temporary license:
*A. All of the answers are correct Correct B. To a licensed agent's employee, family member, business associate, or personal representative C. In the event of death, disability, or absence of a general lines agent D. Only if no other person connected with the agent's business is licensed as a general lines agent
Define the term "insurer".
Any person engaged in the business of insurance or annuities
Self-insurance is:
Any plan established for the purpose of providing for employees or their beneficiaries, accident, disability or death benefits
Unfair claim settlement practices include:
1) Attempting to settle claims on the basis of an application or material document which was altered without notice to or knowledge or consent of the insured; 2) A material misrepresentation made to an insured for the purpose and with the intent of effecting a settlement of a claim on less favorable terms than those provided in or contemplated by the policy; 3) Committing or performing any of the following: a) Failing to adopt or implement standards for the proper investigation of claims; b) Misrepresenting pertinent facts relating to coverages; c) Failing to acknowledge promptly with respect to claims; d) Denying claims without conducting reasonable investigations; e) Failing to affirm or deny full or partial coverage of clients including the extent of coverage or partial coverage, or failing to provide a written statement that the claim is being investigated upon written request of the insured within 30 days after proof of loss statements have been completed; f) Failing to promptly provide a reasonable explanation in writing for denial of the claim or the offer of a compromise settlement; g) Failing to promptly notify the insured of any additional information necessary for the processing of the claim; or h) Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
What activities does "solicitation" of insurance include?
1) The benefits or terms of insurance coverage, including premiums or rates of return or; 2) Distributing an invitation to contract to prospective purchasers or; 3) Making general or specific recommendations as to insurance products or; 4) Completing orders or applications for insurance products or; 5) Comparing insurance products, advising as to insurance matters, or interpreting policies or coverages. "
When is a "Union Plan" exempt from state regulation?
A "Union Plan", may receive an express finding (in writing) from the U.S. Department of Labor that the collective bargaining agreements between that union and the employers are bona fide and be exempt from state regulation.
Are Professional Employer Organizations (PEO) or employee leasing companies exempt from state regulation?
A PEO sponsored health plan is not exempt from state insurance regulation under ERISA as 1) even though a purported "co-employer" relationship exist, the state does not recognize an employee/employer relationship with the employee and the PEO since the PEO does not control the hiring and firing of employees, evaluation of employee performance, discipline, determine compensation, or determine the hours, location, nature and method of work to be performed; and 2) Florida Statute 468.529 prohibits PEOs from sponsoring self-insured health plans.
What are examples of core values?
A code of ethics generally emphasizes what people who have subjected themselves to and measure themselves by are supposed to do. Examples of core values include but are not limited to: 1) Honesty and truth; 2) Responsibility and accountability; 3) Respect and tolerance; 4) Fairness and justice; 5) Compassion and caring.
What is meant by the term "domestic insurer"?
A domestic insurer is one who formed their company within the state of Florida.
Who may appoint a Customer Representative?
A general lines agent or a general lines insurance agency
Is a legitimate ERISA Self-Insurance plan necessarily an insurance plan subject to state regulation?
A genuine single-employer ERISA plan is not subject to direct state insurance regulation
An agent may place business with an insurer for which he or she is not appointed as an agent as long as he or she is appointed for such business by another insurer ("Exchange of business")if?
A. A licensed agent must countersign all policies. B. The insurer assigns a unique brokering agent's register number to each agent not appointed with the insurer and furnishes the agent with the insurer`s forms, coverage documents, binders, applications, and other incidental supplies. C. Each form, coverage document, binder, and application must predominantly display, (in 12-point type or the size of any other entity name whichever is larger, capital letters or boldfaced type, and be printed with the name of the insurer at the top. *D. All of the answers are correct Correct
Who may appoint a Customer Representative?
A. A surplus lines agent who is not a managing general agent B. A general lines insurance agency C. A person holding a Florida resident general lines agent license (2-20) *D. Any of the answers are correct Correct
An Authorized Insurer is:
A. An insurance company who has received a certificate of authority from the State of Florida
Describe a MEWA (Multiple-Employer Welfare Arrangement.)
A. MEWAs are defined as an arrangement that is established or maintained to provide one or more various insurance benefits (health insurance) to the employees of two or more employers. B. MEWAs require a Certificate of Authority from the Department of Insurance. C. MEWAs (Multiple-Employer Welfare Arrangement) are regulated as risk-bearing entities by the Florida Insurance Code *D. All of the answers are correct
Why are "Association Plans" not exempt from state regulation?
A. None of the answers are correct *B. Both of the answers are correct Correct C. The "association plan" must be fully insured so the insurer is subject to state regulation. D. There is no employer-employee relationship (usually the relationship is a member and the association)
Why are Professional Employer Organizations (PEO) or Employee Leasing Companies not exempt from state regulation?
A. None of the answers are correct B. Even though a purported "co-employer" relationship exist, the state does not recognize an employee/employer relationship with the employee and the PEO since the PEO does not control the hiring and firing of employees, etc. *C. Both of the answers are correct Correct D. Florida Statute 468.529 prohibits PEOs from sponsoring self-insured health plans.
A Customer Representative's authority does not include:
A. Taking insurance applications, giving quotes, interpreting policies, and giving insurance advice B. Performing preliminary work to assist in processing claims *C. Conducting sales work outside of the agent's office D. Binding new and additional coverages
What are the requirements for a customer representative's license?
A. The applicant must be a bona fide resident at this state B. The applicant must be qualified as to knowledge, experience or instruction in the business of insurance, must have passed any required examination or license, etc. C. The applicant must be a natural person at least 18 years at age *D. All of the answers are correct
What are the requirements for a general lines agent's license?
A. The applicant must be qualified as to knowledge, experience or instruction in the business of insurance, must have passed any required examination or license, etc. B. The applicant must be a bona fide resident at this state *C. All of the answers are correct D. The applicant must be a natural person at least 18 years at age
What is the limitation on advertising gifts?
Advertising gifts are permitted so long as the value is not more than $25.
Who is required to have a Certificate of Authority?
All insurers are required to apply for and have a Certificate of Authority from the Department prior to writing any insurance policies. Further any insurer with an office or personnel in the State of Florida must have a Certificate of Authority from the Department even if it does not write business in Florida. Finally, an insurer who engages in insurance agency activities in Florida without a Certificate of Authority has committed a third degree felony under Florida law.
What is meant by the term "authorized insurer"?
An "authorized insurer" is any insurer who has received a certificate of authority from the state of Florida.
What is meant by the term "unauthorized insurer"?
An "unauthorized insurer" is any insurer who is not authorized by the state of Florida.
What is meant by the term "Exchange of Business"?
An agent may place business with an insurer for which he or she is not appointed as an agent as long as he or she is appointed for such business by another insurer.
What is meant by the term "exchange of business"?
An agent may place business with an insurer for which he or she is not appointed as an agent as long as he or she is appointed for such business by another insurer. This arrangement is titled "exchange of business."
What is meant by the term "alien insurer"?
An alien insurer is one formed outside of the United States or an insurer who is not domestic or foreign.
A Domestic Insurer is
An insurer formed under Florida laws, but which may provide insurance in other states
A Domestic Insurer is:
An insurer formed under Florida laws, but which may provide insurance in other states
A Foreign Insurer is:
An insurer formed under the laws of any state, other than Florida
Define the term insurer.
An insurer is broadly defined as any person engaged in the business of insurance or annuities.
Define "false claims or obtaining or retaining money dishonestly".
Any agent who represents to any insurer a false claim for payment, knowing the claim to be false is guilty of a second-degree misdemeanor.
What is meant by the term "authorized insurer"?
Any insurer who has received a certificate of authority from the state of Florida.
What are the possible consequences for acting as an insurer without a Certificate of Authority?
Any person acting as an insurer without a Certificate of Authority may be convicted of a third-degree felony (F.S. 624.401) and liable for all unpaid claims of the unauthorized insurer (F.S. 629.901) as well as subject to suspension or revocation of all insurance licenses (F.S. 626-621, F.S. 626.611 and F.S. 626.6215).
Which of the following is not grounds for discretionary refusal, suspension or revocation of the license of a general lines agent or customer representative?
Demonstration of a lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license
What are Florida's continuing educations requirements?
Each licensee must complete a minimum of 24 hours of continuing education courses every two years. A person who has been licensed for a period of six or more years may complete 20 hours every two years in intermediate or advanced level courses. A licensee who has been licensed for 25 years or more and is a CLU or a CPCU or has a Bachelor of Science degree in risk management or in insurance with evidence of 18 or more semester hours in upper-level insurance related courses must complete 10 hours of continuing education every two years. Each person subject to the provisions of this section mu st complete, as part of their required number of continuing education hours, a minimum of 3 hours of continuing education, approved by the department, every 2 years on the subject matter of ethics. "
What are the requirements for reporting any change of name or residence address?
Each licensee must notify the department in writing within 30 days of any change of name, residence address, principal business street address, or mailing address.
Describe ethics.
Ethical behavior is a positive goal; to do what is right. The Greek word ethos meaning custom generally refers to proper modes of conduct. Ethical behavior is the product of ingrained attitudes, personal respect, and ideals of service to others in an unselfish manner. Ethical behavior is hard to define although ethical behavior is of ultimate importance in maintaining the integrity of our industry.
What is altruism and how is it involved with ethics?
Ethics may involve altruism ("doing what is right for others") because it is the right thing to do and not because of notoriety or recognition.
What lines of insurance are life agents qualified to write?
Except for a limited license for credit life or disability insurance, the license of a life agent covers all classes of life insurance business.
Define the term Insurance.
Includes any contract where one party agrees to indemnify (restoring to the approximate financial condition prior to a loss) another party after a loss.
What is the effect of a license if an agent moves residence from the state?
If a licensee moves his or her residence from the state, his or her license and all appointments immediately terminate.
The Department of Financial Services of Florida may, upon written application and payment of fees, issue a nonresident license:
If a nonresident does not have a place of business in Florida, or does not have a direct or indirect interest in any insurance agency in Florida
Define the term insurance.
Insurance is a broadly defined by Florida statute to included any contract where one party agrees to indemnify (restoring to the approximate financial condition prior to a loss) another party after a loss.
What is meant by the term "unfair discrimination"?
Knowingly making or permitting any unfair discrimination of the rates charged for any life insurance or annuity contract or knowingly making or permitting any unfair discrimination between individuals of the same actuarial class in the amount of premium
What is meant by the term "unfair discrimination"?
Knowingly making or permitting any unfair discrimination of the rates charged for any life insurance or annuity contract or knowingly making or permitting any unfair discrimination between individuals of the same actuarial class in the amount of premium.
What is meant by the term "misrepresentation and false advertising of insurance policies"?
Knowingly making, issuing, circulating any estimate, illustration, circular, statement, sales representation, omission, or comparison which misrepresents the benefits, advantages, conditions, or terms of any insurance policy etc.
Define "line of authority".
Line of authority" means a kind, line, or class of insurance an agent is authorized to transact.
Describe a MEWA (Multiple-Employer Welfare Arrangement.
MEWAs require a Certificate of Authority from the Department of Financial Services. MEWAs are defined as an arrangement that is established or maintained to provide one or more various insurance benefits (health insurance) to the employees of two or more employers. * Both of these Neither of these MEWAs (Multiple-Employer Welfare Arrangement) are regulated as risk-bearing entities by the Florida Insurance Code.
A General Lines Agent is:
One who may transact property insurance, casualty insurance, surety insurance, health insurance, and marine insurance in the State of Florida
What are the possible consequences for aiding and abetting an unauthorized insurer?
Possible consequences for aiding and abetting an unauthorized insurer include conviction of a third-degree felony (F.S. 624.401) and liability for all unpaid claims of the unauthorized insurer (F.S. 629.901) as well as subject to suspension or revocation of all insurance licenses (F.S. 626-621, F.S. 626.611 and F.S. 626.6215).
An agent`s license is for the purpose of authorizing the licensee in good faith to engage in the insurance business. The license cannot be used for:
Receiving a rebate in the form of commission or other compensation for "controlled business"
What are some factors making ethical behavior a dilemma?
Representing multiple insurers with the volume commitments from insurers, trips and other contests, and contingent commissions (additional payments to the agency based on total premium volume and loss ratios) all add the ethical dilemmas. Personal desires including family expectations, expectations of superiors, emotional pressures, personal financial dilemmas, and moral and religious views of the agent all add to the ethical dilemmas.
When does the Department issue a temporary license?
The Department may, in its discretion, issue a nonrenewable temporary license for a period not to exceed 6 months authorizing appointment as a general lines insurance agent to a licensed agent's employee, family member, business associate, or personal representative for the purpose of continuing or winding up the business affairs of the agent who is deceased or disabled. "
What is meant by the term "Department"?
The Florida Department of Financial Services
What lines of insurance are a customer representative qualified to write?
The license of the customer representative covers all such classes of insurance that his or her appointing general lines agent or agency is currently authorized to transact under the general lines agent's license and appointments.
What are the penalties for diverting or misappropriating "trust funds"?
The penalties range from first-degree misdemeanor to first-degree felony.
Why the increased regulatory concern with unauthorized insurers?
There is increased regulatory concern with unauthorized insurers due to 1) ongoing instances of such activity; 2) the potential for criminal activity within the business of insurance; 3) the potential for adverse economic impact upon authorized insurers; 4) the potential for quantities of unpaid claims due to dishonesty along with the absence of state or federal guaranty funds to cover unpaid claims; 5) the potential for adverse economic impact on the future insurability of participants under statutes mandating guaranteed-issue health coverage; 6) the potential for adverse economic impact on health-care providers from unpaid claims; 7) lack of comprehensive federal oversight, including licensure and regulation similar to that of state insurance codes; and 8) the adverse impact on public perception that foresee the role of state regulations as protecting them from illicit insurance schemes, ensuring benefits are paid as contracted, and that legitimate insurance is available and affordable.
Describe one goal of ERISA.
To encourage individual employers to establish employee health plans for that employer's employees and dependents
What activities does "transacting" insurance include?
Transacting insurance includes: 1) Soliciting or inducing the purchase of insurance; 2) Any negotiations for the purchase of insurance; 3) The preparing or execution of any contract for insurance; and 4) Any transactions after a contract of insurance has been written including any matters concerning the insurance contract.
What are "unlawful rebates"?
Unlawful rebates (unless provided by law or in an application filing with the department) include: 1) Permitting or offering to make any rebate unless plainly expressed in the insurance contract; 2) Paying, allowing, are getting directly or indirectly any unlawful rebate premiums or any special favor or advantage in the dividends or other benefits or any valuable consideration or inducement not specified in the policy; or 3) Giving, selling, or purchasing any stocks, bonds or other securities of any insurance company or other corporation when not specified in the insurance policy.
What does the Florida Statute state about ethics?
While the statute does not define ethical behavior, it does state the agent or customer representative should be acting in the public interest.
Are agencies required to carry an insurance license?
Yes As of October 1, 2006 the Department of Financial Services will require the firm, partnership, corporation, association or other entity to be licensed or registered. Agencies engaged in business before 1/1/03 and wholly owned by a licensed or appointed agent or publicly traded or offer insurance to nonprofit corporations may be registered rather than licensed. The penalty for not licensing an agency is $10,000. The penalty for not registering an agency is $5,000. A registered agency may be required to be licensed. "
