FL Statutes, Rules, and Regulations Common to All Lines

What is true regarding branch agency licensing?

Agent in charge must be licensed - Each branch location established by an agent, agency, firm, corporation, or association must be in the active full-time charge of a licensed general lines, or life and/or health agent who is appointed to represent one or more insurers.

Who must be a member of insurance guaranty associations?

All insurers authorized to write insurance within a state

If an insurer holds a certificate of authority, it is known as what type of insurer?

Authorized or admitted

Applicant to an insurer must NOT include all of what information?

Credit history report - Licensed agents may not submit applications to an insurer or furnish a copy of an application to a prospective insured unless the name of the insurer is legibly typed or printed on the first page of the application form at the time coverage is bound or the premium is quoted. The application must also disclose the name and license identification number of the agent as shown on the agent's license.

No insurance policy form can be issued, delivered, or used in this state unless it has been....

Field with and approved by the office of insurance regulation - Prior to the use of any policy or contract form, application form, rider, or endorsement, insurers must submit the forms and all changes to the Office and have the forms approved.

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

Only producers properly licensed for the type of insurance transaction

A participating insurance policy may do what?

Pay dividends to the policyowner

An gent 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.

It would be considered unfair discrimination to ask an insurance applicant about ..... and then use that information as a rating factor to determine insurability?

Sexual orientation - as well as using sexual orientation as a rating factor to determine insurability.

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 examines

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

What is the purpose of insurance guaranty associations?

To protect policyowners, insureds and beneficiaries from financial losses cause by insolvent insurers

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

Twisting

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)

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)

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 type of licensee represents the insured?

Broker

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

Certificate of authority

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

Complete continuing education hours and pay a renewal fee

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

Defamation

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

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

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

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

Who can usually be granted a temporary license?

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

What type of licensee represents the insurance company?

The agent

If an agent is in the military, what would be true?

The agent cannot sell a policy to another active military person who is of a lower rank

Who examines the books and records of insurance companies in Florida?

The chief financial officer - The CFO and the Office of Insurance Regulation have the right to examine the affairs of every person or entity authorized to transact insurance in this state. Examinations must be conducted at least once every 5 years.

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

The department of insurance (Commissioner/director/superintendent)

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

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

If an insured company makes a statement that its policies are guaranteed by the existence of the insurance guaranty association, that would be considered...

An unfair trade practice - It is an unfair trade practice to make any statement that an insurer's policies are guaranteed by the existence of the Insurance Guaranty Association. Though it is illegal to advertise, the statement is still true and would not be considered a misrepresentation.

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

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

Cease and desist order

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

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

Domestic, foreign, and alien

What is NOT a responsibility of the office of insurance regulation?

Enacting new insurance laws - New laws are enacted by the state legislature.

In the agent/Insurer relationship, who is considered the principal?

Insurer

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

Who owns stock companies?

Stockholders

Who is an insurance agent?

A person authorized to sell, solicit and negotiate insurance contracts

What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws?

Absolute - Florida statutes provide the Office of Insurance Regulation with an absolute right to examine the affairs of every person (insurers and licensees) involved in the business of insurance to see if they are engaged in any unfair trade practices.

For what reason can temporary license be issued?

For continuation of business in case the licensed producer dies or becomes disabled

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

Illegal - It is illegal to be involved in any activity of boycott, coercion, or intimidation that is intended to restrict fair trade or to create a monopoly.

Which entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?

Insurance guaranty association - Guaranty Associations are created to protect policyowners, insureds, and beneficiaries under life insurance policies, health insurance policies, annuity contracts, and supplemental contracts when insurers fail to perform contractual obligations due to financial impairment.

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

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 - Funds not paid out after paying claims and other operating costs are returned to the policyowners in the form of a dividend. If all funds are paid out, no dividends are paid.

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

No, advertising of the existence of the guaranty association for the purposes of solicitation and sale of insurance policies by insurers is an illegal business practice

What would be NOT be considered an insurance transaction?

Obtaining an insurance license - An insurance transaction means the carrying on of business in insurance, which could include the solicitation of a policy, advising, negotiation, or inducement related to coverage or claims. Obtaining an insurance license is a prerequisite to transacting insurance.