Florida Statutes, Rules, And Regulations Common To All Lines

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien insurer- alien insurer is defined as an insurer formed under the laws of another country

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

Authorized. Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers. Guaranty Associations are funded by their members: all authorized insurers are required to contribute to a fund to provide for the payment of claims for insolvent insurers.

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based ob the insured's habits and lifestyle Discriminating between individuals of the same class with equal life expectancies, or by reason of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also not allowed to cancel individual coverage due to a change in marital status. Discriminating in benefits based on the insured's habits and lifestyle (such as smoking or dangerous hobbies) is acceptable.

Which of the following 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 is the major difference between a stock company and a mutual company?

Ownership Mutual companies are owned by policyholders, while stock companies are owned by stockholders.

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.

What method do insurers use to protect themselves against catastrophic losses?

Reinsurance. Insurers use reinsurance to protect themselves from catastrophic losses. This is a method where the reinsurer indemnifies the ceding insurer for part or all of the losses it sustains related to a policy issued previously.

If an agent is in the military, which of the following is true?

The agent cannot sell a policy to another active military person who is of a lower rank. Agents are not allowed to sell insurance policies, contracts, or certificates to any active duty military person or their families if the buyer or proposed insured is of a lower rank or pay grade.

Under what circumstances can an agent's appointment be transferred to another person?

Under no circumstances Any issued appointment is valid only for the person named and is not transferable to another person.

An insurance agent B likes to add additional coverages to applicants' policies and charge them for such coverages without their knowledge. The agents is guilty of

sliding Charging an applicant for a specified additional coverage or product, in addition to the cost of the coverage applied for, without the applicant's knowledge or consent.

In order to maintain an insurance license, an agent licensed for less than 6 years will need to satisfy Florida's continuing education requirement of

24 hours every 2-year period. Agents licensed for less than 6 years must complete 24 credit hours of continuing education every 2 years. Agents licensed for more than 6 years must complete 20 credit hours. As part of their CE hours, all agents must complete a 4-hour Law and Ethics updates course.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums. An agent acts in a fiduciary capacity, based upon trust and confidence, when handling the financial affairs of their customers, including the handling of premiums.

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination. Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.

Which of the following statements is INCORRECT?

Replacing insurance policies for the purpose of making commissions is legal. Churning is defined as replacing insurance policies for the sole purpose of making commissions, and it is illegal.