Georgia State Laws, Rules, and Regulations

Which of the following insurers are owned by stockholders who have the usual rights of ownership, including he right of voting?

Stock

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in this state

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)

All the following are examples of violations of replacement EXCEPT a) Intntionally answering a question incorrectly b) Advising an applicant to answer questions correctly c) Any deceptive or misleading information d) Failing to ask the applicant to answer questions correctly

b) Advising an applicant to answer questions correctly

Which of the following would be considered a violation of life insurance advertising regulations? a) Making oral sales presentation b) Calling a variable insurance policy an investment plan c) Informing the applicant that the sole subject of the sale is insurance d) Not guaranteeing dividends

b) Calling a variable insurance policy an investment plan

Which of the following is NOT true regarding a Certificate of Authority? a) Its is equivalent to an insurance license b) It i issued by state department of insurance c) It is issued to group insurance participants d) It may be necessary for transacting business in a specific state

c) It is issued to group insurance participants

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

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

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

Defamation

The term " conservation effort" deals with

Discouraging policyholders from dropping existing policies

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, alien

For what reason can a temporary license be issued?

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

On its advertisement, 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 may share in the commission from the sale of a life insurance policy?

Only producers properly licensed foe the type of insurance transaction

Who is responsible for the contents of insurance advertisements?

The insurance company

What is the purpose of insurance guaranty associations?

To protect policy owners, insured and beneficiaries from financial losses caused by insolvent insurers

What type of licensee represents the insured?

broker

Who owns stock companies?

stockholders

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

30 days

Who must be a member of insurance guaranty associations?

All insurers authorized to write insurance within a state

Whenever agents submit applications to insurers, they must also submit statements disclosing whether or not replacement is involved. Who must sign these statements?

Applicant and agent

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

Authorized or admitted

If an insurers 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 or an unfair practice, what order will be issued?

Cease and desist order

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

Certificate of Authority

If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of

Churning

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

Complete continuing education hours and pay a renewal fee

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

Express Authority

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

Misrepresentation

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 the solicitation and sale of insurance policies by insurers is an illegal business practice

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

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

The insurer who is being examined

What is the purpose of a cease and desist order?

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

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

Twisting

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 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.

c) Always representing the insured

Who is required to hold a producer license?

A person who negotiates insurance contracts

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

Insurer

Who is an insurance agent?

A person authorized to sell, solicit and negotiate insurance contracts

In replacement, an existing insurer must provide policy owners with a policy summary for existing life insurance within how many days of receiving the written communication and replacement?

10 days

When a policy is being replaced, the replacing company notifies the

Replacement Company

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 who do not 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

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

Rebating

Whenever agents submit applications to insurers, they must also submit statements signed by the applicant and agent, disclosing the involvement of

Replacement

Which of the following is an example of a producer's fiduciary duty? a) A duty to base all transactions upon the principle of Utmost Good Faith. b) The obligation to tell the truth to the best of one's knowledge c) The trust that a client places in the producer in regard to handling premiums. d) An obligation to state every known fact about the policy the producer is selling.

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

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

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

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

The Department of Insurance (Commissioner/Director/Superintendent)

How is the Commissioner of Insurance selected to be the chief officer of the Department of Insurance?

Elected to office

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

Which of the following positions is responsible solely for offering advice on insurance policies (for a fee)? a) Broker b) Counselor c) Agent d) Sub-agent

a) Broker