health ch 8 laws and rules

The required grace period for life insurance policies in Tennessee is

1 month

Right to examine (free-look) Health insurance policies must provide a minimum free-look period of

10 days upon the delivery. f the policyowner decides not to keep the policy within the 10 days allowed, a full refund will be given.

A producer who allows his or her license to lapse may reinstate the license without retaking the state licensing exam within what time

12 months from the renewal date. but a penalty of double the unpaid renewal fee will be required.

the Commissioner's intent to take testimony requires what

14 days written notice and the Commissioner must notify both parties within 30 days of completing an investigation

Insurers are responsible for submitting an appointment notice to the Commissioner within

15 days of an agent's appointment or submission of first insurance application. The insurer is also responsible for paying the agent's appointment renewal fee

The Commissioner may issue a temporary insurance producer license for a maximum period of

180 days (or longer for good cause

Resident producers must complete

24 hours of continuing education every 2 years to keep their license active. 3 of those hours must be in ethics

Domestic insurance company is

A company that resides and is incorporated under the laws of the state in which its home office is located. an example is a company domiciled in TN

Stock Insurance Company is

An insurance company that is owned and controlled by stockholders (shareholders). The stockholders provide the capital and share in profits or losses

An insurer that terminates an agent appointment must notify the

Commissioner within 30 days of the date of termination.

Equivalent level annual dividend

Dividends vary each year. To determine level dividends, divide the total dividends for 10 or 20 years by the years included to arrive at an average amount.

"Insurance Transaction" includes

Solicitation or inducement to purchase insurance • Negotiations toward the sale of insurance • Executing a contract of insurance • Advising on coverages and claims

if the Commissioner deems that the temporary license is necessary for the servicing of an insurance business, such as what

The designee of a licensed insurance producer entering active service in the armed forces • To the surviving spouse or next of kin of a licensed insurance producer who dies or becomes disabled

investigations by a commissioner must be completed within what period

a 2 year period with annual tracking reporting to the Commissioner

Regardless of where the insurance company is incorporated, it still has to get

a Certificate of Authority before transacting insurance within a state

The Commissioner of Commerce and Insurance, the chief officer of the Tennessee Department of Commerce and Insurance, is appointed by

the Governor

A cash dividend is

the current illustrated dividend that can be applied toward payment of the gross premium

Insurance companies are classified according to

the location of its corporation

unfair and deceptive claim settlement practices are

• Misrepresenting to insured's pertinent facts or policy provisions relating to coverage at issue • Failing to acknowledge and act reasonably promptly upon communications with respect to an insurance claim • Failing to adopt and implement reasonable standards for prompt investigation and processing of insured's claims • Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements are completed and submitted by insured's • Not attempting in good faith to effect prompt, fair and equitable settlements of claims on which liability has become reasonably clear; Refusing or delaying a settlement solely because there is other insurance available to partially or entirely satisfy the claim loss; the claimant who has a right to recover from more than one insurer has the right to choose the coverage from which to recover and the order in which payment is to be made • Compelling insured's to initiate suits to recover amounts due under an insurance policy by offering substantially less than the amount ultimately recovered in those suits

The replacing insurer must provide in or with its policy notice that the applicant has a right to an unconditional refund of all premiums paid, which may be exercised within

20 days of the date of policy delivery

Producers must report any ny bankruptcy, felony conviction, or any other administrative action that occurs in Tennessee or another jurisdiction to the Insurance Department within

30 days after the final deposition

Producers must report a change in address or name to the Insurance Commissioner within

30 days of the change

The Department of Commerce and Insurance will provide the person with a copy of the complaint within

30 days of issuance of the receipt of the complaint

• A nonresident producer who moves from one state to another or a resident insurance producer who moves from Tennessee to another state must file a change of address within

30 days of the change of legal residence

Upon receipt of the notice of appointment, the Commissioner will verify within a reasonable time not to exceed

30 days that the insurance producer is eligible for appointment. Within 15 days of such notice, the insurer must mail a copy of the notice to the terminated agent, after which the agent will have 30 days to submit written comments to the Commissioner.

• If the producer is determined to be ineligible for appointment, the Commissioner notifies the insurer within how many days of the determination

5 days

Foreign insurance company is

A company whose home office is located in another state. its considered a foreign company in all states except for its home office.

or all insurance contracts unlawfully made in Tennessee with or on behalf of an insurance company that is not authorized to do business in Tennessee

A person will be held personally liable

It is an illegal practice to unfairly discriminate against a person in any way on an insurance-related matter what would an example be

An example would be charging a different rate for someone in the same actuarial class. Fair discrimination is necessary for the issuance of life insurance policies, which is based on mortality

an insurance producer is

An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation

Mutual life insurance companies is

An insurance company owned and controlled by its policyowners. These policyholders elect a board of trustees or governing body to manage the firm.

Unauthorized insurer is

An insurance company that has been denied or not yet applied for a Certificate of Authority and may not sell insurance in this state

Authorized insurer is

An insurance company that has qualified and received a Certificate of Authority from the Insurance Department to sell insurance in this state. also called an admitted insurance company

An applicant for a resident producer license in Tennessee must

Be at least 18 years of age • Not have committed any act that is grounds for denial, suspension, or revocation • Completed a prelicensing course • Have passed the state exam for the lines of authority in which licensure is sought • Submit the application with fees • Not intend to use the license primarily to write controlled business

Replacement regulations do not apply to:

Group life insurance • Credit life insurance • Policies distributed on a mass merchandise basis • Policies issued in connection with a pension, profit sharing, individual retirement account, or other benefit plan qualifying for tax deductibility of premiums

if u replace a new life policy or a new annuity the existing life insurance or annutities will be :

Lapsed, forfeited, surrendered, or otherwise terminated • Reissued with any reduction in cash value • Converted to reduced paid-up insurance, continued as extended term insurance or otherwise reduced in value by the use of nonforfeiture benefits or other policy values • Amended so as to affect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid • Reissued with a reduction in cash value • Used in a financed purchase • Subject to a policy loan exceeding 25% of the total cash value

There must be a prominently placed title as follows:

STATEMENT OF POLICY COST AND BENEFIT INFORMATION • Must contain the name and address of the insurance agent • Must include a statement that dividends are based on the company's current dividend scale and are not guaranteed • Must include the date on which the policy summary is prepared

Alien insurance company is

a company that is chartered and organized in any country other than the United States. It is considered an alien company in all states

When a producer reports a final disposition of an administrative action against the producer to the Insurance Commissioner, the report must include

a copy of the order or other relevant legal documents

Duties of the replacing insurance company Require from the producer

a list of the applicant's life insurance or annuity contracts to be replaced and a copy of the replacement notice provided to the applicant

A limited lines producer is

a person authorized by the Commissioner to sell, solicit, or negotiate limited lines insurance

it is illegal to publish any false financial statement regarding

a person or entity

An unauthorized insurer is

a person who has not applied for or has not qualified for a certificate of authority and is not authorized to transact insurance business in Tennessee.

The Department of Commerce and Insurance and the Commissioner of Commerce and Insurance are responsible for

administering Tennessee's insurance laws

All premiums after the first are payable in

advance at the insurer home office or to an agent of the same office.

Applicants for a producer license are required to complete what before taking the license exam

an online or classroom course approved by the commssioner which are 20 hours for life • 20 hours for accident and health

t is an illegal practice to misrepresent

any fact about an insurance policy, such as policy terms, benefits, value, cost, effective date, or existence of a contract of insurance

Replacement: means

any transaction in which new life insurance or a new annuity is purchased and, as a result,

If the Commissioner decides to deny an application for a license, he must notify the

applicant and give written notice that the application has been denied within 30 days

A producer cannot act as an agent for an insurer unless he or she is

appointed to work for that insurer

it is an illegal practice to commit or coordinate any act or

boycott, coercion, or intimidation in order to restrain or monopolize the business of insurance.

The Commissioner retains the authority to enforce what

code provisions and impose any penalty against any person under investigation.

The buyer's guide enables applicants to

compare different life insurance policies and help them choose which policy is best for their needs. A life insurance buyer's guide normally includes information such as: • Deciding on how much life insurance to buy • Comparing life insurance policy rates • Comparing life insurance policy requirements

Nonresident producers are not required to

complete Tennessee continuing education requirements as long as their home state requirements are met

A business entity is a

corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity

Rebating is

illegal to offer a prospective client something of value that is not specified in a contract to induce the purchase of an insurance policy.

it is an illegal practice to falsely advertise

insurance products or publish misleading information about its insurance coverage. This includes making false statements about the financial condition of an insurer

Defamation

it is an illegal practice to make any public statement or advertisement that contains false information or unsubstantiated criticisms about an insurance company intended to harm or malign

Producers have a fiduciary responsibility for all funds collected from clients must not

mingle these funds with their own personal funds.

Stock insurance companies that issues both participating and nonparticipating policies are referred to as a company doing business on a

mixed plan

to apply to a nonresident license in tn what must nonresidents do

must submit an application form, proof of resident license in good standing, and fees

Stock insurance companies are considered

nonparticipating because the policyowners do not share in the profits of the company

A producer who holds a resident license in a different state may apply for a

nonresident license in Tennessee, as long as both states have a reciprocal agreement

Mutual insurance companies are considered

participating because the policyowners do share in the profits of the company • The objective is to provide insurance to its owners, the policyowners, at the lowest net cost

the profits of a mutual insurance company are returned to the

policyowners in the form of dividends or retained as surplus to meet future obligations

The objective of a stock insurance company is to

produce profits for the owners

In Tennessee, an individual producer is considered to

represent the insurance company

Any producer that sells an insurance policy for an unauthorized insurer runs the risk of being

responsible for unpaid claims. also called a non-admitted company

No person shall pay or accept commissions to/from an unlicensed individual for the purpose of

selling or negotiating insurance business

A generic name is a

short title which is descriptive of the premium and benefit patterns of a policy or a rider

The policy summary contains

specific information on the provisions, benefits, and coverage of the policy applied for.

The Commissioner may

subpoena witnesses and examine them under oath.

The Commissioner must give written notice to

the producer before holding a hearing that may lead to the suspension or revocation of the producer's license

After the investigation, if the Commissioner determines that those involved are responsible, a fine can be given up to

to $1,000 for each violation, not to exceed $100,000 for all violations • If the violation was committed knowingly, the penalty can be up to $25,000 per violation not to exceed $250,000 total

The licensing of insurance producers is needed to

to protect the public

Nonresident producer applicants do not have

to take the Tennessee state licensing exam, but must not have committed any act for which the license could be denied, suspended, or revoked.

A licensee may not

transact insurance business in Tennessee until the licensee is appointed by an insurer.

the replacement of life insurance contracts with a new contract requires the producer to give the applicant a

written comparison and summary statement at the request of the policyholder and to follow instructions regarding replacement as obtained from the appointing insurer

Duties of the producer

• Present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the producer. A copy must be left with the applicant. • Obtain a list of all existing life insurance and/or annuity policies to be replaced including policy numbers and the names of all companies being replaced. • Leave the applicant with the original or a copy of written or printed communications used for presentation to the applicant. • Submit to the replacing insurance company a copy of the Replacement Notice with the application. • Tennessee producers licensed for fewer than 120 days may not take applications for replacement policies until 10 days after mailing a notice of intention to replace existing insurance to the replacing insurer

The Commissioner may place on probation, suspend, revoke, refuse to renew, or deny a license to any person who has

• Provided incorrect, misleading, incomplete or untrue information in the license application • Violating any insurance laws, regulations, subpoena, or orders from the Insurance Commissioner • Obtaining to obtain a license through fraud or misrepresentation • Intentionally misrepresent the terms of an insurance contract • Been convicted of a felony • Committed any insurance unfair trade practice • Using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial irresponsibility in this or any other state. • Having an insurance license denied, suspended, or revoked by another state • Forging a name to an insurance document or application • Cheating on an insurance license examination • Knowingly accepting insurance business from an unlicensed individual • Failing to comply with a court order imposing child support • Failing to pay state income tax