Insurance Regulation, 9 Questions

Licensees must inform the Commissioner of a change of address within .....days of the change.

30 days

Misrepresentation acts are punishable by a fine of up to $.... or up to .....months imprisonment.

$1,000, 6 months

....... include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.

Consumer Reports

No misrepresentation made by the insured during the negotiation of an insurance policy will be deemed...... unless it is made with the intent to deceive or increases the risk of loss.

material

Insurers that issue nongroup, guaranteed issue health plans may establish rates based upon age. In addition, the insurer may establish rate adjustments ranging from ....to.... for each of the.... geographic rating areas determined by the Commissioner. The rate each individual pays is the base premium rate multiplied by the area rate adjustment.

.8 to 1.2, each of the 5 geographic rating areas

The refusal of any person to submit to examination is grounds for suspension, refusal, or nonrenewal of any license or authority. A fine of up to $..... or imprisonment of a maximum term of ...year may be imposed.

$1,000, 1 year

Anyone acting as an officer, director, agent or other insurance employee, that is caught embezzling funds, faces the aforementioned fines and imprisonment. However, if the embezzlement was in an amount that is less than $..... , prison time may be reduced to ....year.

$5,000, 1 year

The consumers must be advised that they have a right to request additional information concerning the report, and the insurer or reporting agency has ....days to provide the consumer with the additional information.

5 days

Knowingly paying an unlicensed person acting as a producer punishment

Fine of $50 - $500

Engaging in unfair or deceptive acts in connection with insurance transactions punishment

Fine up to $1,000 per act

Insurers or their representatives may not base an adverse underwriting decision in whole or in part on the following:

The fact of a previous adverse underwriting decision Personal information received from an insurance-support organization whose primary source of information is insurance institutions; The basis of sexual orientation:

An individual who unknowingly violates the Fair Credit Reporting Act is liable in the ....amount to the loss to the consumer, as well as any reasonable attorney fees incurred in the process.

equal

It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements. Committing this illegal act is called.....

misrepresentation.

Any person who engages in conduct that is in violation of Section 1033 may be subject to civil penalty of not more than $..... for each violation or the amount of compensation the person received as a result of the prohibited conduct - whichever is greater.

$50,000 for each

A person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses may also be fined and/or imprisoned for up to .....years.

2 years

Anyone who purchases a life insurance policy or annuity contract because of the misrepresentations of an officer or producer of the insurer that issues or executes it may recover all premiums, less any indebtedness to the insurer and any payments made by the insurer, by bringing an action against the insurer within ....years of the policy or contract issue date.

2 years

Any company, officer, or agent that neglects or refuses to submit policy form copies within ......days of the Commissioner's written request faces a fine of at least $.... and up to $..... .

30 days, $100 up to $500

Under the Fair Credit Reporting Act, if a policy of insurance is declined or modified because of information contained in either a consumer or investigative report, the consumer must be advised and provided with the name and address of the reporting agency. The..... has the right to know what was in the report. The....... also has a right to know the identity of anyone who has received a copy of the report during the past year. If the consumer challenges any of the information in the report, the reporting agency is required to reinvestigate and amend the report, if warranted. If a report is found to be inaccurate and is corrected, the agency must send the corrected information to all parties to which they had reported the inaccurate information within the last .....years.

consumer, consumer, 2 years

Anyone convicted of a felony involving dishonesty or breach of trust, that also engages in the business of insurance, will be.... , imprisoned for up to ....years or both.

fined, 5 years

In lieu of an examination of....... and...... insurers, the Commissioner may accept an examination report from the accredited Departments of Insurance of their state of domicile or port of entry.

foreign and alien

An insurance company or its agents must provide a notice of information practices In the case of a policy renewal, no later than the..... , except that no notice is required in connection with a policy renewal in the case of either of the following:

policy renewal date

The...... information includes bankruptcies more than .....years old, civil suits, records of arrest or convictions of crimes, or any other negative information that is more than .....years old.

prohibited, more than 10 years, more than 7 years

Any person who knowingly and willfully obtains under false pretenses information about an individual from an insurance institution, insurance representative, or insurance-support organization will be fined a maximum of $.... , imprisoned for a maximum term of ..... year, or both.

$10,000, 1 year

Consumer reports cannot contain certain types of information if the report is requested in connection with a life insurance policy or credit transaction of less than $...... .

$150,000

It is considered.... for any person engaged in the business of insurance to willfully, with the intent to deceive, make any oral or written statement that contains either false statements or omissions of material fact.

unlawful insurance fraud

The license Portable Electronics Insurance is valid for a .....year period and no examination is required for licensure.

2 year

an offer that attempts to influence the other party

Inducement

Representing an insurance policy as a share of stock, or using names or titles that may misrepresent the true nature of a policy also will be considered...... . In addition, a person or an entity cannot use a name that deceptively suggests it is an.......

false advertising, insurer

If the Commissioner believes that granting such a certificate would be detrimental to the........ , he/she may refuse to issue the certificate.

public interest

In any action to recover on an insurance policy, a court may award ......... damages , in addition to the amount of the claim. This cannot exceed ...% of the claim if the court finds that the party seeking to recover on the insurance policy has been damaged by a violation as determined by the Commissioner.

punitive damages, 25%

An advisers' license may be issued to a partnership as long as each named party in the partnership is found to be..... for a license as an adviser.

qualified

Whoever acts as an insurance adviser without a license or with a suspended license can be punished by a fine of between $... and $.... , by imprisonment for a maximum of .....months, or both.

$50 and $500, maximum of 6 months

Every insurer must file with the Commissioner all rates, every rating plan, and every modification of any of the foregoing which it proposes to use at least ....days.... to the proposed effective date of such plan.

15 days prior

To become a life settlement broker, an individual must meet one of the following eligibility requirements:

Be licensed in this state as life insurance producer or licensed in another state with at least 1 year of experience and a nonresident license; or Be licensed as an attorney, certified public accountant, or financial planner whose compensation is not paid by the life settlement provider or purchaser.

.........is any person who, for a fee, offers to examine any insurance, annuity, or pure endowment contract for the purpose of giving advice, counsel, recommendation, or information in respect to the contract's terms, conditions, benefits, coverage, or premium.

Insurance Advisor

The Commissioner may issue a license to act as an insurance adviser to any applicant who

Pays the required fee; Submits a written application on a form provided by the Commissioner (must be executed on oath by the applicant and kept on file by the Commissioner); and Is deemed trustworthy and competent.

A special broker's license must be renewed..... .

annually

The Commissioner has the power to investigate the affairs of any...... engaged in the business of insurance in order to determine whether the person has been or is engaged in any unfair method of competition.

any person

An insurance producer cannot act as an agent of an insurer unless the producer becomes appointed by that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become......

appointed.

Any person who violates a ......and..... order after it has become final must pay a fine of up to $......... for each violation, which may be recovered in a civil action. Upon order of the Commissioner, the person will be subject to suspension or revocation of his/her license.

cease and desist, $10,000 for each

Prior to conducting business in this state, a domestic company must obtain a........ from the Commissioner a stating the company has complied with all the conditions and provisions of the law.

certificate of authority

The purpose of rate regulation is to promote the public welfare by regulating...... in order to assure that they are not excessive, inadequate, or unfairly discriminatory, and to authorize and regulate cooperative action among insurers in rate-making.

insurance rates

An insurance producer or broker who receives any money or substitute for money as a premium for a policy or contract from the insured is deemed to hold those premiums in trust for the company. If the producer fails to pay the premiums collected to the company after written demand is made, the failure is evidence that the producer has used or applied the premium for a purpose other than paying the premiums to the company. The producer, upon conviction, would be guilty of.... .

larceny

An insurer is...... if it has the assets to meet its financial obligations. If at any time an insurer becomes unable to meet financial obligations, it is considered insolvent.

solvent

An unlicensed person impersonating an agent, broker or adjuster punishment

Fine of $10 - $100

All reinsurance intermediaries must maintain complete records of reinsurance transactions for at least .....years after the expiration of the policy.

10 years

Anyone engaged in the business of insurance whose activities affect interstate commerce and who knowingly makes false material statements may be subject to a fine, imprisonment for up to .....years or both. If the activity jeopardized the security of the accompanied insurer, the punishment can be up to ......years.

10 years, 15 years

Public Insurance Adjuster license will remain in force for .....years unless revoked or suspended. The license can be renewed without additional written examination as long as continuing education requirements are satisfied ( ....hours of approved continuing education instruction) before the renewal date.

3 years, 15 hours

The Commissioner may delay the effective date for a maximum of..... additional days in order to properly examine the filing.

30 additional days

If an individual (or an authorized representative of the individual) submits a written request for the personal information the insurance institution collected, the institution must make it available within ....days.

30 business

Unlike consumer reports, these reports cannot be made unless the consumer is advised in writing about the report within ....days of the date the report was requested.

3 days

In most cases, an insurance institution may not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction, unless the applicable individual gives his or her...... .

written authorization

.....occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business.

Defamation

forceful act or threat aimed to influence a person to act against his or her will

Coercion

Certificates will not be issued until the Commissioner is satisfied that the company has

Complied with the laws of the state; Adopted a proper system of accounting; Employed a competent accountant, claim manager, and underwriter; Filed an affidavit stating the company is without liabilities employed a competent actuary, and that officers and directors are of good repute and competent to manage.

Business Entity Producers

Pay the fees prescribed; and Designate a licensed producer responsible for the business entity's compliance with the insurance laws, rules, and regulations of the commonwealth.

any individually identifiable information gathered in connection with an insurance transaction from which judgments can be made about an individual's character, habits, avocations, finances, occupation, general reputation, credit, health, or any other personal characteristics. This includes an individual's name and address and medical-record information but does not include privileged information.

Personal Information

....provides coverage for the repair or replacement of portable electronics against the following causes of loss:

Portable Electronics Insurance

.......means an interview by a person who attempts to obtain information about a natural person and who commits one or more of the following acts: Pretends to be someone he/she is not; Pretends to represent a person he/she is not in fact representing; Misrepresents the true purpose of the interview; or Refuses to identify himself/herself upon request.

Pretext interview

In the event of an adverse underwriting decision, the insurer or its representative responsible for the decision must provide the applicant, policyholder, or individual proposed for coverage the following:

The specific reason for the adverse underwriting decision in writing A summary of the rights.

The complaint record must include the following:

The total number of complaints; Their classification by line of insurance; and The nature, disposition, and time of processing of each complaint.

......in rates, premiums, or policy benefits for persons within the same...... or with the same..... is illegal. No discrimination may be made on the basis of an individual's marital status, race, national origin, gender identity, sexual orientation, creed, or ancestry unless the distinction is made for a business purpose or required by law.

Discrimination, Class, Life expectancy

It is considered an..... to knowingly commit an unfair method of competition or to engage in such actions with enough frequency that the commission of unfair marketing practices indicates a general business practice.

unfair trade practice

if the Commissioner suspects that an insurer or its agent has committed a violation or is engaged in an..... , the Commissioner may issue a statement of charges and hold a hearing for any purpose deemed necessary (within the scope of the Insurance Code). The hearing may be held .....days..... the date the notice is served.

unfair trade practice, 21 days after

Any other violation, not specified for a penalty

Fine up to $500

Personal information is collected only from the..... or from public records; or A notice meeting the requirements has been given within the previous .....months;

policyholder, 24 months

An individual who willfully violates this Fair Credit Reporting Act enough to constitute a general pattern or business practice will be subject to a penalty of up to $..... .

$2,500

Rebates may include, but are not limited to, the following:

Rebates of premiums payable on the policy; Special favors or services; Advantages in the dividends or other benefits; and Stocks, bonds, securities, and their dividends or profits.

.....is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy. Both the offer and acceptance of a rebate are illegal.

Rebating

....are licensed to negotiate, continue, or renew insurance contracts with nonadmitted, foreign insurers. Such insurance may only be procured if the required amounts of insurance for the specified risks cannot be obtained in the market of admitted insurers

Special Brokers

It is prohibited to advertise or circulate any materials that are untrue, deceptive, or misleading. False or deceptive advertising specifically includes misrepresenting any of the following:

Terms, benefits, conditions, or advantages of any insurance policy; Any dividends to be received from the policy, or previously paid out; Financial condition of any person or the insurance company; or The true purpose of an assignment or loan against a policy.

An insurance company or its agents must provide a notice of information practices No later than at the time....

The Application for Insurance is made

An advisers' license may be issued to a corporation if the..... of the officers qualify for advisers' licenses.

majority

Insurers, their representatives, or insurance-support organizations....... or authorize the use of pretext interviews for the purpose of obtaining information in connection with an insurance transaction, except in the cases of.......

may not use, criminal activity or fraud.

An insurance producer doing business under any name other than the producer's legal name is required to notify..... prior to using the assumed name.

the Commissioner

Insurers must establish a base rate premium for each class of business. Group rates charged for any group or individual may not exceed .......times the.... rate that the insurer charges for the same business classification in that geographic area.

2 times the lowest rates

Any person or organization willfully violating any provision of rate-making provisions of the law can be punished by a maximum fine of $..... for each such violation, in addition to other penalties indicated by the law.

$500 for each violation

The Commissioner may examine any company at any time, but at least once every .......years. The costs of the examination are paid by the....... being examined.

5 years, company

receiving written consent from an insurance regulatory official for any individual convicted of a crime involving dishonesty, breach of trust or a violation of the Violent Crime Control and Law Enforcement Act of 1994 to work in the business of insurance

1033 waiver.

Within .....days of any initial........ date, a producer must report to the Commissioner any criminal prosecution against that producer taken in any jurisdiction. The report must include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.

30 days of any initial pretrial hearing date

A producer must report to the Commissioner any administrative action taken against such producer in another jurisdiction or by another governmental agency in the state within .....days of the...... of the matter.

30 days of the final disposition

....is any written communication primarily expressing a grievance. Producers, brokers, and adjusters must maintain any written communications received by them which expresses a grievance.

Complaint

.......established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used. The law also protects...... against the circulation of inaccurate or obsolete personal or financial information.

Fair Credit Reporting Act, consumers

.....are those that are intended to deceive public officials or the general public about the financial condition of an insurer. This often occurs when an important fact about the financial status of an insurer is deliberately withheld in order to present the company in a more favorable light.

False Financial Statements

......are similar to consumer reports in that they also provide information on the consumer's character, reputation, and habits. The primary difference is that the information is obtained through an investigation and interviews with associates, friends and neighbors of the consumer.

Investigative Consumer Reports

A nonresident person can receive a nonresident producer license upon meeting the following requirements:

The person is currently licensed as a resident and in good standing in his/her home state; The person has submitted the proper request for licensure and has paid the fees prescribed; The person has submitted or transmitted to the Commissioner the application for licensure that the person submitted to his home state, or in lieu of the same, a completed uniform application; The person's home state awards nonresident producer licenses to residents of the commonwealth on the same basis.

Acting as a public insurance adjuster without a license or with a suspended license is punished by a fine not to exceed $..... or by imprisonment for not more than ....months.

$10,000, 6 months

A nonresident producer who moves from one state to another state or a resident producer who moves from Massachusetts to another state must file a change of address and provide certification from the new resident state within .........days of the change of legal residence. No fee or license application is required.

30 days

If the company does not improve its finances within ......months of receiving such notice, the Commissioner may apply to the Supreme Judicial Court to become the receiver for the company and the company may be restrained from further business.

3 months

A reinsurance intermediary license may be renewed every ....years by paying the prescribed fees.

3 years

Applicants for a reinsurance intermediary license must have held a producer's or broker's license for at least ....years in the lines applied for.

3 years

Upon payment of renewal fees, the Commissioner may renew insurance adviser's licenses for any succeeding ....-year period without requiring the detailed information that was required for issuance of the initial insurance adviser's license.

3-year

Within .....days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the Commissioner.

30 days

The continuing education requirements do not apply to the following:

Persons holding resident licenses, for which an examination is not required; Persons holding a nonresident license, who also hold an equivalent resident license in their home state; and Any limited or restricted license which the Commissioner may exempt.

If, after a hearing, the Commissioner determines that someone has engaged in an unfair or deceptive act or practice, the Commissioner can issue a copy of the findings and an......... order requiring that person to from engaging in the act of violation. The Commissioner may suspend, or in the case of repeated violations, revoke the person's........ and impose conditions for license reinstatement. In addition, the person may be fined up to $......... per act for violations.

cease and desist, license, $1000 per

....... also applies to statements that are maliciously critical of the financial condition of any person or a company.

Defamation

An agent trying to obtain any premium payment by fraudulent representations punishment

Fine of $100 - $1,000 Imprisonment for 1 year

Any individual insurance producer who allows his or her license to lapse may, within ...months from the due date of the renewal fee, reinstate the same license without passing a..... . A penalty in the amount of the unpaid renewal fee will be..... required for any renewal fee received after the due date.

12 months, written examination, double

Within .....days after making the notification required, the insurer must mail a copy of the notification to the producer at his/her last known address.

15 days

When such insurance is procured, a special broker must file an affidavit with the Commissioner within ......days that states that, after diligent effort, the full amount of insurance required was not obtainable from admitted insurers, and that the foreign insurance is in excess over the amount of insurance procurable from admitted insurers.

20 days

An adviser's license expires .....years from the effective date, unless it is revoked or suspended.

3 years

An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with a producer must notify the Commissioner within .....days following the effective date of the termination.

30 days

If a policy form has been on file for at .....least days, an approval by the Commissioner is not required prior to its use. Every policy form filed with the Commissioner must be accompanied by a certificate stating that the Flesch scale readability score is achieved.

30 days

Licensees must complete the following number of classroom hours (in an approved continuing education course), during every .......month licensing period: During the licensee's first licensing period: .....hours (...including hours in ethics); and After the initial period: ....hours (including ....hours in ethics).

36 month 60 hours, 3 hours 45 hours, 3 hours

All policy forms must meet the following requirements: The text achieves a minimum Flesch scale readability score of.... ;

50

If an insurance policy form is going to be delivered to more than... policyowners, the copy of the form must be on file with the Commissioner for at least .....days it can be delivered or issued for delivery unless, before the expiration of the ....-day period, the Commissioner approves the form in writing.

50 policyowners, least 30 days before, 30 day period

If such filing is made by a medical malpractice insurer regarding medical malpractice insurance, the Commissioner may further delay the effective date of such filing for a maximum of .....additional days.

90 additional days

A life settlement broker found guilty of committing a fraudulent act may be subject to the following penalties:

A civil penalty of up to $10,000 for each violation; and The revocation of license for at least 1 year.

Applicant Licensing Requirements

Applicants must apply to the Commissioner on the uniform application, pass written exam, must show proof that he/she has completed a prelicensing course of study

The Commissioner administers and enforces all the insurance provisions. If upon a complaint or other evidence the Commissioner believes that any insurance provision has been violated, he/she reports the facts to the..... , who then may prosecute the offender.

Attorney General

In order to obtain a Public Insurance Adjuster license in Massachusetts, an individual must meet the following requirements:

Be at least 21 years old; Be a resident of the Commonwealth; Successfully complete a written examination; Submit a written application with all required components Have 2 years of experience performing services in connection with adjusting of property losses; and Be trustworthy and competent.

The....... applies to an insurance institution, insurance representative, or insurance-support organization that collects, receives, or maintains information in connection with an insurance transaction which pertains to a natural person who is a resident of the state.

Insurance Information and Privacy Protection Act

........place reinsurance cessions or retrocessions on behalf of a ceding insurer, without the authority to bind reinsurance on the insurer's behalf; and

Reinsurance intermediary brokers

.....bind and/or manage the assumed reinsurance of a reinsurer and act as the reinsurer's agent.

Reinsurance intermediary managers

temporary license is necessary for the servicing of an insurance business in the following cases:

To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled, in order for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer's business; To a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license; To the designee of a licensed insurance producer entering active service in the armed forces of the United States; o In any other circumstance where the Commissioner deems that the public interest will best be served by the issuance of this license.

A...... is a person (or partnership) who for compensation represents an insured in connection with the assessment of damages, negotiation, settlement, appraisal or reference of a loss under any of the following insurance policies:

public insurance adjuster

The Commissioner may require the temporary licensee to have a..... who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee. A temporary license may not continue after the owner or the personal representative disposes of the business.

suitable sponsor

Advertising covers a wide scope of communication, from publishing an ad in a newspaper or magazine, to broadcasting a commercial on television or the Internet. Advertisements cannot include any untrue, deceptive, or misleading statements that apply to the business of insurance or anyone who conducts it. The violation of this rule is called.....

False Advertising

The...... protects consumers in the area of claim settlements by identifying certain claim practices that are illegal:

Massachusetts Insurance Code

The Commissioner may examine a life settlement broker's business and affairs at any time. The..... is responsible for any costs arising from the examination.

broker

The Commissioner must notify the applicant or licensee and explain the reason for the ......or........ of the license. The applicant or licensee then has ....days to submit a written request for a hearing before the Commissioner in order to determine the reasonableness of the Commissioner's action.

denial or non-renewal, 30 days

The Commissioner may issue a temporary insurance producer license for a period not to exceed .....days without requiring an examination if the Commissioner determines that the temporary license is necessary for the servicing of an insurance business

180 days

In the event of nonrenewal or denial of a license, the Commissioner must notify the affected individual. Within .....days of the notice, the individual may make written demand for a hearing regarding the action.

30 days

Reinsurance intermediary managers must also have a written contract with the reinsurer before representing that reinsurer, and a true copy of this contract must be filed with the Commissioner at least ......days before the manager assumes or cedes (gives up the right to) any business.

30 days

Policy Forms: Companies must submit to the Commissioner copies of

Any policy form used by the company; A form of any rider, endorsement or application used in connection with policy forms; and Copies of any circular or other advertising matter the company issues.

Producers Requirements

Be at least 18 years of age; Have not committed any act that is a ground for denial, suspension, or revocation based on state insurance law; Have completed any required prelicensing course of study; Have paid the required fees; and Have successfully passed all required examinations.

to stop or discontinue

Cease and Desist

No rating license can be suspended or revoked except upon a written order of the Commissioner, made after a hearing held upon not less than ......days' written notice to the organization.

not less than 10 days