Insurance Regulation SC

Process of Licensing SC

* 18 years of age *good moral character *no convicted of a felony or crime involving dishonesty, fraud, breach of fiduciary duties. *pay licensing fees *pass state examination

Misdemeanor FIRST offense LESS than $1,000 penalty is?

*FINE $100 -$500 *imprisonment of 30 DAYS

Felony first offense $10,000-$50,000 penalty is?

*FINE $10000-$50000 *imprisonment up to 5 YEARS * or Both

Misdemeanor first offense $1,000 to $10,000 penalty is?

*FINE $2000-$1000 *imprisonment up to 3 YEARS * or Both

Felony first offense $50,000+ penalty is?

*FINE $20000-$100000 *imprisonment up to 10 YEARS *or Both

Felony second or subsequent offense penalty is?

*FINE 20000-100000 *imprisonment up to 10 YEARS

Civil penalty for insurance fraud

*FIRST offense -up to $5000 *SECOND offense-$5000-10000 *THIRD or subsequent offense-$10,000-15,000

Unfair claims settlement practices

*KNOWINGLY misrepresenting to insured or third party's on misleading information about coverage. *FAILING to acknowledge communication about claims. *FAILING to promptly INVESTIGATE and SETTLE claims. *FAILING to make GOOD FAITH effort to promptly and fairly settle claims that *focusing policyholder to FILE LAWSUITS *offering LESSER amount than what is DUE. *raising or threatening to raise policy defense or to rescind the policy to discourage or reduce claim *ANY practice that constitutes an unreasonable delay in payment or failure to pay claim.

Solvency - the director can suspend or revoke an insurer's certificate of authority if:

*NOT financially SOLVENT *VIOLATED a law *POSES a hazard to the public or policyholders *REFUSE to submit examination by the director *DISOBEY a lawful order

Type of Licenses

*Producer *Nonresident *Temporary Licenses *Broker

The Director of SC has the right to

*REGULATE the rates and services of every insurer, and set reasonable standards and practices for insurers to follow *ENFORCE insurance laws *ISSUE regulation to administer insurance laws *REPORT criminal violation to the Attorney General or other law enforcement *INSTITUTE lawsuits

Policy Forms (must be approved by the director before selling or issuing)

*can NOT contain unfair, deceptive, ambiguous, misleading,or unfair discriminatory provisions. *can NOT be solicited through deceptive or misleading advertising communication. * Director has 30 DAYS to notify insurer of approval. *Director can EXTENT review for 60 days.

Maintenance and duration of sc licenses

*license is valid for two years *renewable by the last day of producers birth month *satisfy continuing education requirement *pay renewal fee

Broker license

*licensed in the same line of insurance they want to be a broker in. *pass state broker license exam *pay license fee every two years *post a $10,000 bond with the department to cover injures made by error or omission, violation of laws, breach of fiduciary duties. *pay broker premium tax rate on surplus lines policies.

Temporary License

*valid for up to 180 days *surviving spouse or court appointed to represent a licensed producer who dies or mentally or physically disabled.

Continuing Education Requirement

24 HOURS of continuing education every TWO YEARS. Producers licensed in life and health must complete one-third of these 24 HOURS in focus license. 18 maximum hours earned over the minimum may be applied to the NEXT TWO YEARS

Producers and Blank Forms

A PRODUCER CANNOT SIGN a BLANK application , CONTRACT, or INSURANCE POLICY, if CONVICTED can be fined up to $200 for EACH offense.

Peasons CONVICTED of DISHONEST acts while ENGAGING in interstate insurance BUSINESS are subject to FINES and IMPRISONMENT and are PROHIBITING from transacting such business WITHOUT?

A WRITTEN PERMISSION of the DEPARTMENT of INSURANCE

Twisting

A person CAN NOT make FALSE STATEMENTS or COMPARE insurance policy in order to induce someone to lapse, surrender, terminate, retain, or CONVERT an insurance policy or buy a policy with another insurer.

Fraudulent Acts and Restitution

A person who WILLFULLY lies and MISREPRESENTS an fact are guilty with the intent to defraud and DECEIVE.

Annual Notice Required

An INSURER must NOTIFY its customer at least ONCE a YEAR of its PRIVACY POLICIES or PRATICES

Examination of Books and Records

DIRECTOR can EXAMINE as often as necessary, but at least every FIVE YEARS.

Free insurance

Free insurance is insurance that is provided WITHOUT charges or for a LOWER-THAN-USUAL cost to a buyer of real estate or personal property of services related to such property.

Consumer Information Privacy Regulation

GOVERNS how INSURERS and their PRODUCERS treat personal HEALTH and personal FINANCIAL information from individuals.

A producer who obtains their license by fraud or misrepresentation SC director may

IMMEDIATELY suspend license and specify how long. suspension can not last longer than TWO YEARS.

The State Law Enforcement Department

INVESTIGATES alleged insurance fraud.

Rebating

Insurers are NOT able to OFFER to pay anything of value to induce someone to BUY an insurance policy, including rebates on premiums. must be specified in the policy if insurer does pay anything.

Unfair Discrimination

NO ONE can CHARGE different premiums, fees, or other changes to people of the SAME class and substantially EQUAL risk.

False Advertising

NO ONE can PUBLISH or CIRCULATE a false, deceptive, or MISLEADING STATEMENT about the insurance business or ANYONE INVOLVED in the insurance business.

Defamation

NO ONE can PUBLISH or circulate any FALSE statements that is maliciously critical of or derogatory to the financial condition of an insurer that is DESIGNED to INJURE anyone in the INSURANCE BUSINESS.

Boycott, Coercion, and Intimidation

NO ONE can enter into an agreement to BOYCOTT, coerce, or intimidate anyone that result in the unreasonably restraint of , or monopoly in the insurance business.

False Financial Statements

NO ONE can make FALSE STATEMENTS about the insurer's FINANCIAL CONDITION with the intent to deceive the public or public officials.

Misrepresentation

NO ONE can misrepresent the terms, benefits, misleading statements about FINANCES or DIVIDENDS paid , or ADVANCES, of an insurance policy.

A producer convicted of a crime involving dishonesty, fraud , breach of fiduciary duties the director may

PLACE producer on Probation revoke or suspend license.

The Insurance Fraud Division of the state Attorney General's Office

PROSECUTES insurance FRAUD cases.

Immunity from liability

PROTECT individuals who REPORT insurance FRAUD from any liability.

Fair Credit Reporting Act of 1970

PROTECTS the RIGHTS of CONSUMERS for whom an inspection report or consumer credit report has been REQUESTED.

Reporting of Actions

Producer has 30 DAYS before pretrail to report to SC director any criminal prosecution taken against them.

Insurance Fraud Act

SC has an Omnibus Insurance Fraud and Reporting Immunity Act that address problems of insurance fraud. *detect insurance fraud *encourages reports of suspected insurance fraud *granting immunity for persons who report suspected insurance fraud *setting immunity for persons who report insurance fraud. *setting penalties for insurance fraud *required restitution for victims of insurance fraud.

Rates

THE DIRECTOR REVIEWS the premium rates set by insurers, and establishes standards and practices for INSURERS TO FOLLOW when setting these rates

If a producer's license is REVOKED and producer has to wait

TWO year before reapplying for licenses

Producers sharing Commissions

a individual MUST be LICENSED in SC in order to RECEIVE a COMMISSION , or FEE for SELLING an insurance contract.

Disciplinary Measures

a producer who is engaged in unfair practice has to report before the SC DIRECTOR must be notify 30 DAY IN ADVANCE of the offenses and violation charges.

Appointment

an INSURER can appoint AS MANY PRODUCERS it wants. * INSURER has 15 DAYS to NOTIFY DIRECTOR of appointment * DIRECTOR has 30 DAYS to CONFIRM eligibility, 5 DAYS if PRODUCER is NOT ELIGIBLE .

Producer license

an licensed PRODUCER who is appointed by an insurer to SELL, ADVERTISE, TAKE APPLICATIONS and DELIVER insurance policies.

Assumed Names

business using another name other than the producer's legal name must notify the director BEFORE conducting business.

The HEAD of the state's insurance department is called?

director or commissioner

Reinstatement

have 6 MONTHS to reinstated license, satisfy continuing education and pay reinstatement fee.

Cease and Desist Order

if a producer found guilty of the alleged act he or she can be: cease of desist from committing the act or engaging in the practice, fined up to $2500, have license revoked or suspended, or BOTH

Prohibited Inducement

inducements CAN NOT be offered as for purchase of insurance policy or annuity contracts. *PAID employment or service contacts. *PROMISES of RETURNS and profits, stocks, bonds, or other securities *advisory board contracts promising returns and PROFITS

Producer Records maintenance

keep records for FIVE YEARS

Nonresident license

must be in good standing in home state, apply and pay for licenses, provide certified copy of license application from home state to sc director. Home state grants nonresident producer's license.

Change of Address

must notify sc director within 30 DAYS of change. •can be fine $2,500, licenses revoked or suspended., or both.

Certificate of Authority

permits QUALIFIED insurers the right to transact insurance business in SC .

Scope of regulation

regulation APPLIES to ALL NONPUBLIC personal financial and health information about individuals who OBTAIN products or SERVICES from insurers and producers for PERSONAL purposes.

Representing an Unauthorized Insurer

the person if NOT a SURPLUS LINES BEOKER transact insurance in SC in has committed a misdemeanor. • The person will be LIABLE up to the Limit of COVERAGE in the policy. (have to pay)

Penalties for insurer of HMO

up to $15,000 fine( up to $30000 if violation was WILLFUL) SUSPEND or REVOKE authority to transact insurance in SC or Both fine and revoke and suspend

Producer who are convicted of a misdemeanor offense

up to $2,500 fine imprisonment of up to TWO years OR both fine or imprisonment

Penalties for a producer

up to $2500 fine( up to $5000 if violation was WILLFUL) suspend or revoke producers license OR BOTH fine and revoke or suspend license

Non-licensors who transact insurance are guilty of misdemeanor offense that's

up to a $10000 FINE imprisonment of up to TWO years OR both fine or imprisonment

Initial Notice

when COLLECTING or USING NONPUBLIC PERSONAL financial and health INFORMATION, an insurer of producer must INFORM individual about the insurers or producers privacy Policies and practices, inform customer on when they can disclose information, provide methods for customers to PREVENT their information from being DISCLOSED.

Termination of Appointment

when an INSURER TERMINATES a producer's appointment the DIRECTOR must be notified WITHIN 30 DAYS.

Notice of Right to Opt Out Required

when the CUSTOMER chooses to PREVENT their information from being DISCLOSED he or she "OPTS OUT" of the otherwise permissible disclosure.

an insurer must PAY a claim

within 40 BUSINESS DAYS of receiving the claim .