Insurance Regulations - Life Insurance

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

A cease and desist order A fine License suspension or revocation

The term illustration in a life insurance policy refers to

A presentation of nonguaranteed elements of a policy

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice Though illegal to advertise, the statement is still true and would not be considered a misrepresentation

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

The Washington Insurance Code regulation regarding policy replacement applies to which of the following types of transactions?

Immediate annuity contract

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)

Insurance contracts are agreements between which two parties

Insurer and policyowner For a consideration(the premium payment), the insurer agrees to indemnify the insured for losses resulting from specific causes

An insurer must pay interest on death benefits payable under the terms of a life insurance policy

Insuring the life of any person who was a resident of this state at the time of death

Group life insurance policies delivered in this state must contain all of the following provisions EXCEPT

Statements of the applicant are considered warranties

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association. It is illegal for insurers to state that their policies are guaranteed by the existence of a Guaranty Association

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in this state.

What type of licensee represents the insured?

broker

Twisting(life insurance)

the act of inducing or attempting to induce a policy owner to drop an existing life insurance policy and to take another policy that is substantially the same kind by using misrepresentations or incomplete comparisons of the advantages and disadvantages of the two policies.

When can the Commissioner or Director examine insurers?

The commissioner shall so examine each insurer holding a certificate of authority or certificate of registration not less frequently than every five years.

On its advertisement, a 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 for the type of insurance transaction

A producer has established a separate account for premiums collected on life insurance policies sold by the producer. Who is entitled to the interest earned on the deposits in the separate account?

Producer The separate account may be interest-bearing and interest earned on the deposits held in the separate account may be retained by the producer.

Who can be granted a temporary license and for how long?

Producer's spouse or designee in case the licensed producer dies or becomes disabled. The temporary license is valid for a period of 180 days and may be renewed for one additional 180-day period.

The purpose of insurance regulation is to

Promote the public welfare.

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

The department of Insurance. (commissioner/director/superintendent)

Rebating

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

What 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

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

Complete continuing hours and pay a renewal fee.

Which of the following would pay covered claims when an insurance company becomes insolvent?

Guaranty Association

A producer is selling a client a Variable Life Insurance policy and as an inducement shows the client a projection based upon shares or dividends paid on a similar policy. This is

Misrepresentation - This is a misrepresentation and a violation of insurance regulations defined by the Insurance Code

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

Rebating

Business entities must provide a list of all individual licensees authorized to represent it to

The Commissioner

Business entities must provide a list of all individual licensees authorized to represent it to

The Commissioner - Business entities must provide the Commissioner a list of all individual licensees authorized to represent the business entity

What protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

What type of licensee represents the insurance company?

The agent

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

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

Authorized or Admitted