Insurance Unit 2
What does the state require for continuing education if you hold a license 6+ years?
20 hours and 5 in ethics
What are the rating services?
A.M. Best Company; S & P; Moody's; Fitch
Agent
Represent the company, has an agent contract; Classified as captive
What does the state require for continuing education if you hold a license for less than 6 years?
24 hours and 5 must be in ethics
What is the grace period in an industrial policy?
4 weeks= 28 days
Independent Agency System
Also known as American Agency System; Sell everything; work with multiple carriers
What is the Safe Guaranty Association?
Association to support insurers to protect consumers if an insurer becomes insolvent and cannot pay
Reinsurer
Assume a portion of the risk from the ceding company; Insure insurers not policy owners or public
A reinsurer is a company that?
Assumes a portion of the risk from another insurers
How are agents classified?
Career, captive and independent
Ceding Company
Company that is transferring the risk.
All of the following methods support the role of insurance through agents and brokers except?
Direct selling System
Stock Insurers
Do not participate in dividends
Personal Producing General Agency (PPGA)
Do not recruit, train or supervise (ex: State Farm)
Domestic Insurers
Doing business in the state in which it was incorporated Ex Florida/Florida
An insurance organized ad headquartered in Florida can be described as what type of company?
Domestic
How do you describe insurance companies and site of incorporation?
Domestic, Foreign, Alien
The Buyers Guide is intended to accomplish all of the following except?t
Ensure that buyers obtain the lowest price possible
Role of conversion
If client has more than one policy they can combine into 1 policy without having to go through underwriting
What are the different types of Home Service Insurers?
Industrial Policy, Debit Policy, Credit Policy
In an insurance transaction license agents legally represent which of the following?
Insurer
Alien
Insurers incorporated in a country other than the U.S Ex: Florida/Canada
How is the safe Guaranty Association funded?
It is funded by insurance companies through assessments
Foreign Insurers
License and doing business in a state other than the state incorporated Ex: Florida/Georgia
Which of the following is not service producer?
Loyd's of London
The head of state office of insurance regulation is responsible for all of the following except?
Making insurance laws
Reciprocal Insurers
Managed by attorney in fact; have no stockholders; owners are the policyholders
Fraternal Benefit Societies
Non-profit; Issue insurance certificate to member
Direct Selling System
Not allowed in Florida unless you have a license
Direct Selling
Not allowed in Florida unless you have a license; Selling policies through ads, no agent or broker is involved
Loyd's of London
Not an insurance company; group of individuals or companies that underwrite insurance
Mutual Insurers
Participate in dvidends
Career Agency System
Recruit, train and supervise; Supervised by a general agent who has a vested right in the business (Ex: AFLAC)
Which of the following statements regarding types of insurers is not correct?
Reinsurers usually deal with group insurance
Broker
Represents the buyer
In addition to the state, the organization that regulates variable life and variable annuities is the?
Securities and Exchange Commission (SEC)
Home Service Insurers
Small policies in the amount of 1,000-2,000; Premiums are collected weekly or monthly by the agent.
The state guarantee association guarantees?
That a claim will be paid if an insurer becomes insolvent
Regarding landmark cases and laws involving the regulation of insurance, which of the following statements is not correct?
The Federal Trade Commission (FTC) directly supervises all insurance marketing activities.
What happens if a company is unable to pay its claims?
The Safe Guaranty Association pay it
What is the NAIC most notable for?
The creation of the Advertising Code and Th Unfair Trade Practice Act
What is grace period?
Time given if a insurer forgets to pay their premium (Usually 30 days)
NAIC National Association of Insurers
To protect insurers not insurance companies
Captive Career Agent
Works for one insurance company and sells only that company policies.
Risk Retention Group (RRG)
mutual insurance company formed to insure people in the same business/occupation (dentist, Doctor)
In Florida properly licensed appointed agents may act as brokers in insurance transactions in which case they may legally represent?
the applicant and the insurer