L&H: Insurance Regulation
90 days
A licensed producer moving to PA may become licensed as resident if the producer submits a completed application within how many days of establishing residence in PA w/ proof of licensing from their prior home state?
Incorrect Statement
A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation, or negotiation of a contract of insurance for commercial business
24 hours to current, 24 hours to period immediately following
A producer completed 52 hours of cont edu. How many hours can a producer apply to her current reporting period, how many hours can she carry to the next reporting period
30 days
A producer licensed in PA must notify the Insu Dept of any change in address w/in how many days?
Reciprocity
A producer licensed in another state wants to become a producer in PA. The other state gives the same privileges to PA producers wanting to be licensed in that state as it does its own agents. PA, therefore extends the privileges of its agents to the prospective agent of the other state. What is this called?
All (bc licensed at time of sale)
A producer sold an insu policy. His license was suspended. In this case, how much of the commission will the producer receive
Considered an Unfair Claims Settlement Practice
Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Unfair Claims Settlement Practice
Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently offered
Twisting
Agents who persuade insured to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
Third-degree misdemeanor and $1,000 fine
An individual caught acting as an exclusive general agent- even tho he is not licensed. Assuming this occurred in a single day, what is max penalty
Illegal
An insurer devised an intimidation strategy in order to corner a large portion of the insu market. What describes this process?
10 years
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insu may be imprisoned for up to
Commissioner
Authorities allowed to issue temporary insurance producer's license
Dept of Insurance
Authorities monitors the financial strength of insurers?
False Advertising
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
$5,000
Civil Penalty for the first violation of the PA Insurance Fraud Prevention Act?
$10,000
Civil penalty for violating a cease and desist order of the Commissioner
Appointed by governor
Commissioner of Insurance is placed in office by which means
Cease and Desist Order
Commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would offer the person to stop committing the act of violation?
24 hours each licensing period
Continuing Edu required for those holding a PA producer license
Telling a client that his first premium will be waived if he purchases the insu policy today
Ex of producer being involved in unfair trade practice of rebating
Calls not commercial or don't include unsolicited ads Calls by or on behalf of tax-exempt nonprofits Calls for which the consumer has given prior written permission
Exceptions (not included) in National Do Not Call List
Ex of Unfair Claims Settlement Practice
Failure to promptly settle a claim when liability has been clearly established
W/o receiving written consent from an insurance regulatory authority
Fed law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insu affect interstate commerce
Protect private customer info filed w/ a financial institution
Gramm-Leach-Bliley Act was passed to
180 days
How long does temporary producer's license last for the surviving spouse of a deceased producer?
3 days
How many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained
Every 5 years
How often must the Commissioner examine rating organizations?
Within 30 days
How soon after the due date should the insurer pay the agent appointment fees?
5 days
If a consumer requests additional info concerning an Investigative Consumer Report , how long does the insurer or reporting agency have to comply
Dept of Insu
If an insurer appoints a producer, which authority must be notified
The Licensee
If another gov agency takes legal action against a licensee, who reports the action?
Change reported to Commissioner
If licensee wants to transact insu under a diff name than that listed on his/her producer's license, what must occur?
Offering benefit certifications or securities in return for purchasing insu Issuing or delivering insu company stock in return for purchasing insurance Promising returns and profits from the purchase of insu
Illegal inducements in marketing insurance
The consumer's associates, friends, and neighbors provide the report's data
In comparison to consumer reports, what is a unique characteristic of investigative consumer reports
Consumer Report
Includes info regarding a person's credit, character, reputation, and habits
Representative of the consumer
Insurance producers that do not have company appointments are considered a/an
Misrepresentation
Issuing sales material w/ exaggerated statements about policy benefits
90
Licensed producer moving to PA may become licensed as a resident if the producer submits a completed application w/in how many days of establishing residence in PA w/ proof of licensing from their prior home state
Producer
Licensees is classified as a representative of the insu company and not allowed to represent and insured or claimant?
30 days
Licensees must make a report of any action taken against them in another jurisdiction or by another gov agency in PA w/in how many days of the final disposition of the matter
General fitness, competence, and reliability Maintaining on staff at least 1 person in good standing Applying for a license in the same lines of authority as held by licensed designees
Licensing requirements for a business entity
$2,500
Max penalty for habitual willful noncompliance w/ the Fair Credit Reporting Act
$100
Maximum allowed value of a gift that an agent can give to an insured w/o violating regulation of rebating
18
Minimum age for obtaining producer's license in this state
Explaining to the client the advantages of permanent insu over term and suggesting changing policies
NOT Twisting actions
Suggesting negotiations in settling the claim
NOT Unfair Claims Settlement Practices
Only written statements are fraud
NOT correct regarding false statements by a person engaging in the business of insu
Inviting prospective clients to the grand opening of the company's new office
NOT illegal inducements in marketing insurance
Telemarketers
National Do Not Call Registry was created to regulate
Having all emps complete cont edu courses once every 2 yrs
Not a licensing requirement of business entity
Dividends from mutual insurer
Not a rebate offered to insured in sale of insu
Calls based outside of United States
Not considered an exception (included) in National Do Not Call List
giving a client a $50 pen w/ the insurer's logo during the insu application process
Not rebating
$5,000 for each violation
Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the Dept may impose a civil penalty of
be responsible for at least 25% of total commissions collected by officer that they manage
Person applying for a manager or exclusive general agent license must NOT
Sufficiently fit, competent, and reliable by Dept of Insu Have paid all applicable fees Have authority to act on insurer's behalf
Person applying for a manager or exclusive general agent license must meet the following criteria
Fiduciary capacity refers to a producer's
Position of financial trust to clients and insu company
24 credit hours
Prior to license renewal, all insurance producers must successfully complete how many hours of cont edu
Issue policies
Producer does not have authority to
Producer's fiduciary responsibilities
Producer forwarding premiums to insu company
Deliver policies Solicit insu contracts Negotiate contracts of insu
Producer has authority to
Biennially
Producer's licensed must be renewed
Fair Credit Reporting Act
Protects consumers against circulation of inaccurate or obsolete personal or financial information
Offer of emp Stocks, securities, or bonds Offer to share in commissions generated by the sale
Rebates if offered to insured in sale of insur
Federal Fair Credit Reporting Act
Regulates consumer reports
Salaried emp who advertises and solicits insu
Required to be licensed as an insurance provider
Fiduciary Responsibility
Requirement that an agent not co-mingle insu monies with their own funds is known as
Appointing Insurer
Responsible for paying producer appointment fees
Unfair claim methods and practices regulations
Should an insu company deny a claim submitted by an insured w/o providing to that insured a prompt and reasonable explanation of the claim denial, the insured would be in violation of
Committing any misdemeanor
State Insu Code identifies all of the following as prohibited acts that can cause suspension, revocation or denial of an insu producer license EXCEPT
8am until 9pm
Telemarketing hours
Misappropriation of funds
Term used when a person in a fiduciary position has used assets in a manner for which they were not intended such as the wrongful taking or use of money belonging to another
10 days
To avoid violations of Unfair Claims Settlement Regulations, insurers are required to acknowledge the receipt of a claim w/in how many days
10 days
To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim w/in how many days
Misrepresenting terms and conditions of existing policy to make new one more attractive Embellishing the terms of proposed policy in order to convince the insured to switch Making an incomplete comparison btwn the existing and proposed policies
Twisting actions
Respond to consumer's complaint
Under Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must
Must be informed of the source of the report
Under Fair Credit Reporting Act, individuals rejected for insurance due to info contained in a consumer report
If consumer does not sign and return notice of disclosure w/in 30 days
Under which circumstance can financial institutions share insurance coverage info w/ third parties, for purpose of soliciting the purchase of insu?
Refusing to pay claims w/o conducting a reasonable investigation Failing to acknowledge pertinent communication pertaining to a claim Failing to adopt and implement reasonable standards for settling claims
Unfair Claims Settlement Practices
30 days
When a producer holding a certification or broker's license has a change in his/her residence or business address, he/she must notify the Dept of Insu and any company for which the producer holds the appointment w/in
30 days
Within how many days must a producer respond to an inquiry from the Commissioner?