Life and Health Section Ch. 8

Reinstatement:

A lapsed license may be reinstated within one year of the suspe

Business Entity:

A business entity that acts as an insurance producer in any manner (sells, solicits, negotiates, advertises, collects commission) must be licensed in New Jersey.

Reporting of Actions

Producers must report any bankruptcy, felony conviction, or any other administrative action that occurs in New Jersey or another jurisdiction to the Commissioner within 30 days.

Shared Commissions:

A producer may share a commission with another producer when the other producer is licensed in the same line of business.

Reinsurance:

Reinsurance is a contract under which an originating insurer, called the ceding insurer, buys insurance for itself from another insurer called the assuming insurer, with respect to part or all of the insurance of the originating (ceding) insurer.

Continuing Education:

Resident producers must complete 24 hours of continuing education every 2 years to keep their license active. Of those 24 hours required, 3 hours must be in ethics. Nonresident producers are not required to complete New Jersey continuing education requirements as long as their home state requirements are met.

Retrocession:

Retrocession (or retroceding) occurs when a reinsurer accepts too many risks and has to reinsure some of those with another reinsurance company.

Claims

All claims must be reported promptly to the insurer and the insurer must maintain adequate claim files.

Producer Records

All producers shall maintain full and correct transaction records of the business done by them for a period of 5 years.

Insurance Agent:

An insurance agent is an insurance producer authorized by an insurance company to act as its agent to solicit, negotiate, or sell insurance contracts on its behalf or to collect insurance premiums and countersign insurance policies on its behalf.

Insurance Broker:

An insurance broker is an insurance producer who represents the insured (for a fee) and places insurance with an insurance company that he does not represent as an agent.

Assumed Names:

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

____________________ of authority the comissioner will look at all finanial afairs before granting a _________________ of authority to transact business in New Jersey

Certificate of Authority

Controlled Business

Controlled business can be defined as policies written on people that the licensed producer has direct influence over: including family, employers, and/or any company to which the producer has stock control.

Term of Coverage:

Coverage begins when the borrower becomes obligated to the creditor. The maximum term is 5 years.

Deferred Commissions:

Deferred commissions may be paid to a person who sold an insurance policy when the person was a licensed producer at the time of the sale.

Genetic Testing

Individual or group health plans shall not exclude any person or eligible dependent based on actual or expected health conditions on the basis of genetic testing.

Insurance _________________ is a term commonly applied to an agent, broker, personal producing agent or general agent that produces business for the insurer.

Insurance producer

Insurance Producer:

Insurance producer is a term commonly applied to an agent, broker, personal producing agent, or general agent that produces business for the insurer.

False Advertising:

It is an illegal practice to falsely advertise insurance products or services in any way. This includes circulating statements, letters, or statements in newspapers, magazines or other solicitation materials. Insurance advertisements in a local newspaper are regulated by the Department of Banking and Insurance (DOBI).

Defamation:

It is an illegal practice to make any public statement or advertisement that contains false or malicious information or unsubstantiated criticisms about an insurance company.

Misrepresentation:

It is an illegal practice to misrepresent any fact about an insurance policy, such as policy terms, benefits, value, cost, effective date, or existence of a contract of insurance.

Commissions:

It is illegal for an unlicensed person to receive commissions from the sale, solicitation, or negotiation of insurance. However, renewal or deferred commissions are payable to retired producers.

False Financial Statements:

It is illegal to publish any false financial statement regarding a person or entity.

Notice and ________________ any public hearing required should be held by the comissioner shall give notice to the person or entity being investigated and it must be delivered by certified and registerd mail.

Notice and Hearing

Pen________ any comissioner may place on probation, suspend, or refuse or renew an insurance producers license or may levy a penelty up to $5,000 for the first violationa and up to $10,000 for each subsquent violation

Penalties

Records Maintenance:

Producers and insurers must keep full and accurate records of all insurance business in which they are involved. Records must be kept for at least five years.

So________________ The comissioner will suspend the certificate of authority of any insurer that becomes insolvent (inability to pay ones debt), is inefficient with insolvency or is delequent in claim payments

Solvency

__________________ certificate is when a comissionary may issue a temproray certifificate which allows the applicant to begin work when a proper application for a license has been submited, that does not disclose any information that would disqualify the individual

Temporary certificate

License Denial:

The Department shall advise the applicant in writing that the license requested is denied when it appears from an application, renewal form, attached documents or Department records that the qualifications are not demonstrated.

Twisting:

Twisting is the unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation.

Intimidation

is the unfair trade practice of using threat or force to restrict fair trade in the transaction of insurance.

Entire Contract:

provision that the policy and the application shall constitute the entire contract between the parties. All statements made by the policyholder are considered representations.

__________ of Loss written loss of any loss must be given to the insurance comapany withnin 90 days

Proof of loss