Life insurance chp 5

The violation of a cease and desist order may result in a fine of....

$10000

When fulfilling a premium loan request, an insurer must provide a policyowner with:

1. A notice regarding the interest rate at the time a cash loan is made 2. A notice specifying the interest rate and frequency of rate determination 3. Advance notice of interest rate increases

2 types of licenses:

1. Individuals- resident and nonresident 2. Temporary license- valid for 6 months, issued to maintain the existing business

Maintenance and duration licensing requirements:

1. Must be renewed every 2 years 2. Continuing education- must be completed every reporting period 3. Disciplinary actions

All life insurance policies that allow for policy loans must contain at least one off the interest rate provisions, which Are:

1. Rate of interest on policy loans is not to exceed 8% per annum 2. The Max policy loan interest rate is adjustable

When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for:

3 years

How many years must insurers keep filled off all advertisements used in Georgia

4 years

What are the most common penalties for violations of insurance statutes

A cease and desist order, A fine, and license suspension or revocation

What is the closest term to an authorized insurer

Admitted

Who must a member of insurance guaranty associations

All insurers authorized to write insurance within a state

Who is considered a non resident agent

An agent who resides and is licensed in another state but who is authorized to transact insurance in this state

Insurer who has received a certificate of authority from the department of insurance to transact insurance in this state

Authorized insurer

If an insurer holds a certificate of authority, it is known as what type of insurer

Authorized or admitted

If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer

Authorized or admitted

What type of licensee represents the insured

Broker

To stop our

Cease and desist

If the commissioner/superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued

Cease and desist order

What document is required for an insurance company to transact insurance

Certificate of authority

Defined as replacing insurance policies for the sole purpose of making commissions

Churning

Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium

Commission

The head of the state department of insurance

Commissioner

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

Complete continuing education hours and post a renewal fee

The act of trying to discourage a policy holder from dropping their existing policy is called

Conservation effort

If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

Defamation

Revealed info to help someone make an intelligent and educated decision

Disclosure

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

Insurers see classified according to the domicile. What are three types of insurers

Domestic, foreign, and alien

Refers to location where an insurer is incorporated, not necessarily where the insurer conducts business

Domicile

Authority granted to an agent through the agents contract is referred to as

Express authority

Based upon trust and confidence, when handling the financial affairs of their customers

Fiduciary capacity

For what reason can a temporary license be issued

For continuation of business in case the licensed producer dies or becomes disabled

Insurer headquarters, principals place of business

Home office

An offer that attempts to influence the other party

Inducement

Unable to meet financial obligations

Insolvent

In general, who can be excluded from producers licensing and examination requirements

Insurance company officers, directors, or any other employees who don't trust insurance and who don't receive commissions for their services

What is a controlled business

Insurance on the producers own life or property, or the lives or property of the producers family or business associates

In the agent/insurer relationship, who is considered the principal

Insurer

Operate an insurance mechanism, in which my renters are liable only for their portion of risk

Lloyds associations

Oh it's advertisement, a company claims that it has funds in its possession that are not available for the payment of losses or claims. What is the company guilty of?

Misrepresentation

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is

Misrepresentation

Conduct that is contrary to community standards of justice, honesty, or good morals

Moral turpitude

Can insurers advertise protection by the insurance guaranty association

No they can't

Benefits of a life insurance policy that the policyowner doesn't forfeit even if the policy lapses

Non forfeiture values

Who may share in the commission from the sale of a life insurance policy

Only producers properly licensed for the type of insurance transaction

Who is an insurance agent

Person authorized to sell, solicit and negotiate insurance contracts

What grants authority to an agent through the agent

Principal

who can usually be granted a temporary license

Producers spouse of designee in case the licensed producer dies or becomes disabled

To make public, to put into action

Promulgate

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

Rebating

A mutual interchange of rights and privileges

Reciprocity

When a nonresident agent may receive a nonresident licensee if they reside in a state that awards nonresident agent license to residents of Georgia on the same basis

Reciprocity agreement

A formal written law enacted by legislature; insurance statutes can be found in the state insurance code

Statute

Who owns stock companies

Stockholders

Insurance not available from authorized insurers; placed with nonadmitted insurers who specialize in offering insurance to the high risk market

Surplus lines

What type of license represents the insurance company

The agent

Who is responsible for determining whether an advertisement might mislead or decide a pest on oof average education and intelligence

The commissioner

Who must be notified of a producers change of address

The department of insurance

Who is responsible for the contents of insurance advertisements

The insurance company

Who is responsible for the contents of life insurance advertising

The insurer

Who is responsible for the costs associated with the examination of insurers

The insurer who of being examined

To whom may a certificate of authority be issued

To an insurer authorized to transact business in this state

What is the purpose of a cease and desist order

To prevent a producer or insurer from further violation laws for transacting

What is the purpose of insurance guaranty associations

To protect policyowner, insurers and beneficiaries from financial losses caused by insolvent insurers

What type of misrepresentation persuaded an insured, to cancel, lapse, or Swift policies from one to another

Twisting

When is controlled business legal

When the commissions from controlled business do not exceed the aggregate commissions on all other business

When can the commissioner or director examine insurers

Whenever necessary, but at least once every few years