Missouri Property and Casualty State Laws

Proof of financial responsibility means

$25,000 bodily injury from any one person. $50,000 bodily injury to two or more persons in any one accident. $10,000 property damage.

Guaranty Fund generally provides coverage for resident and nonresident policy holders up to the following amounts:

$300,000 for the death benefit under a life insurance policy. $300,000 for a property or casualty insurance claim. $100,000 for the cash value of an annuity or life policy. $100,000 for unpaid health insurance claims;

The Director may grant a waiver of the mandatory continuing education requirement for _______ for any of the following reasons:

1 year. Serious physical injury or illness. Active duty in the armed services for an extended period of time. Residence outside the United States. The licensee is at least 70 years of age

FAIR Plan offers coverage for

1-4 family dwelling and personal property up to $200,000, commercial property (including 5 family and larger dwellings), business property, farm property and personal property up to $1 million. Crime coverage ($10,000 residential; $15,000 commercial) CRIME IS A RIDER Basic coverage

Any company or individual being examined must provide any requested records within ___ days.

10

written notice must be given for non renewal or cancellation of a Missouri Homeowner policy

10 days for cancellation due to nonpayment of premium. 30 days for cancellation or nonrenewal. The notice must clearly state the reason for cancellation or nonrenewal. The notice shall state the insurer's actual reason for proposing the action. The cancellation notice must state that the insured may be eligible for insurance through the Missouri FAIR Plan.

A Producer who voluntarily relinquishes a license by allowing the license to expire has ___________ from the due date of the renewal fee to reinstate the license without examination.

12 months

After passing the exam, one must apply for a license within

12 months

The Director must give ____ days written notice of hearings regarding rule changes

15

The person is entitled to a public hearing before the Director if a request for a hearing is made in writing to the Director within _____ days.

15

Continuing education ___ hours for Property & Casualty; ___ hours for Life, or Health, or both; ___ hours for a combination of Property and Casualty with Life or Health; ___ hours must cover Missouri law, ethics, and Producer obligations to the Department.

16 hours for Property & Casualty; 16 hours for Life, or Health, or both; 16 hours for a combination of Property and Casualty with Life or Health; 3 hours must cover Missouri law, ethics, and Producer obligations to the Department.

Before approving a Producer application, the Director must verify that the individual

18 years of age, has paid a license fee of $100, has not committed any act that is a ground for denial, suspension or revocation, has passed the appropriate licensing exams

standard fire insurance policy for use in Missouri is declared by the legislature to be the

1943 New York Standard Fire Insurance Policy. And must be used unless the director says otherwise and the policy is at least as favorable

A Producer must pay a renewal fee for each license every

2 years

Every Producer must complete Continuing Education courses every

2 years

How long does a producers license last?

2 years

The business entity must notify the Director of termination of a Producer within ____

20 days

If the Director fails to act on an application with ______________, the application will be deemed approved, unless the applicant has indicated a conviction for a felony or a crime involving moral turpitude

25 working days

Either the Producer or the Insurer must maintain a complete set of transaction records for _________ after policy termination.

3 years

A Producer has only __________ to appeal the suspension, revocation, or nonrenewal

30 days

A Producer must report to the Director within _______ any criminal prosecution for a felony

30 days

If an insurer terminates a Producer's appointment, it must notify the Director within __________ and explain reasons for the termination.

30 days

Insurance Producers must submit premium payments to the Insurer within ________ (unless the parties agree otherwise in writing).

30 days

Producers must notify the Director of an address change within

30 days.

The insurer must register the appointment in the Insurer's "register of appointed Producers" within

30 days.

After taking an application, the Producer must give the applicant written notice within _____: of what?

30 days: If the Producer is unable to secure coverage. If the insurer denies coverage. If coverage has been obtained.

The Director's records of disciplinary action against a Producer must be expunged after ___ years if the action resulted in a penalty of ____ or less

5 200

Within ___ business days after the inspection, a copy of the completed inspection report will be sent promptly to FAIR's Facility. Is the applicant given a copy of inspection report?

5, only on request

The Director must approve or reject any form or rate filing within____ days

60

An individual licensed as a Producer in another state who moves to this state must make application within _________ days of establishing legal residence

90 days

The Director may issue a temporary Producer license to the following persons for _____ days without requiring an examination:

90 days surviving spouse or court-appointed personal representative of a licensed insurance Producer who dies or becomes mentally or physically disabled. To a member or employee of a business entity licensed as an insurance Producer. To the designee of a licensed insurance Producer entering active service in the armed forces of the United States.

A Producer is "_____________" by the Director of Insurance, but after licensing the Producer is "_________" by an insurer(s); the Producer will be "________" by the insurer(s).

A Producer is "licensed" by the Director of Insurance, but after licensing the Producer is "hired" by an insurer(s); the Producer will be "appointed" by the insurer(s).

Proof of financial responsibility may be given by

A certificate of insurance from an Insurance Company. $60,000 surety bond. $60,000 cash deposit and get certificate of deposit submitted to the State Treasurer. Certificate of self-insurance issued by the Director of Revenue showing that you have enough money to pay auto accident claims. A religious group with 25 or more members if the group prohibits buying insurance. Any person or business with more than 25 motor vehicles.

___________________ may split a commission with any property or casualty Producer. Surplus Lines Brokers don't represent any particular insurance companies and thus do not have appointments.

A surplus lines broker

________________________________________ is required to sell property or casualty insurance through a non-admitted insurer.

A surplus lines broker license Surplus lines brokers must pass an examination

Each web site or home page of insurance Producers or insurance companies must contain:

An address and telephone number; and A list of the states in which they are authorized

The following are Unfair Trade Practices

Boycotting in any insurance transaction. *Defamation*, which is making false statements about the financial condition of any *insurer*. Failure to maintain complaint handling procedures. False advertising. False statements made to any public official. Misrepresentations of any insurance policy. *Rebating*, which is paying an inducement (such as stock) to any person to purchase insurance. Unfair discrimination, which is charging different rates or terms for persons of the same risk class. Using a senior-specific certification or professional designation that may mislead a senior client to believe that the Producer has special certification or training in advising seniors (60 or over). Discriminating solely because of age, race, accestory...

commission will be paid to the licensed Producer designated

By applicant

All Insurers doing business in Missouri must obtain a

Certificate of Authority from the Director. Failure to do so is a felony.

The Director may suspend or revoke a Producer license for:

Convicted of a felony or crime involving moral turpitude. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, Untrustworthiness or financial irresponsibility. Having an insurance Producer license, or its equivalent, denied, suspended or revoked in any other state. Didn't pay child support, didn't pay income taxes

It is considered to be discriminatory in Missouri to

Deny maternity benefits to insureds purchasing an individual health policy when comparable family coverage contracts offer maternity benefits. Treat complications of pregnancy differently from any other illness or sickness under a health policy

Each Insurer must file all policies, applications, endorsements, and rates for the

Director's approval.

An insurance license is NOT required to

Dispense brochures and other general information so long as there is no conversation relating to the terms of an insurance contract. Receive and record information from a policyholder to give to an insurance Producer for review and response.

FAIR

Fair Access to Insurance Requirements-provides property insurance as a "last resort" for people unable to obtain property insurance. insures higher risk properties and usually charges a higher premium than normal. Paid out ACV not replacement cost. Can inspect every 5 years. Cant deny coverage because of area. Policies are issued for 1 year

Cancellation of FAIR insurance

Fair will provide written notice of cancellation, 10 days notice will be given for nonpayment of premium, 30 days notice will be given if FAIR has other reasons

The Director may issue a

Fine of up to $1,000 for each unintentional violation, but not to exceed $100,000 in any 12 month period. Fine of up to $25,000 for a flagrantly intentional violation, not to exceed $250,000 in any 12 month period. Order of forfeiture of up to $100 for each intentional violation of the insurance laws. License suspension or revocation.

What does a person in missouri need to get a license and has a suspended one?

Get proof of insurance

if your license has been suspended for failing to meet the financial responsibility requirement they must

Get relicensed and file proof of insurance with the Director of Revenue for 3 years. This is done by a SR-22 filling form that gets signed by insurance company to notify director or revenue that vehicle is insured

"financial responsibility" is required for all auto except:

Government vehicles. Tractors and other vehicles only incidentally operated on public roads. Motorized bicycles

Director of the Department of Insurance is appointed by

Governor, with the advice and consent of the senate.

All property insurers in Missouri are required to be part of

Joint Reinsurance Association" that will pay claims if premiums paid to FAIR are not adequate. If an insurer receives 17% of the dwelling premiums in the normal market, it will be responsible for paying 17% of FAIR's losses.

The person may be represented by a __________ at the hearing.

Lawyer

Bank or trust companies selling insurance products must employ

Licensed products

The two Missouri Guaranty Associations protect Insureds if an insurance company becomes insolvent

Life Health Guaranty Association and Property Casualty Guaranty Association.

Missouri requires the following to be licensed

Life and Annuity Producer (and Variable Life or Annuity Producer); • Accident and Health Producer (Health); • Property Producer; • Casualty Producer; • Personal Lines Producer; • Prepaid Legal Producer; • Limited Lines Credit Producer (no exam required); • Crop Producer; • Limited Lines Travel Producer (no exam required); • Limited Lines Surety Producer; • Title Producer; • Surplus Lines Broker; and • Public Adjuster.

NAIC's suggested 1976 Nationwide Marine Definition specifying that Inland Marine policies may be used to cover:

Marine transportation (transportation on lakes, rivers, and canals), Imports, Exports, Domestic Shipments, Bridges, tunnels and other instrumentalities of transportation and communication, including piers, wharves, docks, slips, dry docks and marine railways, pipelines, power and communication transmission lines, radio and television equipment, Personal property floaters, Commercial property floaters. NOT HOMES even on the beach

If a Financial Planner (etc.) also has a Producer license, the Financial Planner must

Must tell client about the conflict of interest, keep records of financial planning fee in writing for 3 years

e Director of Revenue must furnish each self-insured an insurance identification card containing

Name of the self-insured. The word "self-insured" THIS CARD MUST BE CARRIED IN THE SELF-INSURED MOTOR VEHICLE FOR PRODUCTION UPON DEMAND

Can the insurer ask if the applicant has been denied or cancelled in past?

No

The transaction records which must be maintained by either the Producer or the Insurer must include:

Policy applications, declaration pages, endorsements, riders, or binders associated with the policy. Any written correspondence concerning the policy. Any policy claim documents. Any premium receipts or documents associated with premium payments

The Director can only be involved with an insurance company as a

Policy holder

The Producer license must contain the:

Producer's name, address, and identification number, The date of issuance, The lines of authority, The license expiration date NOT phone number or years of experience

Director has full power and authority to

Regulate the Department of Insurance, Interpret laws, Examine records of insurer, examine the insurer's records every 5 years, determine solvency, Bring suit in Circuit Court to enjoin any illegal act, enforce compliance with the laws, administratively subpoena documents and witnesses in any investigation

Who may examine the affairs of any person or organization involved in an insurance transaction?

The Director or the Chief Examiner

A Producer cannot obtain a loan from a client unless

The client is in the business of providing loans (banker). There is an insurable interest relationship between the client and the Producer (a loan from a family member is permitted).

A nonresident may receive a nonresident Producer license without taking the licensing examination if

The person is currently licensed and is in good standing in the home state. The home state will reciprocate by giving nonresident Producer licenses to Missouri Producers. The nonresident Producer has satisfied the continuing education requirements of the person's home state.

The following do not take the exam and do not get an appointment letter

Third Party Administrators (administrators) who manage health plans, and Adjusters (who represent an insurance company).

Binder premium charge

Used if a binder is not replaced by a policy. A binder premium charge must be made which does not exceed the pro rata amount of premium which would have been applicable had a policy been issued. not required if the charge is $20 or less.

FAIR Plan excludes the following properties

Vacant property (Property that is essentially unoccupied (70% commercial, 50% dwelling). Property that is in a severe state of disrepair or in a state of poor housekeeping. Property with unrepaired damage from prior losses. Property where the applicant has had an unsatisfactory loss history. Property in violation of law or public policy. Property with unsafe heating or wiring. Farm equipment, crops, or livestock (but farm buildings are covered)

FAIR will assign each Producer an ________________________ for ____________________. Commissions under the FAIR program are:

account number for paying commissions. 12% for new business and 10% for renewal business. 14% for new crime policies, 12% for crime renewals.

Neither the Producer nor a member of the Producer's immediate family may be a beneficiary or acquire any ownership interest in client's policy unless

an insurable interest relationship exists (such as with a spouse or other family member)

When a policy is issued to replace a binder, the Insurer must

back-date coverage to the date the binder became effective.

A Producer's license must be renewed

biennially on the anniversary date of issuance.

The company's register of appointed Producers must be open to examination

by the Director. (Usually done electronically)

The Director may issue __________________________ to any insurance company or person violating the law.

cease and desist orders

The following business entities may obtain a Producer's license

corporation, partnership, limited liability company, limited liability partnership, limited partnership. NOT sole proprietorship

Deemer Provision

coverage will be "deemed" effective 20 days after application if: application includes the estimated annual premium payment. Fair Facility does not respond to the application by offering or denying coverage within the 20 day period.

If a member insurer is broke, the Guaranty Association may The Guaranty Association will not pay claims for

guarantee the impaired insurer's debts, loan money to the impaired insurer, provide the money to pay the claims. a nonresident policy holder where the debt is covered by a Guaranty Association in the Insured's home state.

The County Circuit Court may

hold the person in contempt; order the person to appear before the Director; order the person to testify; order the production of records; grant injunctive relief; or impose a civil penalty of up to $50,000 for each violation

If it is the Insurer's responsibility to maintain these records, this must be specified

in a written document, a copy of which must be retained by the Producer.

Premium cash payment premium receipt must bear the words "Receipt" or "Premium Receipt" and must include the following:

insurance Producer must give a written receipt must be signed by the Producer and given to the client. Copy of the premium receipt must be kept by the Producer. The name of the insured/ insurer. The date. The amount of the cash payment. The policy number or description of the policy or a comment that a policy/insurer has not yet been selected. The signature of either the Producer or the Producer's employee with written authorization to accept premiums.

Each Insurer must provide Insureds with an ______ _________ card containing

insurance identification. name of Insured. name and address of the Insurer, policy number, effective dates of the policy, including month, day and year, description of the Insured motor vehicle, including year and make or at least five digits of the autos ID number or the word "Fleet" if the insurance policy covers five or more motor vehicles. "THIS CARD MUST BE CARRIED IN THE INSURED MOTOR VEHICLE FOR PRODUCTION UPON DEMAND."

A producer's appointment letter may be revoked by the

insurer

If we make a false statement or false entry in the books then:

is a level four violation which allows the Director to impose a civil order to pay $10,000 per violation, up to an aggregate civil penalty of $250,000 per annum (year) for multiple violations. is a class D felony for which the court must order the Department to revoke the offender's license or company's certificate of authority

Guaranty Associations can

make assessments

Can producers make binders for the FAIR plan?

no, any applicant can request an inspection by FAIR's inspection bureau

All Missouri property insurers agree to

participate in the Plan. pay a proportional assessment if the FAIR Plans premiums are insufficient to pay claims and expenses. undertake a continuing public education program to assure that the FAIR Plan receives adequate public attention

Insurers must keep records of

policies for 2 years, claims for 3 years, complaints for 3 years

The following courses will not be approved by the Director for continuing education

prospecting, motivation, sales. marketing techniques, psychology, recruiting. office skills or management training

If a motor vehicle owner has not maintained financial responsibility, the Director of Revenue must

provide 33 days written notice, and then suspend the owner's driver's license privilege

The Director must give _______________ before suspending, revoking, or refusing to issue or renew a license.

public notice

Cant use a binder to. time limit of binder?

put in place of policy to lower price. has no time limit

The Director may order

restitution from the "Consumer Restitution Fund" established to distribute to aggrieved consumers funds obtained through the Director's enforcement proceedings.

All premiums received by a Producer must be kept in a

separate checking account (called a trust, escrow, or fiduciary account) separate from the office or personal savings or checking accounts. The Producer is not required to have a separate trust account for each client.

Homeowner insurer cant refuse to write policy because:

solely discrimination (but can if its actuarially sound if sex, age, living area), solely because another insurer has denied them coverage

If a person does not testify or otherwise comply with the Director's subpoena, the Director may

suspend or revoke the producer's license or company's certificate of authority. Apply to the *County Circuit Court* to enforce compliance with the subpoena.

An Insurer cannot use a "retrospective commission contract" under which

the Insurer receives an agreed portion of its earned premium free from any obligation to pay claims. the Producer is required to pay all claims and keep as a commission only the net funds not paid as claims.

It is illegal for a Producer to charge a fee to a client unless:

the Producer and client have a written agreement clearly specifying the details of the extra charge

Copies of all Producer's commission agreements must be kept by both

the insurance company and the Producer for three 3 years.

National Association of Insurance Commissioners (NAIC)

writes rules and statutes for legeslature