Section 1 Law
Indiana Property and Casualty Insurance Guaranty Association
The purpose of establishing an insurance guaranty association is to provide a mechanism for the payment of claims under certain insurance policies to avoid excessive delay in payment and to avoid excessive financial loss to claimants or policyholders because of the insolvency of an insure, to assist in the detection and prevention of the insurer insolvencies, and to provide and association to assess the cost of this protection among insurers .
Failure To Report Address Change Within 30 days they can fine you $1,000
A licensee must inform the Commissioner of a change of address not more than 30 days after the change of address by any means acceptable to the Commissioner. The failure of licensee to timely inform the Commissioner of a change in legal name or address shall result in a penalty.
Boycott, Coercion, and Intimidations
It is illegal to enter into any agreement to commit an act of boycott, coercion, or intimidation that result in an unreasonable restraint of or a monopoly in the insurance business. Coercion - is the act of forcing a person to buy insurance from a specific producer or insurer. Boycott - is the act of forcing someone to buy insurance from anyone other than a specific producer or insurer
Sircon (Sircon Ce Tracking)
SIRCON is a service for producers that provides Web-based license applications, license renewals, letters of certification, name, and address change. The service helps producers meet state requirements for timely and complete applications, filings, and continuing education credits, and tracks the producers' compliance with these requirements.
Cease And Desist Order
The Commissioner can issue a cease and desist order if, after a hearing, the Commissioner believes the person charged has engaged in any unfair method or competition or unfair trade practice. 1. Any person who violates a cease and desist order may, after notice and hearing be fined up to $25,000 for each violation, as well as have his license or certificate of authority suspended or revoked 2. Any person found by the Commissioner to be in violation may ask for judicial review of any cease and desist order.
Guaranty Association Pay
100,000 per person 300,000 per claim
Penalties 1 year in jail $5,000 fine if it was criminal
If, after a hearing, the Commissioner determines that an insurer or other engaged person engaged in any unfair method of competition, any deceptive act or practice, or any unfair claim settlement method as defined by the Code, the Commissioner may, in addition to a cease and desist order, impose - a fine of not more than $25,000 for each act or violation - a fine of not more than $50,000 for each act or violation if the person new or reasonably should have known that he was in violation - suspension or revocation of the person license or certificate of authority if he knew or reasonably should have know that he was in violation
Non Payment Of Child Support or Income Taxes Being behind in child support $200,000 or 3 months past due.
In determining if a person has failed to pay child support or state income tax payments, the Commissioner may check public records, including tax warrant lists, and take appropriate action base on an individuals appearance on such lists. If a court finds that a person who holds or is an applicant for a producers license is delinquent as a result of intentional violation of an order for child support, the court will issue an order to the Commissioner requiring that the person's license be suspended until further court order or that the license be denied or not renewed.
Certificate of Authority
Is an insurers license to transact insurance business in Indiana. An insurer may not conduct insurance business in Indiana without first receiving a certificate of authority from the Commissioner that sets forth the type of insurance the company is authorized to write.
Unfair Claims Settlement Practices
Indiana law protects insurance consumers by clearly identifying certain illegal claims settlement practices. - misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue - failing to acknowledge and act reasonable promptly on communications with respect to claims arising under insurance polices. - failing to adopt and implement reasonable standards for investigating claims - refusing to pay claims without conducting a reasonable investigation based on available information - failing to affirm or deny coverage within a reasonable time after a proof-of-loss statement has been filed. - not attempting in good faith to effect a prompt, fair, and equitable settlement after liability has become reasonably clear. - compelling insureds to institute legal action to recover amounts due under insurance policies - attempting to settle a claim for an amount less than a reasonable person - attempting to settle a claim based on an application that was altered without the knowledge or consent of the insured -making claims payments that are not accompanied by a statement explaining the coverage under with the payment is being made - making known a policy of appealing arbitration awards in favor or insured or claimants in an effort to compel insureds or claimants to accept settlements or compromises less that the amount awarded arbitration - delaying the investigation or payment of claims by requiring and insured to submit duplicate forms that contain substantially the same information - failing to promptly settle claims where liability is reasonably clear under a portion of a policy to influence settlements under other portions of the policy - failing to promptly provide reasonable explanation of the basis for denial of a claim or offer of a compromise settlement - ascribing a percentage of fault to a person seeking to recover from an insured person despite a lack of fault on the part of that person.
Defamation
Making oral or written statements that are false, maliciously critical, or derogatory of the financial condition of an insurer or are intended to injure anyone in the insurance business is know as defamation and is illegal
Hours Of Con Ed Limited Lines Producer Needs
Must complete 5 hours of Con Ed for limited Lines
Controlled Business Cannot be more than 25% of your Commission
The Commissioner may not grant, renew, continue, or permit to continue any license that is being used or will be used for purpose of writing controlled business - is written on the interest of the : a. applicant or licensee b applicant's or licensee's immediate family c applicant's or licensee's employer - includes an insurance contract covering a. the applicant o r licensee b members of the applicant's or licensee's immediate family c either a corporation, limited liability company, association , or partnerships( or the officers, partners, members, managers, etc of such organization) if the applicant or licensee or a member of the applicant's or licensee's immediate family is an officer, director, substantial shareholder, partner, member, management, associate, or employee of the organization - to determine if an applicant or licensee has violated the controlled business provision, the Commissioner will determine fi the commission eared on controlled business is more than 25%of the aggregate commission eared on all business written during the same period.
Privacy and Consumer Information
All insurers, producers, and other licensees must provide and initial privacy notice to potential customers before they disclose any nonpublic person information about customers to a nonaffiliated third party. The notice must be given at the time the licensee and customer establish a customer relationship
Unfair Discrimination
In Indiana, it's illegal to: - discriminate between individuals of the same class and equal expectations of life in rates or assessments in the benefit's payable - discrimination between individuals of the same class involving essentially the same hazards in the amount of premium, policy fees, assessments, or rates, charged in the benefits payable - charge excessive or inadequate premiums, policy fees, assessments, or rates or make a permit any unfair discrimination between persons of the same class involving essentially the same hazard
Rebating
Nothing of value may be given to a prospective insurance applicant to induce the purchase of a policy. - Illegal inducements to buy described by the Insurance Code a) offering to rebate part of the commission earned on the sale of the policy b) paying or offering to pay any part of the premium of a policy c) promising to provide a special favor or advantage in the dividend or other benefits received under a policy d) offering anything of value to specified in the contract, including the offer of employment, shares of stock or other securities in agent's corporation, or any merchandise possessing more than incidental value. - A rebate can take many forms. In general, it is something of real value to the recipient. A plastic ballpoint pen with the insurers logo on it given after the completion of a questionnaire would not be considered an illegal inducement. A fine leather portfolio with the insurers logo stamped on it, promised to a prospect if he completes an application , would probably be considered an illegal inducement. However it is not considered rebating for an insurance company to: a) pay bonuses fairly to all nonparticipating policyholders out of surplus, provided it is in the best interests of the policyholders and the company(as when owners of participating policies receive policy dividends out of an insurers surplus, a common occurrence) b) readjust group premium rates based on the current year's loss or expense experience.
How Long Licenses Are Issued For Hours Of Con Ed Need Completed
An insurance producer license remains in effect unless revoked or suspended, as long as the applicable renewal fees are paid and the continuing education requirement is met before the renewal date. 1.Licenses are issued for 2 years and require 24 hour continuing education requirement. Could be 2 years 20 hours A. Insurance consultant, producer, limited lines producer, and surplus lines producer renewal fees are paid every 2 years.
Prohibited Commission
An insurance producer may not receive compensation for the sale, solicitation, negotiation, or renewal of any insurance policy issued to any person or entity for whom the insurance producer, for a fee, acts as a consultant for that policy unless the insurance producer - provides to the insured a written agreement - discloses to the insured the following information before the sale, solicitation, negotiation, or renewal of any policy a. fact that the insurance producer will receive compensation for the sale of the policy b the method of compensation
Business Entity License Suspended or Revoked
The license of a business entity ( corporation, association, , limited liability company, limited liability partnership or another legal entity) may be suspended, revoked, or refused if the Commissioner finds after a hearing that a violation of an individual licensee acting on behalf of the entity was known or should have been known by one or more of the partners, officers, or managers of the entity and the violation was not reported to the Commissioner and no corrective action was taken. 1) Upon request, a licensed insurance producer must, within 10 days furnish the Commissioner with a listing of each insurer with which the licensee has held an appointment during the previous year. Failure to comply may result in suspicion of the producers license. 2) The Commissioner must notify both the licensee and all appointing insurers of any suspension, revocation, or termination of a license by the Commissioner under this section.
Obligations Of A consultant
An individual or corporation man not currently hold a consultant license and an insurance producer's license, surplus lines producer's license, or limited lines producer's license at any time. 1. A licensed consultant may not employ, be employed by, be in partnership with, or receive any remuneration whatsoever from a license insurance agency, or limited lines producer or insurer, except for providing consulting services. 2. A consultant is obligated under the consultant's license to: - serve with objectivity and complete loyalty to the insurance interests of the consultant's client's insurance needs and interests.
Examination of Books and Records
The Commissioner has the power to examine the affairs of any person engaged in the insurance business in Indiana to determine whether that person has engaged in any unfair method of competition or any deceptive act 1) The Commissioner may also examine the affairs of any insurer doing business in Indiana A) An examination will be conducted whenever the Commissioner feels it is necessary, but all insurers must be examined at least once every 5 years B) The Commissioner or the assigned examiner is allowed free access to the books and documents relating to the insurer's business and may subpoena witnesses and administer oaths during and investigation. 2) When deciding the nature, scope, and frequency of examinations, the Commissioner an consider matters such as the insurer's financial statement analyses and rations, changes in management or ownership, actuarial opinions, and the reports of independent certified public accountants, among other things 3) In lieu of an examination under this chapter of any foreign or alien issuer licensed in Indiana, the Commissioner may accept an examination report on such company, as prepared by the insurance department of the company's state of domicile or port-of-entry state if: - the insurance department that prepared the report was at the time of the examination accredited under the NAIC Financial Regulations Standards and Accreditations Program - the examination performed with the participation of one or more examiners who are employed by an accredited state of insurance department and who state, under oath, that examination was performed in a manner consistent with the standards and procedures required by their insurance department.
Commissioner Must Verify Before Approving a License
- at least 18 - has not committed any act that is a ground for denial, suspension, or revocation of license under Indiana Law - has completed, if required a certified prelicensing course of study for lines of authority for which the individual has applied - has paid the applicable fee - has passed the examinations for the lines of authority for which the individual applied
Reason's License Can Be Suspended, Revoked, or Refused
- providing incorrect or misleading, incomplete, or materially untrue information in a license application. - violating an insurance law, regulation, subpoena of Insurance Commissioner of Indiana or any other state - obtaining or attempting to obtain a license through misrepresentation or fraud - improperly withholding, misappropriating, or converting any monies or property received in the course of doing insurance business - intentionally misrepresenting the terms of an actual or proposed insurance contract or application of insurance - having been convicted of a felony - admitting to having committed or being found to have committed any unfair trade practice or fraud in the business of insurance - using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in Indiana or any other state - having an insurance producer license or its equivalent denied, suspended, or revoked in any other state, province, district, or territory - forgoing another's name to an application for insurance or to any document related to an insurance transaction. - improperly using notes or any other reference material to complete an examination for and insurance license - knowingly accepting insurance business from an individual who is not licensed. - failing to comply with an administrative or court order imposing child support obligations. - failing to pay state income tax or to comply with any administrative or court order directing payment of state income tax - failing to satisfy the continuing education requirement - becoming a beneficiary or owner of a life insurance policy when there is no insurable interest in the life insure - failing to timely inform the Commissioner of a change in legal name or address
Fair Credit Reporting Act
Requires consumer reporting agencies to adopt reasonable procedures for exchanging information on credit, personnel, insurance, and other subjects in a manner that a fair and equitable to the consumer with respect to the confidentiality, accuracy, relevancy, and the proper use of this information: - Reports on consumers prohibited unless the consumer is made aware that an investigative consumer report may be made, which may contain information about the person's character, reputation, person characteristics, and lifestyle. This notice must be given to the consumer no later than 3 days after a report requested. - a consumer may make a written request for a complete disclosure of the nature and scope of the investigation underlying the report. Disclosure must be made in writing within 5 days after the date on which the consumers request was received.
Commissioners Duties 1 out of every 5 years examines, runs audits, watches for insurance company bankruptcy
The Commissioner of Insurance is appointed by the governor and must posses knowledge of the subject of insurance and be skilled in matters pertaining to insurance, regardless of political beliefs or affiliations A) The Commissioner must post a bond of $50,000 to cover the performance of his duties and has immunity from individual liability. Commissioners Duties include: - conducting an examination of every insurer at least once every five years or as often as the Commissioner deems appropriate - maintaining records that insurers are required by and the law to file, including a statement of the condition of any insurer examined by the Commissioner - maintaining records that demonstrate that an authorized insurer is conducting insurance in a safe and prudent manner and is in a safe and solvent condition. - examining applications for licenses and certificates of authority and issuing or refusing to issue such license or certificate - investigating possible violations of insurance laws and presenting the findings to other interested parties. preparing an annual report for the governor and the general assembly that describes the performance of the Department and the Commissioner - overseeing the insurance business in Indiana to ensure that it is conducted in accordance with state law and in the best interest of the public - revoking or suspend any certificate of authority when any condition warrants this action by law. - transmitting taxes and fees collect by the Department to the appropriate state authority administering the affairs of any company that is in rehabilitation, liquidation, conservation, or dissolution B. The Commissioner can hire employees to help carry out these duties C. The Commissioner is authorized to attend and participate in the meetings of National Convention Insurance Commissioners (NAIC). If he deems it advisable, he may request the attorney general or a deputy attorney general to attend and participate in such meetings with him. He and his deputies, actuaries, assistants, and attorneys will aid in promoting improvements in the insurance laws and their uniformity in the several states.
Misrepresentation and False Advertising
Those transacting insurance business are expect to honestly represent their policies and the policies against which they compete. Misrepresenting or false advertising of a policy or company is illegal. Producers and their representatives are prohibited from making , issuing, circulating, or using any written oral statement that: - misrepresents the terms of or benefits provided by an insurance policy - misrepresents or makes false statements about the dividends or share of surplus to be received under any insurance policy - misrepresents the financial condition of any person or insurer or the legal reserve system on which a life insurer operates - use a name or title of policy or class of policies that misrepresents its true nature. makes a misrepresentation with the intent to induce someone to let lapse, forfeit, or surrender any policy or contract ( also known as twisting) - makes , in any publishing format, untrue, deceptive, or misleading advertisement, announcement, or statement with respect to any person in the conduct of the persons insurance business