State Regulation

How to fulfill CE Requirements

1 Attend an approved CE seminar course(no test) 50 minutes of class time is the equivalent of one hour of CE credit 2. Teach an approved CE Seminar course(no test) 3. Self study an approved CE correspondence or online study course and pass a test OID approves CE courses

Commissioners General Responsibilies

1. Adopt rules and regulations to carry ou the provisions of "The Insurance Code" (Oklahoma State Statutes) 2. Examine (audit) insurance companies. 3. Jurisdiction over complainst against anyone engaged in the insurance business. 4. Authority to: conduct hearings, issue cease and desist orders, initiat civil actions, censure, suspend, revoke or non-renew insurance license. 5. Approving and monitorying the adequacy of insurance company rates. 6. Maintain books and records requried by law** 7. Provide an ANNUAL report to the governor regarding the financial status of the insurance industry and the total amount of insurance claims paind in the state of Oklahoma. 8. Educate consumers. 9. Deliver to their successor all furniture, records and property of the Insurance Department. Can hire independent attorneys, actuaries and examiners to assist in the enformcement of the Insurance Code. They do NOT recruit producers, enact laws or develop laws.

Acceptance or Denial of a Claim

1. Insured's responsibility to submit a complete "Proof of Loss" within 60 days *from the date of receipt of the blank forms* No requirement for it to be notarized 2. Insurer's responsibility to accept or deny the claim is within 45 days from the *recipt of the completed "Proof of Loss"* shall advize if accepted or denied

Resident License Qualifications

1. Resident of Oklahoma and legally entitled to work in the USA 2. Be competent, trustworthy and financially responsible with good business and personal reputation (no felony convictions) 3. Be at least 18 years of age 4. Pay Oklahoma Fees 5. Have an insurance company appointment (sponser) only exception independing adjuster. 6. Pass license examination with a 70% or better unless exempt Exemption if a person is licensed in another state No experience No education No requirment to live in Oklahoma for 3 months Personal bankrupcy is ok

Examination of Claim files

A written inquiring from the OID regarding that status of a claim must be responded to within 30 days A written inquiry from the claimant regarding that status of a claim must be responded to within 30 days An insurer's failure to comply may result in a civil fine of $100 to $5000 paid by the insurer

Public Adjuster

Adjusts exclusively property claims on behave of the insured

Orders

After the hearing if the OID determins a violation has occurred they may: Issue a cease and desist order Institute a civil suit Institute a civil penalty $100 - $1000 Suspend license for a period of time Revoke liceense CANNOT make licensee pay restitution, going to jury trial or serve jail time.

Fraternal (Fraternal Benefit Society)

An Incorporated society, order or lodge without capital stock. Operating as a non-profit insurers, Fraternal Benefit Societies are organized for the sole benefit of their members.

Rate Hearing

Any insurer or rating organization may request a hearing to dispute an order of the Oklahoma Insurance commission regarding rathes. The OID will give ten (10) days notice before the hearing. For INSURANCE Co.

Producer

Appointed by an insurer to transact insurance, AKA Agent.

Insolvency

Bankruptcy

The Oklahoma Insurance Commisioner

Chief executive officer of the Oklahoma Insurance Department(OID) and has teh duty to administration and enforcement of the provisions of the Oklahoma Insurance Code. John Doak (Okie Doakie) is the current Oklahoma Insurance Commissioner. Is publicly elected by voters to a four year term. Qualifications: Must be at least 25 years old, Must have been a resident of Oklahoma for a least 5 years, Must have a minimum of 5 years experience in the insurance industry, Must have NO financial interest in any insurer, agency or insurance transactions except as policyowner or claiment under the policy. NOT: education requirement, continuing education, cannot work for an insured or agency, appointed by the Governor

Deframation

Circulation of false or maliciously critical information for the purpose of injuring any person engaged in the insurance business.

OID may Suspend, Revoke or NonRenew For

Convicted or pleading guilty to any felony Failing to pay courtmandated childsupport Failing to pay Oklahoma State Income tax *Lie Cheat Steal* NOT ACCUSED unpaid speeding ticket personal bankrupcy Can also be issued Civil Penalty in addition to of $100 to $1000

Rate

Cost of insurance per unit of exposure

Civil Penalty

If INSURER is found in violation under the Oklahoma Insurance Rating Act they are subject to a fine of $100 to $5000.

Surplus Lines

If the type of insurance required is not procurable from an admitted insurer(authorized) insurance company, then the insured can purchase insurance from a non-admitted (unauthorized) insurance company subject to the following requirment: must be purchased through a licensed surplus lines broker and cannot be purchased directly from the non-admitted insurance company.

Stock Company

Incorporated insurer with capital stock owned by its shareholders. Shareholders are entitled to the profits of the insurance co. Shareholders elect the Board of Directors who hires the management of the company.

Mutual Company

Incorporated insurer without capital stock owned by its policyowners. Policyowners are entiteld to the profits of the insurance co. Policy owners elect the Board of Directors who hires the management of the company.

Federal Government Insurers

Insurers operated by the Federal Gov. Flood Insurance Program/ Crop Insurance/ Crime Insurance / Terrorisim Insurance / Nuclear Energy Liability Insurance / Social Security /Medicare / Medicaid / FDIC NOT Worker's Compensation

Required to be Licensed as Adjuster

Investigates claims Adjusts losses Negotiates claim settlements

Adjuster

Investigates claims, adjusts losses and negotiates claim settlements for the insurer.

Self-Regulation

Is done by the National Association of Insurance Commissioners (NAIC). The NAIC is a voluntary NONPROFIT organization with the purpose to promote uniformity among states by proposing standardized laws or model legislations. The Oklahoma Insurance Commissioner is a member of the NAIC. The NAIC makes recommendations to state insurance departments but has NO legal authority.

Right to Appeal

Licensee has the right to appeal any OID action, has 30 days to file for judicial review in court. Note: NOT appeal to the governer.

IF License is Suspended OID MUST notify

Licensee(producer or adjuster) All appointing insurers National Association of Insurance Commissioners (NAIC) Other states where producer or adjuster is licensed NOT Claiments, insured's or clients

Actuary

Mathematician who develops the rates(premiums) for the insurer.

Notification of Change

Must be made within 30 days Change of Legal name Change of mailing address Change of email address Failure to notify of change: A $50.00 admin fee if change is made byond the required 30 days. Failure to notify after 45 days will result in a fine between $100 to $1000.

Adjuster Continued Education

Must complete 24 CE hours during a biennial term 24 months 19 total hours in subjects the adjuster is licensed, general 3 hours in ethics 2 hours legislative update

OPCGA

Oklahoma Property and Casualty Insurance Guaranty Association Has three separate accounts 1. Workers Compensation 2. Automobile 3. All other traditional types of property and casualty insurance policies. Maximum obligation 1. Full amount of a covered claim for Workers Compensation (no limit) 2. Up to $10,000 for the return of unearned premium 3. Up to $150,000 per claimant for other covered property and casualty claims.

Private Rating Services

Perform financial analysis of insurance companies to determine financial strength, creditworthiness, investment vehicles and adequacy of reserves. After the financial analysis these rating services issue ratings. Ex. A.M Best Moody's Weiss Duff and Phelps

Unfair discrimination

Permitting unfair discrimination between individuals of the same class and same hazard or equal expectation of losses is prohibited! Race, religion, nationality, sexual preferencek, or political party cannot be used in the underwritting process *HOWEVER*, discrimination of rates is permitted for individuals with increased hazards based on ages, gender, marital status and driving record.

Surplus Lines Insurance Broker

Person or legal entity that transacts insurance on behalf of a NON-Admitted (unauthorized) insurance company.

Purpose of the Oklahoma Property and Casualty Insurance Guaranty association

Protect the insureds and claimants against financial loss caused by an insolvent insurance company. 1. provide a mechanism to pay claims and unearned premium 2. avoid excess delays in claim payment 3. Reduce insolvencies by early detection NOT determine adequate rates Protects ONLY admitted Insurers which would include domestic, foreign and alien insurers NO protection for policies issued by non-admitted insurers such as Surplus lines, self insured organizations, surety insurance (Bonds) or Fraternal nonprofit NOT the OID

Regulation of the Insurance Business

The purpose of insurance regulation is to protect the public consumer's interest. There are three sources of regulation: State, Federal and Self-regulation.

Conduct the Hearing

There is No judge or court fees, used by the OID to determine if the licensee has commited a violation. The OID MUST summarize the findings in writting within 30 days of the hearing.

Premium Tax

a premium tax of 6% of the gross premium less any return premium is charged on all surplus lines polices, the surplus lines BROKER collects this tax from the insured.

Re-instatement of expired license

a producer or adjuster who allows his/her license to lapse may reinstate the licensee within twelve 12 months without retaking the exam. Penalty in the amount of double the license renewal fee must be paid.

Staff(employee) Adjuster

adjusts claims for employer insurance company

Independent adjuster

adjusts for several insurance companies

Penalities

applied for violating a ratemaking standar under the Oklahoma Insurance Rating Act

Rules and Regulations

are made by the Oklahoma Insurance Department to enforce the provisions of the Oklahoma Insurance Code. The Oklahoma Insurance department does NOT enact law. Are promulgated(put into effect) as OFTEN as necessary.

Examinations (audit)

focuses on financial solvency and will consider Financial statements including analysis of adequate capital and surplus, Changes in management and ownership, and reports from actuaries and independent financial examiners.

Record (file) Maintenance

must maintain records for 3 years from the date of the last transaction

Adjuster Licinsing Act

purpose is to govern the qualification and procedures for the licensing of insurance adjusters, simplifies and organizes statutory language to improve efficiency, permit the use of new technology and reduce costs associated with issuing and renwing insurance licenses. A license shall remain in effect unless rvoked or suspended as long as fees are paid and continuing education is fulfilled.

File and use

rates are effective 30 days after filing unless disapproved. File and put into effect right away, NOT prior approval

Certificat of Authority

the Insurer's license to do business in the State of Oklahoma, are perpetual and automatically renew annually on March 1, unless insurer fails to qualify or renew. Authorized or Admitted

Timing of Examinations

the OID may examine any insurere as often as necessary but by law much examine ALL domestic, foreign and alien insurer's every 5 years. The insurer being examined pays cost of examination

Funding for the OPCGA

the Oklahoma Property and Casualty Guaranty Association is funded by assessments of its member insurers. The assessment amount is a direct proportion to the insurer's premium volume in the State of Oklahoma in the previous year. It is NOT funded by insureds, sales taxes, or the State

Oklahoma Insurance Rating Act

the purpose is to regulate insurance rates not be excessive, inadequate or unfairly discriminatory.

Acknowledgement of Receipt of claim

within 30 days of receipt of a notification of a claim the insurer must respond to the claimant. Notice 1. Notification given to the producer(agent) is considered notification to the insurer 2. Acknowledgement by the insurer may be written or verbal 3. After acknowledgement the insurer must then provide necessary claim forms and instructions

Non Resident License Qualifications

1. Resident of another state 2. Be competent, trustworthy, and financially responsible, with a good business and personal reputation, no conviction of a felony 3. Atleast 18 years of age 4. Pay Oklahoma Fees 5. Have an insurance companies appointment, exception independent adjuster 6. Maintain a resident insurance license in his/her home 7 Reciprocity (agreement between two states) waives the Oklahoma examination if the producer or adjuster has passed a similar licensing exam in his or her own state.

Penalty for not completeing CE requirements

1. Suspended or non - renewed license 2. Double the license renwal fee 3. Civil fine up to $500.00

Exceptions to CE Requirements

1. non resident adjuster if he/she has complete resident state CE 2. Limited insurance producers 3. Surplus lines brokers

Transacting Insurance without a License

A producer or adjustor transacting with a suspended or revoked license is subject to a felony and the following criminal penalties: fine up to $5000 and/or jail time from one to five years*** A person NEVER licensed who transacts insurance is supject to a misdemeanor and the following criminal penalities: fined up to $500 and/or jailed from 6 months to one year

Unauthorized Insurere (Non-Admitted)

Does not have an Oklahoma Certificate of Authority, business can be conducted wtih a non-admited insurance company for one reason only: the type of insurance required is not procurable from an authorized insurer. Refered to as surplus lines insurance A Surplus Lines Broker must be used to access an unauthorized insurer.

Boycott, coercious and intimidation

Entering into an agreement that would result in the restraint or monopoly of the insurance business

Annual Reports

Every insurer must file an annual report exhibiting the financial performance for the previous year, must be filed electronically by March 1

Domestic Insurer

Formed under the laws of Oklahoma, home office in Oklahoma

Alien Insurer

Formed under the laws of another country, office in Oklahoma with HOME offices in another country.

Foreign Insurer

Formed under the laws of another state, Office in Oklahoma with HOME office in another state.

Underwriter

Gathers information, analyzes exposures and selects risks for the insurer.

Authorized Insurer (Admitted)

Has an Oklahoma Certificate of Authority, would include domestic, foreign or alien insurer doing business in Oklahoma

Fair Credit Reporting Act

Purpose give teh consumer the right to privacy 1. Regular consumer reports: Credit report, motor vehicle report, comprehensive loss underwriting exchange report or CLUE 2. Investigative Reports: gathers data through personal interview with neighbors and associates regarding person's character, lifestyle, reputation etc. Notification of the report must be made to the consumer withing 3 days of ordering the report Notification of adverse information is required, consumer must be notified and provided the name/address of reporting agency NOT detailed information.

How rates are developed

Rates are developed by an Actuary who is a mathematician and works for the insurer. The OID does not develop rates

State

Regulation is the primary source.

Apprentice Trainee Adjuster

Temporary license issued for new adjustors for *180* days

Federal (Watchdog Role)

The Federal regulation supervises areas of insurance not covered by state regulation or when state jurisdictions are in conflict.

Oklahoma State Statutes

The Insurance Code that is enacted by the Oklahoma State Legislature.

Give Notice of Hearing

The Insurance Department must give at least 5 days written notice but no more then 30 days. Must include: Time, Place and Reason for hearing.

Prospective Loss Cost(Loss Ratio)

The portion of the rate which is projected to be paid out in insurance benefits, not included in insurer expenses. Expenses are the portion of the rate used to pay operating expenses, producer, commissions ect

Hearings and Orders

The Oklahoma Insurance Department(OID) has jurisdiction over violations of the Insurance Code. A hearing is used to determine if a licensee has violated the insurance code. Any licencee receiving a written request form the Insurance Department regarding violations of the Insurance Code shall respond IMMEDIATELY to the insurance department. Four Steps are to be followed: Give Notice of Hearing, Conduct Hearing, Orders and Right to Appeal.

Rebating

The act of offering to make an insurance contract using illegal inducement. Any prizes or tangible property of aggregate value in excess of $100.00*

Examination Reports

The chief examiner must file a report within 30 days of completion. The examined insurer has up to 20 days to make a rebuttal(rebuke).

Prohibited Practices

The following are unlawful whten settling a claim under any type property and casualty insurance policy. Applies to 1 producers 2 adjusters and 3 insurers on all types of insurance policies. Study pg P23