Chapter 1 - Insurance Regulations

What type of agent activities can result in a license suspension, revocation, or denial?

1. Violate or fail to comply with the law, rule, DOI order, or consent agreement. 2. Be convicted, plead guilty or no contest to a felony, or a misdemeanor involving improper use or theft of money, fraud, violation of fiduciary duty, forgery, or similar dishonesty issues in the business of insurance. 3. Admit or are found to have committed any insurance unfair trade act or insurance fraud. 4. Have an insurance agent license, or equivalent, denied, suspended, or revoked in any other state or provincew, district or territory. 5. Fail to comply with administrativew or court ordewr regarding payment of federal, state or local income or sales tax, or Workers Compensation Premium. 6. Fail to respond in writing within 21 days of receipt of DOI inquiry 7. Fail to appear before the Director of Insurance after notificatiojn of a scheduled interview.

A temporary license is valid for ___ ___ and will expire if the owner's personal representative ___ or ____ the business

180 days Sells or closes

The licensed agent must renew their license every ___ on or before ___.

2 years on or before the last day of the agent's birth month

How many credit hours of continuing education are required, and how often reported?

24 hours (3 hours must be in the field of ethics); Every 2 years

Every agent must report any change in the agent's home or business address, phone number, or email address with ____ of the change.

30 days

What is the difference between having a license and having an appointment?

A licensed agent can sell, quote, discuss coverage, solicit, negotiate or write or bind coverage. An appointment if those working for the insurer (underwriter, company claim adjustor) or agency if they do not receive commission or provide counsel to client or prospect.

What is/are the difference(s) between a resident and non-resident license?

A resident agent is licensed to sell, quote, discusses coverage, solicit, negotiate, or writes or binds coverage in the state of Ohio. A non-resident agent is an agent that lives outside of the state of Ohio but have followed the necessary steps to be able to act as an agent.

What is a cease & desist order and who sends it?

A written order requiring a person to immediately stop and refrain from further use, some activity considered to be harmful. ; A court or the Director of Insurance

Who is an insurance agent? A. Any person licensed to sell, solicit or negotiate insurance B. Any person licensed under the laws of another state C. Any person appointed by an insurance company D. Any person who represents the insured in the sale of insurance

A. Any person licensed to sell, solicit or negotiate insurance

Under the Fair Credit Reporting Act, individuals rejected for insurance dues to information contained in a consumer report? A. Must be informed of the sources of the report B. Are entitled to obtain a copy of the report from the party who ordered it C. Must be advised that a copy of the report is available to anyone who requests it D. May sue the reporting agency in order to get inaccurate data corrected

A. Must be informed of the sources of the report

What is a Certificate of Authority and who receives it?

Allows insurer to transact business in the state. / The insurer

Every licensed agent with active status must complete how many hours of continuing education and within what time frame? A. 20 hours each year, including 3 hours on topic of flood B. 24 hours, 3 of which must be on topic of ethics, every 2 years C. 12 hours for property, and 12 hours for casualty every 2 years D. 30 hours including 12 hours on Ohio insurance regulations every other year

B. 24 hours, 3 of which must be on topic of ethics, every 2 years

All of the following would be considered rebating EXCEPT? A. An agent offers tickets to a baseball game as an inducement to buy insurance B. An agent misrepresents policy benefits to convince a policy owner to replace policies C. An agent offers the use of his lake house to a client as an inducement to buy an insurance policy form him D. An agent offers to share his commission with a policy holder

B. An agent misrepresents policy benefits to convince a policyowner to replace policies.

How often are agents required to renew their insurance license? A. Every year B. Every 2 years C. Every 4 years D. Every 5 years

B. Every 2 years

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? A. Consumer Privacy Act B. The Fair Credit Reporting Act C. Unfair Trade Practices Law D. The Guaranty Association

B. The Fair Credit Reporting Act

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? A. The customer has no knowledge of this action B. The customer's associates, friends, and neighbors provide the report's data C. They provide additional information from an outside source about a particular risk D. They provide information about a customer's character and reputation

B. The customer's associates, friends, and neighbors provide the report's data

When do you renew your agent's license, and what happens if you are late?

Biennially on or before the last day of the agent's birth month./ If the license has not been renewed on time, license will be suspended.

The maximum duration of a temporary license in this state is: A. 30 days B. 90 days C. 180 days D. 1 year

C. 180 days

According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls? A. 7am - 7pm B. 7am - 9pm C. 8am - 9pm D. 10am - 10pm

C. 8am until 9pm

Which of the following would be considered an illegal inducement to purchase insurance? A. Listing the insurance companies the agency represents in a letter B. Inviting prospective clients to the grand opening of the producer's new office. C. Guaranteeing future dividends in a life insurance proposal D. Mailing an agency brochure to prospective client

C. Guaranteeing future dividends in a life insurance proposal

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? A. False statements about financial condition of an insurer are unlawful B. Statements made with the intent to deceive are unlawful C. Only written statements can be considered fraud D. Omissions of material fact on insurance application fraud

C. Only written statements can be considered fraud

For how long is the certificate of pre licensing course completion valid? A. 1 year B. Indefinitely C. 90 calendar days D. 180 calendar days

D. 180 calendar days

Agents who change their state of residence must notify the Director within how many days of any changes in address? A. 10 B. 15 C. 20 D. 30

D. 30

Agents may share commission with other agents under what condition? A. The insurer providing the policy agrees to the split B. The Department of Insurance approves the transaction C. The proper 1099 or other tax forms are certified as accurate and recorded with authorities D. Both agents hold the proper insurance license for the type of policy sold

D. Both agents hold the proper insurance license for the type of policy sold

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? A. Stating that the insurance policy is a share of stock B. Exaggerating the benefits provided in the policy C. Stating that the competitors will arbitrarily increase their premiums each year D. Making comparisons between different policies

D. Making comparisons between different policies

Insurance licenses for various lines of authority in Ohio

Life, accident & health; variable life & annuities, property, casualty, personal lines, surety bail bond, title insurance and credit insurance

Must one be a U.S. citizen to obtain a license?

No but they have to be legally able to work in the U.S.

What is the purpose of the Fair Credit Reporting Act?

To ensure consumer reporting agencies (CRA's) maintain records that are confidential, relevant, accurate and properly used.

What are unfair claims practices and unfair trade practices?

Unfair claim practices include: 1. Misrepresenting the policy provisions, changing fees for claim service. 2. Failing to maintain files and record documentation for at least 3 years. 3. Communications - fail to acknowledge notice of claim within 15 days. 4. Fail to respond to DOI claims inquiry within 21 days. 5. Not provide insured with necessary information, or forms needed to settle. 6. Fail to investigate a claim properly. 7. Fail to inform insured more time needed to investigate the claim if more than 90n days has passed with no settlement (45 days auto policy) 8. Refusing to pay claims without an investigation 9. Attempt to settle or deny claim on basis of an altered application 10. Fail to confirm or deny coverage within a reasonalbe time (21 days if insurer has all necessary information) 11. Compelling insured to sue by offering less than what is reasonable 12. Making payments or denial of coverage without stating which coverage applies, or why and where in policy is reason for denial\ 13. Purposely delaying a claim payment without just cause 14. Fail to make payment within 5 days of final agreement. Unfair Trade Practices: 1. Rebating 2. Premium Refunds 3. Misrepresentation 4. Defamation of Insurer 5. Unfair Discrimination 6. Illegal Inducements

How long do you have to report a change of address to the Dept. of Insurance?

Within 30 days