GA PC Insurance State Laws, Rules and Regulations

Workers compensation coverage

pays for doctor bills, hospital bills, physical therapy, prescriptions, and necessary travel expenses; but not in home medical devices

All of the following are examples of transacting insurance in GA

solicitation and inducement to insurance, preliminary insurance negotiations, effectuation of an insurance contract, and transactions of matters subsequent to and arising out of effectuation of an insurance contract

The maximum penalty that may be assessed for a single nonwillful violation of the Insurance Code is

$1,000 or $5000 for willful violations where a person knew or reasonably should have known they were in violation

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

$10,000

If a policy is cancelled due to nonpayment of premium, how many days' advance notice must the insurer give the policyholder before cancellation?

10 days

An insured must get advance warning if the premiums will be increased by more than...

15% // Written notice of an increase in premiums that exceeds 15% of the current policy's premium must be delivered or mailed to the insured at least 45 days before the effective date of the change.

In GA, no automobile insurance policy issued as proof of financial responsibility will be issued with bodily injury and property damage limits less than

25/50/25: no less than $25,000 for bodily injury or death of one person; $50,000 for bodily injury or death of two or more people; and $25,000 for damage to property of others

An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held?

30 days

If an agent changes his residence address, within how many days must the agent notify the Commissioner of the change?

30 days

Rates for private passenger motor vehicle insurance on file with the Commissioner are considered approved after

45 days

If a policy has been in effect for at least 60 days or is due for renewal, a cancellation may only be effected for which of the following reasons?

A change in the risk that is substantially increases the hazard insured against

Which of the following conditions must be met for a vehicle to be license in GA?

A vehicle may not be licensed in GA until the owner has furnished proof of auto liability insurance or an approved self insurance plan. This is in compliance with GA's financial responsibility law

Which of the following would be considered an unfair claims settlement practice?

Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

Which of the following statements is TRUE regarding members of the GA Fair Access to Insurance Requirements FAIR plan?

Every authorized insurer writing property insurance in GA is required to be a member of the GA FAIR Plan and the Plan's underwriting association

Who is required to participate in the GA Insurers Insolvency Pool?

Every insurer authorized to write property or casualty insurance in GA must be a member of the insolvency pool. The members of the pool are responsible for payment of assessments

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility // Money collected with respect to an insurance transaction must be held in a position of trust by the agent or broker

Under workers compensation laws, injured workers are entitled to how many weeks of treatment from the date of the accident?

Medical treatment for injuries due to an on the job accident is limited to a maximum of 400 weeks of coverage from the date of the accident

An agent commingled $500 of insurance premiums collected with new applications with his personal funds. The agent could be found guilty of a

Misdemeanor // Any willful violation will be considered a misdemeanor unless the amount involved exceeds $1,000, in which case the violation will be considered a felony

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual // Funds not paid out after paying claims and other operating costs are returned to the policyowners in the form of a dividend. If all funds are paid out, no dividends are paid

What is the major difference between a stock company and a mutual company?

Mutual companies are owned by policyholders, while stock companies are owned by stockholders

What is the function of a certificate of authority??

No person can act as an insurer, and no insurer can trans insurance in Georgia, unless properly authorized by a current and valid certificate of authority issued by the Commissioner, except for transactions expressly otherwise provided for in the Insurance Code.

Which of the following insurers are owned by stock holders?

Only stock insurance companies are owned and controlled by stockholder?

Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility?

Promptly forwarding premiums to the insurance company // Fiduciary refers to a position of trust. When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity

If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true?

The policy will not lapse since payment to the agent is the same as a payment to the insurer

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums // An agent acts in a fiduciary capacity, based upon trust and confidence, when handling the financial affairs of their customers, including the handling of premiums

An alien insurer

domiciled in one country and transacts insurance in another

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

Authorized

What entity has the power to issue certificates of authority?

Commissioner of Insurance

In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the

Company // An agent's license authorizes them to represent an insurance company, not the insured

Which types of liability insurance may an insured reject in writing?

Uninsured motorist coverage

A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered

a felony

Receiprocity agreement

a nonresident agent may receive a nonresident's license if he or she resides in a state that awards nonresident agent licenses to residents of GA on the same basis

Every insurer must maintain copies of the rates, plans, systems and underwriting rules it uses. These rate filings must be updated by the insurer

at least once every 2 years

A foreign insurer

domiciled in one state and transacts insurance in another

How often does an agent's insurance license expire?

every 2 years

In which of the following situations is it legal to limit coverage based on marital status?

Availability of insurance benefits or coverage may not be denied based on sex or marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits

All of the following are unfair claims settlement practices

failing to acknowledge pertinent communication pertaining to a claim, refusing to pay claims without conducting a reasonable investigation, failing to adopt and implement reasonable standards for settling claims

Rebating

occurs when an insured is offered something of value in order to induce the sale of an insurance product

Authorized insurer

insurers who meet the state's financial requirements and hold a Certificate of Authority to transact business in the state

Misrepresentation

issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends

The purpose of the GA Automobile Insurance Plan

make automobile insurance available for insureds who are unable to puchase coverage in the voluntary market

An example of unfair trade practice of defamation

making oral or written statements directly or indirectly which are derogatory or maliciously critical of another insurer

A domestic insurer

transacts insurance in the domicile state

Workers compensation benefits in Georgia are limited to what amount of a worker's average weekly wage?

two thirds of a worker's average weekly wage up to $575 a week

A mutual insurer

no stock and is owned by the policyholders. Since they may receive a dividend (not guaranteed), such policies are known as participating policies. Dividends received by policy holders of a mutual insurer are not taxable

An insurance agent's responsibilities

perform professionally, preform faithfully, represent the insurer, not the client

Auto Liability Coverage

required of all owners and operators of motor vehicles in the state of GA as evidence of security in complying with the state's financial responsibility law

An insurer decides to stop issuing auto policies in this state, and is planning to cancel the existing policies. Along with a notice of nonrenewal, the insurer must send which of the following to its policyholders?

A notice of eligibility for the Automobile Insurance Plan

Which of the following would be required to be licensed as an insurance producer?

A person does not require an insurance producer license if he or she only advertises without intent to solicit insurance. However, once there is solicitation, a license is required

If the Commissioner cannot serve due to death, disability or resignation

the Chief Deputy Commissioner serves until the next election

The Commissioner of Insurance

the cheif officer of the department. The Commissioner is elected to office for a term of four years. The purpose and function of the Department and the duties and powers of the Commissioner are to carry out and enforce the provisions of the Insurance Code

If the premiums for a policy will be increased by more than 15 percent, how much warning must the insured get?

45 days before the effective date of such termination or change

Authorized insurance companies are examined by the Commissioner at least once every

5 years