Georgia State Laws
Policy Owner / Controller
The "person" entitled to exercise the rights and privileges that a policy offers.
Applicant
(Proposed Insured) - Person applying for insurance.
If an aggrieved person demands a hearing, the Commissioner is obliged to hold one within ____ days, and must give all parties advanced notice of at least ____ days
30 days and 10 days in advance
The chief officer of Georgia's Department of Insurance is the Insurance Commissioner, who is elected to office for a term of
4 years
All records for any transaction must be kept for at least
5 years after the transaction or the contract term is completed, whichever is greater.
A licensee whose application or license has been refused or revoked may not reapply for a license for
5 years from the date of final order.
A temporary license is valid for
6 months from the original issue date, and renewable for 3 months at a time for a maximum of 15 months from the original issue date.
If, upon examination, the Commissioner finds accounts or records to be inadequate or incorrectly kept or posted, the person being examined will have
60 days upon notification to correct the accounting
The Commissioner may impose which of the following penalties on any person who violates a cease and desist order following a hearing
A fine of up to $10,000 per violation
Which of the following individuals is required to hold an insurance license
A person transacting insurance for a commission must be licensed.
Every agent, counselor, and adjuster must keep a record of all insurance transactions, including
A record of each insurance contract procured or issued with the names of the insurers and insureds The amount of premium paid or to be paid, and a statement of the subject of the insurance The names of any other licensees involved in the transaction and if they received any compensation
Insurance Policy
A written instrument, in which contract of insurance is set forth
False Information and Advertising
An individual may not make a statement containing any assertion or representation about the insurance business or any person in the conduct of their insurance business, which is untrue, deceptive, or misleading,
Defamation
An insurer may not make an oral or written statement which is false or maliciously critical or misrepresentative of the insurer's financial condition with intent to injure any person engaged in the insurance business.
Misrepresentation
An insurer may not make or issue a false estimate or illustration, misleading statement or misrepresentation of: A policy's terms, benefits, advantages promised, or dividends to be received An insurer's financial condition or a life insurer's legal reserve system The name or title of any policy or class of policies
The qualifications for becoming an insurance producer include which of the following?
Applicants for a resident license must reside in Georgia at least half the year or have a business domiciled in the state
Insurer (Principle)
Company who issues an insurance policy. *Coverer*
Limited licenses may be issued for
Credit insurance Rental company insurance Portable electronics insurance Travel insurance
A nonresident person can receive a nonresident license if all requirements are met. To qualify for issuance of a nonresident license, applicants must:
Currently be licensed and in good standing in their home state Submit the proper request for licensure Submit a copy of the license application submitted to the home state Pay the required fees
unfair trade practices are
Defamation, Misrepresentation, Twisting and Churning, False Information and Advertising, Boycott, Coercion, Intimidation, Controlled Business, False Financial Statements, Unfair Discrimination and Rebating
Boycott, Coercion, Intimidation
Entering into any agreement to commit any act of boycott, coercion, or intimidation resulting in restraint of, or monopoly in, insurance business is considered an unfair trade practice and is prohibited.
Applicants for a temporary license must undergo a criminal background check
False -
. Certificates of authority for agents must be renewed biennially
False - Annually
insurers must provide additional information as determined by the Commissioner
Foreign and Alien
Which of the following statements regarding certificates of authority is correct
If an insurance company refuses to be examined by the Commissioner, its certificate of authority may be suspended or revoked
Reciprocity
In order to obtain a nonresident license without additional requirements, the person's home state must have reciprocity with Georgia and award nonresident agent licenses to Georgia residents on the same basis
Controlled Business
It is an unfair trade practice to use a license chiefly to procure insurance on the life or property of one's self, family, employer, or the officers, directors, stockholders, partners, or employees of a partnership of which the producer has an interest.
Certificate of Authority
No person may act as an insurer or transact insurance in Georgia unless a ____________________ has been granted by the Commissioner.
all licensees must meet
Notify the Commissioner within 30 days of any change in business and residence address
If an insurance agent is also licensed as a counselor, the agent may not receive any compensation from, or charge any other fee to the customer, or receive compensation from the insurer or other third-party for the placement of insurance with that customer unless the agent:
Obtained, prior to the insurance transaction, the customer's written consent that the agent will receive such compensation; and Disclosed to the customer the amount of compensation to be received from the insurer for the placement of insurance
Premium
Payment
Insured
Person covered by an insurance policy
In addition to issuing a cease and desist order, the Commissioner has the authority to:
Place the violator on probation for up to 1 year for each act in violation Assess a penalty of up to $2,000 for each act or violation, or up to $5,000 per violation if the person knew or reasonably should have known they were in violation
Which of the following actions is not considered to be misrepresentation under law?
Presenting a dividend estimate that clearly shows the estimate is based on past experience
Insurance
Transfer of Risk
A dividend estimate prepared on a company form that clearly shows that estimated dividends are based on past experience is not considered misrepresentation
True
A temporary license will authorize the negotiation of renewal policies and receipt and collection of premiums, but does not authorize the holder to sell, solicit, or negotiate new insurance contracts.
True
Agents, subagents, and counselors may share commission with a licensed insurance agency.
True
An agent is considered an individual insurance producer and is required to be licensed for each line of authority to be transacted
True
An insurer or agent may not compensate any person for services as an agent unless that person is duly licensed, except in the case of renewal or deferred compensation to a person who held a license when the compensation was earned.
True
Each principal and branch office of a business entity that sells, solicits, or negotiates insurance must obtain an agency license and renew biennially
True
If an insurance company refuses to be examined by the Commissioner, its certificate of authority may be suspended or revoked
True
On or before March 1 in each year an insurer has transacted insurance business, the insurer must make and file with the Commissioner a report of its affairs and operations during the year ending on December 31 of the preceding year.
True
The Commissioner has 90 days to approve or disapprove an application
True
The Commissioner may extend the probationary period, or refuse to grant or reinstate a license at the end of a probationary period
True
The Commissioner may issue a temporary license to a family member, associate, guardian, receiver, executor, or administrator in the same line of authority held by the agent.
True
Each authorized insurer must obtain a
a certificate of authority for each agent representing that insurer.
Producer / Agent
a legal representative of an insurance company who represents one company.
Broker / Independent Agent
a legal representative of multiple insurance companies
The Commissioner may make a
full written report of each examination they complete including only facts obtained from documents examined and from the sworn testimony of witnesses.
Any person who willfully violates licensing requirements or compensation regulation may be found
guilty of a misdemeanor.
Failure to file the required license renewal form with the appropriate fee and evidence of completion of required continuing education by the due date will result
in the expiration of the license.
Hazard
increases the chance of Peril (Loss)
Person
individual human beings, associations, organizations, corporations, partnerships, and trusts
An agent
is an individual appointed or employed by an insurer who sells, solicits, or negotiates insurance whether in person or by phone.
A counselor
is any individual who engages in the business of counseling, advising, or rendering opinions as to the benefits promised under contract or offered by any insurer regarding the terms, value, effect, advantages, or disadvantages under the contract of insurance.
A person in the business of selling, soliciting, or negotiating insurance contracts for a commission
is required to hold an insurance license
Churning
is the act of illegally misrepresenting an existing policy to induce a policyholder to unnecessarily replace that policy with a new policy from the same insurer for the purpose of earning additional or higher commissions.
Twisting
is the act of making a misrepresentation to any policyholder or insured for the purpose of inducing a policyholder to lapse, forfeit, or surrender insurance to purchase a policy with another insurer.
The Commissioner must provide a copy of the proposed examination report to the insurer examined
least 20 days before the report is filed.
Nonresident agents who move to another state, or resident agents who move to another state from Georgia,
must notify the Commissioner within 30 days of the change of legal address to maintain a nonresident license.
The application for an agent's license
must state the kinds of insurance proposed to be transacted.
A person who has not passed the exam after 3 attempts
must wait 60 days before their next attempt and all future attempts. They will be required to pay the appropriate fees with each new attempt.
Nonresident licenses are issued
on a biennial basis and expire at the end of the licensee's birth month.
The Commissioner or a person authorized by the Commissioner, may conduct an examination of any HMO and its providers no less than
once every 3 years
The Commissioner, or a person authorized by the Commissioner, may conduct an examination of any insurer authorized to do business in this state as often as necessary, but most domestic insurers must be examined at least
once every 5 years
Pure Risk
only Risk that is insurable.
An insurer
pay commissions to a licensed agency in which all employees, directors, and officers who transact insurance are qualified insurance agents
All _____________________ with the exception of temporary or probationary licenses, are issued on a biennial basis
resident licenses
The Commissioner enforces and executes the duties imposed by
the Insurance Code
To qualify for a counselor license
the applicant must submit an application, pay the required fees, including the cost of submitting electronic fingerprints for a criminal background check, and file a $5,000 counselor bond with the Commissioner.
A temporary license may be issued
to an individual in the event of the death of an agent, or the agent's inability to act as an agent by reason of service in the armed forces, illness, disability, or termination of an appointment. T
If a late renewal reinstatement is received more than 6 months after the expiration date, the licensee will be required to
to submit electronic fingerprints
Failure to file for late renewal reinstatement______________________________will require the licensee to reapply for the license and satisfy the prelicensing and examination requirements.
within 1 year of the license expiration date
After passing the exam, applicants must complete the licensing process
within 12 months. If they do not, they must retake the exam.
All resident and nonresident licensees must promptly notify the Commissioner in writing
within 30 days of any change in the licensee's business address, residence address, and name and address of each insurer or agency the licensee represents
An insurer that terminates an agent's appointment must notify the Commissioner
within 30 days of the termination.
Risk
The uncertainty, chance, or possibility of a loss.
The Insurance Commissioner has which of the following duties and powers?
The Insurance Commissioner may make rules and regulations in order to enforce the law, but the Commissioner does not have the power to change the law itself (code). In order to be effective, orders and notices must be in writing. The Commissioner investigates instances of unfair trade practice themselves.
The Commissioner must have rules and regulations, as well as amendments and repeals, on file as public record for at least
10 days before they become effective.
A person who fails the examination once or twice must wait
14 days before their next attempt.
If after the investigation, it is determined to be in the best interest of the public, the Commissioner will issue and serve a statement of charges and a notice of a hearing to be held at a fixed time and place not less than
15 days after service of the notice
Applicants must successfully complete an approved prelicensing course, which must contain a minimum of
20 hours of instruction per major line of authority.
How many hours of CE does an agent who has been licensed for 10 years need to complete during each license period?
24
The Commissioner may issue a probationary license for
3 to 12 months, subject to revocation for cause without a hearing.
The following activities are not included within the definition of discrimination or rebating
Adjusting premiums based on loss experience of the previous policy year Donating commissions from public insurance to nonprofits for use in civic enterprises Paying bonuses or abating life insurance or annuity premiums out of surplus accumulated from nonparticipating insurance as long as the activity is fair and equitable to all policyholders Charging lower premiums on life or health insurance for the insurer's employees Charging a reduced rate on industrial policies based on the savings in collection expense created by establishing a payment plan Compensating agents or brokers, or returning funds to participating policyholders, members, or subscribers Conducting promotion programs which offer prizes, goods, wares, store gift cards, gift certificates, sporting event tickets, or merchandise to current or prospective customers as long as the value does not exceed $100 per customer per year and giving away such items is not contingent upon the sale or renewal of a policy
A licensed insurance counselor:
Advises consumers about their insurance needs for compensation
Exceptions to the prelicensing course requirement include applicants who:
Are currently licensed in good standing for the same lines of authority in another state, or have applied for license within 90 days of the cancellation of their previous license Are licensed in another state, move to Georgia, and submit an application to become a resident licensee within 90 days of establishing legal residence Apply for a property and casualty license and hold a CPCU designation Apply for a life or health license and hold a CLU or FLMI designation Provide satisfactory evidence indicating successful completion of 2 college or university courses related to insurance in the applicable lines of authority or who hold a degree in insurance Apply for a temporary license or limited lines license
The Commissioner will not issue a license to an individual who does not meet the qualifications or requirements as specified in the law. To qualify, an individual applicant must:
Be a resident of Georgia, who must reside and be present within the state for at least 6 months of every year, or have a principal place of business in Georgia Be at least 18 years of age Be of good character Complete an approved prelicensing course Pass a required examination for licensure
Speculative Risk
Loss or gain; gambling
The Commissioner may, after a hearing, impose an administrative fine if an insurer, or its representative: Failed to use diligence in processing claims, failed to pay claims in a timely manner, or failed to provide proper notice when required as to the reason the insurer failed to make claim payments Compelled, without just cause, insureds or claimants to accept less than the amount due, or to bring action against an insurer to secure the full amount of the claim or settlement Accepted money or other remuneration for referring automobile or other property repair business, including glass breakage, to a particular repair company
True
The fine imposed cannot exceed $1,000 for each misconduct resulting in a violation, or $5,000 for each willful misconduct resulting in a violation.
True
Rebating
an unfair trade practice and includes knowingly permitting an agreement other than as expressed in the contract and offering anything of value as an inducement to insurance if not specified in the contract, except a rebate approved by the Commissioner.
The insurer is responsible for renewing the agent's certificate of authority
annually and for paying appointment and renewal fees.
The Commissioner may examine the records of any licensee
as often as the Commissioner deems advisable
most domestic insurers must be examined
at least once every 5 years.
All resident licenses, with the exception of temporary or probationary licenses, are issued on a
biennial basis
The applicant must give permission for a
criminal background investigation and submit, at the applicant's expense, electronic fingerprints through a vendor selected by the department
No person other than a ___________________________may accept commission or other valuable compensation from an insurer or duly licensed agency, agent, counselor or subagent.
duly licensed agent or counselor
In order for an insurance license to be renewed
each licensee must complete a minimum of 24 continuing education hours,
