Insurance Regulations - Life Insurance

How often must an authorized insurer be examined?

Authorized insurers must be examined at least every 5 years.

Temporary insurance producer license

The commissioner may issue a temporary insurance producer license for the servicing of existing business, for a maximum for 180 days without requiring a written exam,

What is the penalty for the insurer who fails to refund premiums within 30 days after the free-look period?

If an insurer does not refund the premium within 30 days of return of the policy, an additional 10% penalty is added to any premium refund due.

Entire contract and statements on the application

the policy and the application attached to it constitute the entire contract between the parties, and in the absence of fraud, all statements made by by the insured are deemed to be representations and not warranties

Misstatement of age

when it it found that the insured's age has been misstated, the amount payable under the policy will be adjusted to what the premium would have purchased at the correct age.

Producers found guilty of any violations of the Insurance Code that are subject to license suspension, revocation, or non renewal may also face fines after a hearing. The Commissioner may level a fine up to $1,000 for each offense.

The order levying the fine must specify that the fine must be fully paid at a time between 15 and 30 days from the date of the order.

What type of violation is transacting insurance without a license?

Any person who transacts insurance without a license is punishable with a Class B felony.

When is the insurer NOT required to deliver a policy summary to a policy applicant?

When the insurer provides an illustration during the sale of a policy.

Reporting of Actions

Insurance producers must report any administrative action taken against them in another jurisdiction or by another governmental agency in this state to the Commissioner with 30 days of the final disposition.

Every order by the Commissioner suspending any insurance license must specify the period during which the suspension will be effective and may not last longer than

12 months

If a business entity terminates the affiliation of an insurance producer for cause, the commissioner must receive notice of that termination by electronic submission within (____) days of the termination date.

30 days

How long does any person receiving written notification of the commissioner's order have to respond and request a hearing?

90 days. Any person recieving written notification of the Commissioner's order has 90 days to respond back to the Commissioner to request a hearing.

general rule for disclosure in life insurance products:

Each insurer must maintain at its home office or principal office, a complete file containing one copy of each document authorized by the insurer for use under the regulation for a period of 3 years following the date of its last authorized us unless otherwise provided by this regulation

Reply to the insurance commissioner

Every licensed person in this state must reply within 15 business days to an inquiry of the commissioner regarding the business of insurance. failure to do so constitutes a violation of the Insurance Code.

If a producer is convicted of a felony, the Commissioner may revoke or refuse to renew the producer's license immediately and without hearing if the facts leading to the conviction show the licensee to be untrustworthy.

The license may be revoked or suspended by an order delivered to the licensee within 15 days prior to the effective date, or by an order of a hearing effective no less than 10 days after the date of the order.

For how many years must insurance producers keep records of written disclosures regarding producer compensation?

5 years. A disclosure signed by both the producer and the insured must be provided prior to the sale of the policy. Producers must maintain written disclosures for 5 years.

How many eligible employees must elect coverage before a policy can be placed for a Public employee Association?

At least 75%. No policy may be placed in force unless and until at least 75% of then eligible employees have elected to be covered and have authorized their employer to make any required deductions from salary.

Any person (licensee) receiving written notification of the commissioner order has (____) days to respond back to the commissioner and to request a hearing.

90 days

Any life insurance policy that accumulates cash values must include a provision for policy loans after a certain period of time. In the State of Washington, that period of time is

After 3 full years of premium payments.

In group life insurance, if an insurer was able to pay out the proceeds until the 45th day after receiving proof of death, what will be the interest on the proceeds?

Either 8% or the insuer's current rate, whichever is greater.

When an insurer receives notification of a claim, it must acknowledge the receipt of such notice within

10 working days (or 15 working days for claims under group contracts), unless payment is made within such period of time. Notification given to a producer is the same as notification to the insurer.

Twisting

Twisting is a misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades an insured/owner, to his or her detriment, to cancel, lapse, switch policies, or take out a policy with another insurer. Twisting is prohibited.

Investigative Consumer Reports

Unlike consumer reports, these reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested. The consumer must be advised that they have a right to request additional information concerning the report, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

The Commissioner may temporarily suspend a license by an order sent through the mail, to less than

3 days prior to the effective date. Every order suspending any such license must specify the period during which the suspension will be effective. This period may not last longer than 12 months.

Payment of Proceeds

Insurers are obligated to pay the proceeds of any benefits under a group life insurance policy within 30 days after the insurer receives satisfactory proof of death. If the proceeds are not paid within 30 days, the insurer must pay interest from the date of the insured's death until the date of the proceeds are paid. The interest must be the greater of either 8% or the rate paid by the insurer on any other withdraw able policy proceeds at that time. Benefits not paid within 90 days of the receipt of proof of death must be paid with an additional interest of 3% starting the 91st day after the receipt proof of death.

In regards to continuing education requirements, the insurance education provider must issue a certificate of completion within (___) after the completion of the course.

10 days. Additionally, the licensee must retain the certification of completion for 3 years from the date on the certificate.

After approval by the National Association of Insurance Commissioner (NAIC), the current Buyer's Guide cannot be used for long than

6 months.

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500 .

An insurer must pay interest on death benefits payable under the terms of a life insurance policy insuring the life of any person who who was a resident of this state at the time of death. Such interest accrues beginning on the date of death at the rate then paid by the insurer, but not less than 8%.

If the benefits have not been paid to the beneficiary within 90 days of the receipt of proof of death, starting on the 91st day, the insurer will be required to pay interest at the stated rate plus 3%

To appoint a producer, the insurer must file a notice of appointment with the commissioner within...

15 days from the date the agency contract is executed or after the first insurance application is submitted. If the producer is eligible, the commissioner will verify the appointment by electronic message within 30 days of receiving the notice from the insurer. However, if the producer is deemed ineligible, the Commissioner will notify the insurer within days.

What must be included in all life insurance policy illustrations?

All life insurance policy illustrates must clearly be titled "Life Insurance Illustration" and must contain the following details: name of the insurer; name and business address of the producer or insurer's authorized representative, if any; name, age and sex of proposed insured, execept where a composite illustration is permitted; underwriting or rating classification upon which the illustration is based; generic name of the policy, the company product name, if different, and form; number; initial death benefit; and dividend option election or application of non-guaranteed elements, if applicable.

A legally acceptable attempt by an existing insurer to persuade their client to continue an existing life insurance policy in force when a written communication is received from a replacing insurer is called

Conservation. The insurance Code requires that when a life insurance policy is being replaced by another insurer, the existing insurer must be notifed and have an opportunity to conserve the business.