Life & Health
Instead of revoking or suspending an insurance license, the Superintendent may:
- Require a licensee to pay a penalty up to $500 per offense -Pay a maximum penalty of $2,500 for all offenses
Examples of Rating services
-AM Best Company -Standard & Poor's -Moody's Investment Servives -Weiss Insurance Rating - Fitch Ratings
An insurance producer may have his/her license suspended or revoked by earning commissions for business written on his/her own property and risks if the commission received are more than what percentage of the licensee's net aggregate commissions during the preceding 12 months ?
10%
If the Superintendent determines a licensee is liable for a civil penalty, he/she may enter a judgment against the licensee within __________ of the determination
120 days
Insurance producers are required to complete how many hours of approved continuing education during each 2-year license period?
15
Within how many days from the date of execution of the agency contract or the date the first insurance application does the certificate of appointment hae to be filed
15 days
How long are the terms that insurance licenses are issued for ?
24 months (2 years)
All licensees are required to notify the superintendent of a change in address within__________ of the change
30 days
License renewal applications must be submitted no few than___________days before the expiration of the licesnse to avoid a __________late filing fee
60, $10
Foreign Insurer
An insurer organized under the laws of any other state, possession, territory, or the District of Columbia of the United States, whether or not it is admitted to do business in this state.
Domestic Insurer
An insurer organized under the laws of this state, whether or not it is admitted to do business in this state
Fradulent insurance Act
Any act committed by a person who, knowingly and intentionally plans to defraud an insurer, self-insurer, or agent by submitting any written statement in connection with an insurance application, certificate of insurance, or claim that while knowing the statement contains materially false information concerning any material fact or conceals, for the purpose of misleading, information concerning any material fact
What is the penalty for transacting insurance without a certificate of authority?
$1,000 (first violation ) $2,500( each subsequent violation
What is the fee for a replacement license?
$15
What is the overall maximum penalty for not filing an annual statement
$25,000
What is the max daily penalty for failing to file an annual statement
$250 /day
What is the penalty for violating the "aiding unauthorized insurer" provision
$500
Joint Underwriting Association/ Joint Reinsurance Pool
Requires insurers writing specific coverage lines in a given state to assume their share of profits/losses or the total voluntary market premiums
Moral turpitude
an act or behavior that gravely violates the sentiment or accepted standard of the community
Insurance provider
an individual who is licensed to sell, solicit, or negotiate insurance in New York
nonresident insurance agent/broker
an individual who is not a resident of New York and who is licensed or authorized to act as an insurance agent or broker in the state where he/she resides
personally identifiable financial information
any information -a consumer provides to a licensee to obtain an insurance policy or insurance services -about a consumer that results from an insurance transaction between a licensee and the consumer -a licensee obtains about a consumer in connection with the provision of insurance services or products to that consumers
warranty
any insurance contract provision that conditions the applicability of coverage on any fact that either reduces or increases the likelihood of any loss, damage, or injury- including death, disability, injury , physical and moral hazards, and any cause of loss or peril insured against
Insurance Agent
any person (individual or business entity) authorized or acknowledged by an authorized insurer to act as its agent in the solicitation, negotiation, or sale of insurance
Insurance broker
any person (individual or business entity) who , in exchange for commision or any type of compensation, helps another person- in any manner- to 1. solicit, negotiate, or sell insurance 2.place insurance 3.purchase insurance
independent adjuster
any person or business entity that, in exchange for money, commission, or anything of value- acts on behalf of an insurer to investigate and adjust insurance claims arising under the insurers policies
public adjuster
any person or business entity that-in exchange for money, commision, or anything of value- acts on behalf of an insured to investigate and adjust insurance claim.
Residual Markets
are a last resort private coverage source for businesses and individuals who have been rejected by the voluntary insurance market
self-insurers
assume all of the financial risk faced without transferring that risk to an insurer sets aside funds in an amount equal to or greater than the expected losses
Insurance Agencies
captive or independent organizations that recruit, contract with, train, and support insurance producers.
Insurance Frauds Bureau
charged with detecting, investigating, and preventing insurance fraud and referring fraudsters for prosecution
Insurance brokers act on behalf of the _________
client
The National Association of Insurance Commissioners
consists of all state and territorial insurance commissioners/ regulators provides resources, research, legislative and regultory recommendations and interpretations for state insurance regulators -promotes uniformity among states members may accept or reject recommendations has no legal authority to enact or enforce insurance laws
Lloyd's of London
consists of groups of underwriters called Syndicates, each of which specializes in insuring a particular type of risk ( not an insurance company) members are individually liable for each risk they assume
clear and conspicuous
a notice is reasonably understandable and is designed to call attention to the information it contains and the importance of that information
The Superintendent is responsible for:
-ensuring the solvency of the state's insurers -eliminating insurance fraud, criminal abuse of the insurance industry, and unethical conduct in the transaction of insurance in this state -receiving and mediating consumer complaints and referring them to any appropriate federal, state or local law enforcement agencies
What must the certificate of authority contain?
-insurer's name -home office address -the certificate's term -the state or country in which the insurer was organized - the lines of insurance for which the insurer is authorized to transact in this state
A license is considered to be in good standing during its term unless:
-it is revoked or suspended by the superintendent -all certificates of appointment have been terminate by insurers (if this occurs, the license becomes inactive_ -the license fails to file a renewal application, if it was in good standing before expiration.
continuing education statutes do not apply to:
-licensees holding licenses that did not require an examination -limited and other licensees that are exempt from continuing education requirements by the superintendent -life settlements, if the licensee is acting as a life settlement broker with a life line of authority
Continuing education statutes applies to resident and nonresident licensees with the following lines of authority :
-life insurance, annuities, variable annuities, and variable life insurance -sickness, accident, and health insurance -all lines of property and casualty insurance -life settlements
Requirements for RRGs
-must be made up of a large number of homogeneous or similar units -membership is limited to risks with similar liability expsoures - must have sufficient liquid assets to meet loss obligations
Stock Insurance Company
-private and for profit -owned by stockholders or shareholders - directors and officers are elected by stockholders and put in place a management team to carry out the company's mission -stockholders may receive taxable corporate dividends as a share of the company's profit when and if declared by the directors
Any person, firm association, corporation is prohibited from acting as an agent or broker to conduct any of the following activities on behalf of an unlicensed or unauthorized insurer
-solicit insurance -negotiate insurance -effectuate insurance -place risks with such an insurer -in any manner, assist or aid such an insurer in effecting any insurance agreement, policy, or contract
Once a license has been revoked, the licensee cannot obtain any type of insurance licensee in this state for at least ____________ from the date of revocation or from the date of a final determination resulting from any judicial review
1 year
Public Adjuster License Requirements
1. 1 year of experience in the insurance business that involves sales, underwriting, claims or other appropriate experience. 2. 40 hours of formal training in an approved course or program of instruction
Adjuster Licensing Requirements
1. cannot act on behalf of an insurer unless licensed as an independent adjuster 2.cannot act on behalf of an insured unless licensed as a public adjuster 3. 18 years old 4. complete license application/ pay fees 5. No criminal record/employed someone who has 6. Provide references that satisfy appropriate requirements
Certificate of appointment are valid until
1. terminated by the carrier according to the agency contract's provisions 2. the agent's license is suspended or revoked 3.the agents license expires and it does not renew
Before a resident license can be revoked or suspended, the Superintendent must give the licensee and all sublicensees a hearing with ___________
10 days advance notice
The Superintendent must give a nonresident liensee___________ before revoking a license
10 days' written notice
Reciprocal Insurance Company
a group-owned insurer whos main activity is risk sharing formed by individuals, firms, and business corporations that exchange insurance on one another
McCarran-Ferguson Act of 1945
Established that the federal government will not regulate the business of insurance in areas which the states have historically had the authority to do so (such as producer and company licensing) unless the states fail to cooperate.
certificate of authority
a license issued to an insurance company authorizing it to transact insurance in this state
Risk Sharing Plan
Insurers agree to apportion among themselves those risks that are unable to obtain insurance through normal channels.
When do business entity licenses renew/expire (property and casualty lines of authority)
June 30th of even-numbered years
When do business entity licenses renew/expire ( life and health lines of authority)
June 30th of odd-numbered years
By what day does the insurer have to file an annual financial statement with the Superintendent
March 1
Fraternal Benefit Societies
Primarily social organizations that engage in charitable and benevolent activities that provide life and health insurance to members; membership consists of members of a given faith, lodge, order, or society; usually organized on a non-profit basis.
what is the best manner in which a licensee must provide a clear and conspicuous notice to its customers that accurately reflects its privacy policies and practices?
The notice must be provided at the time the insurance application is taken and annually therafter
Affiliate
a company that controls, is controlled by, or is under common control with another company
Federal Insurance Office (FIO)
established by the Dodd-Frank Wall Street Reform and Consumer Protection Act monitors: -the insurance industry and identifies issues and gaps in the state regulation of insurers -access to affordable insurance by traditionally under deserved communities and consumers, minorities, and low-and moderate-income persons
Insurance Frauds Prevention Act
established to eliminate the commission of arson as a form of insurance fraud
Independent Financial Rating Services
evaluate and rate the claims paying ability and financial stability of insurance companies assign letter ratings that indicate the financial strength of each company which may be based on both public and nonpublic data
On what basis do non-exempt resident and nonresident licensees have to complete approved continuing education courses
every 2 years ( biennial)
The superintendent has the authority to create insurance laws (true or false)
false
what must be done if an agent apointment is terminated for cause
file with the Superintendent a statement containing the reason for termination within 30 days of the termination
Risk Retention Groups (RRG)
group-owned insurers that primarily assume and spread the liability-related risks of its members. They are owned by their policyholders, and are licensed in at least one state. However, they may insure members of the group in other states.
Nonpublic Personal Health Information
health information that identifies an individual who is the subject of the information or provides a reasonable basis to believe the information could be used to identify a specific individual
In what situation does a licensee write controlled businnes
if he/she receives more than 10% of his/her aggregate net commisions in the preceding 12-month period from the placement of insurance on the life of, or property owned by -the spouse of the individual applicant/licensee -any corporation of which the individual applicant/licensee and/or his/her spouse own more than 50% of the shares -of any firm or association of which the individual applicant/licensees and/or his/her spouse are members
Reinsurance Companies
insurance companies that operate to accept all or a portion of the financial risk of loss from the primary (or "ceding") insurance company
insurance producers
licensed individuals representing and appointed by an insurance company when transacting insurance business
Treaty Reinsurance Agreement
reinsurance agreement that automatically accepts all new risks presented by the ceding insurer ( the company seeking or requesting the reinsurance from the reinsurer)
Insurance companies
manufacture and sell insurance coverage in the form of insurance policies or contacts of insurance
Firms/ Associations
may authorize its members and employees to act as individual insurance consultants on its behalf
Corporations
may only authorize the sublicensees listed on its license to act as individual insurance consultants on its behalf
Insurance consultant
meets with clients and discusses insurance, providing advice and recommendation in exchange for a consulting fee based upon a written agreement signed by the client
When do individual licenses renew/expire ( even numbered year birthday)
on the individuals birthday in each even numbered year
When do individual licenses renew/expire (odd numbered year birthday)
on the individuals birthday in each odd numbered year
Fiduciary
one who is entrusted to care for, or act on behalf on another
mutual insurance company
owned by policyholders (member) that elect Board of Trustees/Directors. Policy holders may receive non-taxable dividends as a return of any divisible surplus Board of Trustees carries out the company's mission
Nonpublic Personal Financial Information
personally identifiable financial information and any customer list, description, or grouping that is derived using personally identifiable personal information that is not publicly available
Non-participating Polices
policy holders not entitled to receive dividends
Participating polices
policyholders are entitled to receive any dividends as a return of excess premium
sell/sale
refer to the exchange of insurance for money or its equivalent on behalf of a licensed insurer, fraternal benefit society, or HMO
solicit/solicitation
refers to the attempt to sell insurance or to ask or encourage a person to apply for a particular type of insurance from a particular licensed insurance company, fraternal benefit society, or HMO
Domicile
refers to the jurisdiction (i,.em state or country) where an insurer is formed or incorporated
Negotiate/ Negotiation
refers to the process of one individual discussing with another person a specifc insurance contract and its major benefits, terms, and/or condition - so long as the person engaging in the negotiation either sells or obtains insurance from licensed insurers, fraternal benefit societies, or HMOs
Facultative Reinsurance Agreement
reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature
A temporary insurance license authorizes the licensee to ____________
renew existing insurance on behalf of the original licensee
What must the superintendent do after a hearing ?
serve a a copy of a written report that contains his/her findings upon the person charged and any other involved party
business entity
term includes a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.
Home State
the U.S location where the person mantains a principal place of residence or business and in which the person is licensed to act as an insurance producer
capital and surplus
the amount of the insurer's assets after liabilities are subtracted..
What do the requirements for a certificate of authority include ?
the insurer meeting the capital and surplus requirements of insurance code
An Insured
the person or entity that is covered by the insurer, which covers losses due to loss of life, health, property, or liability
An Owner
the person responsible for paying the policy's premium; this person is not necessarily the insured under the policy, but has various rights that are specified in the contract
Rebating
the unfair and prohibited practice that involves the offer of a special premium or favor as an incentive to purchase insurance
persons who are excluded from the definition of "insurance broker"
those who are not required to be licensed as an "insurance producer"
Commissioner, Director or Superintendent
typically appointed by the Governor, has the power to issue rules and regulations to help enforce these statutues
What is the penalty for violating a cease and desist order
up to $5,000
What is the civil penalty that the Superintendent is authorized to impose in case of a fraudulent insurance act
up to $5,000 plus the amount of the claim for each violation
