Life Insurance Law Exam DE

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Max penalty for insurance fraud?

$10,000

Maximum Penalty for violation of cease and desist order

$11,500

Fine for submitting false and fraudulent info. about CE completion

$15,000

Fine for failure to comply with CE requirements

$2.000

Penalty in lieu of or in addition to license denial, suspension, or revocation

$200-$20,000

Producer Regulation

- Must be licensed in the line of authority for which the agent transacts insurance - Must be appointed by insurer to transact on insurer's behalf - Avoid unfair trade practices

How long is grace period for stipulated payment of premium before policy will lapse

1 month, not fewer than 30 days, subject to an interest charge not exceeding annual 6%

Maximum extension for CE completion

12 months/1 year

Time period to reinstate lapse license with proof of CE completion and payment of fees

12 months/1 year

Payment of claims?

2 months after proof of death

Producer's license period

2 years

When do policies become incontestable?

2 years

CE credit hours to be completed each reporting period

24 hours

CE requirement for ethics

3 hours

Keep records of insurance transactions required for Commissioner's examination

3 years

Producers must report change of name or address

30 days

Commissioner's term of office

4 years

Who manages Guaranty Association?

5-9 member insurers

Appeal after the order on hearing?

60 days

Twisting

A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage.

Policy Loan

After 3 years, and if policy has sufficient cash surrender value, the insured may borrow the cash value at an interest rate of not more than 8%. The insurer may take up to 6 months after the request to borrow, to disperse funds.

Rebating

Any inducement offered to the insured in the sale of insurance products that is not specified in the policy

Apparent Authority

Assumed based on agent's actions and statements

When must an insurer provide a notice of right to convert to an individual policy?

At least 15 days prior to expiration of such period. If not provided, individual is entitled to an additional 15 days

How often does commissioner conduct examination of any insurer?

At least once every 5 years

Churning

Changing old policies for new ones for the purpose of receiving commission

How is credit life insurance written?

Decreasing term insurance

Buyer's Guide

General guide to life insurance policies; must be provided at the time of application

Misrepresentation

Illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms. Also refers to oral statements

Implied Authority

Incidental to agent's express authority(not specifically written in the contract)

Who may accept a finder's fee for an insurer for a life policy?

Licensed life insurance producers

Agent

Licensed producer appointed by the insurer

Broker

Licensed producer who represents policyholders and is not a direct rep of any insurance company

Consultant

Licensee of the department who offers advice, counsel, opinion or service regarding benefits

Commingling

Mixing the client's money with the producer's personal money

How long does insurer have to pay the disable surplus (dividend) to insured?

No later than end of 3rd policy year

Defamation

Oral or written comment made to insure a person engaged in the insurance business.

Unintentional Act

Penalty of not more than $1,000 for each violation,. not to exceed an aggregate penalty of $150,000 in any 6-month period

Intentional Act

Penalty of not more than $10,000 for each violation, not to exceed an aggregate penalty of $150,000 in any 6 month period

Unfair Discrimination

Persons in same class with same life expectancy receive different rates based on gender, marital status, sex, etc.

Delaware Life and Health Insurance Guaranty Association

Protects policyowners, insureds and beneficiaries from financial losses caused by insurers who become insolvent or otherwise unable to perform their contractual obligations.

How is Commissioner of insurance chosen?

Qualified Electors

Policy Summary

Specific information about policy issued; must be provided at the time of application

What does credit life and health insurance cover?

The life and disability of a debtor during the time a loan is outstanding

Coercion

To require, as a condition to a loan, that the applicant purchase insurance from a specific insurer.

When can an annuity and Endowment contract be reinstated?

Within 1 year after the date or premium default

When can a lapsed insurance policy be reinstated?

Within 3 years, 2 years for industrial life policies. Must pay any indebtedness, provide evidence of insurability, and pay all past premiums with interest not to exceed 6%

If application filed and deemed made in good faith, when must hearing be held?

Within 30 days after filing application

If person aggrieved of an act wants to submit a written application for hearing, when must it be filed by?

Within 90 days after act was violated

Expressed Authority

Written in the contract

When must a notice of hearing be delivered?

at least 20 days prior to date of hearing


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