Life - Lesson 10: WA Laws on insurance commissioner

What is the procedure for an insurer to sell a new policy in WA? -File a notice in the paper of record for Thurston County. -File with the National Association of Insurance Commissioners. -Most policies must be filed with the IC at least 30 days before use. -File with the IC 30 days after first use.

Most policies must be filed with the IC at least 30 days before use. --- That is correct Rates and Forms a. Most policies must be filed at least 30 days before use with the IC. b. If no action has been taken by the IC, the policy will be deemed approved.

Which of the following is true about the Insurance Commissioner? -Elected in caucus. -Appointed by the legislature. -Publicly elected. -Appointed by the Governor.

Publicly elected. --- That is correct Insurance Commissioner (IC) is elected for 4 years and executes a bond to the state for $25,000.

The maximum fine and time of license suspension cannot exceed: $1,000 and one year. $500 and one year. $500 and 6 months. $25,000 and 10 years.

The correct answer is: $1,000 and one year. Suspension may not exceed 12 months. Fines shall not exceed $1,000 per violation and paid within 30 days.

How much advance notice must the IC give when suspending a producer's license? Ten days. 15 days. None. 30 days.

15 days. --- That is correct To revoke or suspend a license the IC must give 15 days written notice (3 days public safety concern).

A person engaged in the business of making contracts of insurance may be: -A broker or agent. -An insured. -Any person. -An issuer.

An issuer or an insurance company --- That is correct Insurer - as used in this code includes every person engaged in the business of making contracts of insurance. Issuer - as used in this title means insurer, fraternal benefit society, certified health plan, health maintenance organization, and health care service contractor.

What is NOT considered an "insurance transaction?" -Applying for an insurance license. -Delivery of a policy to the insured. -Solicitations for insurance. -The insurer promising to pay for losses in the future.

Applying for an insurance license. --- That is correct Insurance transaction - includes any: Solicitation. Negotiations preliminary to execution. Execution of an insurance contract. Transaction of matters subsequent to execution of the contract and arising out of it. Insuring

Which of the following is a duty of the insurance commissioner? -Delegating authority to employees of other state agencies. -Engage in the business of making insurance contracts. -Negotiating insurance contracts. -File rules and regulations for public inspection.

File rules and regulations for public inspection. --- That is correct Powers and duties: 1) Enforce this code 2) Make reasonable rules and regulations effective after filed for public inspection.

What is the maximum penalty that may be imposed by the commissioner for violations of the code? -Fine of not more than $1,000. -Fine not more than $25,000 and imprisoned not more than 1 year. -Imprisoned not more than 5 years. -$25,000 fine

Fine of not more than $1,000 and imprisoned up to 1 year. --- That is correct Penalties for any person violating this code - guilty of a gross misdemeanor and upon conviction will be fined not less than $10 nor more than $1,000 and imprisoned not more than 364 days.

A person violating the insurance code is: -May not be convicted in a trial. -Answerable to the state legislature. -Required to pay a fine for any class of felony. -Guilty of a misdemeanor.

Guilty of a misdemeanor. --- That is correct Penalties for any person violating this code - guilty of a gross misdemeanor and upon conviction will be fined not less than $10 nor more than $1,000 and imprisoned not more than 1 year.

When the Governor declares a state of emergency, the IC may do all of the following EXCEPT: -Change grace periods. -Postpone the ability of insurers to cancel policies. -Terminate any insurance contract. -Change time periods to report claims.

Terminate any insurance contract. --- That is correct When the governor proclaims a state of emergency, the IC may issue an order that addresses any of the following : Reporting requirements for claims; Grace periods for payment of insurance premiums and performance of other duties by insureds; Temporary postponement of cancellations and nonrenewals; and Medical coverage to ensure access to care.

Which of the following is true for unlicensed activities? -It is considered a misdemeanor with a maximum fine of $1,000. -The IC could issue a cease and desist and fine up to $25,000. -It is considered a misdemeanor. -Anyone passing the producers exam would not be subject to any penalties.

The IC could issue a cease and desist and fine up to $25,000. --- That is correct READ THIS CAREFULLY. There is a difference between civil and criminal penalties. Unlicensed activities: Criminal - Class B felony (a fine of up to $20,000 and 10 years imprisonment.) Civil Penalties - Issue a cease and desist, suspend or revoke, or fine $25,000/violation.

Who is required to examine insurers and bureaus? -Producers. -Secretary of State. -The Insurance Commissioner. -No one.

The Insurance Commissioner. --- That is correct Examination of Insurers and Bureaus: a. IC shall examine each insurer holding a certificate at least every 5 years. b. IC shall examine rating organizations and examining bureaus at least every 5 years. c. IC may accept an audit of out of state insurers from their state of domicile or port-of-entry state. d. IC may examine insurance producers, adjusters or title insurance agents or a person holding shares or proxies of domestic insurers for the purpose of control of its management.

If the IC places a producer on probation, the IC may require all the following, EXCEPT: -A $30,000 fine -Renewal of continuing education. -Regular reports -The practice to be limited.

The correct answer is: A $30,000 fine A revoked or suspended license shall be surrendered. However, the IC may place on probation and require: Regular reports The practice to be limited. Renewal of continuing education.

What non insurance action could cause the IC to suspend a producer's license? -Failing to renew within prescribed time periods. -Knowingly employing any illegal alien. -Failing to pay child support ordered by a court and enforced by DSHS. -Failing the citizenship exam.

The correct answer is: Failing to pay child support ordered by a court and enforced by DSHS. A license shall be suspended for non compliance of a DSHS (Department of Social and Health Services) order.

Which of the following time periods, in days, are correct if the IC were to suspend a license? -30 notice, 30 request a hearing, 30 days for the IC to provide a hearing. -Hearing within 30 days of demand, 15 day notice of suspension or revocation, demand hearing in 90 days -15 notice, 30 request a hearing, 30 days for the IC to provide a hearing. -15 notice, 30 request a hearing, 90 days for the IC to provide a hearing.

The correct answer is: Hearing within 30 days of demand, 15 day notice of suspension or revocation, demand hearing in 90 days To revoke or suspend a license the IC must give 15 days written notice (3 days public safety concern). A hearing by an aggrieved person may be demanded by written notice within 90 days. If a licensee, temporarily suspended demands a hearing, it must be provided within 30 days.

In the enforcement of the WA law, rules, and regulations (under penalties), the commissioner may: -Define the scope of the Revised Code of Washington. -Require a person marketing insurance to be licensed. -Regulate the size of an agency. -Set insurance rates.

The correct answer is: Require a person marketing insurance to be licensed. Enforcement 1) IC may prosecute in any court of competent jurisdiction. 2) IC shall certify facts of violations to the public prosecutor in the jurisdiction the offense. 3) IC may issue cease and desist orders or bring action in court. 4) The attorney general and other prosecutors process requests of the IC. 5) IC may take action against an insurer, charitable gift annuity provider, HMO, HCSC, viatical settlement provider. This action includes fines and revocation of authority to transact in WA. 6) IC may suspend or revoke licenses of a producer or broker or levy a fine. 7) IC requires all insurers to be registered, licensed or certified and meet financial and legal requirements before transacting in WA. 8) IC collects premium taxes from insurers 9) IC requires any person engaged in marketing or sale of insurance in WA to hold a license. 10) IC assists those having complaints about insurers or licensees and offers assistance to consumers. 11) IC publishes tables for courts and appraisers showing life expectancy 12) IC participates in the anti fraud program with other agencies to prosecute insurance fraud.

Which of the following is a false statement about the broad powers of the IC? -The IC may delegate authority to any of his/her employees -The IC enforces the codes by order. -The IC may issue cease and desist orders. -The IC may enjoin.

The correct answer is: The IC may enjoin. The IC enforces the codes by "order." Records shall be available for public inspection. (Trade secrets are excepted.) IC may delegate authority to any deputy, assistant, examiner, or employee of the IC. The IC may issue cease and desist orders or seek to have a court enjoin.

Which of the following statements is true regarding the examination of insurers in WA? -The commissioner must examine insurance producers. -The insurers must be examined at least every 10 years. -The commissioner may audit major shareholders of insurers. -The commissioner is only responsible for domestic insurers.

The correct answer is: The commissioner may audit major shareholders of insurers. Examination of Insurers and Bureaus: a. IC shall examine each insurer holding a certificate at least every 5 years. b. IC shall examine rating organizations and examining bureaus at least every 5 years. c. IC may accept an audit of out of state insurers from their state of domicile or port-of-entry state. d. IC may examine insurance producers, adjusters or title insurance agents or a person holding shares or proxies of domestic insurers for the purpose of control of its management.

For which of the following reasons would the IC NOT be able to suspend, revoke, or deny a license? Conviction of any felony. Working in an insurance office before being licensed. Involved in any insurance unfair trade practice. Demonstrating incompetence.

The correct answer is: Working in an insurance office before being licensed. The IC may place on probation, suspend, revoke or refuse to issue or renew a license for: 1) Providing misleading information in the license application. 2) Violating insurance laws or orders of this state or other states. 3) Misappropriating money in the course of insurance. 4) Misrepresenting an insurance contract. 5) Conviction of a felony. 6) Committing any insurance unfair trade practice. 7) Using dishonest practices or demonstrating incompetence or financial irresponsibility, anywhere. 8) Having an insurance license restricted in another state or territory. 9) Forging another person's name in an insurance transaction. 10) Cheating on an insurance test. 11) Knowingly accepting insurance business from an unlicensed person. 12) Obtaining a loan from an insurance client that is not a financial institution, relatives excepted.

An agency has discovered that an employee has been embezzling client money. When confronted, the employee agrees to return the funds and quit. Because no damage has been done, no further action is taken. What could be the consequences for the parties involved? -The license of the business may be revoked. -Only the employee could suffer any legal repercussions. -If no clients lost any money and no insurance coverage was affected, no action would be taken. -The renewal of the business license could be denied.

The license of the business may be revoked. --- That is correct The license of a business may be revoked if the managers don't report violations of employees.