Marketing and Selling Insurance

twisting

A person cannot make a false or misleading statement or comparison about an insurance policy in order to induce someone to lapse, surrender, terminate, retain, or convert an insurance policy or buy a policy with another insurer. This unfair practice is known as ____.

Class D felony

Anyone who engages in twisting is guilty of a ____.

Notify the insured by November 15 that additional time is necessary for the investigation, and give reasons for the additional time.

Ascent Insurance Company receives a claim from its insured on October 1. Although it promptly begins to investigate the claim, it soon determines that it will be unable to complete its investigation before December 1. Which of the following actions should it take with respect to the claimant?

within 15 days after

If an insurer needs more time to determine whether a claim should be accepted or denied, it must give the claimant written notice ____ receiving proof of loss, stating the reason more time is needed.

Order the agent to pay restitution

If the Commissioner finds that an agent engaged in an unfair method of competition or an unfair or deceptive business practice, he or she may do all of the following EXCEPT:

terms, benefits, or dividends

It is unlawful to make statements or comparisons that misrepresent a policy's ____.

Rebating

John offers potential clients courtside tickets to a professional basketball game in exchange for purchasing a homeowners insurance policy. Which prohibited sales practice is John committing?

fine up to $10,000 up to 6 years in prison both

Twisting is subject to:

Misrepresentation

When asked about the payment of dividends by a prospect, Maloney assures his client that policy dividends are always guaranteed, even though they are not. Maloney has committed the unfair trade practice of

twisting

When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Melanie's company. Which unlawful act has Melanie committed?

Defamation

When meeting with a prospect to discuss automobile insurance, Tyler makes disparaging comments about the financial stability and reputation of a competitor to dissuade the prospect from purchasing its policies. Which unfair trade practice has Tyler committed?

Refusing to settle a claim for which liability is uncertain

Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in Arkansas?

Requiring policyholders to file proof of loss before paying claims

Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in Arkansas?

unfair claims

Insurers are prohibited from engaging in ____ settlement practices.

receipt of claims, communications, and investigate

Insurers must acknowledge ____, reply to claimants' ____ and settle claims within certain time periods specified in the Insurance Code.

15 days

Insurers must acknowledge receipt of a claim within ____, unless payment is made within that time period.

45 days

Insurers must complete claim investigations within ____ after being notified of a claim, unless the investigation cannot reasonably be completed within that time.

10 working days

Insurers must mail or deliver claim checks within ____ after a claim is processed, all claim investigations are completed, and the claim file is closed and ready for payment.

15 days

Insurers must notify claimants within ____ after receiving properly executed proofs of loss whether the claim has been accepted or denied.

15 working days

Insurers must reply to all other communications from claimants within 15 working days.

15 working days

Insurers must respond to inquiries from the Arkansas Insurance Department about a claim within ____.

$1,000 $10,000 six-month

Penalties include: A fine of up to ____ for each violation (but not more than ____ total in any ____ period)

$5,000 $50,000 six-month

Penalties include: A fine of up to ____ for each violation (but not more than ____ total in any ____ period) if the person knew or should have known he or she was violating the law

Advise the insured about his or her legal rights within 7 working days

Summit Insurance Company receives a claim from its insured on May 1. It decides to investigate the claim before it pays the benefit. Which of the following is NOT among the duties it owes to the insured at this time?

$10,000 fine for each violation license suspension

The Commissioner may also impose the following penalties for violating a cease and desist order: