PA life and health ch15
coercion
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases an insurance policy from the bank in the amount of the loan. This is an example of
30
A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in their address within how many days?
reciprocity
A producer licensed in another state wants to become a producer in Pennsylvania. The other state gives the same privileges to Pennsylvania producers wanting to be licensed in that state as it does its own agents. Pennsylvania, therefore, extends the privileges of its agents to the prospective agent of the other state. What is this called?
twisting
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
a
All of the following actions can be described as twisting EXCEPT a. Explaining to a client the advantages of permanent insurance over term and suggesting changing policies. b. Misrepresenting the terms and conditions of the existing policy to make the new one more attractive. c. Embellishing the terms of the proposed policy in order to convince the insured to switch. d. Making an incomplete comparison between the existing and proposed policies.
rebating
An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?
Fair credit reporting act
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
24 hours each licensing period
Continuing Education required for those holding a Pennsylvania producer license?
For continuation of business in case the licensed producer dies or becomes disabled
For what reason can a temporary license be issued?
defamation
If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?
authorized or admitted
If an insurer holds a Certificate of Authority, it is known as what type of insurer?
authorized or admitted
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
the licensee
If another governmental agency takes legal action against a licensee, whose responsibility is it to report the action?
cease and desist
If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?
Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical).
In general, who can be excluded from producer licensing and examination requirements?
30
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within how many days of the final disposition of the matter?
misrepresentation
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?
An appointment by the Governor
The Commissioner of Insurance is placed in office by which means?
To an insurer authorized to transact business in this state
To whom may a certificate of authority be issued?
discrimination
Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?
Complete continuing education hours and pay a renewal fee
What are producers required to do in order to renew their license?
A cease and desist order, a fine, and license suspension or revocation
What are the most common penalties for violations of insurance statutes?
misrepresentation
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
$10,000
What is the civil penalty for violating a cease and desist order of the Commissioner?
To prevent a producer or insurer from further violating laws for transacting insurance
What is the purpose of a cease and desist order?
agent
What type of licensee represents the insurance company?
broker
What type of licensee represents the insured?
twisting
What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
Whenever deemed necessary, but at least once every few years
When can the Commissioner or Director examine insurers?
discrimination
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
Producer's spouse or designee in case the licensed producer dies or becomes disabled
Who can usually be granted a temporary license?
A person authorized to sell, solicit and negotiate insurance contracts
Who is an insurance agent?
An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state
Who is considered a nonresident agent?
insurer who is being examined
Who is responsible for the costs associated with the examination of insurers?
Only producers properly licensed for the type of insurance transaction
Who may share in the commission from the sale of a life insurance policy?
The Department of Insurance
Who must be notified of a producer's change of address?
3 days
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
consumer report
what will provide the underwriter with the information about an insurance applicant's credit?
