Property and Allied / Insurance Regulation
A producer has successfully completed 52 hours of CE. How many hours can the producer apply to her current reporting period and how many hours ca she carry forward to the next reporting period?
24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. The excess 4 hours may not be carried over.
A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days?
30 Days
What are the most common penalties for violations of insurance statutes?
A Cease and Desist order, a fine and license suspension or revocation
Who is an insurance agent?
A person authorized to sell, solicit and negotiate insurance contracts
Which of the following wold be required to be licensed as an insurance producer?
A salaried employee who advertises and solicits insurance. A person does not require an insurance producer license if he or she only advertises without intent to solicit insurance.
An individual was just caught acting as an exclusive general agent - even though he is not properly licensed, assuming that this occurred in a single day. What is the maximum penalty he faces?
A third degree misdemeanor and a $1,000 fine
Who is considered a nonresident agent?
An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state
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?
Authorized or Admitted
If an insurer holds a Certificate of Authority, it is known as what type of insurer?
Authorized or admitted
A person applying for a manger or exclusive general agent license must meet all of the following criteria EXCEPT
Be responsible for at least 25% of total commissions collected by the office that he or she manages.
If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?
Cease and desist order
A state-issued document empowering an insurance company to become an admitted insurer is called what?
Certificate of Authority
What document is required for an insurance company to transact insurance ?
Certificate of Authority
What are producers required to do in order to renew their license?
Complete continuing education hours and pay a renewal fee
National Do Not Call Registry
Created to keep telemarketers from calling consumers who do not wish contacted. A national registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who prefer to limit the telemarketing calls they receive.
If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?
Defamation
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?
Discrimination
Insurers are classified according to their domicile. What are the three types of insurers?
Domestic, foreign and alien
The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility
Fiduciary
What type of insurer is formed under the laws of another state?
Foreign
Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance?
If a consumer does not sign and return the notice of disclosure within 30 days
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances, called defamation.
In general, who can be excluded from producer licensing and examination requirements ?
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)
What is controlled business?
Insurance on the producer's own life or property, or the lives or property of the producer's family or business associates
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?
Misrepresentation
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
Misrepresentation
Which of the following situations would punishment include imprisonment?
Omission of a material fact with intent to embezzle funds
Who may share in the commissions from the sale of an insurance policy?
Only producers properly licensed for the type of insurance transaction
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
Only written statement can be considered fraud. According to Title 18, Sections 1033 & 1034 of US code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud.
The Fair Credit Reporting Act
Protects consumers against the circulation of inaccurate or obsolete persona or financial information
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?
Rebating
The Federal Fair Credit reporting act
Regulates consumer reports
Who owns Stock companies?
Stock holders
What type of licensee represents the insurance company?
The Agent
What authority is authorized to issued a temporary insurance producer's license
The Commissioner has the power to issue and revoke all types of licenses, including those that are temporary.
Who must be notified of a producer's change of address?
The department of insurance (Commissioner/ director/ superintendent)
Who is responsible for the costs associated with the examination of insurers?
The insurer who is being examined
To whom may a certificate of authority be issued ?
To an insurer authorized to transact business in this state
What is the purpose of a cease and desist order?
To prevent producer or insurer from further violating laws for transaction insurance.
Which type of misrepresentation persuades an insured, to his or her detriment to cancel, lapse or switch policies from one to another?
Twisting
When would a misrepresentation on an insurance application be considered fraud?
When is intentional and material
When is controlled business legal?
When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)
When can the Commissioner or Director examine insurers?
Whenever deemed necessary, but at least once every few years
How soon after the due date should the insurer pay the agent appointment fees?
Within 30 days