property insurance basics
Any person who violates a cease-and-desist order after it has become final may pay a fine of up to
$10,000 for each violation, which may be recovered in a civil action. Upon order of the commissioner, the person will be subject to suspension or revocation of license.
an agent trying to obtain any premium payment by fraudulent representations
-fine of up to $100-$1,000 -imprisonment for 1 year
The commissioner determines that the temporary license is necessary for the servicing of an insurance business in the following cases:
-to the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled -to a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application of the license -to the designee of a licensed insurance producer entering into the Armed forces of the United States -in any other circumstance where the commissioner deems that the public interest will best be served by the issuance of this license
a life insurance producer who has been licensed in the commonwealth contract to transact a life line of authority for at least
1 year is qualified to operate as a life settlement broker.
an adviser's license expires
3 years from the effective date, unless it is revoked or suspended.
a policy that insures all property at multiple locations for a single amount is referred to as
Blanket
Insurance Policy Conditions
Insuring agreement provides information on the policy's coverages. Conditions state the legal obligations and duties of the parties to contract.
The commissioner may issue a temporary insurance producer license for a period
Not to exceed 180 days without requiring an examination.
standard mortgage clause
Protects the interest of the financial institution against loss to real property caused by perils insured against.
additonal coverages
The additional coverage portion of a policy provides an additional amount of coverage for specific loss expense, at no additional premium.
financial conditions
The insurance department monitors the financial condition of the insurers. The insurers report to the state not to policy holders.
Functional Replacement Cost
This loss valuation method allows the insurer, at the time of loss, to adjust the loss on the basis of functional replacement cost, which is the cost to replace damaged property with less expensive and more modern construction or equipment.
Any company, officer, or agent that neglects or refuses to submit copies of policy forms within 30 days of the commissioners request faces
a fine of between $100 and $500
Agreed Value
a property policy with a provision agreed upon by the insurer and the insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written. When a loss occurs, the policy pays the agreed value as specified on the policy schedule, regardless of the insured's property's appreciation or deprecation.
the property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called
abandonment
every insurer must file with the commissioner all rates, every rating plan, and every modification of any of the foregoing which it proposes to use
at least 15 days prior to the effective date of such plan.
Acting as a public insurance adjuster without a license or with a suspended license can by punished
by a fine not to exceed $10,000, or by imprisonment for not more than 6 months.
whoever acts as an insurance advisor without a license or with a suspended license can be punished
by a fine of between $50 and $500, by imprisonment for 6 months, or both.
knowingly paying an unlicensed person acting as a producer
fine of $50-$500
an unlicensed person impersonating an agent, broker or adjuster
fine of up to $10-$100
engaging in unfair or deceptive acts in connection with insurance transactions
fine up to $1,000 per act
Any other violation, not specified for a penalty
fine up to $500
Upon payment of renewal fees, the commissioner may renew insurance adviser's license
for any succeeding 3 year period without requiring the detailed information that was required in the initial licensing period.
conditions
how parties should act following a loss
total loss
in the event of a total loss, the coinsurance clause does not operate and the full amount is paid.
using an air cooled engine, a proposed insured has developed a new, experimental aircraft. if the inventor applies for liability insurance, what rating type will the insurer most likely use?
judgement
A portable electronics insurance license
may be issued to a vendor for the sale, negotiation, or solicitation of portable electronics insurance. The license is valid for 2 years an examination is required for licensure.
Specific Coverage
one location is insured for a specific amount of insurance on the structure and contents.
Specific Insurance
provides a specific amount of coverage for each property. A blanket insurance policy provides for more than one property with a single limit of coverage.
subrogation
provision found in most insurance policies that gives the insurer , after payment of loss caused by a third party, the insured's rights are only to the extent of the loss payment.
all of the following are considered parts of the policy structure EXCEPT
provisions
manual rates
rates that are established by similarity of risk, also known as class rate.
unoccupied
refers to an insured structure in which no people have been living or working within the required time period, but the structure contains contents.
Nonconcurrency
refers to other insurance written on the same risk, but not on the same coverage basis.
which of the following Is used in the formula for calculating the actual cash value of a property?
replacement cost
in property insurance, actual cash value is defined as what?
replacement cost at the time of the loss, less depreciation.
salvage
salvage clause in insurance policies allows the insurer to sell the damaged property as salvage to recover part of the paid loss.
what will happen if a house covered by a standard mortgage clause is a total loss?
the insurer pay the mortgagee according to the morgtagee's interest on the property
abandonment
the property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss. Until the insurer has determined that the loss is total, the insured
pro rata liability
to preserve the principle of indemnity, each policy pays a pro rata share based upon the share of the coverage. Limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property.
Valued Policy
type of policy that is used to provide a specific amount of replacement cost for a given risk after an insured property has been destroyed. without regard to actual value or depreciation.
an insured relocated to another state for work. However, she still owns and insures a house in this state, but has had noone living in it for 3 months. She is also storing some furniture and clothes in the house. From an insurance standpoint, the insured's house is considered
unoccupied
the refusal of any examination of any person to submit to examination is grounds for supension, refusal, or nonrenewal of any license or authority. A fine of
up to $1,000 or imprisonment for a maximum term of 1 year may be imposed.
Additional Insured
usually added by endorsement and is not named on the declarations page but protected by the policy.
Nonrenewal
when an insurance policy does not offer a continuation or replacement at its expiration date.
Declarations
who, what, when, where, and how much insurance and premium all are stated in the policy declarations
Public adjuster contracts must give insured the right to cancel a contract without recourse.
within 3 calendar days of receipt.
Agreed Value
works best for items whose value does not fluctuate much. When a loss occurs, the policy pays the agreed amount