Quiz Questions - Section 4
All of the following are incorrect penalties for violating the Unfair Practices article EXCEPT:
$5,000 fine for each act in violation; $10,000 fine for willful violation
Which of the following is a penalty for violating the insurance information and Privacy Protection Act?
$50,000 fine for violations committed with regularity showing they are general business practice
Upon receiving any written or oral inquiry from the Department of Insurance concerning a claim, every licensee shall immediately, but in no event more than ..... calendar days of receipt of that inquiry, furnish the Department of Insurance with a complete written response based on the facts as then known by the licensee.
21 Days
Once insured an insurer are in agreement payment must be made within:
30 Calendar Days
Under Fair Practices, Insurer has up to how many days to accept or deny a claim?
40 Days
Rates shall remain in effect if they are:
Adequate, Reasonable, and Not Discriminatory
Which is not a violation of Unfair Practice?
Age Discrimination Hint: In the class of Life and Disability age and sex can use used to discriminate Violation of Unfair Practices: Delaying an Investigation Defamation of an Insurer Misrepresentation
Which of the following is NOT considered an unfair practice?
Age discrimination
Which describes use and file as a type of rating law?
An insurance company uses the rate they determine appropriate first and then file that rate with the commission Hint: Some companies use the rate they determine appropriate first and then file that rate with the Commission
What is not a TRUE statement about insolvency?
An insurer cannot escape the condition of insolvency by being able to provide for its liability and reinsurance of all outstanding risks. Hint: An insurer cannot escape the condition of insolvency by being able to provide for its liabilities and reinsurance of all outstanding risks
Which of the following describes prior approval as a type of rating law?
An insurer files policy rate information with the Department of Insurance. After filing, the insurer delivers evidence that the rates proposed are reasonable and fair. Then the insurer waits (30-60 days) for approval.
Penalty for violation of a summary seizure would be:
Any And/Or... 1 Year Imprisonment Misdemeanor $1,000 Fine
According to the Code, the word "person" means:
Any person, association, organization, partnership, business trust, limited liability company, or corporation Hint: The term "person" can mean an individual, organization, etc.
When the Commissioner takes over a company that is insolvent, his/her first responsibility is to:
Attempt to restore the company if possible
The State of California requires that all admitted insurers be a member of the:
California Insurance Guaranty Association
Who administers the California Administrative Code of Regulations?
Commissioner Hint: The commissioner does not create the code, but administers it
Which of the following is not one of the three principal parts to the privacy requirement of Gramm-Leach-Billey Act?
Credit Reporting Hint: The Financial Modernization Act of 1999, or GLB Act, includes provisions to protect consumers personal financial information held by financial institutions. Financial Privacy Rule Safeguards Rule Pretext Provisions
All of the following are efforts the Department of Insurance takes to combat insurance fraud EXCEPT:
Each company is required to submit a complete record of fraudulent claims made to the business each year.
How is the insurance Commissioner put into office?
Elected by the citizens of California
To change the California Insurance Code a bill is brought before the Assembly and the Senate. After both parties vote on the bill and it is approved, it moves to the:
Governor
CIGA pertains to:
Insurer's Insolvency Hint: California Insurance Guarantee Association pays claims of insolvent members
Which of the following is NOT a type of rating law?
Legal Competition Use & File Prior Approval File & Use
A subsequent violation of a cease and desist would result in:
License Suspension Hint: License Suspension OR Revokation
Unless expressly otherwise provided, any personal notice required by any person by a provision of the code may be given by any of the following: Notice required by any person by a provision of the code may be given by any of the following EXCEPT:
Notification at his residence or principal place of business Postage Prepaid Mailing Notice A Third Party
Every company in California required to report its financial condition to the Commission every year:
On or Before March 1
All of the following are penalties for unfair discrimination EXCEPT:
Prison
Solvency requires the insurer to have enough assets to cover:
Reinsurance, Paid-in-Capital, & Liabilities
Which court case reversed the Paul vs Virginia case of 1868?
SEUA case of 1944
What is the role of the Commissioner and the Department of insurance in relation to the consumers?
The Commissioner and DOI are responsible for regulating the conduct of agents and insurers Hint: Protection, Regulation, and Conduct of insurance companies and agents
An example of a self-regulatory authority of the insurance industry is:
The NAIC Hint: The NAIC develop model laws and guidelines for the insurance industry
What is the significance of the SEUA case of 1944?
The court decided the federal government should regulate insurance Hint: Overturned Paul vs. Virginia legislation
If convicted of insurance fraud:
The fine can be up to $150,000 and up to 5 years in state prison
Which of the following is a responsibility of the Commissioner?
To Enforce the Law of Insurance Hint: The commissioner enforces the code, nuut does not write it or change it
What is NOT a purpose of the Unfair Practices Article?
To determine the punishment for an agent found guilty of unfair practice in insurance Hint: The Unfair Practices regulation was designed to protect and regulate, but not to create a punishment. Punishments are typically determined by the courts
According to the Code of a "Notice of Claim" is a(n):
Written Notification OR Oral Notification
