WV Life LAW
Maximum fine for each unauthorized transaction of insurance
$20,000
If an insurer has committed or performer unfair claims settlement practices, the commissioner may impose a fine of?
$250,000
Maximum fine for unfair claims settlement practices
$250,000
up to $___ civil penalty for specific producer licensing violations
$5,000
License Renewal
- renews 24 months(biennially) -must complete all required continuing eduction -Lapsed producer licensee may be reinstated within 12 months from the rental due date, without passing a written exam.
Free-look provisions
-10 days for most health insurance policies -30 days for medicare supplement polices -30 days for LTC insurance policies
commissioner will issue a cease and desist order that they must stop business within how many days
-20
Penalties of unauthorized insurance
-20,000 fine per each unauthorized act, guilty of a felony act upon conviction. -1-5 years in prison, or both fined and prison.
defamation
-Making statements, written or oral that is false of maliciously critical fo the financial condition of an insurance company or producer representing that company is illegal.
If a person knew or should have known that he was violating the law, penalty will be:
-a fine of $5,000 for each violation -Fines totaling $100,000 for all violations committed within 6 months -Suspension or revocation of license.
Unauthorized insurer
-a person who engages in the transaction of insurance without valid license as required by the laws of West Virginia, unless exempt. --bound by the terms of the insurance contract as if the contract were legally procured under the insurance laws of this state.
Cease and desist order
-after a hearing can be issued if insurance code has been violated. -can be suspension or revocation or license -fine of not more than $1,000 per violation (not to exceed an aggregate penalty of $10,000) -anyone who violates a cease and desist order fine up to $10,000 for each such violation
filing and approval forms
-all forms, group insurance certificate forms, app. forms, or riders must be approved by commissioner. --revised forms must be approved before the revised forms can be used.
Assignment of proceeds
-anyone in a group life policy may assign all or any part og ownership under group policy including: -the right to designate a beneficiary. -The right to convert to an individual policy.
Debtor groups
-at least 100 new debtors annually -at no time can outstanding amount of life insurance exceed the remaining balance of the debtor loan.
When does an agent have to give a policy summary and buyers or shoppers guide to the client?
-consumer guides to the client at the time the application is taken.
Conditional Receipt
-covered immediately from the date of application and premium as long as the he passes the insurers underwriting requirements. -if medical examination for blood is required, coverage beings once applicant passes medical examination.
limitation on items of value with respect to rebates
-educational materials, promotional materials, or merchandise that cost $25 or less, not considered rebating.
License renewal and fee
-expires every 2 years and is $50
Engaging in any unfair trade practice will result in insurance of cease and desist order and following penalties:
-fine of up to $1,000 for each violation -Fines amounting to $10,000 for all violations.
spendthrift clause
-gives the owner right to select death settlement option and it states proceeds will direct to the beneficiary not to creditors. -if policy was bought to defraud creditors, beneficiary will be liable to creditors for amount of all premiums paid.
Exemptions of Replacement
-group life and annuities used to fund prearranged funeral cost -credit life insurance -group life insurance or group annuities where this is no direct solicitation of individuals by an insured producer. -
Boycott, intimidation, and coercion
-illegal for an insurer or agent in any activity to crerate an monopoly, restrains from competitors ability to compete, or -force a person to believe he must buy insurance from that one agent or company.
the Guaranty associations maximum liability is as follows:
-life insurance death benefit: $300,000 -life insurance cash surrender values:100,000 -Disability or long term care insurance:$300,000 -Basic hospital, surgical, and medical expense policies or major medical polices:$500,000 -All other health insurance benefits: 100,000 -present value of annuity benefits: $250,000
frequency at variable rate is determined
-maximum rate must be recalculated once every 12 months but not more than once every three months -rates may be adjusted when the rate computed above differs from the current rate by more than .5%
Unauthorized Transactions
-may be fined by the commissioner up to $20,000 for each act or transaction.
Suspension or Revocation
-may fine or place probation, suspend, revoke, or refuse to issue or renew the license of a producer who: -incorrect information that misleading or untrue in the application -violate any law, rule or regulation -obtain a license by fraud or misrep. -failed to pay child support -failed to pay state tax -found or admitted to any unfair trade practice -fine up to $5,000
license requirements
-must be 18 y/o -have not committed any fact this is ground for denial, suspension, or revocation. -Not intend to use the license primality for controlled business. -complete a licensing application and pay the necessary fees -successfully pass the examination for the lines of authority for which the person has applied.
Continuing Education
-must complete 24 hours of continuing education every 2 years. -three hours must be on ethics.
License limitations
-no producer may write business with an insurer not licensed in WV
Before a producer can solicit the sale of annuity product, the producer must complete a ___ hour training course
-one time four-hour
conversion to individual policy at termination of group policy
-participants must have been in the plan for at least 3 years -Conversion to an individual policy must be within 31 days -Group life plan must have been in existence for at least 5 years.
Excessive charges
-producers who compensated based on sales commission may not charge ant type of fee for the sale or servicing of those polices. -unfair discrimination
Lafe and Health Guaranty Association
-purpose of the association is to protect policy owners and beneficiaries against insurers who become financially impaired or insolvent.
Annuity Suitability
-suitability information includes the consumers: -age, financial status, tax status, investment objectives, other relevant information -suitability records must be kept with the insurer for 10 years.
Life settlements
-transaction between owner and investor. The lump sum payment is more than a cash surrender value but less than the face amount. unlike viatical settlement,, the policyowner is not expected to die within a set period of time.
trustee groups
-two or more employers in the same industry -commonly known as MET -permits small employers who could not otherwise qualify for group insurance to do so. -group must cover at least 100 persons when the policy is issued.
guilty of committing unfair trade practice, commissioner may impose a fine of:
-up to $1000 for each violation, subject to an aggregate penalty of $10,000. -Up to $5,000 for each violation knowingly committed, subject to an aggregate penalty of $100,000 in any six-month period.
insurable interest
-when the contract was made
The replacing insurer must notify any existing insurer that may be affected by the proposed replacement within?
-within 5 business days of the receipt of a completed application indicating replacement.
Reports of suspected Fraud. insurance acts must be filed within
14 days
An insurer must file a notice of appointment within___ days of the agency contract date or first insurance application
15 days
Employer group polices must cover at least ___ employees at insurance
2 employees
Producer licenses renew every ___ years
2 years
commissioner must enter an order for Calling for a hearing with at least ___ days notice to the company `
20 days
___ hours for property or casualty insurance licensing applicants
20 hours
Companies have how many days to make written submission or rebuttal?
30 days
Free-look for life insurance replacements
30 days
Licensees must report a change in address, name, or phone number within
30 days
Time frame to report administrative actions or criminal prosecutions to the commissioner
30 days
When an insurance company terminates its relationship with a producer, the company must notify the commissioner within ___ days of the date of the insurer terminated its agency relationship with producer.
30 days
Producer must report to the commissioner any admin. actions taken against the producer in another jurisdiction or by another governmental agency in this state or any criminal prosecution in any jurisdiction within ___ days of the action.
30 days.
___hours for property and casualty insurance licensing applicants
40 hours
Commissioner must report findings and judgment within __ days after the end of the hearing
45 days
Maximum preexisting condition exclusions
6 months
Length of Comissoner's Term
6 years
All policy forms must be filed for approval at least __ days before their intended use.
60 days
noncommercial property and casualty forms must be filed with the commissioner at least ___ days prior to use
60 days
No later than ___ days following the completion of the examine, the examiner in charge must file with the commissioner a written report of examination.
60 days.
Maximum annual fixed rate on life insurance loans
8%
Binders are valid until the later of ___ days or policy insurance
90 days
Commissioner must make the results for any examination for the public inspection after ___ days
90 days
twisting
A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage.
Commissioner of Insurance
Appointed by the governor, -powers and duties are: investigations and examinations -rules and regulations -orders and notices -imposing penalties - including fines, suspensions, and revocations.
Guaranty Association
Authorized to: -employ persons to perform the associations duties and obligations -borrow funds -sue or be sued -negotiate and become a party to contracts. -take legal action as necessary to avoid or recover payments of improper claims -organize itself as a corporation or in other legal form as permitted by state law. -Perform such other acts as necessary to compete the association duties.
Reports of Fraudulent insurance acts section
sec. 33-41-5, Rule 114-71-3
The commissioner must conduct the hearings ___ days of the application for the hearing.
45 days
Commissioner must conduct an examination of every insuerer at least once every
5 years
Replacement insurers must maintain copies of replacement notices for at least ___ years, or until after the next regular department examination, whichever is later
5 years.
Viatical statements
-an agreement in which the owner of a life insurance policy who is critically or terminally ill, sells the policy to a third party for less than the death benefit in exchange for immediate cash.
False Advertising
-illegal for any producer to formulate or use an ad. or statement that is untrue, deceptive, or misleading regarding insurance company or persons with company.
Rebating
-illegal for insurers to induce applicant to purchase insurance by making agreements not specifically included in the insurance contract.
misrepresentation
-illegal to make written or oral statement, sales presentation, or comparison that: --misreps the dividends, benefits, conditions or terms of policy. -the purpose of inducing the lapse, exchange or conversion or policy loan of any insurance policy.
commissions
-insurer or producer may not pay commission or fee to a person for selling insurance if the person is required to be licensed and the person is not. -renewal or deferred commissions may be paid to person who was licensed at the time of sale but is not licensed now.
Transacting insurance
-issuing or delivering certificates or contracts of insurance. -soliciting, negotiating, procuring or effecting insurance.
Nonresident License
-person must be currently licensed and in good standing in her resident state. -must submit proper application and fees. -Persons home state must award insurance producer licenses to producers of this state on the same basis (reciprocal agreement)
Continuing education does not apply to
-person who did not have to pass an exam to sell insurance -inactive agents -have limites or restricted licenses -agents whose licenses have expired -who have voluntarily cancelled their licenses -nonresident agents -adjusters -person who sell credit life or credit accident insurance.
assignment of proceeds
-person whose life is insured may assign all or part of his incidents of ownership under the policy, -including right to designate a beneficiary(es) and conversion to an individual plan.
group life insurance
-policies may be issued to an employer or trustees for the benefit of the employees. -eligibility can be restricted to certain classes of employees ( can not arbitrarily choose employees in the same general class) -policy must cover at lease two employees at the time policy is issued.
if a variable rate is charged for policy loans the max rate cannot exceed higher of:
-published monthly average of moodys corporate bond yield average two months prior to the date the rate is determined -the rate used to compute the cash surrender value, plus 1% per annum.
At least ___ days advance notice of the hearing must be sent to the licensee
15 days
labor unions
plan must cover at least 25 union members at date of policy