Ch 6 & 7 Qs Wrong- NJ Laws, Rules, and Regulations

In order to become a producer in NJ, after submitting a licensing application, candidates must pass a licensing examination within

1 year- In order to obtain a producer's license, candidates need to pass a licensing exam. The candidate must then apply for a license within 1 year.

A producer received a group master policy and certificates for delivery to the insured. Within how many days must the policy and certificates be delivered?

10 CALENDAR DAYS- All policies, certificates or other evidence of insurance that are received by an insurance producer must be delivered or mailed to the insured within 10 calendar days of the receipt by the producer.

The Commissioner believes that an insurance rule or regulation has been violated, and decides to call a disciplinary hearing. How many days before a hearing must the Commissioner issue a notice to the person charged with a violation?

10 days

When an insurance producers sustains a spinal cord injury in a car wreck, he is rendered permanently disabled. In order to continue his business, his wife establishes an agreement with another producer to continue his business. This authorization will last for a maximum of

180 days...If a producer dies/becomes disabled, a family member or an associate can enter in an agreement with another producer to continue the business.

If a producer has been convicted of a crime, he/she must notify the Commisioner within

30 days

The company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. Within how many days must the producer pay the insured?

5 business days- All premiums must be REMITTED to the insurer within 5 business day after receipt of funds. All premiums due the insured must also be paid to the insured or credited to the insured's account within 5 business days.

An insurance producer is acting as a broker when he/she negotiates for an insurance congtract on behalf of

A client

All of the following candidate for a resident producer license may be exempted from the examination requirement EXCEPT

A resident producer licensed for Property and Casualty insurance applying for a life insurance license... The Commissioner may waive the prelicensing education and exam requirement if the applicant holds a professional designation or a license in the kind of insurance for which the applicant seeks authority.

What type of licensee represents the insurance company?

Agent- An insurance agent is an insurance producer acting as an agent authorized in writing by an insurance company to solicit, negotiate, or sell insurance contracts, or collect premiums on its behalf.

Which of the following types of insurance would be written by a limited lines agent?

Credit insurance- Limited lines agent can write the following types of insurance: bail bonds, car rental insurance, credit insurance, ticket insurance, travel insurance, group mortgage cancellation, legal insurance, self-storage personal property insurance, and special nonresident limited lines.

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the habits and lifestyle- Discriminating bw individuals of the same class with equal life expectancies, or by reason of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also not allowed to cancel indivdiual coverage due to change in martial status. Discriminating benefits based on the insured's habits and lifestyle (such as smoking or dangerous hobbies) is acceptable.

The requirement that agents must account for all insurance funds collected, and are not permitted to comingle those funds with their own is know as

Fiduciary responsibility- All premiums collected on insurance policies must be help by a producer in a fiduciary capacity and must not be misappropriated, illegally withheld, or improperly converted to the producer's own funds.

What significance did Paul vs. Virginia have one the insurance industry?

It was decided that insurnace was not interstate commerce and could not be regulated by the federal government...Samuel Paul represented NY insurance companies in his state. Paul challenged the right to the state to regulate insurance by refusing to obtain a license from the state. When he continued to sell insurance without a license, he was arrested and fines. The case was carried all the way to the US Supreme Court, where it was finally decided in 1869. The Supreme court stated that insurance was not interstate commerce.

The company has issued a policy and delivered it to Producer B on May 1st, Monday. By what date must the policy be delivered to the insured?

May 10th (within 10 calendar days)... All policies, certificates, or other evidence of insurance that are received by an insurance producer must be delivered or mailed to the insured within 10 calendar days of the receipt by the producer.

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual- Funds not paid out after paying claims and other operating costs are returned to the policyowners in the form of a dividend. If all funds are paid out, no dividends are paid.

A nonresident licensed producer decides to conduct business under an assumed name. Which of the following is true?

Non resident producer may not conduct business under any name besides legal names.

All of the following would be considered an insurance transaction EXCEPT

Obtaining an insurance license...An insurance transaction means the carrying of business in insurnace, which could include the solicitation of a policy, advising, negotiation, or inducement related to coverage or claims. Obtaining an insurance license is a prerequisite to transacting insurance

The Supreme Court stated that insurance is interstate commerce and is therefore subject to regulation by the federal government in the decision of what case?

The US v South-Eastern UW Association

The Paul v Virginia case was decided in 1869. To what extent does the Supreme Court's decision still apply to insurance today?

The decision has changed. Insurance is considered to be interstate commerce and is subject to regulation by the federal government- The decision of the US Supreme Court that insurance was not interstate commerce, and therefore, was not subject to regulation by the federal government stood for 75 years. The Supreme court reverse its decision in US vs Southeastern UT, this decision stands today.

An organization licensed as a producer business entity based in New York would like to transact insurance in New Jersey. Which of the following is true?

The organization will need to obtain a nonresident business entity license, and its producers will need to obtain nonresident licenses....Nonresident producer business entities can obtain nonresident licenses as long as they meet all of the qualifications (other than location) required of resident producer business entities. They, too, must already possess resident licenses in their home state of residency.

Which of the following is included in the term "insurance related conduct"?

Transmitting funds between producers and the insurance company- The term "insurance related conduct" indcludes acts related to insurance transactions, such as selling, soliciting, negotiating, and binding insurance policies; processing claims; or transmitting funds between the insured, producers, premium finance companies and insurance companies.

A producer's appointment lasts for how long?

Until it is terminated- While the producer is licensed, any agency appointment continues in effect until termination.