chapter 5
15: A producer who fails to separate premium monies from his own personal funds is guilty of
Commingling.
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid.
If an insurance premium is paid by the policy owner to the agent, and the agent fails to remit that premium to the insurer, what happens ?
The policy will not lapse since payment to the agent is the same as a payment to the insurer.
rebate
an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission.
In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the
company
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
discrimination
When are rebates allowed?
if they are specifically stated in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.
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. The company is guilty of
misrepresentation
agent's license authorizes them to represent who?
the insurance company not insured
Before insurers may transact business in a specific state, they must apply for
a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set down by the state.
When producers give or promise anything of value that is not specified in the policy, they are guilty of
rebating
