Connecticut Insurance Supplement - Questions & Terms
What must health insurers and third-party administrators in CT implement by October 1, 2017, how will it certify compliance?
1. A comprehensive information security program to safeguard personal information of insureds and enrollees. 2. Insurers must provide a copy of the security program to the Commissioner to certify they are compliant.
There are stringent regulations in place regarding replacement of health policies under CT law. What are the primary provisions that should be scrutinized when considering replacement?
1. Preexisting conditions. 2. Waiting periods. 3. Exclusions. 4. Limitations. 5. Insurer underwriting requirements.
What is the maximum length of time information can be requested regarding an employer's employee benefit plan?
Maximum of 24 months of info prior to the date or request.
When does proverbial statute of limitations run out on being able to bring action against a violation of the Privacy Protection Act?
2 years from the date of when the alleged violation took place.
Who makes up the CT Life and Health Insurance Guaranty Association?
Admitted insurers in CT.
Guaranty Association
An association established in each state to support insurers and protect consumers by providing funds for claim obligations in case of insurer insolvency. They are funded through assessed funds from member insurers.
What does the CT Life and Health Insurance Guaranty Association help the Commissioner of insurance with?
In detecting and preventing insurer impairments.
What is the name of the CT guaranty association established for life and health insurance companies?
Life and Health Insurance Guaranty Association
What law protects the privacy of individual's personal information as it relates to insurance in CT?
The Connecticut Insurance Information and Privacy Protection Act.
What is the CT Life and Health Insurance Guaranty Association's relation to advertising?
No company or producer advertise that it is a member of the CT Life and Health Insurance Guaranty Association as inducement to sell a policy.
How is the CT Life and Health Insurance Guaranty Association funded?
The admitted insurers who are members are assessed amounts.
In the event of a data breach, how long does the insurer or producer have to provide notice of the breach according to CT law?
90 days, unless a shorter time is required by federal law.
There are stringent regulations in place regarding replacement of health policies under CT law. What is the producer required to give the applicant regarding replacement?
A Notice Regarding Replacement. The form and content is set by law; it generally advises consumers to carefully consider the effect of replacement on their coverage.
When must certificates of authority for insurers be renewed in CT?
A certificate of authority will expire on the May 1 succeeding the date of its issuance. They must be renewed annually.
When must the life insurance surrender cost index be disclosed (by determining guaranteed surrender cash value, if any, is available)?
At the end of the 10th and 20th policy years.
Under CT law, what is required and prohibited for advertising related to health insurance policy exclusions, limitations and reductions?
Descriptions of policy limitations, exclusions, reductions must: 1. Be accurate 2. Include the negative features 3. Not imply that / show limitations as a benefit.
What is the penalty for misrepresentation or twisting?
Fine of no more than $5000, 30 days in prison, or both.
What is the penalty for soliciting insurance business for an unauthorized insurer in the state of CT?
Fine up to $2000, 6 months in prison, or both.
There are stringent regulations in place regarding replacement of health policies under CT law. What is strictly prohibited regarding replacement of group comprehensive medical coverage?
Insurers are prohibited from replacing group comprehensive medical coverage with group limited benefit plans. ***Additionally, group limited benefit plans must state, in 12 font, that it doesn't provide comprehensive coverage and what it's benefit limit is.
An insurer or producer is required to provide written notice of information practices to all applicants and policy holders regarding privacy and personal information. What must they distinguish between?
The insurer or producer must distinguish between: a. Questions designed solely to obtain information for market or research purposes. b. Questions designed to obtain information for insurance transactions.
Under CT law, what are requirements related to statistics used in advertising health policies?
Statistical information in health insurance advertising must: 1. Must be relevant facts and figures. 2. May only be used if it accurately reflects ALL the relevant facts. 3. The source of the statistics must be stated in the advertisement.
What must the Commissioner of Insurance do for the governor annually?
Submit a report.
Under CT law, what is prohibited content specifically related to direct-response health insurer policies?
Using words or phrases that imply it is a "low-cost plan". Direct response policies can have substantial cost too.
What is the penalty for a surplus lines broker who places insurance with an unauthorized carrier and fails to file the required affidavit?
Maximum fine of $4000 and license revocation, prison for 6 months, or both.
All CICs have a fiduciary responsibility to the public and any insurer they represent. What is the penalty if they violate these responsibilities?
Minimum of $250, maximum of $2500.
What is the penalty for any individual impersonating someone in order to take the insurance exam?
$500, 6 months in prison, or both.
What is the minimum age for a person to apply for, and take the exam for, an insurance producer license in CT?
18 years old
How many hours of pre-licensing coursework must a person take for each line of authority they are testing for?
40 hours
How much more must the premiums paid on policies written by a producer on people in the general public be than those on controlled business?
9 times.
What is the penalty if regarding certificates of authority if just cause is shown?
A fine not to exceed $50,000; suspension or revocation of the license.
What does a CIC license designation stand for?
Certified Insurance Consultant
When do CIC licenses renew and how often?
Every 2 years, on September 30, of odd numbered years.
When does a producer's license renew in the state of CT?
Every 2 years, on the producer's birthday.
Twisting
Misrepresenting terms of a policy to induce an insured to lapse, forfeit or surrender their current policy in order to sell them one from another company.
Are producers that become CT residents and are granted a license based on their previous home state's licensure required to complete CT CEs?
No, not during the initial biennium. When their license comes up for renewal, they will be required to do CEs in that next biennium.
Cease & Desist Order
Order issued by the Commissioner of insurance that prohibits an individual or company from continuing a practice which was a violation and unfair act.
Who appoints the Commissioner of Insurance
The governor of Connecticut.
How many days does the Commissioner have, if they determine an appointee is determined to be ineligible for appointment, to notify the insurer?
Within 5 days of determination.
What is the penalty for any violation or unfair act committed without prior knowledge that it was a violation?
$5000 for each violation, not to exceed an aggregate of $50,000.
Insurance Agent
In the state of CT, an insurance producer appointed by an insurer to act on the insurer's behalf. The agent is licensed and has a written appointment (contract) with the insurance company.
Can a producer carry over any CEs from the previous biennium into the next?
No
What is the penalty for violating a cease and desist order issued in connection with violations of the Privacy Protection Act (subject to Commissioner discretion)?
1. A maximum fine of $20,000 per violation. 2. A maximum fine of $100,000 for multiple violations, committed often enough to indicate general business practice. 3. Suspension or revocation of the license.
An insurer / producer must obtain a signed disclosure authorization from an applicant or insured. What are the requirements for this form?
The form must: 1. Be written in plain language. 2. Be dated. 3. Specify who is authorized to disclose the individual's personal data. 4. Specify the nature of the info being disclosed. 5. Specify the people who are authorized to receive disclosed info. 6. Specify the purposes for which info is being collected. 7. Specify how long the authorization is valid. 8. Tell the person they are entitled to a copy of the disclosure authorization form.
Under CT law, regarding health insurance, if someone is serving in the military and possess a policy that suspends coverage when they are serving, what must the policy do?
Upon written request from the insured, the policy must refund premiums as applicable on a pro-rata basis.
Boycott, Coercion, Intimidation
Using threat or force to create a monopoly or restrict fair trade in the transaction of insurance. It is illegal.
What must a person do to obtain an insurance producer license in the state of CT?
1. Complete 40 hours of pre-licensing coursework for the line of authority they are applying for. 2. Be at least 18 years old. 3. Pass a written exam for appropriate lines of authority. 4. Have paid appropriate fees. 5. Not committed any act that would be grounds for denial, suspension or revocation of a license.
What are the main powers of the Commissioner of Insurance?
1. Conduct investigations, hearings and issue subpoenas. 2. Revoke licenses of insurers, producers, adjusters and consultants for just cause. 3. Regulate insurers for solvency. 4. Regulate most insurance premium rates.
What lines of insurance is exempt from the 24 hours of CE credit hours normally required in CT?
1. Credit insurance, including credit life, credit accident and health, and mortgage guaranty. 2. Travel accident and travel baggage insurance. ***The producer must have these as their ONLY line of authority.
What must an insurance company supply to the Commissioner of insurance to incorporate, obtain a certificate of authority?
1. File a charter or articles of incorporation. 2. Financial statement. 3. Evidence of timely claim settlement.
When may a person receive a nonresident producer license?
1. The producer is currently a resident licensee in their home state and in good standing. 2. The producer has submitted the proper license request and paid the fees. 3. The producer has submitted the proper application from their home state, or a uniform application. 4. The producer's home state awards nonresident licenses to CT residents on the same basis.
Unless a person holds a CIC license, what are they prohibited from doing in terms of advertising?
1. They may not advertise with business cards, circulars, letters, pamphlets, or any other way. 2. They may not use the title CIC or designate themselves as analysts, certified insurance advisor, specialist, counselor, or other similar titles.
How long does a nonresident producer who moves to CT have to file a change of legal address and provide certification of such to the Commissioner?
30 days
Alien Insurer
An insurer that is originated under the laws of a state or country outside the USA.
Foreign Insurer
An insurer that is originated under the laws of another US state or territory.
Insurer / Insurance Company
Any person or entity, other than fraternal benefit societies, that transact insurance business.
How many days after a notice of hearing is issued will the hearing take place?
At least 30 days.
False Financial Statements
Making untrue statements about the solvency of an insurer with the intent to deceive. It is illegal. This includes false entries or omissions in records, books and documents with intent to deceive an insurance examiner upon records inspection.
Rebating
Offering valuable consideration, other than what is offered in the contract, as an inducement to purchase a policy. ***It's illegal! It includes commission kickbacks, extraordinary gifts, offering to pay an insured's premium etc.
What are the CE requirements for a producer whose license is only renewed for one year according to the transitional process?
The producer is required to complete 12 hours of CEs during the transitional period.
What are the CE requirements for producers whose license expired and was reinstated within 12 months?
The producer must complete any deficient CEs for the previous biennium and complete 24 hours of CEs for the current biennium.
Unfair Claim Settlement Practice
Unfair, deceptive, misleading acts committed by an insurer in the course of settling claims (without just cause and performed with the frequency indicating a general business practice) that injure the insured.
Under CT law, what are prohibited words and phrases in advertising health insurance that would try to exaggerate the benefits of a policy?
- All - Full - Complete - As high as - Comprehensive - Unlimited - This policy will help fill some gaps that Medicare and your present insurance leave out. - This policy will help to replaces your income (related to disability income policies). - Similar words / phrases designed to exaggerate policy benefits.
In CT, the purpose of life insurance solicitation regulations is to make sure insurers deliver purchasers with information to help them select the best plan for them and help them understand the benefits and features of the policy. What types of life insurance are exempt from these solicitation regulations?
- Annuities - Credit Life - Group Life - Life Insurance related to pension/welfare - Variable Life
How long is a disclosure authorization form valid?
- For life, health or disability insurance, 30 months from date of signature. - For property or casualty insurance, 1 year from date of signature.
Under CT law, what words or phrases are prohibited in order to make sure advertising of health insurance doesn't imply to the public that they can make a profit from being hospitalized?
- Tax free - Extra cash - Extra income - Extra pay - Similar / words or phrases
No person may disclose individually identifiable medical information with malicious intent to damage that person's reputation or character. What is the penalty for such?
1. A maximum fine of $500, prison for no more than three months, or both for first offense. 2. A maximum fine of $2000, 1 year in prison, or both, for subsequent offenses.
Under CT law, what are requirements and prohibitions related to HIV / AIDS testing and disclosure?
1. An insurer that requests an applicant take an HIV must have the person's permission in writing. 2. A person/institution who obtains HIV info on a person may not disclose unless: - The person or legal guardian gives consent. - A release of confidential HIV info is secured. - It's mandated/authorized by federal/state law.
Under CT law, what constitutes "advertisements" in terms of health insurance?
1. Any printed and published material 2. Any audio/visual material 3. Any descriptive literature used in direct mail, newspapers, magazines, radio scripts, TV scripts, billboards or similar displays. 4. Any descriptive literature, prepared sales presentations, sales aids etc. used for presentation of insurance to the public. 5. Prepared sales talks, presentations, and material used by agents, brokers, solicitors.
Under CT law, an insurer must provide a notice of information practices to all policy holders or applicants. When must it be provided?
1. At time of policy delivery (regarding insurance applications. 2. At policy renewal date. 3. At the request for the reinstatement of a policy or change of benefits.
An insurer may not disclose personal information obtained on an individual unless the disclosure is...
1. Authorized by the person. 2. Necessary for determining the person's eligibility for benefit payment or preventing criminal activity. 3. Made to a regulatory authority (Commissioner). 4. Made to law enforcement or gov't authority. 5. In response to administrative or court order. 6. Made for purposes of conducting actuarial or research studies.
When must a Buyer's Guide and a Policy Summary be delivered to prospective buyers of life insurance?
1. Before application and initial premium are accepted. 2. If a policy has a 10 day free look, they must be delivered before policy delivery.
What is the penalty for intentional violations of the Privacy Protection Act (subject to Commissioner discretion)?
1. Cease and desist order. 2. A maximum fine of $20,000 per violation. 3. A maximum fine of $100,000 aggregate for multiple violations.
What is the penalty for negligent violations of the Privacy Protection Act (subject to Commissioner discretion)?
1. Cease and desist order. 2. A maximum fine of $2000 per violation. 3. A maximum aggregate fine of $20,000 for multiple violations.
Under CT law, what are the optional provisions, as set forth in NAIC, to be included in every accident and sickness policy?
1. Change of occupation 2. Misstatement of age 3. Other insurance with this insurer 4. Insurance with other insurers for medical and disability 5. Unpaid premiums 6. Cancellation 7. Conformity with all state statutes
Under CT law, what are prohibitions and requirements related to policy comparisons used in advertising health policies?
1. Comparisons between policies must not be made unfair or incomplete, directly or indirectly. 2. Comparisons must not be made with non-comparable policies from another insurer. 3. Comparisons must not be made to disparage competitors or their policies or their business methods.
Under CT law, what is required of each insurer relating to records of their advertising material for health insurance?
1. Each insurer must maintain a complete file containing every advertisement used (printed, published, prepared). 2. Each individual advertisement must be notated with the manner and extent of distribution and the form number of any policy advertised. 3. Each file must be maintained for 4 years, or until the next inspection from the Department of Insurance, whichever is longer. 4. Insurers must file an annual statement declaring they are in compliance with advertising records to the best of their knowledge.
Under CT law, what are the required provisions, as set forth in NAIC, to be included in every accident and sickness policy?
1. Entire contract 2. Time limit on certain defenses (incontestability) 3. Grace period 4. Reinstatement period 5. Claim procedures 6. Notice of claim 7. Claim forms 8. Proof of loss 9. Payment of claims 10. Physical Exams & Autopsy 11. Legal actions 12. Change of beneficiary
Under CT law, what is required regarding the disclosure of required information when advertising health policies?
1. Information must be conspicuous and with the information it is related to. 2. Information must be under appropriate captions so it isn't minimized, obscured or presented ambiguously or in a misleading way.
Under CT law, what is the requirement of health insurers as it relates to genetic information?
1. Insurers cannot use a person's genetic information to discriminate by denying coverage, refusing renewal or limiting the amount, extent or kind of coverage provided. 2. Insurers cannot use a person's genetic information to charge more for the same coverage.
Under CT law, regarding dread disease health policies, what is prohibited and required in advertising?
1. It may not imply coverage beyond policy terms. 2. It must state clearly that it is a "limited policy".
Under CT law, an insurer must provide a notice of information practices to all policy holders or applicants. What are the requirements for this notice?
1. It must be in writing. 2. It must state if personal info will be collected from people other than the person themselves. 3. It must state the types of personal info being collected and the techniques and sources for collection. 4. It must include a description of the insured's rights. 5. It must state that info obtained from a report prepared by a third party may be retained by that organization or disclosed to other persons.
Under CT law, what are the exclusions from coverage in health insurance policies?
1. Mental & emotional disorders. 2. Alcoholism 3. Drug addiction 4. Pregnancy (except for complications) 5. Illness/injury/medical condition arising from war. 6. Illness/injury/medical condition arising from participation in a felony, riot, or insurrection. 7. Illness/injury/medical condition arising from military service. 8. Illness/injury/medical condition arising from committing suicide, sane or insane. 9. Illness/injury/medical condition arising from attempted suicide. 10. Illness/injury/medical condition arising from an intentionally self-inflicted injury. 11. Illness/injury/medical condition arising from aviation. 12. Illness/injury/medical condition arising from interscholastic sports, regarding short-term renewable policies. 13. Cosmetic surgery, except reconstructive. 14. Treatment provided in a government hospital - benefits provided by Medicare, a government program, worker's comp etc. 15. Dental care or treatment 16. Eyeglasses or eye exams 17. Hearing aids or ear exams 18. Rest cures, custodial care, transportation and routine physical exams. 19. Territorial limitations.
What are the 3 primary life insurance solicitation regulations that producers must do according to CT law?
1. Provide Buyer's Guide & Policy Summary 2. Provide life insurance surrender cost indexes for 10th and 20th year cash values. 3. State that they are an insurance producer (agent) and provide the full name of the insurance company that they represent. ***Producers must NOT use a title such as financial planner, investment advisor, financial consultant, financial counselor that might imply a fee is charged for advice.
If an insurer makes an adverse underwriting decision, what is their responsibility to the applicant?
1. Provide written notice as to the reason for denial. 2. Inform the person that they can submit written request for the reason for denial within 90 days of notice. The insurer has 21 days to provide this reason after date of written request for info.
What are the requirements for the comprehensive information security programs mandated to health insurers and third-party administrators to safeguard private info?
1. The program must be in writing and contain all administrative, technical and physical safeguards appropriate to its size, resources and needs. 2. The program must be reviewed at least annually, or as often as needed. 3. They must design and implement protocols for dealing with active and form employees and third parties in case there is an actual breach.
Under CT law, what are the only situations in which an insurer or agent disclose personal or privileged information
1. With the person's written authorization. 2. Made to someone other than the insurer or affiliate and when it is necessary to determine eligibility for benefits or in detecting fraud or material misrepresentation. 3. Made to an insurer or affiliate when the person receiving the disclosure is directly involved in detecting fraud or criminal activity regarding insurance transactions. 4. Made to medical professionals or institutions to verify coverage, tell person of a medical condition or conduct an audit. 5. Made to an insurance regulatory authority. 6. Made to law enforcement or government agency investigating fraud or illegal activities. 7. When otherwise permitted by law. 8. Made per court order. 9. Made to conduct actuarial or research studies. 10. Made to people involved in sale, transfer, merger etc. of insurance businesses. 11. Made to person who will only use it to market a product or service. 12. Made to an affiliate who will only use it in connection with an audit of the insurer/agent. 13. Made to a peer review service for a professional review of conduct or service by a medical care institution or professional. 14. Made to government authority to assess person's eligibility for health benefits provided by that authority. 15. Made to a certificate holder or policy owner to provide info regarding an insurance transaction. 16. Made to a leinholder, mortgagee, assignee, lessor, or to other person with legal or beneficial interest in the policy.
Under CT law, regarding health insurance, how long does an applicant have for a free look?
10 days
A person has the right to request a correction, amendment or deletion of incorrect information regarding themselves. How long does the insurer have to change the information or refuse to do so?
30 days ***Note: The person can file a concise statement specifying what they believe the correct info is and why they disagree with the insurer's refusal to change it.
If a person requests access to their personal information obtained by an insurer, how many days does the insurer have to supply that information?
30 days ***Note: The insurer can charge a "reasonable" fee to provide the copy of information.
Under CT law, how long must insurers maintain advertising files for health insurance?
4 years, or until the next regular inspection from the department of insurance, whichever is longer.
What is the penalty for anyone who obtains protected information from an insurance company under false pretenses?
A maximum fine of $20,000
Under CT law, what is required related to advertising policies outside their jurisdiction used in advertising health policies?
Content must not imply the insurer is licensed beyond the limits of its jurisdiction.
Under CT law, what is required of all form and content with relation to health insurance advertising?
Content must: 1. Be truthful and not misleading. 2. Not use words or phrases only people familiar with insurance vocab would understand. 3. Include the insurer's name.
Under CT law, what does it say about unfair discrimination related to health policies?
Discrimination is prohibited between people of the same class regarding premium amounts / rates charged, benefits paid, in terms and conditions or in any other manner.
Under CT law, if required by the department of insurance, how many days does an insurer have to file a particular advertisement with the department of insurance?
Not less than 30 days before use.
There are stringent regulations in place regarding replacement of health policies under CT law. What should the producer consider if they try to replace through misrepresentation?
Not withstanding penalties by law, the producer must understand they will be exposed and subject to errors and omissions liability and penalty.
Under CT law, regarding health insurance, under what conditions are the terms "noncancellable" and "guaranteed renewable" allowed to be used?
Only relating to policies where the insured has the right to continue renewing until age 65 (or eligibility for Medicare) by paying premiums on time. During this time, the insurer can't unilaterally make changes to noncancellable policies. The insurer can make changes to premium by class in guaranteed renewable policies.
What must an insurer do for the client if they plan to prepare or request an investigative consumer report?
Provide written notice to the individual.
Under CT law, what health insurance policy is excluded from the free look provision?
Single premium nonrenewable policies.
Under CT law, what are requirements related to testimonials used in advertising health policies?
Testimonials in health insurance advertising must: 1. Be genuine. 2. Represent the current opinion of the author. 3. Be applicable to the policy advertised. 4. Be accurately reproduced. 5. If the person is paid, that must be disclosed.
Under CT law, regarding a hospital confinement benefit in advertising health insurance, what is required when stating a the amount for hospital room and board expenses is payable?
The advertising must also state the maximum daily benefit and the time limit for such expenses.
In the event of a data breach affecting social security numbers, what must insurers provide to consumers at no cost? For how long?
The insurer must provide appropriate identity theft prevention services and, if applicable, identity theft mitigation services for at least 12 months.
False Information in Advertising
The placing of an advertisement that is untrue, deceptive, or misleading. It is illegal. It includes any all forms of advertising - TV, radio, printed or digital publications, media presentations, sales talks and any material used to solicit insurance.
Insurers are prohibited from obtaining information regarding previous adverse underwriting decisions unless...
The reasons for those previous underwriting decisions are requested. ***Note: Insurers are prohibited from using previous adverse underwriting decisions or past assigned risk coverage in their own underwriting.
What is the primary duty of the Commissioner of Insurance?
To see that insurance laws are properly executed and the public interest is protected by the enforcing of these laws.
What is the renewal fee for a producer's license in the state of CT?
$160 (every two years)
By CT state insurance law, who is exempt from needing an insurance producer license?
Salaried officers and employees of insurance companies or a producer whose duties are administrative or clerical in nature and don't involve insurance sales or negotiation.
A producer has a fiduciary responsibility to remit all payments received in the transaction of insurance to the appropriate place ie. insurer. How many days does the producer have to do this?
30 days
Maintaining a Complaint Record
Every producer should keep accurate, detailed records of every complaint received since the last examination. Complaints should include the total number of complaints, the classification by insurance line, nature of each complaint, the disposition of each complaint, time it took to process.
Fact: In CT, no insurer may continue to do business unless it maintains the minimum capital and surplus amounts required. For mutual insurance companies, no capital stock is required. What are the minimum surplus amounts for a mutual insurance company?
- Health - $1,000,000 - Life - $3,000,000 - Liability (Casualty) - $1,000,000 - Fidelity & Surety - $1,000,000 - Property - $750,000 - Worker's Comp - $1,000,000
Fact: In CT, no insurer may continue to do business unless it maintains the minimum capital and surplus amounts required. What are they for a stock insurance company?
- Health - capital $500,000; surplus $500,000 - Life - capital $1,000,000; surplus $2,000,000 - Liability (Casualty) - capital $500,000; surplus $500,000 - Fidelity & Surety - capital $500,000; surplus $500,000 - Property - capital $500,000; surplus $250,000 - Worker's Comp - capital $500,000; surplus $500,000
What are the lines of authority a person can obtain an insurance license in?
- Life insurance - Accident or health or sickness insurance - Property insurance - Casualty insurance - Variable life or variable annuity products - Credit: limited line credit insurance - Personal lines (property/casualty insurance sold to persons and families for noncommercial purposes) - Any other line of insurance permitted under CT law
Under CT insurance regulations / law, what is NOT considered rebating?
1. Paying bonuses or reducing premiums out of surplus for policy owners in a nonparticipating insurer (provided it is fair and equitable). 2. For industrial policy owners, making allowance to those who have continuously paid premiums to insurer showing savings to insurer in having to collect it. 3. Readjusting group premium rates for group insurance based on loss, experience rating, or both at the end of the first or subsequent policy year. It may be retroactive for the year.
What are considered unfair claims settlement practices?
1. Purposely misrepresenting policy provisions related to coverage of claim. 2. Not acknowledging or communicating promptly about claims. 3. Not implementing reasonable standards for prompt investigations of claims. 4. Not settling claims in a fair manner. 5. Compelling insureds to sue to recover amounts due under the policy by offering substantially less than the amounts ultimately recovered. 6. Compelling claimants to accept settlements for less that was potentially awarded in arbitration. 7. Attempting to settle claims based on applications altered without the knowledge or consent of insureds. 8. Attempting to settle claims for less than what a reasonable person would consider themselves entitled to based on reference to written or printed advertising accompanying or made part of the application. 9. Impeding investigation and payment of claims by requiring claimant or their physician to submit written proof of loss and then formal proof of loss documents, both of which contain essentially the same information. 10. Failing to pay claims, or deny them, within reasonable time after receiving proof of loss. 11. Refusing to pay a claim purely on the insured's say so rather than conducting an independent investigation into their liability.
How many days does the Commissioner have, after receiving notice of appointment, to verify the producer is eligible for appointment?
30 days
Examinations of Books & Records
All insurers and producers are required to keep accurate, up-to-date records in their place of business. The Commissioner can inspect or examine books, accounts, or records at their own discretion.
What is the penalty for an insurer that makes false statements or advertisements about financial information?
$10,000 for the first offense, $20,000 for each subsequent offense.
What are the conditions required in order for a contract with a CIC to be enforceable?
1. It must be in writing and executed, in duplicate, by the client. 2. It is delivered to, and kept by, the client when they sign it. 3. The contract specifies the fee the client will pay and the services the CIC will render. 4. It is in a form currently approved by the Commissioner of insurance.
How many days does an insurer have to notify the insurance department, the agency and the agent that they are terminating appointment?
30 days (it must be in writing).
How long does a nonresident producer who moves to CT have, after providing the change of legal address, have to apply for a resident producer license without having to take the exam?
90 days
What is the penalty for any person or corporation that violates any part of CT insurance law for which there is no stated penalty?
$15,000
What is the penalty for any violation or unfair act committed where the perpetrator knew that it was a violation?
$25,000 for each violation, not to exceed an aggregate of $250,000, in any six month period.
What is the reinstatement fee for any producer who failed to renew their license (they can do so within 12 months)?
$320
What is the nonrefundable filing fee for a producer's license application?
$50
Of the 24 hours required per biennium for continuing education, what are the requirements within?
1. A minimum of 3 hours of CE must be on CT insurance law and regulations or ethics. 2. A minimum of 6 hours of CE must be taken through course work applicable to each line of authority.
When might a CIC exam requirement be waived?
1. For property / casualty producers if they hold a CPCU designation. 2. For life insurance producers if they hold a CLU designation.
In what situations can the Commissioner impose requirements on a temporary license or revoke it in CT?
1. The Commissioner can limit the temporary licensee's authority if they deem it necessary to protect insureds and the public. 2. The Commissioner can require a temporary licensee have to a licensed sponsor who will assume responsibility for their acts. 3. The Commissioner can revoke the temporary license if they feel insureds or the public are endangered. 4. The temporary license will cease when the owner or personal representative of the producer has disposed of the business.
Certificate of Authority
A license granted to an insurer to conduct insurance business within the state of Connecticut, pursuant to a particular line of authority ie. life insurance.
Domestic Insurer
An insurer that is originated under Connecticut Law.
Defamation
Making false, maliciously critical, or derogatory statements, whether oral or written, about the financial condition of a person or insurer engaged in the business of insurance, that is calculated to injure them. It is illegal.
If a producer fails to remit payments made in the transaction of insurance to the appropriate party within 30 days of receipt, what is the penalty?
The Commissioner of insurance may order a hearing, and upon completion, suspend or revoke the producer's license.
Misreprensentation
The act of making, issuing, circulating or causing to be issued and disseminated, any oral or written statement that falsely represents the terms of an insurance policy / contract. It includes twisting, churning, making false statements or representations on an application for the purpose of obtaining compensation.
Churning
The practice of misrepresentation to induce replacement of a policy issued by another with the same insurer, in order for the producer to get a lucrative first year commission again.
What is the penalty for violating a cease and desist order?
A fine of $50,000 or suspension or revocation of the violator's license.
What is the penalty for anyone who acts as a CIC without the license, or when their license is suspended?
A fine, at minimum $250, maximum $2500, not more than 6 months in prison, or both.
What is a notice of hearing?
A notice issued by the Commissioner of insurance listing the charges laid against a licensee suspected of engaging in unfair acts (like sales methods).
Complaint
Any written communication primarily expressing a grievance.
Appointment
In order for a producer to represent an insurer, they must be "appointed" by the insurer. This allows the producer to conduct insurance business on behalf of the insurer.
How long will a producer license remain in effect?
Indefinitely, as long as the producer pays the renewal fees every two years, completes all continuing education by their due date, and doesn't have their licensed revoked or suspended.
Controlled Business
Insurance business written on the producer themselves, for their spouse, or their employer. To be compliant with CT law against writing controlled business, the premiums on insurance for the public that producer sells must be 9 times that paid on controlled business by the producer.
Certified Insurance Consultant
Person who holds a CIC license and charges a specific fee for services of examining an insurance policy and providing advice, counsel, recommendations, or information on the terms, conditions, coverage, benefits or premiums.
Unfair Trade Practice
Unfair method of competition or unfair or deceptive practices when conducting the business of insurance.
Can a nonresident producer ever be exempted from taking CEs?
Yes, if that producer resides in another state, provides evidence of having completed required CEs in their home state and as long as their home state will provide similar exemptions to CT resident producers who operate as nonresident producers in that state and complete CEs in CT.
What are examples of unfair trade practices in CT law?
- Rebating - Misrepresentation - Twisting / Churning - False Advertising - Defamation of Insurer - Boycott, Coercion, Intimidation - False Financial Statements - Unfair Discrimination - Failure to maintain complaint record - Obtaining a license EXCLUSIVELY for controlled business - Representing an unauthorized insurer - Acting as a consultant without a license - Acting as an agent to an insurer without a license or appointment. - Not maintaining records and books, not complying with examination. - Failing to remit payments belonging to insurers to insurers. aka. Violating fiduciary responsibility.
How many days does an insurer have to notify the Commissioner of the appointment of a producer?
15 days from the date of agency contract or the first insurance application is submitted.
How long may someone hold a temporary producer license?
180 days.
How many hours of continuing education must an insurance producer, both resident and nonresident, complete each biennium (two years)?
24 hours
A person, firm, partnership, association or corporation holding a license in the state of CT (or a license in a trade name) has 30 days to notify the Commissioner of insurance, in writing, of what kinds of changes? What are the penalties?
1. Change of business or resident address. 2. Change in employer. 3. Change in name. 4. Change in licensed members of a firm, partnership, corporation etc. 5. Any bankruptcy proceedings. 6. Felony conviction. 7. An administrative action taken against the licensee in another state. 8. After an initial pretrial hearing, any criminal prosecution in any jurisdiction against the licensee. 9. After the final disposition, any administrative action against the licensee in another jurisdiction or by a government agency in this state. Penalties: $5000 fine, revocation or suspension of the license.
When might the Commissioner of insurance waive the exam requirement for a producer license applicant?
1. For a temporary producer's license. 2. For a nonresident producer's license. 3. For someone who held the license within the past 12 months and is looking to reinstate. 4. A producer who moved to CT, held the license in their previous state and has applied for the license within 90 days of becoming a resident. The other state must certify the producer held the license previously and was in good standing.
For what reasons can the Commissioner of insurance place a producer on probation or suspend, revoke or refuse to issue or renew an insurance license?
1. Lying on a license application (incorrect, misleading, incomplete or materially untrue info). 2. Violating any insurance law, regulation, subpoena, or order issued by CT's Commissioner or that of another state. 3. Lying to get a license (misrepresentation or fraud). 4. Stealing money (withholding, misappropriating, converting monies) received through business transactions for one's own use. 5. Lying about an actual insurance application or contract (intentionally misrepresenting terms of actual or proposed contract). 6. Being convicted of a felony. 7. Confessed to / been convicted of insurance unfair trade practices or fraud. 8. Using fraud, coercion, or dishonest practices; demonstrating incompetence, untrustworthiness or financial irresponsibility in conduct of insurance business in CT or another state. 9. Having one's producer license denied, revoked, suspended in another state. 10. Forging another's name on insurance documents. 11. Cheating on the license exam (using notes). 12. Knowingly accepting insurance business from someone who is unlicensed. 13. Not paying court-ordered child support. 14. Not paying state income tax, even after court-ordered.
CT practices reciprocity regarding nonresident licenses and nonresident becoming resident licensees. What does this mean?
1. Nonresident licenses will be issued, if all requirements are met, and the producer's home state issues nonresident licenses to CT producers in the same way. 2. Nonresident producers who move to CT will receive resident licenses here, if all requirements are met, and the producer's home state issues nonresident licenses in the same way and recognizes CT's continuing education requirements in the same way.
What must a producer do to make sure their license remains in effect?
1. Pay the renewal fee every two years. 2. Complete all continuing education requirements. 3. Not commit any act that would result in revocation or suspension of their license.
What is the process and time frames if the Commissioner receives a report concerning dishonored checks issued by a producer to the department of insurance?
1. The Commissioner notifies the producer of the report. 2. The producer's license is automatically suspended if an arrangement for payment hasn't been reach to the Commissioner's satisfaction inside 15 days. 3. The producer can supply written demand for a hearing within 60 days of receiving notice to prove why the suspension should be lifted. 4. The hearing must be held within 30 days of the written demand. 5. If at the end of the 60 days, the producer did not demand a hearing, the Commissioner can revoke the producer license.
What the other main duties of the Commissioner of Insurance?
1. To make sure that insurance laws are properly executed 2. To make sure the public interest is protected by the enforcing of insurance laws. 3. To issue licenses and collect appropriate fees. 4. Set reserves for domestic companies. 5. Appoint examiners (ie. department directors or chiefs) who are delegated the duty of examining insurers. 6. Issue cease and desist orders to insurers, producers, adjusters and consultants for just cause. 7. Conduct hearings in connection with wrongdoing by an insurer or licensee. 8. Report illegalities to the insurance department or state attorney general.
Who qualifies to receive a temporary insurance license in CT?
1. To the designated person of a producer entering active duty in the US military. 2. To a member / employee of a business entity licensed as a producer, when the key person designated on the license dies or becomes disabled. 3. To the surviving spouse or court-appointed personal rep for the producer who dies or is physically or mentally disabled, or provide adequate time for the insurance business to be sold, for the producer to recover, or for training a new person to take over. 4. Any situation the Commissioner deems will be in the best interest of the public by issuing the license.
Insurance Producer
A person required to be licensed under the laws of CT to sell, solicit, or negotiate insurance.
Surplus
A profit made after expenses, overhead costs, claims etc. are paid. The excess of qualified assets (securities, installment premiums, deferred premiums, cash, currency) over the sum of paid-in capital and liabilities.
By CT state insurance law, who must have an insurance producer license?
All people or businesses who sell insurance directly to the public and whose compensation is directly linked to those insurance sales. Such activities include selling, soliciting and effectuating coverages of insurance.
Unauthorized Entity / Non-admitted Insurer
An insurer that hasn't been granted a certificate of authority by the Commissioner of insurance to transact business in Connecticut.
Stock Insurer
An insurer that is incorporated with capital stock contributed by stockholders, who share the earnings distributed as dividends on their shares (owned by shareholders).
Mutual Insurer
An insurer without capital stock and having a managing board of directors or officers elected by its members (owned by it's policy holders).
How are CICs paid, and how are they prohibited from being compensated?
CICs are paid a specified fee. They are prohibited from receiving commissions or other compensation from producers or insurers.
Unfair Discrimination
Charging a different rate, premium, fee etc. for people of the same class and life expectancy based on their race, creed, where they live or their national origin. It is illegal.
Unauthorized Insurance Contracts
Insurance contracts entered into by an unauthorized insurer. They are UNENFORCEABLE by the insurer. If an unauthorized insurer fails to pay a claim, any person who assisted in the procurement of the contract is liable for the full amount. If any person making insurance contracts on behalf of an unauthorized insurer in CT, they are personally liable for all coverage in that contract.
