Insurance Regulation

Types of licenses

- Producers - Resident vs nonresident - Consultants - Producer acting as consultant - Temporary - Limited lines - Insurance company

Felony

- A person who knowingly and with intent to defraud an insurer files a statement of claim containing any false, incomplete, or misleading information

Important dollar amount penalty for willfully making false or fraudulent statement

- $100 - $1,000

Miscellaneous producer regulations CE required for producer license

- 24 hours

Miscellaneous producer regulations Maximum allowed commission from controlled business in any 12 month period

- 25%

Sircon license and CE tracking system

- Provide automated and efficient way to manage process and track critical information - Continuing education module notified when their CE review period is ending - Producer reasonability to renew their license by due date, whether or not the producer receive the renewal notice

Department of Insurance

- Was created to take charge of the organization, supervision, regulation, examination, rehabilitation, liquidation, and conservation of all insurance companies authorized to do business in Indiana, and to enforce, administer and excute the provisions of the state statues applicable to insurance companies the insurance department or to the insurance commissioner - Its best interest and safety of the public - Will promulgate rules

Certificate of authority

- When an insurance company has proven that it is compliant with Indiana insurance laws - Its illegal for an insurance company to transact insurance without it

Complaint process hearings

- When license is deny, commissioner will notify the applicant for reason of denial or nonrenewal. - Applicant may write a hearing for the action, not more than 63 days after the notice. - Hearing will be held no more than 30 days after the applicant or licensee makes the written demand

Case review by commissioner

- Will notify the reason for the denial or nonrenewal of the license - May impose civil fine $50 to max $10k and may order them to make monetary restitution - Suspended revoke or refuse the license

Unfair claims practice complaints

- Within 10 business day o Send a copy of the complaint to the company accused on unfair claims practice o Inform the complaining party about the action taken and the action contemplated upon - Investigation within 20 business day o Specific reasons for the company action or lack thereof o A good faith estimate for the timeframe for the settlement of claim

Temporary license

- Without requiring an exam, maximum period up to 180 days - Surviving spouse of a licensed individual due to death or health o Adequate time for the sale of the insurance business owned by the producer o The servicing of the insurance business until recovery or return of the producer to the business o Training and licensing of new personnel to operate the producer business - Member or employee of a business entity if the designated individual dies or disabled - To individual producer entering military service - Individual by the commissioner to be best interest of the public

Important dollar amount Penalty of 3 times the unpaid renewal fee for fee received after the due date

3 times

Domestic insurer

- Is an insurance company that is incorporated in this state

Alien Insurer

- Is an insurance company that is incorporated outside the US

Limited lines

- Specialty insurance products - Not required examination prior to being licensed - Does not require license if o Flight - selling limited travel accident insurance in transportation terminals o Baggage - issuing insurance on personal effect carried as baggage on common carrier o Title - selling insurance in real estate transaction to indemnify the insured against losses from a defect in the title of the property o Credit - insurance from a lending institution in connection with a debt - Maybe used as funeral director, but must required standard life insurance pre licensing

Commissioner of insurance (SLAEC)

- Supervise insurance business - Licensing - Approve policies and forms - Enforce insurance laws and impose penalties for violation - Conduct examination, investigations, hearings

Boycott, coercion and intimidation

- That is intended to restrict fair trade or to create a monopoly

Certificate of authority can be issued when

- The company has submitted a sound plan of operation - General character and experience of the incorporators, directors, and proposed officers assures reasonable promise of a successful operation. There is no good reason to believe that they are affiliated through ownership, control, management, reinsurance transactions, other insurance or manipulation of asset accounts or reinsurance - Must notify commissioner or the election or appointment of every NEW director within 30 days if possession of certificate of authority - Commissioner may impose a max civil penalty of 25k if operate without a certificate

Fraudulent insurance act

- The preparation or presentation of a written statement as part of, or in support of, a fraudulent application for the issuance or rating of a policy of commercial insurance - Fraudulent Claim under a policy of a commercial or personal insurance - Concealment, for the purpose of providing misleading information, concerning any fact material to an application or claim

Unfair trade practice

- To make any statement that an insurer's policies are guaranteed by the existence of the insurance guaranty associations

Miscellaneous producer regulations to report change of address

- 30 days

Statue

- Formal written law enacted by legislature, insurance can be found in the state insurance code

Department of Insurance Regulations For commissioner to notify a producer of the hearing on unfair trade practice

- 5 days

Department of Insurance Regulations Examine Insurers

- 5 years

Department of Insurance Regulations to demand hearing after notice of license denial or nonrenewal

- 63 days

Important dollar amount fine for insurers for transacting insurance without a certificate of authority

- $25,000

Important dollar amount maximum penalty per violation of cease and desist order

- $25,000

Important dollar amount fine for willful violation of the insurance code

- $50,000

Important dollar amount civil fine for licensing law violation

- $50-$10,000

Licensing and Appointment Requirement to reinstate a lapsed license without taking examination

- 12 months

Licensing and Appointment Requirement minimum age to apply for insurance license

- 18 years

Licensing and Appointment Requirement license renewal fees due

- 2 years

Department of Insurance Regulations for a company to respond to an unfair trade practice complaint

- 20 days

Department of Insurance Regulations To hold hearing after written demand

- 30 days

Miscellaneous producer regulations for insurers to report new directors and principal officers

- 30 days

Not required for complete CE if

- A limited line producer who is licensed without examination - Limited lines credit producer - Nonresident limited line producer with a title qualification whose home state requires CE for a title qualification who has met those CE requirement

Consultant

- A person who for a fee offers any advice counsel opinion or service regarding the benefits advantage or disadvantages promised under any policy of insurance that could be issued in Indiana. - License is valid up to 24 months - Cannot hold by an individual or corporation

Duties of the commissioners

- Adopt rules and regulation to enforce provision of the insurance code - Conduct examination, investigations, and hearings to determine whether any person has violated any provision of the code - Maintain confidentiality of documents, materials, or other information used in regulatory or legal action - Issue a cease and desist order if any person is believed to have violated any provisions of the code - Issue insurance licenses and certificates of authority and take action against fine or suspend the license of any company and or producer - Disseminate information concerning insurance laws of this state and provide assistance to the public in obtaining information about insurance products

Consultant's license is not required for the following

- An attorney licensed to practice law in the state, assuming that the person is acting the role of an attorney when the advice is given - A duly licensed insurance producer or surplus lines producer - A trust officer of a bank acting in the normal course of the trust officer's employment - An actuary or certified public accountant who provides information, recommendation, advice or services in a professional capacity

Class A misdemeanor

- Any person who willfully and recklessly violates the Indiana Insurance Code - Punishable up to one year in jail or fine not greater than $5k - Will be tired in a real court by a judge - Commissioner of Insurance does not have the authority to put anybody in jail

Illegal inducement

- Any special favor or advantage in dividends or benefits - Any stocks, bonds, securities, or accrued dividends or profits - Anything of value not specified in the insurance contract

Producers

- Are individuals or business entities that are licensed to sell, solicit, or negotiate insurance . from a legal standpoint, they represent their respective insurance companies, not their customers.

Producer's requirement

- At least 18 years old - Not committed any act that is a ground for denial, suspension or revocation under the insurance code - Has received a certificate of completion from an approved prelicensing course no longer than 6 months prior to the date of application - Has paid the nonrefundable fee - Has successfully passed the examination for the lines of authority which the individual has applied

Section 1034

- Attorney general may bring a civil action in the appropriate us district court against any person who engages in conduct that is in violation of section 1033 of not more than 50k for each violation, or the amount of compensation the person received as a result of the prohibited conduct, whichever is greater.

List of maintaining a license

- CE every 2 years - Renewal fee - Current name, address - Reinstatement within 12 months

Expiration for license

- Can reinstated within 12 months - Written examination is required - Penalty of 3 times the unpaid renewal fee is required - May waive the penalty if fee is received within 30 days after expiration

Sharing Commissions

- Cannot pay or accept a commission, service fee, brokerage fee, or other valuable consideration to a person for selling or negotiating insurance in Indiana if the person is required to be license but does not actually hold a license - Can only pay person for selling insurance in Indiana if the person was licensed at the time of sale - Splitting commission with unlicensed individual is referred to as rebating

Commissioner can do the following after a hearing

- Censure a producer - Issue a letter of reprimand - Place a producer on probation, which may include limiting business, requiring remedial education and reports from the producer - Order the producer to make monetary restitution - Impose a civil fine in the amount not less than $50 and not more than $10k

Unfair discrimination

- Change of favor in Rates, premium or policy benefit for person within the same class or with the same life expectancy - Marital status, race, national origin, gender identity, sexual orientation, creed, or ancestry - Unless made for a business purpose or required by law

Insurance Commissioner

- Chief executive and administrative officer of the insurance department - Control the power, duties, management of the insurance department - Is appointed by the governor - Has legislative and judicial power

Failure to pay state income taxes

- Commissioner may check public records, including tax warrant lists and take appropriate action based on an individual appearance on such list.

Life and health guaranty association

- Created to protect policyowner against insolvent insurers within certain limitation. - Any company selling LIFE and or HEALTH insurance must belong to this group - If a company goes bankrupt, group contribute and help financially the policyowners of the insolvent company

Nonresident producer must meet the following

- Currently licensed as a resident and in good standing in the person's home state - Has submitted the proper request for a nonresident license and paid the required fees to the commissioner - Has sent the commissioner a copy of the license application submitted to the person's home state or a completed the NAIC uniform application - Resides in a home state that awards nonresident producer licenses to residents of Indiana on the same basis as nonresident producer licenses are awarded to residents of other states the two have reciprocity - Is not required to complete a prelicensing course or take an examination

Rebating

- Defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy o Rebates of premiums payable on the policy o Special favors or services o Advantages in the dividends or other benefits o Stocks bonds securities and their dividends or profits - Small item valued at less than $25 as gift, if not related to purchase or renewal of insurance - May donate to charity as long as client have no influence, and not under client's name, and client does not receive tax benefit

Controlled business

- Defined as insurance written on the interest of - Applicant or licensee - Immediate family - Employer or business partner - A license is considered to be used for the purpose if the commissioner finds that during 12 month period the aggregate commission earned from the business exceeded 25% of the aggregate commission earned on all business written by the licensee

Resident producer must do the following

- Either live in Indiana or have a primary place of business in Indiana - Complete required prelicensing education - Pass the proper examination

Unfair competition law

- Enacted to identify practices of unfair competition and to establish procedures and penalities for violation

1033 Waiver

- Federal law makes it illegal for any individual convicted of a crime involving dishonesty, breach of trust or a violation of the violent crime control and law enforcement act of 1994 to work in the business of insurance affecting interstate commerce without receiving written consent from an insurance regulatory official .

Unlawful insurance fraud

- For any person engaged in the business of insurance to willfully, and with the intent to deceive, make any oral or written statement that are either false or omit material facts. - Information and statement made on an application for insurance, renewal of a policy, claims for payment or benefits, premiums paid, and financial condition of an insurer. - Imprisoned for up to 10 years - If the activity jeopardized the security of the accompanied insurer, up to 15 years - Anyone convicted of a felony involving dishonesty or breach of trust, who also engages in the business of insurance will be fined, imprisoned up to 5 years or both

Unfair Trade Practice Hearings

- If commissioner is to believe that an producer been involved in unfair trade practice, they will hold a hearing. - Producer must be notified of the hearing no later than 5 days.

Unfair claims settlement practices

- If committed openly and in conscious disregard of rules and regulation or if committed with such frequency as to indicate a general business practice - Misrepresenting pertinent facts or insurance policy provisions relating to coverage - Failing to acknowledge and act reasonably promptly upon communications with resepct to claims - Failing to adopt and implement reasonable standards for the promt investigation of claims - Refusing to pay claims without conducting a reasonable investigation based upon all available information - Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statement have been completed - Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear - Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds - Ateempting to settle a claim for less than the amount to which a reasonable person would have believed that such person was entitled by reference to written or printed advertising material accompanying or made part of an application - Attempting to settle claims on the basis of an application which was altered without notice to or knowledge or consent of the insured - Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made - Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration - Delaying the investigation or payment of claims by requiring an insured, claimant or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information - Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage - Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement

Misrepresentation

- Illegal to issue, publish, circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payments of dividends

Whistleblower immunity

- In the state of Indiana, any person who reports, in good faith, a suspected insurance fraud to law enforcement official is protected from any civil liability for damages

List of Department of Insurance

- Insurance commissioner - Admission of insurance companies - Examination of insurance companies - Insurance guaranty association

Location of incorporation

- Insurance companies are classified according, must obtain certificate of authority before transacting insurance within the state

Privacy of consumer Financial information

- Insurance company may order an inspection report on an applicant that request a large amount of life insurance. - Information may be obtained from interviews with employers, neighbors, retail merchants association, and interviews with the applicant - Underwriter can refuse the issuance of a policy - Applicants must be notified that an inspection has been ordered - Within 6 months - Applicant must be told the nature and substance of the information if rejected

Commissioner may accept an examination report under the following

- Insurance department that prepared the report was at the time of the examination accredited under the NAIC financial regulation standards and accreditation program - Examination is performed with the participation of one or more examiners who are employed by an accredited state insurance department and who after a review of the examination work papers and report state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department

Must pass written examination when applying for

- Insurance producer license - Consultant license - Surplus line producers license

Twisting

- Is a misrepresentation or incomplete or fraudulent comparison of insurance policies that persuades an insured/owner, to his or her detriment, to cancel, lapse, switch polices or take out a policy without another insurer - Prohibited

Admitted/authorized

- Is an insurance company that has qualified and has received a certificate of authority from the department of insurance to transact insurance in the sate

Foreign Insurer

- Is an insurance company that is incorporated in another state or territorial possession

A licensee must submits a CE statement that

- Is in a format authorized by the commissioner - Signed by the licensee under oath - Lists the continuing education course completed by the licensee

Producer license can be issue to a business entity if meets the requirement

- Is trustworthy - Pays all the required fees - Designated a licensed producer responsible for the business entity's compliance with state insurance law - Has not committed any acts that are grounds for probation, suspension, revocation, or refusal of insurance license

Branches of department of insurance

- Legislative - making laws - Executive - enforcing laws - Judicial - interpreting laws

Child support

- License suspended or revoked if they fail to comply with an administrative or court order imposing a child support obligation - Would be considered delinquent if they are at least $2k or 3 months past due in the payment of the court - Within 20 days can get out if the producer does o Pay the children support in arrears in full o Establishes a payment plan o Request a hearing - Suspended 5 business after the date of notice - Suspension will termination after 10 business day after commissioner ordering

Duties of a producer

- Life - coverage on human live - Variable life and variable annuity products - insurance provided under variable contract - Accident and health sickness - coverage for sickness boidly injury or accidental death and disability income - Property - coverage for the direct and consequential loss or damage to property of every kind - Casualty - coverage against legal liability - Personal lines - noncommercial property and or casualty coverage - Title - insurance coverage against loss or damage on account of defect in the title to real estate - Credit - debt insurance limited line - Any other types of insurance under the law

Test the knowledge concerning the following

- Lines of authority for which application is made - Duties and responsibilities of a license - Insurance laws and administrative rules of Indiana

Temporary rules by commissioner

- May limit authority - Have a suitable sponsor assume responsibility for the licensee - Revoke the license

Association's Liability

- May not exceed the lesser of the contractual obligations - 300k in life insurance death benefit, but not more than 100k in net cash surrender and net cash withdrawal value for life insurance - 300k in health insurance benefit, but not more than 100k in any net cash surrender and net cash withdrawal values - 100k in the present value of annuity benefits, including net cash surrender and net cash withdrawals values - If a single owner owns more than one non group policy on multiple persons, the guaranty association will not pay more than 4mill to any one owner. This limit also applies to unallocated annuity contracts issued to or in connection with a government lottery.

List of Obtaining a license

- Meet requirements o Education and examination o Age and residency o Good character - Application and fee

Penalties

- Monetary fines of up to $25k for each violation - Suspension of the license for a period of years - Revocation of the license - For knowingly violating insurance code is $50k

Continuing education requirements

- Must complete 24 hrs of credit continuing education course - Carryover credits are not allowed - Only those credits hours earned after the effective date of the licensee last renewal - If more than one license, no more than 24 hours CE needed - Only receive credits by approved commissioner

Change of address

- Notify commissioner of change of business or residential address within 30 days - Failure to report: $100 - No license application or fee is required if moved to another state if notify within 30 days, may change from resident to nonresident

Defamation

- Occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business - Maliciously critical of the financial condition of any person or ompany

Individual may be exempt from either the whole or part of the exam

- Person who have obtained the designation of Chartered Life underwriter, certified financial planner, or chartered financial consultant would only be required to take the Indiana law portion - Person who are resident producers in good standing in another state. Only if the Indiana application is received within 90 days of the cancellation of the other state license

Producer acting as consultant

- Producer may act as a consultant and accept both fee and a commission for the same transaction, if they do o Provides to the insured a written agreement on the fees o Discloses to the insured that the producer will receive compensation for the sale of the policy and the method of compensation prior to the sale solicitation negotiation or renewal of any policy

Insurance company producer appointment and termination

- Producers may not act as agents of an insurer unless they are appointed - Who are not agents are not required to be appointed - Insurer that terminates the producers appointment must notify the commissioner no later than 30 days

Examination of insurance companies

- Purpose is to ensure that the companies remain solvent and conduct business of insurance in compliance with state laws and regulation pertaining to licensing, policy forms, rates, claims, and market conduct - Commissioner may conduct any examination - Every insurer licensed in Indiana must conduct once every 5 years

Renewal for license

- Renewal fee due every 2 years, $40 - Date is based on producer birth month - If hold multiple license, due at the same time - Remain in effect unless its revoked or suspended

Cease and Desist Order

- Requires the person to stop committing the action that is in violation - If violates the order o Maximum civil penalty of $25k for each act o Suspension or revocation of the license

Other violation

- Restraining trade - producers may not conspire to obstruct the normal business process of insurance - Monopolizing any part of the insurance business - Lending institution is not allowed to require that a borrower insure mortgage property by purchasing insurance from the lending institution as a condition for obtaining a mortgage. The lending institution, however, may require the mortgage property to be insured and may exercise its rights to approval depending on the selected insurer.

Resident insurance producer

- Should submit an application to the commissioner on the uniform application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual knowledge and belief

Producers licensing law violations

- The commissioner may levy a civil penalty, place a producer on probation, suspend or revoke a producer's license, or refuse to issue or renew a producer license, or take any combination of these actions, for any of the following causes - Providing incorrect, misleading, incomplete, or materially false information in a license application - Violating an insurance law, a regulation, a subpoena of any insurance commissioner, or an order of any insurance commissioner - Obtaining or attempting to obtain a license through misrepresentation or fraud - Improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business - Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance - Having been convicted of a felony - Admitting to having committed or being found to have committed any unfair trade practice or fraud in the business of insurance - Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business - Having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory - Forging another's name to an application for insurance or to any document related to an insurance transaction - Improperly using notes or any other reference material to complete an examination for an insurance license - Knowingly accepting insurance business from an individual who is not licensed - Failing to comply with an administrative or court order imposing a child support obligation - Failing to pay state income tax or to comply with any administrative or court order directing payment of state income tax - Failing to satisfy the continuing education requirements - Failing to report a change in legal name or address

List of Licensing Laws

- Types of licensees - Duties of a producer - Maintenance and duration

Producer/company compliance

- Unfair competition law - Unfair claims settlement practices - Insurance fraud regulation - Privacy of consumer financial information - Disciplinary actions

Flow of Violation and penalties

- Violation, Hearing, Cease and desist order, other penalties