Insurance Regulation

What is the purpose of the Insurance Guaranty Association?

To protect policy owners against insurer insolvency

Which of the following statements is INCORRECT about appointment of producers?

A Certificate of Authority's is the license given by the insurer to its producers.

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policy owner to replace policies

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all the following information EXCEPT the applicant's

Ancestry

All of the following are minimum requirements to be licensed in South Carolina EXCEPT

Be a registered voter in South Carolina

How often are producers in South Carolina required to pay the license renewal fee?

Biennially

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT

Disputes regarding consumer report information

How often must producers complete by continuing education hours?

Every 2 years

All of the following actions can be described as twisting EXCEPT

Explaining to client the advantages of permanent insurance over term and suggesting changing policies

A producer's license may be revoked or suspended by the director for all of the following EXCEPT

Failure to meet sales quotas set by insurer

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will son have to file for bankruptcy. Which of the following terms best describes the advertisement?

False financial statement

An insurance company assures its new policyholders that their premium cost will not increase for a period of at least 5 years. However due to increasing financial strain, they plan to raise premium cost for all insured by 10% over the next 2 years. What term best describes this act?

Fraud

When the director finds that a license has been obtained by fraud or misrepresentation, he may suspend the license

Immediately, but not for more than 2 years

Conducting insurance in this state without a license would be considered a

Misdemeanor

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. What is the company guilty of?

Misrepresentation

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?

Only written statements can be considered fraud

All of the following are requirements for a nonresident license except

Passing this state's licensing examination

What type of licensee represents the insurance company?

Producer

The Federal Fair Credit Reporting Act

Regulates consumer reports

When are insurers required to renew appointments?

September 30 of every even-numbered year

In order to become licensed as a nonresident producer in this state, a person must do which of the following?

Show proof of a valid license for the same line of authority in the home state

All of the following are unfair claims settlement practices EXCEPT

Suggesting negotiations in settling the claim

Which of the following statements is NOT true regarding the Director of Insurance in this state?

The Director is elected for the term of 4 years

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.

An insurance producer has not been appointed to an insurance company. Who is the producer considered to represent?

The client

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

Who is responsible for covering the expenses associated with the examination of domestic insurers?

The examined insurer

Once the Director issues and cease and desist order, how soon must an insurer comply with the order?

Within 30 day

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.

Is it ever possible for more than one producer to split the commissions on an insurance transaction in this state?

Yes, it is poosible as ling as both are licensed for that line of business

In the event of an insurer's insolvency, the South Carolina Life and Health Guaranty Association will

Reinsure policies of the insolvent insurer through other companies

Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must?

Respond to the consumer's complaint

Anyone who willfully violates a cease and desist order can be fined up to

$100

An insurer may be fined for non-willful or for willful violations of insurance laws with which of the following respective fines:

$15,000/$30,000

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

How many hours of CE must be completed every 2 years?

24 total hours, including 8 hours approved for the line of license that the producer holds

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

A producer must report to the Director nah conviction of the producer taken in any jurisdiction within how many days?

30 days

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

A producer failed to complete the required continuing education hours for this compliance period. Within what period after the deadline may the license be reinstated?

6 months

A producer licensed in Life and Health, as well as Property and Casualty, must complete minimum of how many hours in each line of authority every 2 years?

8

The Director of Insurance has all of the following duties EXCEPT

Make laws relating to the business of insurance in this state.

Before being issued a license, applications must submit which of the following to the Director as part of a background check?

A complete set of fingerprints

Who is an insurance agent?

Any person licensed to sell, solicit or negotiate insurance