Insurance Regulation

Why is a producer required to be licensed? What is it they can do?

A person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. in the state of Michigan Insurance Producers may be issued licenses for for one or more of the following lines of insurance. life coverage on human lives accident and health or sickness coverage for sickness by the Lee injured or accidental death and disability income, variable life and variable annuities coverage under variable life and or variable annuities, property coverage for the direct and consequential loss or damage to property of every kind, casualty coverage against legal liability, personal lines 9 commercial property and or casualty coverage, credit debt insurance limit line, any other type of insurance permitted under the state regulations.

How would you describe insurance fraud regulation?

Any agents, insured, or other persons must not make false, dishonest for fraudulent certificates or reports of death, sickness or disability of any kind in attempt to collect a claim payment from an insurer.

Insurance companies can legally discriminate in some situations, but what situations can a company not discriminate?

Discrimination in rates, premiums, or policy benefits for persons with in the same class or with the same expectancy life is illegal. No discrimination may be made on the basis of an individual's marital status, race, national origin, gender identity, sexual orientation, creed, or ancestry unless the definition is made for a business purpose or required by law.

What are the characteristics that every license must contain?

Every license must contain the licensees name, address, personal identification number, date of issuance, qualifications, expiration date, and any other information the commissioner considers necessary.

What are the characteristics of a cease-and-desist order?

If after hearing the commissioner determines that the person charged has engaged in an unfair method of competition or an unfair or deceptive act or practice, the commissioner will issue a cease-and-desist order requiring the person to stop engaging in such method of competition, at, practice, or violation. At a formal hearing the app the aggrieved party has the option of being presented by an attorney and attempted to prove that a cyst and decease order shouldn't be issued. if criminal violations are uncovered during the investigation the commission must turn the investigation over to the attorney general for prosecution immediately.

Explain the characteristics of a non-resident producer.

If an individual who wishes to transact insurance in Michigan that are not residents of the state may obtain a non-resident license if they hold a current residence insurance license for the same type of insurance in their home state and are at least 18 years old. A non-resident license is based on the resident license the person holds being in good standing if the non-resident license should ever lose his or her home state Authority, the Michigan license will be terminated immediately.

What is the difference between inducement and twisting?

It is unlawful to pay, offer or accept any of the following as an inducement to buy insurance, Any favor or advantage in dividends or benefits, any stocks, bonds, securities, or accrued dividends or profits, or anything of value not specified in the insurance contract. Twisting is a misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades and insured/owner, to his or her detriment, to cancel, lats, switch policies, or take out a policy with another insurer.

List four requirements to be a resident producer.

Must be, a resident of the state of Michigan, be at least 18 years old, possesses a reasonable understanding of the insurance laws of Michigan, intend in good faith to act as a producer, be honest and trustworthy, possesses a good business reputation, and possess good moral character to act as a producer, complete pre-licensing education or obtain a waiver if applicable.

Rebating is illegal. Please explain details of Rebating.

Rebating is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy. Both the offer and acceptance of a Rebate are illegal.

Outline Three of the reasons the commissioner May waive pre-licensing or examination requirements.

The commissioner May waive pre licensing requirements or examinations for someone who applies for a limited license, has been a licensed Insurance producer in the preceding 12 months, has obtained and approved designation chartered Property and Casualty underwriter, accredited advisor in Insurance.

What is the purpose of Licensing

The purpose of Licensing is to ensure that a producer meets educational and ethical standards required to fulfill producer responsibilities to the insurer and to the public.

What are examples of business entities?

a business entity means a corporation, Association, partnership, limited liability company, limited liability partnership, or other legal entities.

When can commission's be shared and when can commissions not be shared?

a producer may share commissions with another license resident or non-resident Insurance producer it is a violation for a producer to share commissions with a non-licensed individual or to provide Financial Rewards or share commissions with a person who met provide the producer with sales leads.

Identify the situations where a temporary license can be issued.

a temporary license may be issued in certain emergency situations in order to best serve public interest. The commissioner May issue a temporary producer license without requiring a written examination to the surviving spouse of a deceased producer, if a producer becomes mentally or physically disabled, or to the design me of a license producer entering active service in the United States armed forces. these licenses have a maximum of 180 days issuance

Explain false information with regards to advertising.

advertising covers a wide scope of communication, from publishing and AD in a newspaper or magazine, to broadcasting a commercial on television or the internet. Advertisements cannot include any untrue, deceptive, or misleading statements that apply to the business of insurance or anyone who conducts it. The violation of this rule is called false advertising.

What does the term fiduciary responsibility refer to? Please explain.

an agent hat is a fiduciary for all money received or held by the agent in his or her capacity of as an agent failure by an agent to turn over, in a timely manner, the money held in a fiduciary capacity to the persons to whom it is old is evidence of violation of the agents fiduciary responsibilities.

What is the process for a producer obtaining an appointment?

an insurance producer cannot act as an agent of an insurer unless the insurance producer becomes an appointed agent of the insurer. to appoint a producer as its agent, the appointing insurer must file a notice of appointment within 15 days of the date that the agency contract is executed or the first insurance application is submitted upon receiving the notice of appointment the commissioner will verify that the producer is eligible for appointment within 30 days.

Explain the process of terminating an appointment.

an insurer that terminates the appointment, Employment, contract, or other insurance business relationship with an insurance producer must notify the commissioner within 30 days following the effective date of termination.

Based on the explanations of a producer and a counselor, what is it that a producer can do that a counselor Cannot do?

and insurance counselor is a person licensed to perform the following duties audit or abstract insurance policies or annuities, provide advice, counsel, or opinions concerning benefits, coverage, terms, and advantages and disadvantages of a policy or annuity, advertise and solicit business as an insurance counselor. an insurance producer is a person required to be licensed under the laws of this state to sell, solicit, or negotiate Insurance of varied kind. the producer can sell insurance the Consular cannot.

Explain some of the penalties for violating the insurance code.

any person found guilty of a violation of the insurance code of this state may be subject to the following penalties, payment of a civil fine of up to $500 for each violation, a civil fine for willful violations may be up to $2,500 for each violation not to exceed $25,000, a refund of any over charges.

What are the continuing education requirements for licensed producers?

continuing education CME rules are established to protect the public by maintaining high standards of professional competence in the insurance industry, and to maintain and improve the insurance skills and knowledge of license producers. in this state producers must learn 24 hours of CME credits every two years from State approved providers, with at least 3 hours in ethics. a license date of c e credits reviews determined by the month and date of birth at least 12 months after the issuance of the initial license. Producers born in an even number year are required to complete the CPE requirement in an even number year producers born in an odd number year must complete the ceu requirement in an odd number of years note that the Cee review date is printed on a producers license document in the lower right-hand corner producers may also use the online insurance agent locator to verify their review date.

Describe what is meant by the term false financial statements.

false financial statements are those that are intended to deceive public officials or the general public about the financial condition of an insurer this often occurs when an important fact about the financial status of an insurer is deliberately withheld in order to present the company in a more favorable light.

Summarize Unfair Trade Practices.

it is considered an unfair trade practice to knowingly commit and unfair method of competition or to engage in such actions with enough frequency that the commission of unfair marketing practices indicates a general business practice

What is misrepresentation?

it is illegal to issue, publish, or circulate any illustrations or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, Etc. This also refers to oral statements. Committing this illegal act is called Miss representation.

Explain some examples of when a producer license is not required when while working in the insurance field.

the following individuals are not required to hold an Insurance Producers license, a director or employee of an insurer whose activities are limited to Executive, Administrative, managerial, or clerical. a person that works in advertising without the intent to solicit insurance,