Insurance Regulation
In the transaction of insurance, which of the following is considered to be representing the client?
The broker.
Directror
The head of the State Department of Insurance
Cease and Desist
To stop or discontinue.
An insurer may be fined for nonwillful or willful violations of insurance laws with which of the following respective fines?
$15,000/$30,000
Penalty for producer for violation of insurance code
$2,500
SLED Report Fee
$25
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.
Director must verify the insurance producer is eligible for appointment
30 days
To pay a penalty
30 days
Fined levied by the director in lieu of license revocation or suspension must be paid within
30 days.
SLED Report Expires
90 days
Which of the following is NOT a penalty for transacting insurance without being properly licensed?
A ban on selling insurance up to 5 years
Authorized Insurer
Insurer who has received a Certificate of Authority from the department of insurance to transact insurance in this state.
All of the following are unfair claims settlement practices EXCEPT
Suggesting negotiations in settling the claim.
3rd or more offense civil penalty
$10,000 - $15,000
Penalty for acting without a license
$10,000 or 2 years imprisonment
General producer appointment fee to be paid biennially
$100
Penalty for willful violation of cease and desist order by producer
$100/day
Penalty for insurer for violation of insurance code
$15,000
Notice to suspend a producer's license by DOI
10 days
Bankruptcies - prohibited information in consumer reports
10 years
Imprisonment for failure to act in a fiduciary manner
2 years
Producer may no reapply for a license if license is revoked or refused
2 years
Director must give notice for hearing to insurer after examination
20 days
Continuing education required
24 hours
CE credits required in ethics
3 hours
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days.
Director will examine each authorized insurer
5 years
Period of time to keep all records
5 years
Reinstatement of license as long as fees and penalties (if any) are paid
6 months
Examiner files report with DOI regarding examination
60 days
CE requirement in line of authority
8 hours (of 24)
Statue
A formal written law enacted by legislature; insurance statues can be found in the State Insurance Code.
Reciprocity
A mutual interchange of rights and privileges.
Domicile (for insurers)
A state in which an insurer is organized and has its main place of business.
Inducement
An offer that attempts to influence the other party.
Moral Turpitude
Conduct that is contrary to community standards of justice, honesty or good morals.
The Federal fair Credit Reporting Act
Regulates consumer reports.
Penalty for willful noncompliance with Fair Credit Reporting Act
$2,500
Notice of Hearing
30 days
Director must notify the agency the producer is ineligible for appointment
5 days
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
Coercion
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual 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 soon 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 costs will not increase for a period of at least 5 years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
Fraud
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits.
During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes
Misrepresentstion
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.
Fine for not complying with change of address (willful and nonwillful)
$2,500 - $5,000
Penalty for misdemeanor
$2,500 or 2 years imprisonment
A licensed producer may be fined for nonwillful and for willful violations of insurance laws with the following respective fines:
$2,500/$5,000
Penalty for signing a blank form
$200
Penalty for insurer for willful violation of insurance code
$30,000
Individual producer appointment fee to be paid biennially
$40
1st offense civil penalty
$5,000
Penalty for producer for willful violation of insurance code
$5,000
2nd offense civil penalty
$5,000 - $10,000
Penalty for violation of cease and desist order by producer
$50/day
Insurer to notify producer of appointment termination
15 days
To file with Director a producer's appointment
15 days
Age to apply for license
18
CE credits that can be carried over
18 hours
Temporary license is valid
180 days
Gain $1,000 - $10,000: Fine $2,000 - $10,000 (misdemeanor), 3 years of imprisonment
1st offense
Gain $10,000 - $50,000: Fine $10,000 - $50,000 (felony), 5 years imprisonment
1st offense
Gain less than $1,000: Fine up to $500 (misdemeanor), 30 days imprisonment
1st offense
Gain over $50,000: Fine $20,000 - $100,000 (felony), 10 years imprisonment
1st offense
Continuing education period
2 years
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
Illegal.
Insurance producers in South Carolina must provide a notice about the insurer's privacy policies and practices to customer
Initially, annually, and anytime the notice was last revised.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
Making comparisons between the different policies.
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Misrepresentation
In order to transact insurance business in this state, an agency must meet all of the following requirements EXCEPT
Obtain an insurance agency license.
Commission
Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium.
All of the following are true regarding rebates EXCEPT
Rebates are allowed if its in the best interest of the client.
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
Rebating
Biennial deadline to pay the appointment renewal fee
September 30th
Gain any amount: Fine $20,000 - $100,000 (felony), 10 years imprisonment
2nd offense
After examination report received by insurer, time to respond to DOI to request a hearing
30 days
For producer to file written complaints with DOI about termination
30 days
Insurer to notify DOI of termination of producers appointment
30 days
Producer reports to Director any administrative action taken against him/her and any criminal prosecution (in any jurisdiction)
30 days
To report change of legal name or address
30 days
A producer licensed in Life and Health, as well as Property and Casualty, must complete a minimum of how many hours in each line of authority every 2 years?
8.
All of the following are true the Insurance Fraud Act EXCEPT
Requires reports of insurance fraud to be available for public inspection.
