Life Insurance Law Exam DE
Max penalty for insurance fraud?
$10,000
Maximum Penalty for violation of cease and desist order
$11,500
Fine for submitting false and fraudulent info. about CE completion
$15,000
Fine for failure to comply with CE requirements
$2.000
Penalty in lieu of or in addition to license denial, suspension, or revocation
$200-$20,000
Producer Regulation
- Must be licensed in the line of authority for which the agent transacts insurance - Must be appointed by insurer to transact on insurer's behalf - Avoid unfair trade practices
How long is grace period for stipulated payment of premium before policy will lapse
1 month, not fewer than 30 days, subject to an interest charge not exceeding annual 6%
Maximum extension for CE completion
12 months/1 year
Time period to reinstate lapse license with proof of CE completion and payment of fees
12 months/1 year
Payment of claims?
2 months after proof of death
Producer's license period
2 years
When do policies become incontestable?
2 years
CE credit hours to be completed each reporting period
24 hours
CE requirement for ethics
3 hours
Keep records of insurance transactions required for Commissioner's examination
3 years
Producers must report change of name or address
30 days
Commissioner's term of office
4 years
Who manages Guaranty Association?
5-9 member insurers
Appeal after the order on hearing?
60 days
Twisting
A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage.
Policy Loan
After 3 years, and if policy has sufficient cash surrender value, the insured may borrow the cash value at an interest rate of not more than 8%. The insurer may take up to 6 months after the request to borrow, to disperse funds.
Rebating
Any inducement offered to the insured in the sale of insurance products that is not specified in the policy
Apparent Authority
Assumed based on agent's actions and statements
When must an insurer provide a notice of right to convert to an individual policy?
At least 15 days prior to expiration of such period. If not provided, individual is entitled to an additional 15 days
How often does commissioner conduct examination of any insurer?
At least once every 5 years
Churning
Changing old policies for new ones for the purpose of receiving commission
How is credit life insurance written?
Decreasing term insurance
Buyer's Guide
General guide to life insurance policies; must be provided at the time of application
Misrepresentation
Illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms. Also refers to oral statements
Implied Authority
Incidental to agent's express authority(not specifically written in the contract)
Who may accept a finder's fee for an insurer for a life policy?
Licensed life insurance producers
Agent
Licensed producer appointed by the insurer
Broker
Licensed producer who represents policyholders and is not a direct rep of any insurance company
Consultant
Licensee of the department who offers advice, counsel, opinion or service regarding benefits
Commingling
Mixing the client's money with the producer's personal money
How long does insurer have to pay the disable surplus (dividend) to insured?
No later than end of 3rd policy year
Defamation
Oral or written comment made to insure a person engaged in the insurance business.
Unintentional Act
Penalty of not more than $1,000 for each violation,. not to exceed an aggregate penalty of $150,000 in any 6-month period
Intentional Act
Penalty of not more than $10,000 for each violation, not to exceed an aggregate penalty of $150,000 in any 6 month period
Unfair Discrimination
Persons in same class with same life expectancy receive different rates based on gender, marital status, sex, etc.
Delaware Life and Health Insurance Guaranty Association
Protects policyowners, insureds and beneficiaries from financial losses caused by insurers who become insolvent or otherwise unable to perform their contractual obligations.
How is Commissioner of insurance chosen?
Qualified Electors
Policy Summary
Specific information about policy issued; must be provided at the time of application
What does credit life and health insurance cover?
The life and disability of a debtor during the time a loan is outstanding
Coercion
To require, as a condition to a loan, that the applicant purchase insurance from a specific insurer.
When can an annuity and Endowment contract be reinstated?
Within 1 year after the date or premium default
When can a lapsed insurance policy be reinstated?
Within 3 years, 2 years for industrial life policies. Must pay any indebtedness, provide evidence of insurability, and pay all past premiums with interest not to exceed 6%
If application filed and deemed made in good faith, when must hearing be held?
Within 30 days after filing application
If person aggrieved of an act wants to submit a written application for hearing, when must it be filed by?
Within 90 days after act was violated
Expressed Authority
Written in the contract
When must a notice of hearing be delivered?
at least 20 days prior to date of hearing
