Life Only, Chapter 5 - B. Licensing and Producer's Legal Responsibility
A producer may amend a license by ______________ or _____________ lines of authority shown on the license
adding; deleting (same for life and health insurance)
Continuing education training must be completed within ______ months after the producer's license renewal date
24 (same for life and health insurance)
Insurers and their producers must follow a _______________________ that lists the producer's compensation for soliciting and acquiring insurance business. Insurers subsequently include these commissions and/or other acquisition expenses in their comprehensive rate filings and must justify these expenses to the Commissioner
commission schedule (same for life and health insurance)
Whenever the Commissioner has reason to believe that any foreign or alien company is violating unauthorized entities provision by transacting insurance without a certificate of authority, the Commissioner may, through the state A.G., cause a ___________________ to be filed in the district court in and for the city of Denver to restrain the company from continuing such violation
complaint (same for life and health insurance)
Certificates of completion for insurance licensing exams are valid for ___ year from the date of completion
1 (same for life and health insurance)
Punishment for violating a valid Certificate of Authority
Class 1 misdemeanor (same for life and health insurance)
No insurance producer license will be granted or extended to any person if the license is being or will be used for the purpose of writing _______________
controlled business (same for life and health insurance)
A copy of the Disclosure Statement signed in advance of the performance of certain services must be retained for not less than ___ years after the completion of services and a copy will be available to the Commissioner upon request
3
It is the responsibility of the producer or business entity to report to the Commissioner any administrative action taken in another jurisdiction or by another governmental agency in this state within _____ days after the final disposition of the matter (same for life and health insurance)
30 - this report must include a copy of the order, consent to order, or other relevant documents
An insurer or authorized rep of the insurer that terminates employment with a producer must notify the Commissioner within _____ days following the effective date of the termination, using a format prescribed by the Commissioner
30 (same for life and health insurance)
To renew a license, the producer must pay a renewal fee by the last day of their _____________ during the _________ year after the issuance of the license. Afterwards, this fee will be due by the last day of the producer's birth month every other year. The Commissioner will notify the producer of the requirements to continue the license 90 days prior to the month the license expires
birth month; 2nd (same for life and health insurance)
In the absence of willful and reckless behavior, an insurer, its authorized rep, a producer, the Commissioner, or any other entity that compiles the info and makes it available to other Commissioners or regulatory or law enforcement agencies will not be subject to ____________________ (same for life and health insurance)
civil liability - (immunity)
Whenever the Commissioner believes that an unauthorized person is engaging in the business of insurance in violation of the provisions of the Insurance Code, and it appears that the alleged conduct is fraudulent, creates an immediate danger to the public safety, or may cause significant, imminent, and irreparable public injury, the Commissioner may issue an ____________________________________ (same for life and health insurance)
emergency cease and desist - must be delivered by registered or certified mail, with return receipt requested, at such persons last known address
If insurance producers charge a separate fee in addition to those included as commissions in the insurer's rate filings, then premiums charged to the policyholders could be considered _____________
excessive (same for life and health insurance)
The CE requirements do not apply to any person holding a ____________ or _____________ license if such license is in good standing with the division and no complaints have been filed against the licensee
limited; restricted (same for life and health insurance)
Insurance premiums or refunds received by an insurance producer or agency must be applied to their ________________ (e.g. premiums received with a policy application may only be applied toward the issuance of the policy), and cannot be credited to any other obligation owed by the insured to the producer or the agency
original purpose (same for life and health insurance)
It is the responsibility of the _______________ to maintain records sufficient to document successful completion of CE credit hours on a biennial basis
producer
Any insurance producer using an assumed name under which the insurance producer conducts business must................. (same for life and health insurance)
register the name with the insurance Commissioner prior to using the assumed name - commissioner must not accept registration of any name that is similar to another currently on file, that would be misleading to the public, or that is identical or similar to the name of the producer whose license has been revoked or suspended - producer's must file with the commissioner a written notice of any change of name
Any agent, representative, or member of a fraternal benefit society will be exempt from the licensing requirements for an insurance producer, if that person (same for life and health insurance):
- devotes all of their time to activities other than soliciting or negotiating insurance - solicited and procured life insurance contracts on behalf of any society in a face amount of insurance not exceeding $50,000 in the preceding calendar year - solicited and procured such insurance on behalf of not more than 25 individuals and did not receive any compensation from these policies - does not reasonably expect to exceed soliciting or procuring insurance on behalf of more than 25 individuals in the current year
Producers applying for license qualification to include variable contracts must furnish evidence that they have a current registration with a broker/dealer through the ___________________, and evidence that they have passed the Series ____, ______, ______ exams. Life insurance producers that have not taken and passed one of these exams will not be permitted to solicit the sale of these variable contracts
FINRA; 6; 63; 7 (same for life and health insurance)
The fees prohibited for insurance producers do not apply to ___________________________; however, they must advise the insurance producer, as the rep of the consumer, in writing, that the cost of the insurance coverage provided includes a fee to a wholesale intermediary in addition to the premium charges
insurance wholesale intermediaries (same for life and health insurance)
An insurer, the authorized rep of the insurer, or producer that fails to report as required or that is found to have reported with actual malice by a court of competent jurisdiction, may, after notice and hearing, have the producer's license or insurer's certificate of authority _________________ or ________________ and may be __________________
suspended; revoked; fined (same for life and health insurance)
Producers must furnish in a form satisfactory to the Commissioner __________________ of compliance with the continuing education requirements
written proof (same for life and health insurance)
A license is not required of any officer or employee who devotes substantially all of his time to activities other than the _________________ or ___________________ of insurance contracts and who receives no commission or other compensation directly dependent upon the number or amount of insurance contracts solicited or negotiated
solicitation; negotiation (same for life and health insurance)
Individuals not required to hold an insurance producer license (same for life and health insurance):
- a director or employee of an insurer whose activities are limited to executive, administrative, managerial, or clerical - director or employee of a special agent assisting insurance producers by providing technical advice and assistance to licensed insurance producers - a person who secures and furnishes information for group insurance and performs administrative services related to mass marketed property and casualty insurance - an employer or association engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees - employees of insurers or organizations engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale of insurance - a person whose activities are limited to advertising without the intent to solicit insurance - a nonresident who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under the contract - a salaried full time employee who counsels or advises his or her employer relative to the insurance interest of the employer or subsidiaries
If, after a hearing, the Commissioner determines that a cease and desist order has been violated, the Commissioner may take the following actions against the violating person (same for life and health insurance):
- impose a civil penalty of $25,000 per violation - direct the person to make complete restitution to all parties affected by the violation
Upon receipt, the insurance producer must treat all premiums and returned premiums in a fiduciary capacity, including but not limited to the following (same for life and health insurance):
- keep all premiums and returned premiums as trust funds and separate from producers own funds - keep an accurate record of all fiduciary funds - not use fiduciary funds as collateral for a personal or business loan; the producer, however, may receive interest on such funds and use it as a compensation balance with the financial institution - deposit any premiums and returned premiums into a bank or savings account as a separate insurance trust account until actually remitted to the insurer or person entitled
All insurance transactions must be conducted through an authorized insurer. The following transactions are exempt from this regulation (same for life and health insurance):
- lawful transactions of surplus lines insurance - reinsurance - transactions in this state involving policies lawfully solicited, written, and delivered outside of this state covering only nonresident insureds - attorneys acting in the ordinary relation with their clients in the adjustment of claims or losses - other eligible transactions specified by law
An insurance producer may receive qualification for a single license to include one or more of the following lines of authority (same for life and health insurance)
- life - accident and health - variable life and variable annuity products - property - casualty - bail bonds - limited lines credit insurance - title - surplus lines - travel ticket selling - personal lines - any line permitted under state law or regulation
The following acts, effected by mail or otherwise, constitute transacting insurance business in this state and must be performed by a properly licensed producer or an authorized entity (same for life and health insurance):
- making or proposing to make an insurance contract to an insurer - receiving any aplication for insurance - receiving or collecting any premium, commission, membership fees, assessments, dues, or other consideration for any insurance or any part thereof - issuing or delivering insurance contracts to residents of this state or to persons authorized to do business in this state - directly or indirectly acting as an agent for or otherwise representing or aiding any person or insurer - doing any kind of insurance business - any other transactions of business in this state by an insurer
Insurance producers are also prohibited from charging fees for (same for life and health insurance):
- new computer equipment - extending business hours - adding new sales facilities, other overhead expenses associated with solicitation or procurement of insurance products or the servicing of existing insurance policyholders
The Commissioner may qualify an applicant as a nonresident and will issue an insurance producer license to any qualified nonresident person in accordance with the following (same for life and health insurance):
- person maintains a license in good standing in the person's home state - an insurance agency or business entity may qualify as a nonresident if the agency or business entity has its principal office located in another state - the nonresident person holds a similar license that is awarded on the same basis in the nonresident's home state and for the same line or lines of authority applied for in this state - the person has submitted the proper request for licensure and has paid the required fees - a nonresident producer who moves from one state to another state or a resident producer who moves from this state to another state must file a change of address and provide certification from the new resident state within 30 days after the change of legal residence. no fee or license app is required
Insurance producers are prohibited from charging separate fees for such services as (same for life and health insurance):
- quoting premiums - issuing policies - signing policies - examining and mailing policies - correspondence and other bookkeeping and clerical work - issuing certificates of insurance and endorsements - issuing proof of insurance cards - making copies of insurance documents - taking loss info
The following are continuing education requirements for producers in this state (same for life and health insurance):
- up to 24 hours of instruction must be completed by attending CE courses or programs of instruction approved by the Commissioner - Out of the 24 CE hours, 3 credit hours must be courses in ethics - for producer authorized to sell property or personal lines insurance, at least 3 hours must be for courses in homeowners insurance coverage - at least 18 of the 24 credit hours must be in approved courses in the authorities for which the producer is licensed - Up to 12 CE hours may be carried over to the next licensing period if completed within 120 days before the license continuation date - If a producer holds more than one license in this state, the required CE hours must be completed within 24 months after the date of the first license renewal - for good reason shown, the commissioner may grant an extension of time, up to 1 year, within which to comply with the requirements of this regulation
Insurance producers may charge fees for specific services which are beyond the scope of services pertaining to acquiring and/or maintaining specific insurance policies, but such fees may be charged only under the following circumstances (same for life and health insurance):
- when the client signs a disclosure statement in advance of the performance of the specific services, which states that the client is under no obligation to purchase any insurance product through the insurance producer in exchange for receiving the specific services. This requirement may be met by including the disclosure language in any disclosure statement required by federal or state securities law - in those cases where it is clear from the outset that no insurance product sale related to the specific services rendered will occur through the insurance producer (*insurance producer must retain a copy of the disclosure statement for not less than 3 years after completion of services and a copy will be available to the Commissioner upon request)
A copy of the notification after termination will be provided to the producer in accordance to the following requirements (same for life and health insurance):
- within 15 days: after making the notification to the Commissioner, the insurer will mail a copy of the notification to the producer at the producer's last known address - within 30 days: after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the Commissioner. The producer must, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments will become a part of the Commissioner's file and accompany every copy of a report distributed or disclosed for any reason about the producer
In the event of criminal prosecution in any jurisdiction, the producer or business entity must report this to the Commissioner within _____ days after the initial pre trial hearing. The report must include a copy of the initial complaint, the order resulting from the hearing, and any other relevant documents
30 (same for life and health insurance)
Individual and insurance agency producer licensees will inform the Commissioner in writing, in a form prescribed by the Commissioner, of any change of address within _____ days after the change (failure to do this is grounds for assessment of a penalty)
30 (same for life and health insurance)
All premiums received (minus applicable commissions) must be remitted to the insurer within ______ days after the receipt. All returned premiums received from insurers or credited by insurers to the account of the licensee must be remitted to or credited to the account of the person entitled within ______ days after such receipt or credit
45; 30 (same for life and health insurance)
Supporting documentation must be maintained by the producer for _____ years following license continuation, and must be available for audit by the Division of Insurance or the Continuing Education Administrator
5 (same for life and health insurance)
An individual seeking insurance producer licensure authority must complete at least ______ hours of an approved prelicensing course or program for certification in their line of authority, including at least _____ hours pertaining specifically to insurance industry ethics and _____ hours pertaining specifically to state laws related to the line of authority
50; 3; 4 (same for life and health insurance)
Insurance producer or producer means...........
a person required to be licensed under the state law to transact insurance, which included soliciting, negotiating, delivering, or renewing insurance contracts (same for life and health insurance)
An insurance agent or producer cannot legally act as an agent of an insurer unless they become an ________________ of that insurer
appointed agent - an insurance producer who does not act as an agent of an authorized insurer does not need to become appointed
The purpose of the state rule regarding producer fiduciary responsibility is to ................ (same for life and health insurance)
clarify the responsibility of insurance producers to treat each insurance policy and premiums handled as a separate account of their insureds unless specific authorization has been obtained from insureds to commingle multiple obligations and funds
Producers are not allowed to __________________ premiums belonging to insurers and returned premiums belonging to insured with their personal funds or with any other funds except those directly connected with the producer's insurance business
commingle (same for life and health insurance)
A license applicant must also pay to the _________________, in addition to any other applicable fees or charges, a fee established by the Commissioner for operation of the prelicensing education program
commissioner (same for life and health insurance)
To add another line of authority to an existing license, a producer must....
complete the minimum requirements necessary for the additional authorities and submit documentation on a form prescribed by the Commissioner along with the payment of the appropriate fee (same for life and health insurance)
Any documents, materials, or other info in the control or possession of the division of insurance that is furnished by an insurer, producer, or employee or agent, or obtained by the Commissioner in an investigation, will remain _________________. The Commissioner is authorized to use the documents, materials, or other info in the aiding of any regulatory or legal action brought as a part of the Commissioner's duties.
confidential (same for life and health insurance)
The producer is responsible for paying the ______________________ fee associated with the authority. If the insurance producer fails to meet the license continuation requirements, his or her license will be ___________________. The producer may reinstate the license within ____ year after cancellation. If the producer fails to reinstate, the producer will be required to apply for an initial license, including passing the exam.
continuation; cancelled; 1 (same for life and health insurance)
All premiums belonging to insurer's and all unearned premiums belonging to insureds received by an insurance producer must be treated in a ___________________ capacity
fiduciary (same for life and health insurance)
In no instance may a producer count as part of their 24 hours of CE, a course taught by an
immediate supervisor or employee of the producer acting in the capacity of supervisor or employee (same for life and health insurance)
An insurance agent license is not required of any officer, director or employee of an insurer or organizations employed by insurers, provided they are not directly or indirectly involved with the actual sale of an _______________________ and do not receive any __________________
insurance contract; commission (same for life and health insurance)
A provider network wanting to do business as a limited service licensed provider network (LSLPN) must obtain a ______________. The Commissioner may refuse to issue an LSLPN license if the applicant qualifies as a ...............
license; licensed carrier under another licensure category (same for life and health insurance)
Except for ________________ by an authorized insurer, it is unlawful for any person, company, or corporation in CO to solicit, receive, or forward applications for insurance, or to issue or to deliver policies for any company not legally authorized to business in CO
reinsurance
Insurance producer licenses are perpetual; however, they are subject to _______________
renewal (same for life and health insurance)
Every insurance producer who solicits or negotiates an application for insurance of any kind on behalf of an insurer will be regarded as __________________________ and not the insured or any beneficiary of the insured in any controversy between the insurer and such insured or beneficiary
representing the insurer (same for life and health insurance)
When deleting a line of authority, a producer needs to....
return the license for amendment. Any request for change to the permanent license must be submitted in writing to the Commissioner (same for life and health insurance)
Each insurance producer license will remain in effect unless ____________ or ________________ as long as the renewal fee is paid, and continuing education requirements are met on or before the due date
revoked; suspended (same for life and health insurance)
If you fail to comply with CE requirements, your license will be _______________ until you demonstrate to the Commissioner that all of the requirements, and others, have been met
suspended (same for life and health insurance)
The failure of a company transacting insurance business in CO to obtain a certificate of authority will not impair _________________ of any act or contract of such company and cannot prevent such company from defending any action in any court of this state. If an unauthorized insurer fails to pay any claim or loss within the provisions of the insurance contract, any person who assisted directly or indirectly in the procurement of such insurance contract is also liable to the insured for the full amount of the claim in the manner provided by the provisions of such insurance contract
the validity (same for life and health insurance)
A licensed insurance producer who fails to comply with license renewal requirements due to military service, long term medical disability, or any other condition approved by the Commissioner, may request a ____________ of those requirements
waiver (same for life and health insurance)
