MODULE 4
According to Va. Code § 38.2-1831, ALL of the following are grounds for disciplinary action EXCEPT:
engaging in the practice of redating (Rebating is prohibited, not redating.) - improperly withholding, misappropriating or converting any moneys or properties received in the course of doing insurance business - intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance - having admitted or been found to have committed any insurance unfair trade practice or fraud
According to Va. Code § 38.2-1831, ALL of the following are grounds for disciplinary action EXCEPT:
engaging in twisting or any form thereof, where "twisting" means inducing an insured to terminate an existing policy and purchase a new policy - using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, or untrustworthiness in the conduct of business in this Commonwealth or elsewhere, or demonstrating financial irresponsibility in the handling of applicant, policyholder, agency, or insurance company funds; - having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory
According to Va Code § 38.2-218, any person who violates without knowledge or intent any provision of Title 38.2 or any regulation thereunder may be punished for each violation by a penalty of not more than __________.
$1,000
According to Va Code § 38.2-218, any person who commits a series of violations without knowledge or intent of any provision of Title 38.2 or any regulation thereunder may be punished for each violation by a penalty of not more than __________ in the aggregate.
$10,000
According to Va Code § 38.2-218, any person who knowingly or willfully violates any provision of Title 38.2 (Insurance) or any regulation issued thereunder shall be punished for each violation by a penalty of not more than _____________.
$5,000
When the Commission proposes to issue a fine....
- Individual/business entity has right to a hearing - commission issues an order to show cause (why commission should not impose fine) - The order has a day and time set for a hearing. The agent may choose to pay the fine or argue for a different result at the set hearing
Additional, Special Fine
- imposed on any individual acting as an agent without a license - the fine is equal to a sum equal to the first-year commission for the placement of that business - Title insurance: premium is paid on a one-time basis when the policy is purchased...So for title insurance agents, this special fine amounts to whatever commission was earned on the placement of that business.
License of a Business Entity
... may be suspended, revoked or refused if the Commission finds, after notice and an opportunity to be heard, that a violation by an individual licensee acting at the direction of, on behalf of, or with the permission of the business entity was known to be a violation by one or more of the partners, officers or managers acting on behalf of the business entity, and the violation was neither reported to the Commission nor corrective action taken
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
10. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, or untrustworthiness in the conduct of business in this Commonwealth or elsewhere, or demonstrating financial irresponsibility in the handling of applicant, policyholder, agency, or insurance company funds;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
11. Having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
12. Forging another's name to an application for insurance or to any document related to an insurance transaction;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
13. Improperly using notes or any other reference material to complete an examination for an insurance license
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
14. Knowingly accepting insurance business from an individual who is not licensed;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
15. Failing to comply with an administrative or court order imposing a child support obligation;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
16. Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax. **NOT federal
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
2. Violating ANY insurance laws, or violating any regulation, subpoena or order of the Commission or of another state's insurance regulatory authority;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
3. Obtaining or attempting to obtain a license through misrepresentation or fraud;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
4. Engaging in the practice of rebating;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
5. Engaging in twisting or any form thereof, where "twisting" means inducing an insured to terminate an existing policy and purchase a new policy through misrepresentation;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
6. Improperly withholding, misappropriating or converting any moneys or properties received in the course of doing insurance business;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
7. Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
8. Having admitted or been found to have committed any insurance unfair trade practice or fraud;
Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license
9. Having been convicted of a felony; ***NOT merely charged
§ 38.2-218. Penalties and restitution payments.
A. Any person who knowingly or willfully [intentionally] violates any provision of this title or any regulation issued pursuant to this title shall be punished for each violation by a penalty of not more than $5,000.
§ 38.2-218. Penalties and restitution payments.
D. 1. The Commission may require a person to make restitution in the amount of the direct actual financial loss: a. For charging a rate in excess of that provided by statute or by the rates filed with the Commission by the insurer; b. For charging a premium that is determined by the Commission to be unfairly discriminatory, such restitution being limited to a period of one year from the date of determination; c. For failing to pay amounts explicitly required by the terms of the insurance contract where no aspect of the claim is disputed by the insurer; and d. For improperly withholding, misappropriating, or converting any money or property received in the course of doing business. 2. The Commission shall have no jurisdiction to adjudicate controversies growing out of this subsection regarding restitution among insurers, insureds, agents, claimants and beneficiaries.
According to Va. Code § 38.2-1831, ALL of the following are grounds for disciplinary action EXCEPT:
failing to pay federal income tax or comply with any administrative or court order directing payment of state income tax.... Failure to pay state, not federal, income tax is grounds for discipline. - knowingly accepting insurance business from an individual who is not licensed - failing to comply with an administrative or court order imposing a child support obligation
According to Va. Code § 38.2-1831, ALL of the following are grounds for disciplinary action EXCEPT:
having been charged with a felony (Conviction, not the mere charge, of a felony is grounds for discipline.) - forging another's name to an application for insurance or to any document related to an insurance transaction - improperly using notes or any other reference material to complete an examination for an insurance license
If a license is revoked or suspended, the corresponding appointment is ________________.
likewise revoked or suspended
The Commission has the power to do the following:
• Refuse to issue a new license • Refuse to renew an existing license • Place a licensed agent on probation • Suspend a license • Revoke a license
§ 38.2-218. Penalties and restitution payments.
E. The provisions provided under this section may be imposed in addition to or without imposing any other penalties or actions provided by law.
True or false: the Commission has no authority to impose penalties on unlicensed individuals.
False Per Va. Code § 38.2-1832: The Commission shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by this title against any person who is under investigation for or charged with a violation of this title, even if the person's license or registration has been surrendered, terminated, suspended, revoked, or has lapsed by operation of law.
According to Va. Code § 38.2-1831, ALL of the following are grounds for disciplinary action EXCEPT:
All of the above are grounds for disciplinary action. - providing materially incorrect, misleading, incomplete or untrue information in the license application or any other document filed with the Commission; - violating any insurance laws, or violating any regulation, subpoena or order of the Commission or of another state's insurance regulatory authority - obtaining or attempting to obtain a license through misrepresentation or fraud
Pursuant to Va. Code § 38.2-218, the Commission may require a person to make restitution in the amount of the direct actual financial loss:
All of the above: - for charging a rate in excess of that provided by statute or by the rates filed with the Commission by the insurer - for charging a premium that is determined by the Commission to be unfairly discriminatory, such restitution being limited to a period of one year from the date of determination - for failing to pay amounts explicitly required by the terms of the insurance contract where no aspect of the claim is disputed by the insurer - for improperly withholding, misappropriating, or converting any money or property received in the course of doing business
§ 38.2-218. Penalties and restitution payments.
B. Any person who violates without knowledge or intent (negligence) any provision of this title or any rule, regulation, or order issued pursuant to this title may be punished for each violation by a penalty of not more than $1,000. For the purpose of this subsection, a series of similar violations resulting from the same act shall be limited to a penalty in the aggregate of NOT more than $10,000.
For disciplinary purposes, the Commission may do ALL of the following EXCEPT:
The Commission may do all of the above: - refuse to issue a new license - refuse to renew an existing license - place a licensed agent on probation - suspend a license - revoke a license
§ 38.2-1831. Grounds for placing on probation, refusal to issue or renew, revocation, or suspension of license.
The Commission may, in addition to or in lieu of a penalty imposed under § 38.2-218, place on probation, suspend, revoke or refuse to issue or renew any person's license for any one or more of the following causes: 1. Providing materially incorrect, misleading, incomplete or untrue information in the license application or any other document filed with the Commission;
Surrendering License
The Commission shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by this title against any person who is under investigation for or charged with a violation of this title, even if the person's license or registration has been surrendered, terminated, suspended, revoked, or has lapsed by operation of law.
True or false: The Commission may discipline for violations resulting solely from a malfunction of mechanical or electronic equipment.
True
True or false: The license of a business entity may be suspended, revoked or refused if the Commission finds, after notice and an opportunity to be heard, that a violation by an individual licensee acting at the direction of, on behalf of, or with the permission of the business entity was known to be a violation by one or more of the partners, officers or managers acting on behalf of the business entity, and the violation was neither reported to the Commission nor corrective action taken.
True
Due Process of Law
Before the Commission imposes any of these disciplinary actions based on one or more of these grounds, an individual has the right to a hearing If a hearing is requested: - Commission will give the applicant or licensee at least ten calendar days' notice in writing of the time and place of the hearing - evidence and witnesses may be presented by either side (similar to a trial) No applicant to whom a license is refused after a hearing nor any licensee whose license is revoked, shall again apply for a license until after the expiration of a period of FIVE (5) years from the date of the Commission's order, or such other time as the Commission prescribes in its order ***If a license is revoked or suspended, whether for an individual or for a business entity, any appointment of that licensee is likewise revoked or suspended
§ 38.2-218. Penalties and restitution payments.
C. Any violation resulting solely from a malfunction of mechanical or electronic equipment shall NOT be subject to a penalty.