MS Casualty Insurance laws
what is the purpose of a cease and desist order?
to prevent a producer or insurer from further violating laws for transacting insurance
which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse or switch policies from one to another?
twisting
when would a misrepresentation on an insurance application be considered fraud?
when it is intentional and material
who is considered a nonresident agent?
an agent who resides and is licensed in another state, but who is authorized to transact insurance in this state
if the commissioner/superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?
cease and desist
what are producers required to do in order to renew their license?
complete continuing education hours and pay a renewal fee
if a producer makes maliciously critical statements about another insurer, what is this illegal practice called?
defamation
what is controlled business
insurance on the producer's own life or property, or the lives/property of the producer's family or business associates
maximum fine for violating state insurance laws
$5,000
if a producer's appointment is denied by the commissioner, when must the commissioner notify the appointing agency by?
5 days
what is the maximum fine for attempting to obtain a license through fraud or misrepresentation?
$1,000 per violation of licensing laws
insurers are classified according to their domicile. what are the 3 types of insurers?
-domestic -foreign -alien
authorized/admitted insurer
-those who meet the state's financial requirements and are approved to transact business in the state -considered a legal insurer
what document is required for an insurance company to transact insurance?
certificate of authority
who owns stock companies?
stockholders
a resident of another state that moves to MS has _____ days after establishing residency to apply for licensure without taking an exam
90 days
who is an insurance agent?
a person authorized to sell, solicit and negotiate insurance contracts
a state-issued document empowering an insurance company to become an admitted insurer is called what?
certificate of authority
if an insurer holds a certificate of authority, it is known as what type of insurer?
authorized or admitted
if an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
authorized or admitted
purpose of insurance regulation
protect the public's interest in matters concerning insurance
when is controlled business legal?
when the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)
an agents acts in fiduciary capacity, which means
it is based upon trust and confidence, when handling the financial affairs of their customers, including the handling of premiums
between how many days can you request a hearing after receiving a cease and desist order?
10-30 days
2 individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. what is this called?
discrimination
maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
what are the most common penalties for violations of insurance statutes?
-cease and desist order -fine -license suspension or revocation
the commissioner must be notified of new producer appointment within:
15 days
assuming it is not denied, within how many days can an insurer begin using the premium rate that they filed with the Commissioner?
31 days
what is the highest percentage of controlled business that a licensed agent is allowed to write?
35% of aggregate premium in any 24 months
an example of an insurance adjuster would be
a person who investigates claims arising under insurance contracts for fee or commission
how is the commissioner of insurance selected in MS
elected by the public for a 4 year term in the same election in which other state officials are chosen
MS Windstorm Underwriting Association
ensures that the state has adequate market for hail coverage and other property insurance to stimulate orderly growth and development in the coast area
the requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?
fiduciary
what type of insurer is formed under the laws of another state?
foreign
commingling
it is illegal for insurance producers to commingle premiums collected from the applicants with their own personal funds
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. what is the company guilty of?
misrepresentation
what illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
misrepresentation
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
who may share in the commission from the sale of an insurance policy?
only producers properly licensed for the type of insurance transaction
insurable property (MWUA)
real property (and its contents) at a fixed location in the coast area
an agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. what is the agent guilty of?
rebating
under the FCRA, if the consumer challenges the accuracy of the information contained in their report, the reporting agency must:
respond to the consumer's complaint
what type of licensee represents the insurance company?
the agent
who must be notified of a producer's change of address?
the department of insurance (commissioner/director/superintendent)
who is responsible for the costs associated with the examination of insurers?
the insurer who is being examined
how is the MS state rating bureau funded?
through annual assessment of its members
to whom may a certificate of authority be issued?
to an insurer authorized to transact business in this state
what is the purpose of the insurance guaranty association
to protect policyowners against insurer insolvency
when can the commissioner or director examine insurers?
whenever deemed necessary, but at least once every few years
in general, who can be excluded from producer licensing and examination requirements?
-insurance company officers -directors -any other employees who do not transact insurance and who do not receive commissions for their services
what should be included in an insurance company's advertisement?
-their policies' limitations or exclusions -the name of a specific agent -an identification of a limited policy as a limited policy
if an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered:
-unfair trade practice -because making any statement that an insurer's policies are guaranteed by the existence of the insurance guaranty association
how long can a temporary license be issued?
180 days
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
in response to a notice of cancellation, the named insured requests reasoning behind the decision. how soon must the insurer respond?
5 days after the request