Property & Casualty - PA - Insurance Regulation

P&C license fees.

$55.00 resident producer, $110.00 non-resident producer.

Licensing requirements.

24 credit hours, pass exam, 18 yrs. or older, able to read and write English, not be a criminal, pay all fees, have professional competence and general fitness, integrity and character, maintain a legal business address in PA, get fingerprinted.

Continuing education requirement.

24HOURS of credit for every 2yrs. Maximum of 24HOURS may be carried toward following 2yrs. Failure to do so = voluntary termination of license.

Changes to address.

30DAYS to report to the Insurance Dept.

Motor Carrier Act.

Aids in the restoration of damage to natural resources from spillage from a truck carrying hazardous substance that accidentally discharges due to an accident. Limits = $750,000.00 non-hazardous, $1,000,000.00 oil and hazardous waste, $5,000,000.00 radioactive, $5,000,000.00 explosives and poison gases. For all vehicles 10,000lbs or more that haul between states.

Policy forms.

All policy forms must have prior approval by the Commissioner. Not considered approved until 30DAYS after the filing. Nothing will be sent telling you they were approved, just if they were not approved.

Insurance rate filing.

All rates must have prior approval by the Commissioner.

Purpose of insurance regulation.

Assure the public is treated fairly and equitably.

Unfair insurance practices.

Basically not to violate the law or cause harm to a client, do not provide untruthful information to sell insurance, do not cheat or lie, ensure you follow all reporting requirements etc. INCLUDES: Rebating, inducements, misrepresentation, false advertising, defamation, unfair discrimination,

Discipline enforcement.

By the Insurance Department: you will receive a notice, you have 10DAYS to respond, there will be a hearing with evidence provided including testimony.

CAN-SPAM Act

Dictates that all spam must have an opt out option. Must be honored within 10DAYS of the request to opt out.

Telephone Consumer Protection Act (TCPA)

Do not call list.

Gramm-Leach-Bliley Act

Federal law for securing and protecting client financial information.

Federal Fair Credit Reporting Act

Federal law protect consumers about reporting on their credit report.

Insurance Fraud Protection Act

Fights insurance fraud.

Managers & Exclusive General Agents.

Firms/licensed producer who work as independent contractors for a domestic insurer. Produce for a specific geographic territory. Managers: Not agents, negotiate and bind re-insurance contracts. Exclusive General Agent: licensee, granted sole authority to act as a producer, can bind coverage, upwards of 25% of surplus. Insurance Department issues the license. Considered independent contractors of domestic insurers.

Appointment.

For producer to sell for an insurer he/she must be appointed. Fee of $12.50 ea. yearly, receive a written contract. Termination of appointment = in writing, insurer has 30DAYS to notify the Insurance Dept.

Discipline penalties.

If found guilty: additional penalties, denial, suspension or refusal to renew, $5,000 ea. cease & desist order, specific action to be taken within 15DAYS (if fail to do = $100.00 ea. day). Also: Did not know = nmt $1,000.00 ea. or $10,000.00 in 6mo., Did know = $5,000.00 ea. or $50,000.00 in 6mo., Violation of Order (from Commissioner) = nmt $10,000.00.

Interstate commerce.

If your business effects interstate commerce and you are fraudulent, you may be charged fines or 10yrs. in prison. Attorney General may also provide civil action of no more than $50,000.00 for each.

State regulation - Commissioner

Insurance Commissioner is responsible for the Dept. of Insurance. Appointed for a 4yr. term by the Governor.

Discipline.

Insurance Department issues fines, revocation of, suspension of, non-renewal of, & denial of licenses. The following acts require discipline: acting without a license, doing business with unlicensed, representing unauthorized, soliciting for non-existent, rebating, twisting, illegal inducement & larceny. FINE nmt = $5,000.00 ea., prison nmt 6mo. and revocation of license.

Types of licenses.

Insurance entities, resident producer, temporary license, managers & exclusive general agents.

Solvency.

Is the financial stability of a company. The Commissioner is responsible to monitor and help companies.

Insurance transaction.

Is the negotiation, solicitation and selling of insurance.

Temporary license.

Issued due to death, disability or active military service. Issued if it is in the best interest of the public and if the person requesting is worthy. Issued for no more than 180DAYS. Not transferable. Used until: business is sold or transferred, producer recovers, replacement licensee hired.

Insurance entities.

Licensed by the Insurance Commissioner of the Commonwealth. Obtains a Certificate of Authority.

Resident producer.

Licensed in home state of PA, principal residence and/or business in home state. If moving into PA from other state, submit application within 90DAYS to obtain a PA resident insurance producer license.

Lines or Authority

Life, Accident & Health, Property, Casualty, Variable Life and Annuity, Personal..etc.

Commissions.

May be collected by licensed persons only except: small fee may be paid to unlicensed for referral and if on a renewal, the previous licensed producer of the account. *A fee may be charged for commercial accounts if it is in writing prior. *A fee MAY NOT be charged for application completion.

Lapse of license/reinstatement.

May request reinstatement if renewal is missed within 1yr. of the renewal date. If a request is made before 60DAYS then it will be retroactive. After 60DAYS not retroactive but will be reinstated. A failure to renew = you must reapply.

Reporting.

Misconduct - 30DAYS to report action taken against them, Criminal - 30DAYS to report from charge date.

Insurance rates.

Must be: Adequate, Fair and not excessive.

Certificate of Authority.

Needed prior to conducting business. There is a $500.00 fine for any business per policy if sold prior to.

License maintenance.

Not transferable, good for 2 yrs., Renewal fees: $55.00 resident, $110.00 non-resident, $165.00 lapsed renewal fee.

Doing business under a fictitious name.

Notify commissioner in writing, file with Dept. of State.

Unfair claims settlement.

Permits that people making claims are being treated fairly.

Producer's license.

Permitted to legally sell, solicit and negotiate contracts of insurance.

Requirements to be licensed.

Pre-licensing requirements, pass the exam, pay application fee

Termination.

Provide 90DAYS notice to Commissioner. Should try rehabilitation for at least 1yr. which includes goals. Must offer at least one yr. of continuation on policies.

Fiduciary responsibility.

Requirement for a producer to act truthful, with integrity and handle monies appropriately and with diligence and accuracy. Not to co-mingle funds.

Commissioner

Responsible for: approves Certs of Qualification, insurance companies, general agencies, surplus lines, and public adjusters. Has the power to: suspend, revoke and non-renew. Regulates companies for solvency, investigates, regulates rates, forms, trade & claims practices collects fees, & reports illegal activities to the Attorney General.

Federal Terrorism Risk Insurance Program (TRIA)

Temporary coverage to help offset any costs for damages incurred from a terrorist attack. Do NOT cover: nuclear, chemical, radiological or biochemical attacks. The Secretary of Treasury certifies whether an attack is from a terrorist or not. Voids commercial policy terrorism exclusions. Damage much exceed 20% of earned premium.

Temporary license qualifiers.

Those who may receive a temporary license include; spouse or representative of deceased, designee of active military service person, someone the Commissioner determines.

Illegal unfair claims practices.

To be found in violation, these practices must be conducted with frequency as to constitute a business practice: misrepresentation, failure to act prompt, not having reasonable standards, refusal of payment, fail to deny or confirm coverage, compelling litigation, settle claim for less, alter application to settle claim, including statement with claims payment, provide prompt reasoning, trying to delay an investigation..etc.

MCS-90 Endorsement

Treat as a surety bond. Absolute liability. Prevents insured from penalty. Insured responsible to pay back cost for restoration.

Consent Agreement.

Written. Individual does not admit to guilt but agrees to pay the civil penalty.