SC Health Licensing: Chapter 10
What is the civil penalty for 3rd or subsequent offense?
$10,000 to $15,000
The required fees for renewal for general producers are:
$100
The required fees for renewal for special producers are:
$100
The required fees for renewal for travel accident and baggage producers are:
$20
The funding for the Insurance Fraud Division and the State Law Enforcement Division must be at least what amount
$200,000
The liability of the Association may not exceed the lesser of the contractual obligations for which the insurance company is liable, or the following amounts with respect to any one life, regardless of the number of policies or contracts:
$300,000 in life insurance death benefits, but not more than $300,000 in net cash surrender and net cash withdrawal values for life insurance; $300,000 in health insurance benefits (including any net cash surrender and net cash withdrawal values), disability income insurance, and long-term care insurance; $500,000 for health benefit plans; and $300,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values.
The required fees for renewal for limited lines individual producer — resident and nonresident are:
$40
What is the civil penalty for 2nd offense?
$5,000 to $10,000
funding generated from fines cannot total more than how much?
$500,000
If an insurer is unable to meet its financial obligations, the Guaranty Association, under the direction of the Director of Insurance, will do the following:
1. Continue coverage of policyholders by placing policies of the insolvent insurer with other insurers; 2. Guaranty payment of benefits of outstanding claims of the impaired insurer, up to certain limits; and 3. Assess funds to pay these claims from the other member of the Association.
Any person or insurer who makes a false statement or misrepresentation with an intent to injure, defraud, or deceive is subject to the following penalties:
1st offense, economic advantage less than $1,000 — a misdemeanor, fine not less than $100, but no more than $500 or imprisoned up to 30 days. 1st offense, economic advantage more than $1,000 but less than $10,000 — a misdemeanor, fine not less than $2,000, not more than $10,000 and/or imprisoned up to 3 years. 1st offense, economic advantage more than $10,000 but less than $50,000 — a felony, fine not less than $10,000, not more than $50,000 and/or imprisoned up to 5 years. 1st offense, economic advantage $50,000 or more — a felony, fine not less than $20,000, not more than $100,000 and/or imprisoned up to 10 years. 2nd or subsequent offense, regardless of amount of economic advantage gained — a felony, fine not less than $20,000, not more than $100,000 and/or imprisoned up to 10 years.
If guilty of misdemeanor, upon conviction, must be fined in the discretion of the court or imprisoned for up to
2 years
A producer who successfully completes an approved course may not repeat the course and receive certification within
2 years of its original completion
The insurer will be given at least how many days notice for the investigatory hearing?
20 days' notice
What are the total amount of hours of continuing education required?
24
What are the minimum amount of hours required for ethics?
3
when an application for auto insurance is rejected, the applicant's driver's license number must be kept on file for
3 years
Providers of CE courses must send a certification of course completion to the CE Administrator, as well as to each individual producer who successfully completed an approved course within how many days?
30 business days after the course completion
A nonresident producer who moves from one state to another must file a change of address and provide certification from the new resident state within how many days?
30 days
For change of address, producers must notify the department within how many days?
30 days
The Director may allow a period of up to how many days to pay the penalty?
30 days
Notice of the annual public hearing held by the Director must be given at least
30 days prior
The Department will forward that exam to the examined insurer, and allow the insurer _____ to provide a ________________
30 days; to provide a written submission or rebuttal
Producers must make and keep a full and correct record of the insurance business they transact for at least
5 years
What are the minimum amount of hours required in each line of authority?
8
A resident property and casualty licensed insurance producer may be licensed as an insurance broker if the licensee has met the following requirements:
A broker license is for the same line of insurance as a producer license; Passed the state broker licensing examination; Paid a biennial license fee of $200; Filed a bond in favor of South Carolina in the amount of $10,000 with the Department in a form approved by the Attorney General; and Paid to the Department the broker's premium tax rate upon premiums for policies of insurers not licensed in South Carolina.
an investigatory hearing may be scheduled
After the 30 days, with or without a rebuttal
Who appoints the broker and who do they represent?
Appointed by the insurance company; represents the client
To serve the position of the Director, he/she must
Be appointed by the Governor, with the advice and consent of the Senate; Be a member of the Governor's Cabinet; Serve at the Governor's pleasure; and Be bonded by a $50,000 surety bond paid for by the State of South Carolina.
To be licensed as an insurance producer in SC, an individual must
Be at least 18 years old; Be of good moral character; Have not been convicted of any felony or crime for the last 10 years that can be a ground for denial, suspension, or revocation or a license; Have not been convicted of a misdemeanor involving dishonesty, breach of trust, or other financial or insurance-related crime within the last 5 years; Pass the required license examination; and Pay the license fee of $25.
Producers who intend to sell long-term care (LTC) policies have additional training requirements:
Complete life, accident, and health licensing requirements; Obtain a license; Complete an initial 8-hour training course in the long-term care partnership product; and Provide proof of training to the appointing carrier.
A producer licensed in another state may become a nonresident producer for the same line(s) of authority in South Carolina if the producer meets the following qualifications:
Currently licensed as a resident and in good standing in their home state; Has submitted a certified copy of the application for licensure from the producer's home state; Has submitted proper requests for licensure and paid the required fees; and The producer's home state awards nonresident insurance producer licenses to residents of this state on the same basis (known as reciprocity).
Where and when must the annual report be posted?
Department website; within 5 days
Who must a producer report abuse to?
Director
Who must approve the appointment by the before the producer transacts any business
Director
Who should the insurance producer notify about assumed names?
Director or disignee prior to using assumed name
The South Carolina Omnibus Insurance Fraud and Reporting Immunity Act was established to do the following:
Facilitate the detection of insurance fraud; Allow reporting of fraud with immunity; Set penalties for fraud; Require full restitution for economic disadvantage resulting from fraud; Require investigation of alleged fraud by State Law Enforcement Division; and Establish the Insurance Fraud Division in the office of the Attorney General.
True or False: Brokers legally bind to the company.
False; brokers do not have an agency agreement with any company; therefore, their words and actions are not legally binding to the company
Who must appoint the Director?
Governor
The Director must submit an annual report regarding the status of the coastal property insurance market to the Senate and House of Representatives by
January 31 every year
The Director will verify the following information about the insurer:
Qualifications to transact business in this state; Payment of all taxes; Proof of adequate reserves; Evidence of adequate reinsurance arrangements; Records of the company officers or directors that show they have not been convicted of crimes of moral turpitude; and Insurer's training and experience to properly manage its business and affairs.
.Rebates may include, but are not limited to, the following
Rebates of premiums payable on the policy; Special favors or services; Advantages in the dividends or other benefits; and Stocks, bonds, securities, and their dividends or profits.
The agency's license must contain
The licensee's name, address, and personal identification number; Date of issuance; and Any other information the Director deems necessary.
The records must show:
The policy number; Date and term of the policy; Amount insured; Premiums; and The person to whom every policy or certificate of renewal is issued.
True or False: A producer can make advance premium payments on behalf of an insured
True
True or False: Producers are prohibited from signing any blank applications, contracts, or policies of insurance.
True
What is the civil penalty for 1st offense?
Up to $5,000
a producer must report to the Director any criminal conviction of the producer taken in any jurisdiction
Within 30 days of a conviction
What must the report of abuse include?
a copy of the order, consent to order, or other relevant documents.
The sharing of a commission with an insured is considered
a rebate
In lieu of an examination of a foreign or an alien insurer licensed in this state, the Director may
accept an examination report on the insurer prepared by the insurance department for the insurer's state of domicile
when it appears that the producer has been convicted of a crime, the director may suspend a producer's license:
after 10 days' notice
The insurer must renew the appointment
biennially by September 30 of even-numbered years.
How can the remainder of the required minimum 24 hours be completed?
by taking any approved CE course
What must the report of criminal conviction include?
copy of the order, sentencing document, or plea agreement and any other relevant legal documents.
which lines of authority are considered limited?
credit health, credit property, credit life, travel baggage, any other credit insurance, auto physical damage, automobile liability, crop hall, industrial fire, mortgage guaranty, title, pre-need burial
The Director must conduct an examination of every insurer authorized to transact business in this state at least
every 5 years or as often as deemed appropriate.
A licensed insurance producer who is unable to comply with license renewal procedure due to active military service or some other extenuating circumstance (such as an illness or catastrophic events beyond the control of the producer) may request
hardship waiver
After notice of an opportunity for hearing before the Administrative Law Judge, if the Director finds that grounds exist for the revocation, suspension, or refusal to issue a license, the Director may
impose an administrative penalty (fine) for each offense in lieu of revocation, suspension, or refusal to issue a license.
SC Broker
individuals licensed to represent state residents in placing insurance. An insurance broker may place insurance either with an eligible surplus lines insurer or with a licensed insurance agent in an insurance carrier licensed in this state.
Aurhorized Insurer
insurer who has received a Certificate of Authority from the department of insurance to transact insurance in this state
Before an insurance company can legally transact insurance
it must first obtain a certificate of authority from the Director.
When can a person obtain a Surplus Lines Insurance Broker license in SC?
license after passing the Surplus Lines examination if that person already holds a Property and Casualty license
Failure to comply with the CE and recordkeeping fee requirements will result in
license revocation and appointment cancellation
What is the penalty for violations of notifying for change of address>
may include a monetary fine ($2,500 NONWILLFUL AND $5,000 WILLFUL violations), license suspension or revocation (or Both)
LTC producers must
meet a 4-hour biennial training requirement to maintain their eligibility to sell and service the product
Multi-line producers who do not wish to complete the required 8 hours in each line of authority must
must submit a request in writing to the Department to cancel the line(s) of authority in which they do not wish to complete the required hours
Defamation
occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business.
All producers licensed in South Carolina (except those with travel/baggage authority only) must renew their license by
paying a $25 renewal fee and completing an online renewal application.
which lines of limited authority requires examination?
pre-need burial, title, mortgage guaranty, industrial fire, crop hall, automobile liability, auto physical damage
which lines of authority are considered unlimited?
property, casualty, surety, marine, accident & health, life, variable contracts
When must a producer's license be renewed?
renewed on a biennial basis by the last day of the licensee's month of birth
If the Director finds that a producer obtained a license through fraud or misrepresentation, the license will be
suspended immediately for a period of up to 2 years.
. The original books or records must be available for inspection by
the Director
The State Department of Insurance is managed and operated by who?
the Director
Insurance premium taxes and fines assessed under the state's insurance regulations fund
the Insurance Fraud Division of the Office of Attorney General and the investigative services of the State Law Enforcement Division
If fees are not paid by the insurer by September 30
the appointment will be canceled
All examination fees and expenses are the responsibility of who?
the company being examined
If the penalty is not paid in full upon expiration of the period
the license or application stands revoked or suspended, or the renewal refused, without any further proceedings
Cease and desist
to stop or discontinue
Any producer convicted of violating the rules of blank forms section of the Insurance Code will be fined
up to $200 for each offense.
Guaranty association
was created to maintain public confidence in the promises of insurers protects policyowners, insureds, beneficiaries, annuitants, payees and assignees of life insurance, accident and health insurance, annuities, and supplemental contracts against failure in the performance of contractual obligations due to the impairment or insolvency of the insurer
Those already exempt from continuing education
will be grandfathered
the insurer must mail a copy of the notification to the producer at their last known address within how many days after notifying the Department
within 15 days
An insurer is allowed to appoint any number of producers to transact business in South Carolina on its behalf by filing a notice of appointment
within 15 days from the date the agency contract is executed or the first insurance application is submitted.
if the Administrative Law Judge affirms the suspension or revocation, a new license may not be applied for
within 2 years from that affirmation
If the Director revokes or denies a producer's license, the producer whose license has been revoked or an applicant who has been refused a license cannot reapply for a license
within 2 years of the effective date of the revocation or refusal
The Director must verify that the insurance producer is eligible for appointment within how many days?
within 30 days
When a producer's appointment is canceled by an insurer, the insurer must notify the Department of Insurance
within 30 days
the producer may file written comments concerning the notification with the Director __________ after the producer has received the original or additional notification
within 30 days
An applicant or licensee may request in writing a review of punitive actions taken by the Director
within 30 days of the Director's ruling
When must a producer report abuse
within 30 days of the final disposition of the matter
If the producer is ineligible for appointment, the Director must notify the insurer
within 5 days
A producer who allows the license to lapse for failure to comply with the continuing education requirements may reinstate the same license
within 6 months if the continuing education requirements have been met, and the required penalty fee of $50 has been paid
The person conducting an examination must file a report with the Department
within 60 days of the examination
the Director of Insurance has the following powers:
•Act as a Circuit Judge (only to invoke punishments for contempt in insurance matters); •Require witnesses to testify; •License individuals, agencies, and companies; •Issue cease and desist orders; and •Charge individuals with perjury.
Before their license is issued, applicants must
•Furnish a complete set of fingerprints to the Director; and •Undergo a state criminal records check by the South Carolina Law Enforcement Division (SLED) and a national criminal records check by the Federal Bureau of Investigation (FBI).
The Director's general duties and responsibilities include the following
•Supervising and regulating the rates and service of every insurer in this state, and establishing fair and reasonable standards, classifications, regulations, practices, and measurements of service to be observed and followed by every insurer doing business in this state; •Ensuring that all the insurance-related laws of this state are faithfully executed; •Reporting to the Attorney General or other appropriate law enforcement officials any criminal violations of the laws relative to the business of insurance; and •Instituting civil actions either through the Director's office or through the Attorney General, relative to the business of insurance.
An individual producer license must contain
•The licensee's name, address, and personal identification number; •The date of issuance; •The lines of authority; and •Any other information the Director considers necessary.