Unit 23- Health Insurance
Defamation
false, maliciously critical, or derogatory communication that injures reputation
8 characteristics of an ethical insurance producer
honesty, integrity, loyalty, fairness, compassion, respect for others, personal responsibility, and accountability
Full disclosure
informing the prospect or client of all facts involving a specific policy or plan so that an informed decision can be made
Controlled business
insurance written in the licensee's own interests or the interests of his spouse or employer
An insurance producer who solicits insurance on behalf of an insurer represents the
insurer
Unfair Trade Practices Act
model act originally created by NAIC to deal with inappropriate use of advertising
A company that has not been authorized to operate in Colorado is known as
nonadmitted insurer
A company that has not been issued a certificate of authority is refereed to as a ____________ _____________
nonadmitted insurer
Twisting
persuading policyowner to drop policy for the sole purpose of selling another
The essence of an agency relationship is ___________
power
What does need selling involve?
problem analysis, action planning, product recommendation, and plan implementation
If a producer offers to refund part of a prospect's premium in exchange for the purchase of an insurance policy, the producer is committing the illegal act of
rebating
What did IMSA do?
watchdog for ethical principals
Misrepresentation
written or oral statement that does not accurately describe a policy's features, benefits, or coverage
What is the maximum amount the commissioner can fine an insurer for each violation of a cease and desist order?
$10,000
A fraternal benefit society representative need not be licensed as a producer if he sells life insurance with a face amount equal to or less than
$50,000
What is the aggregate penalty the commissioner may charge an insurer that has knowingly engaged in an unfair trade practice?
$750,000
To be licensed to sell life, and accident and health insurance in Colorado, an applicant must complete
100 hours of prelicensing education
How many hours of continuing education must be in courses associated with the lines of insurance for which the producer is licensed?
18
A producer has how many days to file a written appeal to the commissioner after he has been terminated by his appointing insurer?
30
An insurer that terminates a producer's appointment must inform the commissioner within how many days?
30
All of the following may result in license suspension or revocation EXCEPT A. making a factual but subjective comparison of two policies B. making a false statement in a license application C. intentionally violating a cease and desist order D. violating an insurance regulation
A
What does IMSA stand for?
Insurance Marketplace Standards Association
All of the following are duties of the commissioner EXCEPT A. keeping records of the insurers that he has examined B. writing insurance laws C. submitting an annual report to the general assembly D. adopting rules and regulations
B
In CO, all of the following are considered unfair trade practices EXCEPT A. misrepresentation B. rebating C. replacement D. coercion
C
What does NAIC stand for?
National Association of Insurance Commissioners
Is paying a claim without conducting an investigation considered an unfair claim settlement practice?
No
A fiduciary responsibility is defined as
a relationship of special trust and confidence when a person is entrusted with another's funds
What grants power between an insurer and producer?
agency contract
How must insurance producers account for each insurance policy and the premiums they receive on it?
as a separate account of the insured
The commissioner gives approval to an insurer to do business in Colorado in a certificate of
authority
A company that has a certificate of authority is referred to as an _______________ ____________
authorized insurer
Rebating
buyer receives part of commission or anything of value
Market conduct
combination of both ethics and compliance
The commissioner may...
conduct investigations and subpoena witnesses whenever he deems it necessary
Compliance
conducting business in accordance with current rules and laws set by government regulatory agencies and the courts
In general, people who represent fraternal benefit societies to solicit insurance are
considered insurance producers and must meet all licensing requirements
A producer who was to write a majority of his insurance business on the employees and officers of a restaurant owned by his wife is transacting
controlled business
Insurance agency
corporation, partnership, association, or other legal entity that transacts insurance business and must obtain a license
Circulation of a maliciously critical statement about an insurer's financial condition to damage the insurer's reputation or business is called
defamation
Ethics
standards of conduct and moral judgement
When an insurer terminates a producer's appointment, the insurer must notify
the commissioner and producer
When appropriate, the commissioner reports a violation of insurance law to
the district attorney