WA COMMON INSURANCE LAW

a gross misdemeanor

A producer puts his clients' cash payment into his personal account and writes a check to deposit in the separate account. He could be charged with

Misdemeanor

A producer puts his personal funds into his separate account. He could be charged with

The insurance company has committed an unfair claims settlement practice.

An insurance company offers to pay $500 of a $1,200 hospital bill of an insured, even though the insurance policy says it will pay $1,000 for that type of expense. Which of the following is true? o The insurance company has committed an unfair claims settlement practice. o The policy is subject to changes made by the insurance company. o The insured must pay the hospital $700. o The insurance company has committed no unfair claims practice and has the right to negotiate claim payments.

the consumer (insured)

An insurance producer is required to be bonded when he/she represents __________.

to the Commissioner and the producer.

An insurer may terminate an appointment by sending notice of termination __________.

have responsibilities for the money and financial affairs of others.

Insurance producers are considered to have fiduciary responsibilities because they __________.

Complete 12 hours of Continuing Education by his license renewal date.

The producer must do all of the following, EXCEPT

an independent adjusters license.

The type of license that a person needs in order to be paid to report to insurance companies regarding claims is

the fee must be fair and reasonable in relationship to the services performed by the producer.

With prior approval from the insurance Commissioner, a producer in Washington state is allowed to charge a fee for extra insurance related services but __________

five years

A producer needs to keep all insurance transaction records for __________.

Fines are paid to the Insurance Commissioner for deposit in the insurance fund.

The Commissioner can fine up to $1,000, per offense, for a violation of the insurance code. Which of the following statements is INCORRECT regarding this fine?

Demand an immediate hearing for a producer who violates the code.

The Commissioner may do all of the following, EXCEPT o Suspend a license with three days' notice under an Emergency Action to protect the consumer. o Revoke an insurance license with not less than 15 days written notice. Demand an immediate hearing for a producer who violates the code.

make insurance contracts (policies) or state code.

The Insurance Commissioner in Washington does NOT __________. o make rules and regulations to clarify the code. o suspend or revoke licenses. o make insurance contracts (policies) or state code. o fine for violation of the code.

$25,000

The Insurance Commissioner must have a bond in the amount of __________.

Sharing commissions with a Multi-Lines (licensed to sell life, disability, property, and casualty insurance) producer.

A Property and Casualty producer could lose his license for all of the following, EXCEPT o Sharing commissions with a Multi-Lines (licensed to sell life, disability, property, and casualty insurance) producer. o Sharing commissions with a non-licensed coworker. o Overcharging a client for car insurance. Discounting premiums for an insured.

the amount of current assets owned by the company.

A certificate of authority is issued by the Commissioner and authorizes a company to sell insurance in our state. A certificate must specify all of the following, EXCEPT o the amount of current assets owned by the company. o the kind of insurance it is authorized to transact in this state. o the name of the insurer and the location of the principal office. o the powers that an insurer grants to its producers

put the cash in her personal account and write a check to cover the premium

A client wants to give an insurance producer cash. The producer could do all of the following, EXCEPT o ask the client to write a check instead. o take the application COD (Cash on Demand/Delivery). o put the cash in her personal account and write a check to cover the premium. o take the client out to purchase a money order.

insurance company at all times when writing, soliciting insurance, or collecting premiums.

A licensed producer acting as an agent represents the __________.

at all times when writing, selling, soliciting, or negotiating insurance; or collecting premiums.

A licensed producer acting as an agent represents the insurance company _____.

any of these would be within the powers of the Commissioner

A life insurance producer binds coverage on an auto policy. The Commissioner could __________.

represents the consumer (or insured)

A person needs to be bonded to become a Public Adjuster because he/she __________.

six months

A producer has failed to submit the proper material information about an applicant to the insurance company. The producer could have his license suspended for

Get prior approval from the Commissioner.

A producer in Washington State is allowed to charge for extra insurance related services. However, the Producer must

His license will EXPIRE at midnight every two years on his birth date and there is a 30-day grace period before any late fee or penalty is charged.

A producer is confused about when his license renews. You explain to him the procedure. Which of the following would NOT be correct? o His license will EXPIRE at midnight every two years on his birth date and there is a 30-day grace period before any late fee or penalty is charged. o If his renewal application is late, but less than 30 days late, there will be a 50% surcharge penalty on top of the license fee. o If he does not apply for renewal, the last day he will be able to sell insurance is the last day of his/her birth month. o His license will EXPIRE at midnight every two years on the last day of his/ her birth month.

90 days

A producer issues a binder to an applicant when applying for auto insurance. The binder is good for a maximum of __________.

must obtain a duplicate license for each additional place.

A producer maintaining more than one place of business in this state

advance written notice to the insurer and send a copy via e-mail to the Commissioner.

A producer may terminate his appointment by sending

15 business days

A producer must respond to any Commissioner inquiries promptly and it must be in writing. Promptly means within __________ from the receipt of the inquiry.

Funds to cover previously used premiums by the producer.

A producer puts insurance premiums, paid to them directly, into a separate (a.k.a. Trust) account. A producer may also deposit money into the separate account for all of the following situations, EXCEPT: o Funds for the purpose of having a reserve in the separate account. o Funds to cover previously used premiums by the producer. o Funds to be able to advance premium or return premiums to customers. o Funds needed to pay bank charges due to the operation of the account.

Ninety days

A producer receives a written notice regarding a cease and desist order issued by the Commissioner against the producer. The producer can request a hearing within how many days from the date of the order?

the insurance company.

A public adjustor represents everyone except_________.

Receive a commission.

A salaried employee of PEMCO must be licensed in order to

one-hundred eighty days, maximum

A temporary license is good for

all of these are correct statements

A temporary license may be issued to any person legally representing the interests of the licensed producer that is __________. o deceased o entering active service in the U.S. Armed Forces o all of these are correct statements. disabled

Agents and Brokers need to be bonded.

All of the following are true about Producers acting as Agents and Brokers, EXCEPT o Agents represent the company (insurer); Brokers represent the public (insured). o Agents must be appointed by an insurer to sell for an insurer, and Brokers do not need to be appointed by insurers. o Agents and Brokers need to be bonded.

Agents and brokers must have a bond to sell insurance

All of the following are true about insurance producers, EXCEPT o Agents represent the insurance company; brokers represent the insured. o Agents must be appointed by an insurer to collect premiums and take applications, brokers do not. o A producer may act as a broker and an agent. o Agents and brokers must have a bond to sell insurance.

Authorized companies are also known as an Admitted company. They have a license to transact business in our state known as a certificate of authority.

All of the following facts about an Authorized company are not true except o Authorized companies are run by an attorney-in-fact. o Authorized companies are also known as an Admitted company. They have a license to transact business in our state known as a certificate of authority. o Authorized companies only offer surplus lines products. o Authorized companies may not sell in our state.

An unlicensed company representative

An agent could split commissions with all of the following, EXCEPT o An unlicensed company representative o Another agent o An agent with the same company o A Broker

All of these are correct statements.

Certificate of Authority is issued by the Commissioner and authorizes a company to sell insurance in our state. o The Certificate must specify the name of the insurance company and the location of its principal office. o All of these are correct statements. o The Certificate lists the kind of insurance it is authorized to transact in this state. o The Certificate shows the powers that an insurer grants to its producers.

$1,000

For violation of an insurance Law, a producer can be fined a maximum of $__________ by order of the commissioner.

Once every five years

How often is the insurance commissioner required to examine the records of an authorized insurance company?

July 1st

How often must an Admitted Company renew its Certificate of Authority?

the last day of his/her birth month.

If a licensee has not sent in the necessary renewal form and fee for renewing his license, the last day that he will be legal to sell insurance is __________

If over twelve months late, an additional 400% surcharge of the license renewal fee.

If a producer applies for the renewal of his license late, there will be a surcharge penalty. Which of the following would NOT be a correct penalty? o If over twelve months late, an additional 400% surcharge of the license renewal fee. o If 61 days to twelve months late, an additional 200% surcharge of the license renewal fee. o If 1 to 30 days late, an additional 50% surcharge of the license renewal fee. o If 31 to 60 days late, an additional 100% surcharge of the license renewal fee.

61 days to one year from the expiration

If a producer does not renew his license, the producer has what period of time to reinstate the license without having to retake the exam and pre license education?

considered illegal and an unfair trade practice

If an insurance company makes a statement that its policies are all guaranteed by the existence of the Washington Guaranty Association, it would be

notify the Commissioner, in writing, within 30 days following the effective date of the termination.

If an insurance company or its authorized representative terminates the appointment of a producer for cause, the insurer must

All three of these answers are correct.

If an insurance producer solicits insurance on behalf of an insurer, but it is later determined that the insurance producer was not eligible for appointment by the insurer, o All three of these answers are correct. o the insurance producer and the insurer may be subject to disciplinary action. o the insurance contract with the consumer will be effective and cannot be terminated by the insurer. the producer must not receive compensation for any insurance product sold.

It is legal only for securing insurance which is not available through authorized insurers.

In Washington State, when is it legal to transact insurance business through an unauthorized insurer?

bona fide differences in risks have been substantiated

In Washington, discrimination regarding sex, marital status, etc., is allowed if __________.

must be given the authority to do so by his company.

In order for a producer to handle claims as an adjuster, he __________.

rebating

In order to get Mr. Smith to buy a policy, a producer gives part of her commission back to Mr. Smith as a refund. In Washington, this is an illegal practice known as __________.

illegal dealings in commissions

In order to sell Susan a life insurance policy, you as a producer, split your commission with her. Susan is not a licensed agent. Sharing your commissions with Susan is an illegal practice known as __________.

policy owner receives the policy.

In the State of Washington, the free look or return of policy right starts when the __________.

give the insured a discount on their premiums for properly answering all questions on the application honestly

It is an unfair business practice in Washington State to __________. o give the insured a discount on their premiums for properly answering all questions on the application honestly. o identify yourself when soliciting business. o give a Buyer's Guide and explain the provisions of a policy to the insured. make actual physical delivery of a policy in a reasonable period of time after issuance.

defamation.

Making, publishing, or circulating any information or statement which is false or maliciously critical if designed to injure the reputation or business of any authorized insurance company (insurer) is known as

keep all insurance transaction records for the 10 years she has been licensed.

Mikala has been a producer for over 10 years and is currently licensed. She is required to do all of the following, EXCEPT o keep her insurance transaction records for five years for the business she effectuates. o keep her continuing education certificates for three years. o respond to any inquiries from the Commissioner promptly (within 15 days) and in writing. o keep all insurance transaction records for the 10 years she has been licensed.

electronically

Most communication today, with the Office of the Commissioner, is done

SHIBA

Ms. A had questions regarding health care insurance. Who can she call who has training and can assist her?

it is canceled by either the agent or the insurer or nonrenewed.

Once an appointment is granted to a producer, it is good until

Admitted or Authorized

Once an insurance company receives a certificate of authority from the State Commissioner, they are often referred to as a/an __________ insurer

When the insurance company appoints the agent.

When can a producer act as an agent and sell products for an insurance carrier?

January 31st

Producer Clancy Wiggum, whose birthday is January 10th, does not send in his renewal application to the State to renew his producer license. The last day in which he can sell insurance is __________.

must not transact insurance under the license until the renewal or reinstatement of the license is completed.

Regarding renewal of your insurance license, if a request for renewal of the license is received by the commissioner after its due date, you

get a duplicate license for the second location.

Should a producer secure a second office location, the producer must

delivered or mailed within one working day

Should premiums be received by a producer, a premium receipt should be __________.

The commissioner will immediately revoke the license of the producer.

The Washington Insurance Commissioner fines a producer for allegedly misrepresenting the facts about an insurance contract. Which of the following would NOT apply to this action by the commissioner? o The fine must be paid in not less than 15 days nor more than 30 days from receipt of the order. o The producer may appeal the fine within 90 days. o The maximum fine for this one circumstance can be no more than $1,000. o The commissioner will immediately revoke the license of the producer.

voters

The Washington Insurance Commissioner is put into office by the __________.

Setting premium rates

The Washington Insurance Commissioner is responsible for all of the following actions, EXCEPT o Issuing Cease and Desist Orders o Issuing Certificates of Authority o Issuing Producer Licenses o Setting premium rates

Insurer

The appointment fee for a producer acting as an agent for an insurer is paid by the

NAIC (National Association of Insurance Commissioners)

The association of state employees which is active in insurance regulatory problems and in forming and recommending model legislation and requirements, with the primary responsibility of protecting the interest of the consumer, is the __________.

The name of the producers selling for the company.

The certificate of authority must contain all of the following, EXCEPT o Location of the home office of the company. o The name of the insurer. o The type of business transacted. The name of the producers selling for the company.

Rebating

The insurance producer offers a cash refund to a prospect for buying insurance. The producer is guilty of

Certificate of Authority

What license is required for an insurance company to do insurance business in Washington?

an offer

When an applicant gives an application and premium to an insurance company, he is making __________ to purchase insurance.

accepted the offer.

When an applicant gives an application and premium, he is making an offer to buy insurance. If the insurance company then issues the policy as it was applied for, the company has

Twisting and Defamation

When attempting to get a consumer to purchase a new policy, the producer makes malicious and false statements about the current insurance company and current policy of the prospect. In this situation the producer is guilty of

All of these are needed to take the pre-licensing exam.

When going to take the pre-licensing exam from PSI, you need o to take two forms of identification (ID), one must be a photo ID, like a driver's license. o certificate of completion from this school. o a scheduled appointment set up with PSI. o All of these are needed to take the pre-licensing exam.

Within the 24 months prior to the month of the renewal

When must an insurance producer meet the continuing education requirement for license renewal?

Prior to or before you apply for renewal of your license.

When must your continuing education be complete?

It is an agreement between two or more parties, enforceable by law.

Which of the following best describes the definition of the word contract?

Foreign insurer

Which of the following describe a Washington authorized insurance company with its home office in another state?

Foreign

Which of the following describes an insurance company doing business in the state of Washington but is incorporated in another state in the United States?

License number of the Producer who writes the business

Which of the following do you think would not be on an insurance contract?

A citizen of the U.S.

Which of the following is INCORRECT regarding an individual who wants to become an insurance producer in Washington State? o The individual must reside in the State of Washington. o The individual must be 18 years old. o The individual must pass the pre-licensing exam. A citizen of the U.S.

Is run by an attorney-in-fact.

Which of the following is NOT a characteristic of a fraternal insurance company?

Use of financial statements

Which of the following is NOT considered an Unfair Trade Practice? o Defamation o Rebating o Misrepresentation o Use of financial statements

Once a producer receives their license, they may immediately represent any insurer.

Which of the following is an INCORRECT statement about a producer in Washington? o Once a producer receives their license, they may immediately represent any insurer. o To become a producer, one must pass the appropriate state licensing exam. Producers who are not acting on behalf of an insurer do not need to be appointed

A producer must keep a trust account, which may combine business funds, personal funds, and client premiums together.

Which of the following is an INCORRECT statement regarding Washington Rules and Laws? o Illegal Dealings in Premiums violations are considered fraud and are punishable as felonies. o A producer must keep a trust account, which may combine business funds, personal funds, and client premiums together. o Anyone diverting premiums for his or her own use is guilty of larceny by embezzlement. A producer must keep a separate (trust) account. Willful violation of this section is a misdemeanor.

A new licensee who acts as an agent cannot sell insurance until they have an appointment, but the appointment must be secured within 180 days.

Which of the following is an INCORRECT statement regarding new licensees? o A new licensee who acts as an agent cannot sell insurance until they have an appointment with the insurer they want to transact business with. o License candidates have 180 days to apply for an insurance license after passing their pre-licensing exam. o A new licensee who acts as an agent cannot sell insurance until they have an appointment, but the appointment must be secured within 180 days. o A new licensee who acts as a broker cannot sell insurance until they secure a bond of $2,500.

All of these answers are insurance transactions.

Which of the following is an Insurance Transaction? o Filing claims and changing coverages for the insured who has a bad loss record. o Delivery of the issued policy to the insured after the conditional receipt is given. o Soliciting, quoting, and selling insurance for a producer who is past due on his car payments. o All of these answers are insurance transactions.

A captive agent needs his appointment renewed every two years, but independent agents do not need their appointments renewed.

Which of the following statements regarding a producer acting as an agent is INCORRECT? o A captive agent needs his appointment renewed every two years, but independent agents do not need their appointments renewed. o A captive agent is appointed by one insurer only. o All producers must act in the best interest of the consumer. An independent agent may be appointed by more than one company.

To protect the public, the Commissioner may order the immediate suspension of a producer's license.

Which of the following statements regarding the Washington Insurance Commissioner is INCORRECT? o The Commissioner may require any of his deputies or employees to post a $25,000 surety bond. o The Commissioner must supply a $25,000 surety bond. o To protect the public, the Commissioner may order the immediate suspension of a producer's license. The Commissioner carries out the task of administering and enforcing the Code.

Age of the insured

Which of the following types of fair discrimination is legal in all policies?

Twisting

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel or switch a policy from one insurer to another?

Illegal inducement

While soliciting the sale of an insurance policy, a producer offers her client an expensive piece of jewelry for buying the policy. Such an offer is considered to be

Officers or employees of companies who do not receive commissions on policies.

Who is exempt from the licensing requirement in Washington?

Broker

Who needs a license, must post a $2,500 bond, and represents the insured?

receive commissions

You are an employee for Vern Fonk Insurance Agency. You must be licensed if you want to __________.

Conservation

__________ means any attempt by the existing insurer or its producer to dissuade a policyowner from replacing an existing insurance policy.