Property & Casualty Insurance

To assure the public that only competent trustworthy individuals and other entities sell insurance and to protect and promote the public interest.

a contract under which on party undertakes to pay another against loss of a specified contingency or peril

the three people involved in insurance

any individual who is required to be licensed under Louisiana law to solicit, sell, negotiate, bind, procure or renew insurance

any business entity required to be licensed under Louisiana law to solicit, sell,negotiate, bind, procure or renew insurance.

a  ______ includes a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity

one who resides in Louisiana or maintains a principal place of business in Louisiana.

a _____ license will be void if licensee ceases to be a resident of Louisiana

a resident producer must surrender license within _____ days by U.S.P.S or in person

licenses are issued to an applicant if he/she maintains a similar license in the U.S., Canada or another country

a person who is currently licensed as a resident in another state and in good standing in their home state can receive a _______ license.  their home state must also award this license to to producer in Louisiana

The Commissioner of Insurance may issue a temporary license for a period not to exceed _____.

An Expiration license is issued for a period of ______.

_____ hours of continuing education are needed to renew a producers license.

_____ carryover hours are allowed fro each licensing period.

P&C and L&H are licensed for a _____ year period.

L&H licenses are renewed every ____ numbered year.

P&C Licenses are renewed every _____ numbered years.

A P&C License and L&H License is renewed at the end of the ______ for that specific year.

The renewal fee and the penalty fee for P&C and L&H is _____.

When a license has lapsed for more than _____, license will be renewed only by _____ for issuance of a _____.

When a P&C and L&H license lapses within 5 years, fulfilling the _____ and paying a fee will renew the license.

The continuing education requirement for license renewal _____ to any person age _____ and older who has _____ years experience as a licensed producer.

Every insurance licensee must notify the Commissioner of any alteration in his or her residence or business address with _____ days  of the change.

Failure to file a notification of change of address will result in a ____ penalty per violation.

when a license has lapsed for _____, the license will be renewed by _____ for issuance of a new license.

_____ hours of continuing education are needed to renew a producers license

_____ hours are allowed to be carried over for each licensing period.

the continuing education requirements for license renewal does ____ to any person(s) _____ and older AND has at least _____ years experience as a licensed producer

every insurance licensee must notify the Commissioner of any alteration in his/her residence or business address within _____ of the change

failure to file a change of address will result in a _____ penalty per violation

the use of non approved trade names will result in a fine not to exceed _____.

if a nonapproved trade name is utilized for _____ or more days after being notified by the Commissioner to cease, the producer will be subject to an additional fine not to exceed _____.

an insurance producer must report any administrative action or law enforcement conviction within _____ days of a final disposition or conviction.

the commissioner of insurance is _____ statewide ever _____ years at the same time as the governor.

a _____ is appointed by the Commissioner as an assistant who may take over in the Commissioner's absence

the Louisiana Insurance Code

in order to transact insurance business in Louisiana, a corporation must have a _____ issued by the Commissioner of Insurance.

All insurers in Louisiana must be audited once every _____ years or as often as deemed necessary or requested by the Louisiana Insurance Guaranty Association.

-Administers and enforces the Louisiana Insurance Code
-May conduct examinations, investigations, hearings, or other forms of inquiry necessary to properly administer the insurance laws.
-Initiates legal actions to enforce the Code.
-May revoke or suspend a license and levy fines.

-Misrepresentation of pertinent facts of a policy
-Failure to promptly acknowledge, settle a claim, or provide a reasonable explanation for denial
-delaying the investigation or payment of claims without just cause
-attempting to settle a claim for less than the amount entitled in insured's policy

An insurance agent must be _____ in order to act as an authorized producer of that insurer.

This act requires companies to give consumers privacy notices that explain the institutions information sharing practices and policies.

A method for consumers to limit some - but not all - sharing of their information

Required to be given to consumers concerning the consumers' rights to opt out from a certain amount of sharing of their personal information

This act states no persons convicted of a felony involving dishonesty or breach of trust can engage in the insurance business without the written consent of the Commissioner of Insurance.

to protect the consumer in regard to his/her credit history.

this ACT requires that an applicant be advised if a credit report may be requested and be told the scope of the possible investigation.

An act that allows a consumer access to their credit report and gives them the right to have incorrect information corrected within 6 months.

-Fair Credit Reporting Act (FCRA)
-Fraud & False Statements
-Federal Violent Crimes Control Law Enforsement Act of 1994

Fraud and False Statements

Under federal law, a person in the insurance business who makes a false material statement or report or who intentionally and materially overvalues land or other securities for insuring purposes will be fined and/or imprisoned up to  ?   years.  If insured's safety and soundness was put in jeopardy, imprisonment may be up to   ?   years.

Insurance written on the interest of the licensee, the licensee's immediate family or licensee's employer or a corporation, the association or partnership the licensee or members of licensee's immediate family is associated.

Exceeds 25% of annual gross business from one account

Insurance license will not be granted or renewed to any person for the sole person of writing _____.

An insurer or insurance producer shall not pay, directly or indirectly, any commission, service fee, or any other valuable consideration to any person or entity for selling, soliciting, or negotiating insurance in this state unless such person or entity holds a valid license as required by law.

Convicted violators of shared commissions: grounds for immediate suspension or revocation of license and subject to a fine not less than _____ dollars nor more than _____ dollars, or imprisonment for up to _____years, or both.

charging different rates to person in the same risk class; however, consideration may be given to the nature of the risk, the plan of insurance, and other relevant factors.

financial records with the intent to deceive

Offering or paying premium rebates or anything or value as an inducement to buy insurance

the circulation of false or maliciously critical information about an insurer

Insurance company deceivingly requires, as a condition to a sale, that an insured purchase another type of insurance policy

-Misrepresentation
-False information in advertising
-Defamation
-Boycott, coercion & intimidation
-False financial statements
-Rebating
-Tying
-Unfair Discrimination

the Department of Insurance must give _____ days notice involving a hearing for a potentially bankrupt insurer

a _____ is when the consumer agency meets with the Department and makes them aware of a problem and requests a hearing

once agreed to by the Department, a hearing on demand has to be held within _____ days.

_____ must be held before a cease & desist order is issued.

Anyone violating a cease and desist order (with or without suspension of a license) of the Commissioner may be subject to a penalty of up to _____ for each act, not to exceed _____ aggregate and/or the suspension or revocation or the person's license or Certificate of Authority.

a device for spreading the chance of financial loss among a large people

two types of risk:

the loss or possibililty of loss to a risk because of its surroundings

a situation where only the possibility of loss occurs

a situation where there is a possibility of gain or loss

_____ risks are not insurable.

Conditions or activities that may increase the chance for loss to occur.

-Morale (attitude)
-Moral (intentional, poor integrity)
-Physical (tangible)
-Legaland Legislative (mandate)

Cause of loss

decrease or loss of value of insured or insured's property

avoid a risk; control a loss exposure

reducing the severity of the risk

transfer the risk to an insurance company

(self insurance)  ex: Exxon, Hurtz

sharing the risk with a large group

-Avoidance
-Reduction
-Transfer
-Retention
-Sharing

-Accidental Loss
-Ascertainable Loss
-Economic Hardship
-Exclusions of Catastrophic Perils

a loss which was unintentional, unforeseen. not on purpose.

setting a value on a future loss

Causes economic hardship, covering the loss only.

terrorism, nuclear plant explosion, war, etc.

insuring the risk of a class that is more prone to losses than the average risk

An insurance company considering insuring theis type of risk may restrict coverage charge a higher rate or may not insure.

to restore to the same condition as before the loss

the larger the numbers of any given class of insureds, the more accurate the prediction of loss

"this" helps to:

-Calculate rates for groups or individuals within a group

-Predict loss in large groups or individual within a group

insurance that insurance companys buy on insurance that they sell

With _____, companies share in paying losses in proportion to their share of risk on quota share or excess of loss basis

-owned by the stockholders
-board of directors elected by stockholders to manage and set policies
-stockholders share in profit
-dividends are paid to stockholders

-owned by the policyholders, have no stockholders

-board of trustees or directors chosen by policyholders to manage company

-nonassessable policies are issued

-often called a participating company

-policyholders sometimes receive profits in the form of non-taxable dividends; not gauranteed; considered to be an over payment of premium

Social or charitable nonprofit organizations. Normally sell to members only.

Employers or individuals retain risks.

-generally for highly specialized or unusual loss exposures

-a special license is required

-placed with insurers not admitted within the state but on the Commissioners approved list

_____ Companies receive a Certificate Certificate of Authority issued by the Dept. of Insurance when a licensed insurance has met all approval qualifications as an authorized or admitted carrier in that particular state.

_____ Companies may solicit only lines of insurance for which they have been approved; business can only be placed through surplus line brokers.

Usually, ____ Companies rates and forms have not been approved by the rating commission nor are they covered by the Louisiana Insurance Guaranty Act.

incorporated in Louisiana and selling coverage in Louisiana

incorporated in another state and selling coverage in Louisiana

Incorporated in another country and selling coverage in Louisiana

-Federal Flood Insurance
-Federal Crop Insurance
-Federal Social Insurance Programs
-Medicare/Medicaid
-Social Security
-Federal Deposit Insurance Corporation (FDIC)

_____ rates insurers according to soundness of financial status.

-Independent Agency System/American Agency System

-Exclusive or Captive Agency System

-General Agency System

-Managerial System

-Direct Response Marketing System

- insurance is sold and serviced by an independent producer. 

-producer may represent an unlimited number of insurers.

-appointed on an non-exclusive basis.

-represents only one insurer.

-appointed on a exclusive basis.

-business is owned insurer.

-earns commissions on personal sales and overrides on other producers (statefarm)

-A general producer may have producers working for his/her agency.

-A general producer contracts with an insurer to place business usually on an exclusive basis.

-Earns commissions on personal sales and overrrides on other producers

-Producer is a branch manager of insurer.

-Is a salaried employee of insurer; may also receive commissions.

-mail, radio, internet, tv and direct response marketing

-clients mail applications directly to insurer

-a producer may be hired or paid a commission for completing a transaction by phone

The insurer in a contractual agreement (known as the principal) is represented by the producer within the authority of the contract when dealing with a third party.

The acts of the producer represent the acts of the insurer.

Knowledge of the producer is considered knowledge of the insurer.

actions and statements of the producer are considered actions and statements of the insurer.

payment to the producer are payments to the insurer.

the authority expressed or written in the Agency Agreement between the Producer and the Company specifically granting the producer such authorities (ex: collecting the first premium)

the authority granted to someone, such as a producer, that is not expressed written in a contract such as the implied authority necessary to do the day-to-day activities of an insurance producer.  (scheduling a medical exam for a new applicant when required for a life policy)

The authority the general public assumes a producer has granted to him/her by the carrier they represent.  (ex: binding coverage on an insurance policy without home office approval. producers should always act within the contractual powers of the Agency Agreement)

The producer's word is the company's word.

3 types of Authority and Powers of Producers

-Loyalty: Places principal's interest above own.

-Obedience: Lawful Orders

-Due Diligence: Expeditiously and with knowledge

-Accounting: Account for all properties

a person must have legal capacity to enter into a contract. those considered not to have legal right are minors, mentally infirm and persons under the influence of drugs or alcohol

written for a legal purpose, enforceable by law. Insurance contract will not be written for illegal or immoral purpose

_____ is completing an application and applying for insurance

_____ when the contact is accepted without changes; policy or binder is issued

exchange of value

first premium is paid by the the insured. the insurer promises to indemnify the insured in the event of loss

_____ must be in writing to be enforceable in court-Statute of Fraud

a contract written by one party and the other party adheres to it as is

insured has no input in the writing of the contract, therefore any ambiguity in the contract will be decided in the insured's favor

this insurance contract is based on chance or uncertain future or unforeseen contingency.

premiums are not equal to benefits

there is an unequal exchange or an unequal value between parties to the contract

personal in nature, between the insurance company and an individual

covers a financial interest in the person or object insured

after the premium is paid, only one party is legally bound to the contract. In insurance, if a client foes not pay for a policy, the coverage lapses. An insurance company cannot sue someone to force payment of premium, thus an insurance contract is unilateral, meaning only one party has a right of legal action.

Conditional in nature because certain future acts or conditions must occur before a contract is legally enforceable and before claims can be paid

If ambiguities exist in a insurance policy, they should be resolved with reasonable expectations of the insured

the greatest degree of good faith for accurate, valid information by both parties for the negotiations involving an insurance contract

statements made on an application that are believed to be true to the best of their knowledge, but are not guaranteed to be true

omission; omit information. intentionally hiding known facts when the disclosure of these factswould change the decision of an insurer.

an intentional concealment or misrepresentation of a fact known to a person with the intent of causing damages to another party or reaping benefits from the insurance company. 
   (ex: a person knowingly lied to receive extra benefits)

Voluntary abandonment of a known right, claim or privilege. Cannot cancel this.  Either party to an insurance contract can waive a right.

EX: Waiver of Premium Rider - If totally and permanently disabled and under certain conditions, company waives right of premium collection.

prevents the denying of a fact because of one's own previous actions or words to the contrary.

A legal principle based on fairness; a right or privilege that has been waived in a contract may not be enforced