Property and Casualty

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  1. If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?
  2. The requirement that agents must account for an promptly remit all insurance funds collected is known as what type of agent responsibility?
  3. To whom may a certificate of authority be issued?
    To an insurer authorized to transact business in this state
  4. What type of licensee represents the insurance company?
    The agent
  5. What is controlled business?
    Insurance on the producer's own life or property, or the lived or property of the producer's family or business associates
  6. Who may share in the commission from the sale of a life insurance policy?
    Only producers properly licenses for the type of insurance transaction
  7. What is the purpose of a cease and desist order?
    To prevent a producer or insurer from further violating laws for transacting insurance
  8. When is controlled business legal?
    When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)
  9. Who can usually be granted a temporary license?
    Producer's spouse or designee in case the licensed producer dies or becomes disabled
  10. An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?
  11. What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
  12. Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
  13. Who must be a member of insurance guaranty associations?
    Any authorized insurer withing a state
  14. On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?
  15. Who is considered a nonresident agent?
    An agent who resides and is licensed in another state,but who is authorized to transact insurance in this state
  16. Who is responsible for the costs associated with the examination of the insurers?
    The insurer who is being examined
  17. When can the Commissioner or Director examine insurers?
    Whenever deemed necessary but at least once every few years (please check your state regulations for specific time requirement)
  18. If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
    Authorized or admitted
  19. In general, who can be excluded from producer licensing and examination requirements?
    Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical)
  20. Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?
    No, advertising of the existence of the guaranty association for the purposes of solicitation and sale of insurance policies by insurers is an illegal business practice.
  21. Two individuals who are in the same risk and age class are charged different rates for their policies due to an insignificant factor. What is this called?
  22. Who must be notified of a producer's change of address?
    • The Department of Insurance
    • (Commissioner, Director/Superintendent)
  23. What type of licensee represents the insured?
  24. If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?
    Cease and desist order
  25. For what reason can a temporary license be issued?
    For continuation of business in case the licensed producer dies or becomes disabled
  26. What is the purpose of insurance guaranty associations?
    To protect policyowners,insureds and beneficiaries from financial losses caused by insolvent insurers
  27. Who is an insurance agent?
    A person authorized to sell, solicit and negotiate insurance contracts
  28. If an insurer holds a Certificate of Authority, it is known as what type of insurer?
    Authorized or admitted
  29. What are agents/producers required to do in order to renew their license?
    Complete continuing education hours and pay a renewal fee
  30. What are the most common penalties for violations of insurance statues?
    A cease and desist order, a fine, and license suspension or revocation
Card Set
Property and Casualty
Insurance Regulation/Laws, Rules and Regulations Common to All Lines
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