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state regulations

Terms in this set (121)

producer/agent
appointed by an insurer to transact insurance
underwriter
gathers info, analyzes exposures, and selects risks for the insurer
adjuster
investigates claims, adjusts losses, and negotiates claim settlements for the insurer
actuary
mathematician who develops the rates for the insurer
3 sources of regulation of the insurance busn:
1. state
2. federal
3. self-regulation
state regulation is the ____ source
primary
federal regulation supervises areas of insurance not covered by state regulation or when state jurisdictions are in conflict
true
self-regulation by ____
the national association of insurance commissioners (NAIC)
NAIC is a voluntary ____ org. Their purpose is to promote uniformity among states by proposing standardized laws
non-profit
the oklahoma insurance commissioner is a member of the NAIC
true
the NAIC makes recommendations to state insurance departments but has NO legal authority
true
the oklahoma insurance commissioner:
1. chief executive officer of the oklahoma insurance department (OID) and has the duty of administration and enforcement of the provisions of the oklahoma insurance code
2. publicly elected by the voters to a 4 yr term
qualifications to become insurance commissioner include:
1. must be at least 25 yrs old
2. must have been a resident of oklahoma for at least 5 yrs
3. must have a min of 5 yrs experience in the insurance industry
4. must have no financial interest in any insurer, agency, or insurance transactions except as policy-owner or claimant under a policy
the commissioner's general responsibility include:
1. adopt rules and regulations to carry out the provisions of "the insurance code"
2. examine insurance companies
3. jurisdiction over complaints against anyone engaged in the insurance busn
4. authority to:
-conduct hearings
-issue cease and desist orders
-initiate civil actions
-censure, suspend, revoke or non renew an insurance license
5. approving and monitoring the adequacy of insurance company rates
6. maintain books and records required by law
7. provide an annual report to the governor regarding the financial status of the insurance industry and the total amount of insurance claims paid in the state of oklahoma
8. educate consumers
9. deliver to their successor all furniture, records and property of the insurance department
the Oklahoma insurance department (OID) has jurisdiction over violations of the insurance code
true
a hearing is used to determine if a licensee or insurer violated the insurance code
true
if the OID considerd a possible violation has occurred, these steps must be followed in sequence:
1. give notice of hearing
2. conduct the hearings
3. orders/punishment
4. right of appeal
the OID must give at least ___ days written notice and not more than ___ days. The notice of hearing must include: time, place, reason for the hearing
5; 30
the hearing is open to the public and the OID can take depositions and subpoena witnesses or evidence
true
the OID must summarize the findings in writing within ___ days of the hearing
30
after the hearing, if the OID determines a violation has occurred the OID may punish the licensee by:
1. issuing a cease and desist order
2. instituting a civil suit
3. instituting a civil penalty - $100-$1000
4. censure, suspend, non-renew or revoke a licensee's license
licensee has the right to appeal any OID action. Licensee has ___ days to file for judicial review
30
types of insurers:
1. stock company
2. mutual company
3. fraternal/fraternal benefit society
4. federal government insurers
stock company
incorporated insurer with capital stock owned by its shareholders
mutual company
incorporated insurer without capital stock owned by its policy-owners
fraternal
an incorporated society, order, or lodge without capital stock. operating as non-profit insurers, fraternal benefit societies are organized for the sole benefit of their members
federal government insurers
insurers operated by the federal government
types of insurers by charter
1. domestic
2. foreign
3. alien
domestic insurer
formed under the laws of Oklahoma - home office in Oklahoma
foreign insurer
formed under the laws of another state - office in Oklahoma with home office in another state
alien insurer
formed under the laws of another country - office in Oklahoma with home office in another country
the certificate of authority is the insurer's license to do busn in the state of oklahoma
true
before an insurer can transact insurance busn in the state of oklahoma, it must obtain a certificate of authority from the OID
true
certificates of authority are perpetual and automatically renew annually on ___, unless the insurer fails to qualify or renew
March 1
examinations
an examination (audit) is ordered by the OID and focuses on financial solvency
the OID may order an examination of an insurer as often as ___
necessary
the OID must by law order an examination of all domestic, foreign, and alien insurers every ___ yrs
5
cost of examination
the insurer being examined pays for the cost of the examination
following an examination, the chief examiner must file a report within ___ days of completion of the examination
30
the examined insurer has up to ___ days to make a rebuttal, which is the right to disagree
20
oklahoma insurance rating act
the purpose is to regulate insurance rates not be excessive, inadequate, or unfairly discriminatory
a rate is the cost of insurance per unit of ___
exposure
the OID approves insurance rates
true
rates are developed by an ____ who is a mathematician and works for the insurer
actuary
prospective loss cost
the portion of the rate which is projected to be paid out in insurance benefits
rate hearing
any insurer or rating org may request a hearing to dispute an order of the OID regarding rates - OID gives 10 days notice before the hearing
penalties
for violating the ratemaking standards under the Oklahoma insurance rating act:
-civil penalty: an insurer is subject to a civil fine of $100-$5,000
producer (agent) licensing act purpose:
this act governs the qualifications and procedures for the licensing of insurance producers
the producer licensing act simplifies and organizes statutory language to:
1. improve efficiency
2. permit the use of new tech
3. reduce costs associated with issuing and renewing insurance license
"practicing insurance" would include any of the following:
1. soliciting
2. preliminary negotiation
3. selling
soliciting
attempting to sell insurance or asking a person to apply for a particular kind of insurance including prospecting
preliminary negotiation
act of conferring with the buyer of insurance including the benefits, terms, or conditions of the contract
selling
completing the application, issuing a binder, making policy changes, delivery of policies, and collecting premiums
a receptionist, actuary, file clerk, and underwriter do not need to be licensed
true
law of agency
a body of law which pertains to contractual relationships where a person is authorized to perform certain acts for another
under the law of agency there are 3 parties involved:
1. principal
2. producer
3. 3rd party
appointment of producer by insurer
a producer may represent as many insurers as may appoint them
the insurer must appoint a producer within ___ days after the date of the agency contract or the date the insurer accepts busn from the producer
15
a producer may sell only types of insurance ___ and ___
licensed; appointed
a producer may receive a commission from an insurer only if the producer is ___ in the line of insurance and ___ by the insurer
licensed; appointed
a producer may split his/her commission with another producer licensed in the appropriate line of insurance
true
an insurer must notify the OID within ___ days from terminating a producer appointment
30
an appointment is for a ___ month period of time
12
producer fiduciary responsibilities
1. identifying types of financial risk to the insured
2. selling the coverage most suitable for the insured
3. explaining insurance coverage
4. collecting the initial premium. forward premiums to the insurance company and do not commingle
5. delivering the insurance policy
the term period for all the following types of insurance license is ___. a license shall remain in effect unless revoked or suspended as long as fees are paid and continuing education is fulfilled
biennial
types of license include:
1. insurance producer
2. customer service representative (CSR)
3. limited insurance producer
4. temp. producer
5. managing general agent
6. insurance consultant
7. surplus lines insurance broker
insurance producer
a person licensed to solicit, negotiate, or sell insurance and appointed by an insurer:
customer service representative (CSR):
a person licensed to solicit, negotiate, or sell insurance and appointed by the insurance agency with whom they are employed:
limited insurance producer
a person licensed to solicit, negotiate, or sell limited lines insurance and appointed by an insurer:
temp producer
a temp producer license may be issued for 180 days to the following without requiring an examination
managing general agent
a person who supervises the busn of an insurer operating within the state of oklahoma
insurance consultant
a person licensed to enagage in the busn of offering advice, counsel or opinion with respect to the benefits, advantages, or disadvantages of an insurance policy
surplus lines insurance broker
person or legal entity that transacts insurance on behalf of a non-admitted insurance company
surplus lines
if the type of insurance required is not procurable from an admitted insurer insurance comp, then the insured can purchase insurance from a non-admitted insurance comp subject to the following requirement:
-surplus lines insurance must be purchased through a licensed surplus lines broker and can't be purchased directly from the non-admitted insurance comp
surplus lines policies
policies issued by a non-admitted insurance comp must contain, in bold face type, a nonfiction stamped on the declarations page that this policy is a "surplus lines policy" and not subject to the protection of the Oklahoma P&C guaranty association
premium tax
a premium tax of 6% of the gross premium less any return premium is charged on all surplus lines policies.
annual report
each surplus lines broker must file an annual report on or before April 1st verifying the amount of surplus lines insurance transacted
Oklahoma resident license qualification
allows the licensee residing in Oklahoma to "transact insurance" or adjust claims in the state of oklahoma
an applicant must:
1. be a resident of oklahoma and legally entitled to work in the USA
2. be competent, trustworthy, and financially responsible, with good busn and personal reputation
3. be at least 18 yrs of age
4. pay oklahoma fees
5. have an insurance comp appointment
6. pass license exam with a 70% or better, unless exempt
re-instatement of expired license
a producer of adjuster who allows his/her license to lapse may reinstate the license within ___ months without retaking the examination unless the license was revoked or suspended by the OID
-penalty in the amount of doable the license renewal fee must be paid
restrictions on writing controlled busn
the insurance code places a restriction on the amount of "controlled busn" a producer can write
controlled busn
insurance written on the interests of the producer, immediate family, and/or employer
oklahoma non-resident license qualifications
allows the licensee residing in another state to "transact insurance" or adjust claims in oklahoma
an (non-resident) applicant must:
1. be a resident of another state with license in good standing and legally entitled to work in the USA
2. be competent, trustworthy, and financially responsible, with a good busn and personal reputation - no conviction of a felony
3. be at least 18 yrs of age
4. pay oklahoma fees
5. have an insurance comp appointment. the only exception is an independent adjuster
6. maintain a resident insurance license in his/her home state
7. reciprocity between states waives the oklahoma examination if a producer or adjuster has passed a similar licensing exam in his/her resident state
record (file) maintenance
all licensees including prodcuers, adjusters, and surplus lines brokers must maintain policy records at his/her place of busn for a period of 3 yrs from the date of the last transaction
notification of change
a producer or adjuster must notify the OID within 30 days of any:
-change of legal name
-change of mailing address
-change of email address
-felony conviction
failure to notify change
a $50 admin fee is imposed by the OID if the change is made beyond the required 30 days
-failure to provide notification after 45 days of the admin fee charge will result in a civil fine between $100-$1000
the OID has the power to suspend, revoke or non-renew a producer or adjuster license - notice must be given to:
1. licensee
2. all appointing insurers
3. national association of insurance commissioner (NAIC)
4. other states where producer or adjuster is licensed
reasons the OID may suspend, revoke or non-renew:
1. providing incorrect, incomplete or untrue info on license application
2. violating any insurance law, regulation or order of the insurance department
3. obtaining a license through misrepresentation or cheating on the license exam
4. improperly withholding or misappropriating monies received
5. intentionally misrepresenting the terms of an insurance contract
6. convicted or pleading guilty to any felony
7. committing any insurance unfair trade practice or fraud
8. using fraudulent, coercive, or dishonest practices or financial irresponsibility
9. forging another's name on any insurance document
10. had license in another state suspended, revoked or non-renewal
11. found incompetent, untrustworthy, or source of injury to the public
12. knowingly accepting busn from an individual who is not licensed
13. forged a signature on an insurance application
14. failing to pay court-mandated child support
15. failing to pay oklahoma income tax
a producer or adjuster, with a suspended or revoked license, who continues to "practice insurance" after losing his/her license due to a violation of the insurance code is subject to a felony and the following criminal penalties:
civil fine imposed by a court of law up to $5000 and/or jailed from 1 to 5 yrs
a person never licensed as a producer or adjuster who "practice insurance" is subject to a misdemeanor and the following criminal penalties:
civil fine imposed by a court of law up to $500 and/or jailed from 6 mmonths to 1 yr
continuing education for a producer:
-19 hrs in subjects the producer is licensed
-+ 3 hrs in the subject of ethics
-+ 2 hrs in the subject of legislative update
=24 hrs total
up to ___ hrs in excess of the required hrs may be carried forward to the next ___ month period
6; 24
exceptions to continuing education requirements:
1. non-resident producer/adjuster if he/she has completed resident state CE requirements
2. limited insurance producers
3. surplus lines brokers
penalty for not complying with continuing education requirements:
1. suspended or non-renewed license
2. double the license renewal fee
3. civil fine up to $500
fulfilling continuing education requirements:
1. attend approved CE seminar course (50 min = 1 hr credit) - no test
2. teach an approved seminar course - no test
3. self study an approved CE correspondence or online study course and pass a test
defamation
circulation of false or maliciously critical info for the purpose of injuring any person engaged in the insurance busn
boycott, coercion, and intimidation
entering into an agreement that would result in the restraint or monopoly of the insurance busn
unfair discrimination
permitting unfair discrimination between individuals of the same class and same hazard or equal expectation of losses is prohibited
you cannot discriminate against:
race, religion, nationality, sexual preference, or political party
you can discriminate against:
increased hazards based on ages, gender, marital status, and driving record
coercion of borrowers
a lender cannot require a borrower to obtain insurance from the fin institution as a condition of the loan being made
twisting
using misrepresentation to persuade an individual to surrender an insurance policy
rebating
offering to make an insurance contract using an illegal inducement
an illegal inducement is defined as:
1. special favor in the form of dividends
2. any prizes or merchandise of aggregate value in excess of $100
3. any special benefit or favor
4. any stocks, securities, or profits from securities
5. offer of employment
actions that are not considered an illegal inducement are:
1. commission payments to producers licensed in the same line of busn - splitting commission
2. dividends returned by insurance comp
3. premiums returned by insurance comp based on loss experience
4. premiums reduced by the insurance comp based on reduced costs in premium collection
5. employees of an insurer receiving commission for policies on their own lives
prohibited practices
1. failing to fully disclose to 1st party claimants all benefits and/or coverage under the policy
2. knowingly misrepresenting pertinent facts to claimants
3. failing to adopt and implement reasonable standards for "prompt" investigations
4. not attempting, in good faith, to promptly, fairly, and equitably settle claims when coverage is clear
5. denying the claim when the insured fails to exhibit the damaged prop without proving the insured was advised the insurance comp wanted to inspect the damage and the insured refused
6. request insured to sign a release beyond subject matter of the claim or issuing partial settlements and have insured sign release for total settlement
7. failing to keep a complete record of complaints that have been received - insurer must keep the complaint records for a period of 3 yrs or from the date of the insurers last fin exam, whichever is longer
8. requesting a refund of a claim payment made to the claimant after 24 months from time pay was made
9. compensating a reviewing physician on a percentage basis of the amount of the claim which is reduced by the review
10. requiring a claimant to give a proof of loss within a short period of time intended to allow the insurer an opportunity to deny the claim if insured does not comply within the time frame
acknowledgement of receipt of claim
within 30 days of receipt of a notification of a claim, the insurer must respond to the claimant
notification given to the ___ is considered notification to the insurer
producer
acknowledgement by the insurer may be ___ or ___
written; verbal
after acknowledgement the insurer must then provide necessary claim forms and instructions
true
insured's responsibility to submit a completed "proof of loss" - the insured must, within ___ days from the date of receipt of the blank forms submit the complete "proof of loss"
60
insurer's responsibility to accept or deny the claim - the insurer, within ___ days from the receipt of the completed "proof of loss" shall advise the claim has been accepted or denied
45
the purpose of the Oklahoma P&C insurance guaranty association is to:
protect the insureds and claimants against fin loss caused by an insolvent insurance comp
-provide a mechanism to pay claims and unearned premium
-avoid excess delays in claim payments
-reduce insolvencies by early detection
policies not covered under the oklahoma P&C guaranty association include:
1. non-admitted insurers - surplus lines
2. self-insured org
3. surety insurance
3 separate accounts:
1. workers comp
2. auto
3. all other traditional types of P&C insurance policies
the max obligation of the P&C guaranty association is:
1. full amount of a covered claim for benefits provided by workers comp
2. up to $10,000 for the return of unearned premium
3. up to $150,000 per claimant for other covered p&c claims
fair credit reporting act purpose:
give the consumer the right to privacy
2 kinds of reports:
1. regular consumer reports
2. investigative reports
a consumer may make a written request of disclosure of adverse info within the report. Disclosure must be made in writing within ___ days after the date the consumer request info
5
insurance info and privacy protection act purpose:
regulate the collection and use of personal info by an insurance provider
Sets found in the same folder