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Texas Statutes and Rules Common to Life and Health Insurance
Terms in this set (64)
Cease and desist
To stop or discontinue
Forceful act or threat aimed to influence a person to act against his or her will
Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium
Not subject to an obligation
Insurer's headquarters, principal place of business
An offer that attempts to influence the other party
Unable to meet financial obligations
Conduct that is contrary to community standards of justice, honesty or good morals
A mutual interchange of rights and privileges
Restoration to the original condition or repayment
A formal written law enacted by legislature; insurance statutes can be found in the state Insurance Code
For what reason can a temporary license be issued?
For continuation of business in case the licensed producer dies or becomes disabled
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
To whom may a certificate of authority be issued?
To an insurer authorized to transact business in this state
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
What type of licensee represents the insured?
Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?
Insurers are classified according to their domicile. What are the three types of insurers?
Domestic, foreign, and alien
Who may share in the commission from the sale of a life insurance policy
Only producers properly licensed for the type of insurance transaction
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
Who is responsible for the costs associated with the examination of insurers?
The insurer who is being examined
In the agent/insurer relationship, who is considered the principal?
Who must be notified of a producer's change of address?
The Department of Insurance (Commissioner/Director/Superintendent)
Who is responsible for the contents of insurance advertisements?
The insurance company
What document is required for an insurance company to transact insurance?
Certificate of authority
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?
Who can usually be granted a temporary license?
Producer's spouse or designee in case the licensed producer dies or becomes disabled
When can the Commissioner or Director examine insurers?
Whenever deemed necessary, but at least once every few years (check state requirements)
What is the purpose of insurance guaranty associations?
To protect policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers
What are the most common penalties for violations of insurance statutes?
A cease and desist order, a fine, and license suspension or revocation
What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another
What are producers required to do in order to renew their license?
Complete continuing education hours and pay a renewal fee
Who is an insurance agent?
A person authorized to sell, solicit and negotiate insurance contracts
If an insurer holds a Certificate of Authority, it is known as what type of insurer
Authorized or admitted
What is controlled business?
Insurance on the producer's own life or property, or the lives or property of the producer's family or business associates
what is the purpose of a cease and desist order?
To prevent a producer or insurer from further violating laws for transacting insurance
Who owns stock comapnies?
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)
What type of licensee represents the insurance company?
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
Who must be a member of insurance guaranty associations?
All insurers authorized to write insurance within a state
If a producer makes a maliciously critical statement about another insurer, what is this illegal practice called?
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?
Can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies?
No, advertising the existence of the guaranty association for the purposes of solicitation and sale of insurance policies by insurers is an illegal business practice
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)
How long is a Commissioner's term of office?
How much experience do administration, an attorney, or CPA need before they can apply to become the Commissioner?
How long does an agent have to request a hearing after receiving a cease and desist order?
How long does the Commissioner have to hold the hearing for an agent after they receive the agent's request?
How often must Commissioners conduct annual examinations of authorized insurers?
What is the minimum required age for licensing?
18 years old
How long are the results of the licensing examination valid?
What is the maximum duration of a temporary license?
How often can a person receive a temporary license?
What is the duration of a reporting period?
How soon after a license revocation or denial can an agent apply for another license?
How long after a felony conviction for breach of fiduciary duty can an agent apply for another license?
What is the duration of an agents license?
How long do agents have to pay fees and complete CE after license renewal date before license expires?
How much CE does an agent have to complete each reporting period?
What is the minimum amount of CE credits an agent must specifically spend on ethics training?
What is the maximum agent licensing fee?
What is the maximum fine for violating the Insurance Code?
What is the fine for willful violation of the Fair Credit Reporting Act?
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