Chapter Recap
This chapter focused on state-specific regulations for insurers and producers. Let's first recap some of the important requirements and processes:
LICENSING REQUIREMENTS
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Licensing Process
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Types of Licenses
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Maintenance and Duration
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STATE AND FEDERAL REGULATIONS
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Superintendent of Financial Services
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AgentRegulation
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| InsurerRegulation |
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Fair Credit Reporting Act
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Coercion — forceful act or threat aimed to influence a person to act against his or her will
Commission — payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium
Exempt — not subject to an obligation
Immunity — exemption from a duty or legal obligation, or protection against a liability
Inducement — an offer that attempts to influence the other partyInsolvent — unable to meet financial obligations
Moral turpitude — conduct that is contrary to community standards of justice, honesty or good morals
Promulgate — to make public, to put into action (e.g. laws, court decrees, and similar)
停止或停止 - 停止或停止
胁迫 - 强制行为或威胁旨在影响一个人违背其意愿行事
佣金 - 保险公司向代理商支付保险金，通常是保单保费的一定百分比
豁免 - 不承担义务
豁免 - 免除义务或法律义务，或免除责任
诱惑 - 试图影响另一方的提议
无力偿债 - 无法履行财务义务
道德败坏 - 违反社会公正，诚实或道德标准的行为
宣传 - 公开，实施（例如法律，法院法令等）
a person has been found liable for a civil penalty in a hearing, that ruling can be entered as a judgment and enforced after
A45 days.
B60 days.
C90 days.
D120 days.
Correct! Once it has been determined that a person is liable for a civil penalty, that determination may be entered 120 days later as a judgment and enforced, without court proceedings.
If licensees have administrative action taken against them, they must file this with the Superintendent within
A45 days.
B50 days.
C20 days.
D30 days.
Correct! Licensees have 30 days after the final disposition on a matter to report administrative action taken against them.
The New York Superintendent has the responsibility to make sure each entity transacting insurance in this state remains solvent. Insurers are required to file a statement with the Superintendent
ASemiannually on or before January and June 1st.
BEvery 2 years by the renewal date.
CAnnually on or before March 1st.
DBiannually on or before April 1st.
Correct! Each entity must file a statement with the Superintendent annually on or before March 1st.
2: Can the Superintendent investigate fraudulent claims if they occurred outside of the resident's state according to the Insurance Fraud Prevention Act?
A Yes, but only if it is a violation of another state's insurance law.
B No. Because insurance is regulated by the state, all claims must occur within state boundaries.
C No. If fraudulent acts are believed to have been committed, the Superintendent must notify the state's Superintendent or Commissioner. It will then become a federal matter.
D Yes. The Superintendent has the power to make an investigation within this state or outside of the state.
If the insurance frauds bureau has reason to believe that a person is engaged or is about to engage in a fraudulent act, the Superintendent has the power to make an investigation within this state or outside of the state.
11: Which of the following individuals must pass the written examination to be licensed as an insurance agent?
A A ticket-selling airline representative for one-time issuance of baggage or accident insurance
B An applicant who has passed the written examination for an insurance agent's license in the past if he applies within 2 years following the date of license termination
C A producer previously licensed in New Jersey who is applying for a New York license 120 days after becoming a resident of this state
D A nonresident licensee currently licensed in another state
Each of the above do not need to take the written examination, except for a previously licensed agent in New Jersey who has allowed more than 90 days to lapse since becoming a resident of New York.
14: For which of the following reasons can a temporary license be issued?
A To solicit new business
B To negotiate new insurance contracts
C To provide temporary help to a licensed producer
D To service the existing business
A temporary license may only be used to service existing business, not to solicit, negotiate or procure new business.
15: Which of the following would NOT be considered an insurance producer?
A A reinsurance intermediary
B An insurance agent
C An insurer’s officer
D An insurance broker
Insurance producer means any person required to be licensed to sell, solicit or negotiate insurance, including agents, brokers and intermediaries. Officers are not required to be licensed.
5: Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
A 3 days
B 5 days
C 10 days
D 14 days
Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.
All of the following are true about the Insurance Frauds Prevention Act EXCEPT
AThe Superintendent has the power to conduct investigations outside of the state.
BEvery insurer must file a fraud prevention plan within 150 days.
CThe Act is intended to permit the Superintendent and department to utilize their expertise to investigate and discover insurance fraud.
DThe Superintendent has the power to designate one or more units for the purpose of preventing fraud.
Correct! Every insurer must file a fraud prevention plan within 120 days
5: Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
A 3 days
B 5 days
C 10 days
D 14 days
Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.
6: When must agents submit license renewal applications to the Superintendent?
A Within 10 business days of their birthdays
B At least 60 days before the license expires
C By the last day of February of every year
D At least 30 days before the anniversary of the day they received their licenses
Agents must file applications for renewal of their licenses with the Superintendent at least 60 days before the expiration of the license.
11: In addition to examinations that are specifically authorized by the Insurance Code, the Superintendent may examine each domestic life insurer as often as it is deemed necessary for the protection of the consumers. The Code requires examination of domestic life insurers every
A 4 years.
B 5 years.
C 2 years.
D 3 years.
Every authorized domestic life insurer and every rate service organization that makes or files rates will be examined at least once in every 5 years.
12: If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
A 10 days
B 3 days
C 5 days
D 7 days
Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.
14: An agent who includes a statement or omits a statement which, when taken in context of the whole presentation, may tend to mislead or deceive the persons addressed has committed
A Twisting.
B Coercion.
C Misrepresentation.
D Defamation.
Making false or misleading statements with the intent to defraud another is misrepresentation.
If a certificate of appointment is terminated, a statement must be filed with the Superintendent within
A 15 days.
B 20 days.
C 30 days.
D 45 days.
When an agent’s certificate of appointment is terminated, the insurer or HMO must file the statement within 30 days and must explain the cause of the termination and surrounding facts.
10: If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
A 5 days
B 7 days
C 10 days
D 3 days
Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.
11: Which of the following individuals must pass a written examination to be licensed as a life insurance agent?
A An individual seeking to be a representative of a fraternal benefit society as its agent
B An applicant who has a Chartered Life Underwriter (CLU) designation
C A resident of New York wishing to transact business in New York
D A nonresident licensee currently licensed in another state
None of the above listed individuals must take and pass a written examination in New York to be licensed as an agent, except a New York resident wishing to act as an agent.
12: An independent adjuster may include which of the following?
A Adjustment bureau or association owned by the insurers
B Attorney at law
C A firm who acts on behalf of the insurer
D Officer, director or regular salaried employee of an insurer
An independent adjuster is any person, firm, association or corporation, who, for a commission, acts on behalf of an insurer in the work of investigating and adjusting claims.
14: Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce
A Without receiving written consent from a Federal Judge.
B Without receiving written consent from an insurance regulatory authority.
C Under any circumstances.
D Unless they have served an appropriate prison sentence.
Title 18, US Code, sections 1033-1034 makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce without receiving written consent from an insurance regulatory authority.
15: All of the following are reasons to terminate an agent's certificate of appointment EXCEPT
A An agent's license expires and is not renewed.
B An appointment is terminated by the insurer under the terms of agent's contract.
C An agent's license is suspended or revoked.
D An agent becomes disabled and is unable to complete his duties for the duration of the disability.
A temporary license may be issued to a spouse or personal representative to complete old business.
Numbers, Dollars, Days, and Dates
In order to perform your best on the state regulations portion of the exam, make sure you memorize these numbers and their definitions.
| Department of Financial Services Regulations: | |
| 5 years | Examination of domestic insurers other than property and casualty (3 years) |
| 10 days | Notice given for hearing |
| 10 days | For applicant or licensee to demand hearing after action |
| Licensing and Appointment Requirements: | |
| 18 | Age to apply for license |
| 2 years | Producer license is valid |
| 60 days | Before license expiration, agent must file an application for renewal |
| 5 days | License expires after renewal license is denied |
| 90 days | Length of one-term temporary license |
| 15 months | Maximum length of a temporary license |
| 15 days | For insurer to file agent's appointment with the Superintendent |
| 30 days | For insurer to notify the Superintendent of termination of producer's appointment |
| 15 days | Send a notice of appointment termination to producer |
| Miscellaneous Producer Regulations: | |
| 20 hours | Prelicensing education for Life only or Accident and Health only agent or broker |
| 40 hours | Prelicensing education for a Life, Accident and Health agent or broker, Personal Lines agent or broker and Public Adjuster |
| 90 hours | Prelicensing education for Property/Casualty agent or broker |
| 15 hours | CE required every 2 years |
| 15 days | Provide requested information to the Superintendent |
| 30 days | To inform Superintendent about change of address |
| 30 days | To notify Superintendent of administrative action against producer |
| 20 days | To pay penalty for licensing law violations without further action |
| 30 days | To pay penalty for violation provisions of the Insurance Code |
| 30 days | To report any fraudulent insurance transactions to the Superintendent |
| 6 years | Keep records of insurance transactions |
| 10% | Maximum allowed amount of commissions from controlled business in one year |
| Important Dollar Amounts: | |
| $500 | Penalty for each offense in violation of state insurance laws |
| $2,500 | Maximum aggregate penalty for all offense in violation of state insurance laws |
| $10 | Late fee for license renewal |
| $25 | Maximum value of any merchandise given by an insurer, agent or broker to avoid rebating |
| $2,000 | Fine per day without appropriate Fraud Prevention Plan |
| $2,500 | Fine for willful noncompliance with Fair Credit Reporting Act |
| $5,000 | Fine for violation of cease and desist order |