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Stack #34972
Property & Casualty Exam Flash Cards
| Question | Response | Reference notation |
|---|---|---|
| what does hull refer to in aircraft hull aviation insurance | refers to fuselage, wings, tails, ruders and other major structural features in aircraft | |
| what type of coverage does Aviation Hull Insurance Provide | provides physical damage coverage on the aircraft itself | |
| what are the 2 basic forms of hull coverage? | all risk on the ground and in flight; and all risk on the ground and limited in flight | (blank) |
| what is fiduciary liability | covers individuals who administer pension or employee benefit plans and have a fiduiary responsibility to manage the funds in best interests of plan participants. | (blank) |
| what type of losses are covered under fiduciary liability? | errors ommission, negligence and poor management. | (blank) |
| when must the policy allow for subrogation for fiduciary liability? | if premiums for fiduciary liability are paid by the fund. | subrogation would be against the individual trustees involved in loss. |
| what is liquor liability also known as? | dram shop liability | (blank) |
| what is a moral hazard? | intentionally causes losses | (blank) |
| what is morale hazard? | attitude | busines sis messy, will not clean up. |
| what is physical hazard? | laws of nature | (wind blows, lightening) |
| proximate cause? | cause which directly through an unbroken chain of events brings about a loss | if a covered peril is proximate cause policy must pay |
| actual cash value? | repalcement cost less depreciation | (blank) |
| replacement cost? | actual cost to repair or replace-no depreciation- | repairs must be done before full payment is made |
| coninsurance | did/should x loss=recovery | (blank) |
| specific insurance | separate amt of insurane on each item insured | (blank) |
| blanket insurance | single amount of insurance on several items to be covered | (blank) |
| direct loss | physical harm to tangible property | (blank) |
| indirect loss? | econimic loss in consequence of direct loss | (blank) |
| what does mortgage clause do? | protects lenders interest in real property | (blank) |
| what does loss payable clause do? | protect Lenders interest in personal property | (blank) |
| what are the 3 ways one may be held civally liable? | breaches of contract (not a subject of ins. covg) (bonds); intentional torts (excluded in virtually any liability policy); torts arising from negligence (this is what liability policies are designed to cover: | (blank) |
| when does one become civilly liable: | if he commits a tort | (blank) |
| what are special damages? | actual economic loss | (blank) |
| what are general damages? | pain, suffering, anguish, loss of companionship | (blank) |
| what is subrogation? | after paying the insured, Company owns rights against party who caused insured loss | (blank) |
| severability? | insruance coverage applies separately to each insured | (blank) |
| primary policy? | pays first | (blank) |
| excess policy: | when limit is exhausted excess policies pay | (blank) |
| pro rata | each policy pays its proportionate share | (blank) |
| equal shares | each policy pays an equal part of loss | (blank) |
| negligence? | is the failure by act or ommission or commission to do what a reasonable and prudent person would in the same situation | (blank) |
| comparative negligence? | when both parties are negligent each shall bear his proportionate share of the other's damage | (blank) |
| personal auto policy eligible insured? | individual, spouses, family members, non-related members of a household,. | (blank) |
| eligible vehicles personal auto? | private passenger autos, pickups and vans weighing less than 10k lbs | (blank) |
| covered auto (personal auto policy) | one in dec, temporary substitute, repalcement auto for policy period; additional auto for 30 days. | (blank) |
| if defending personal auto: what may company elect to do? | defend; settle out of court as it choses, or if policy limit is exhausted company has no further obligation to defend. If company defends defense costs paid in addition to oplicy limit. | (blank) |
| Supplemental Payments in addition to personal auto policy limits: | a) Bail bonds up to $250.00; b) A-appeals bond or release of attachment bond premiums; c) I-interest on judgments until carrier pays share of same; d) L- loss of pay up to $50.00 per day attending court or hearings at company's request; E- expen at compan | E-expense at company request |
| excluded payments under personal auto: | intention BI/PD; property owned, rented, transported by used by or in CCC of insured; employees; transporting people or their prop for fee; while employed | (blank) |
| Which insurance law was added during the 2002 Legislative Session? | Producer Model Law | (blank) |
| What other doc does the Producer Model Law contain reciprocal provisions of? | NAIC's National Producer Model Law | (blank) |
| what are the two changes acording to Producer Model Law? | term producer used instead of agent; individual responsible for obtaining their own license; but not able to write business until appointed by an insurance company? | (blank) |
| what minimum qualifications must an insurance producer in SC meet? | 18 years old; not committed any act ground for denial, suspension/revocaiton, met education requirements; passed required license exam, paid onetime producer licensing fee | exempt from passing exam: credit producer's license or baggage producer license. Director may waive exam for Chartered Life Underwriter (CLU) or Chartered Prop & Casualty UW (CPCU) |
| individual meets prelicensing education requirement? | by within 2 years preceeding sucessfuly completing not less than 40 classroom hours of instructions;or passed an approved correspondence course; or had at least one (1) year of underwriter/markeitng experience as an employee of a producer, insurer, | managers or general producers in all lines of insurance for which application for license is being made. |
| what do you need to obtain an unlimited lines producer license? | license fee $20 (one time fee); SC application for indiv. license (form 3506); exam report from experion (expires after 90 days); 40 hr prelicensing cert form 3536 (exp after 2 years); SLED report $25 fee (expires after 90 days) | (blank) |
| if an agent is previously licensed as a resident in another state, agent must submit? | a letter of clearance from other state. | (blank) |
| what must be provided when applying for Variable Contracts? | proof of Series 6 or 7. | (blank) |
| what are the unlimited lines of insurance? | property, casualty, surety, marine, accident and health, life, variable contracts, accident & health, life, | (blank) |
| what are the limited lines of insurance? | credit health, credit property, credit life, travel baggage, any other credit insurance, automobile liability, crop hail, industrial fire, mortgage guaranty, title & pre-need burial. | (blank) |
| which limited lines of insurance require no examination, no CE requirement and no prelicensing requirements? | credit health, credit property, credit life, travel baggage, any other credit insurance | (blank) |
| which limited lines of coverage require an exam but do not require a CE and do not require prelicensing? | auto physical damage, automobile liability, crop hail, industrial fire, mortgage guaranty, title & pre-need burial. | (blank) |
| what must a sponsoring insurer required to submit for an unlimited lines resident producer to write business in SC? | appointment fee for local producers ($40); and SC appointment fomr no 3505 | (blank) |
| how many licenses will the producer receive? | one license. | the lines of authority will be listed on the license however the appointments will not be reflected on the license. |
| how can producers check their appointments for unlimited lines resident? | confirm active appointments at www.doi.state.sc.us | (blank) |
| what must the sponsoring insurer submit to be licensed as a limited lines resident producer? | License/appointment fee $40; SC application for individual license (form 3506); SC appointment form (3505); exam report from Experior Assessments; 40 hour Prelicensing cert. (3536); SLED report ($25) | (blank) |
| what must happen before an applicant can act as an agent for an authorized insurer? | he/she must be appointed by an official/authorized reprsentative of the insurer | (blank) |
| what does the authorized representative of the insurer do? | verify that the applicant has been appointed an agent to represent it; and has duly investigated the character & record of applicant and has satisfied itself he is trustworthy & qualified to act as its agent & intends to hold him out in good faith agent | and intends to hold himself out in good faith as an insurance agent. |
| when shall an insurance producer not act as agent of an insurer? | only if the insurance producer becomes an appointed agent of the insured. | (blank) |
| what does the producer have to do to appoint an agent? | insurer shall file a notice of appointment within 15 days from date agency contract is executed/first insurance applicaiton is submitted. | receipt of notice of appointment- director shall verify 30 w/in 30 days that insurance producer is eligible for appointment. |
| when does the insurance director notify the insurer that the insurance producer is determined to be ineligible for appointment? | within 5 days of its determination | (blank) |
| 4 types of producers: | local producer, general producer, special producer/state producer; and travel accident baggage producer | (blank) |
| what is a local producer? | formerly referred to as an agent- person authorized by an insurer to represent it and offer to public insurance policies or contracts and attendant services performed incidnet to such policies/contracts | (blank) |
| what is a general producer? | formerly known as a general agent is a person who as a representative of an insurer/insurere is clothed with authority to supervise producers & local producers & to exercise such management authority as deleted by principal. | (blank) |
| what is a special producer? | formerly referred to as a special agent is a person employed by an insurer or general producer to travel in a designated territory dealing with producers to supervise ande asist them in proper discharge of their duties as agents. (continued) | license grants no authority to holder thereof to solicit from public, countersign policies or receive commission |
| travel accident baggage producer? | formerly referred to as a travel accident baggage agent- is a producer of a common carrier who sells only transportation ticket policies of accident & health insurance or baggage insurance on personal effects. | (blank) |
| what must an individual applying for an unloimited lines nonresident producer license? | license fee of $20 (one-time fee); SC application for individual license (3506); home state letter of certification(certifies non-resident is licensed in resident state & in good standing with their home state's dept of insurance). | (blank) |
| what must an individual submit who is applying for a limited linese non-resident producer license? | license fee of $40; SC appointment form 3505; SC Application for indiidual license (3506); home state letter of certification. | (blank) |
| what must an individual nonresident LIcensee applicant be with regard to home state? | must be currently licensed as resident and in good standing in home state; and his home state must have reciprocal agreement with SC for licensing nonresidents. | (blank) |
| when may director/designee issue temporary insurance license? | when license necessary for servicing of insurance business. | (blank) |
| what are the reasons for issuance of temporary license? | surviving spouse/ct appt pers rep of licensed producer who dies/becomes mentally/physicall disabled; member/employee of business related entity licensed as ins. prod.upon death/disbaility of indiv designated in business entity application/license; (contin | designee of a licensed insurance producer entering active service in US armed forces; or except for continuing education purposes in any other circumstances where direct/designee deems it in public interest. |
| to what extent can the director limit the authority of any temporary licensee? | in whatever way considered necessary to protect insureds and the public. | (blank) |
| when may the director revoke a temporary license? | if the interest of the insureds or public are endangered. | (blank) |
| when does a temporary license stop? | after the owner or personal representative disposes of the business for which temporary license was issued. | (blank) |
| how long is the producer's license? | for an indefinite period unless revoked or suspended as long as producer complies with continuing education requirements. | (blank) |
| how much is the biennial appointment fee? | travel accident & baggage $20; local producer $40; general producer/special producer $100. | (blank) |
| how many days notice must the insurer or authorized representative of insurer terminate appointment, employment, contract or other insurance business relationship with a producer? | 30 days following the effective date of termination | (blank) |
| how soon must an insurer notify producer if they terminate the producer's appointment: | shall notify the producer within 15 days by mailing a copy of notification at his/her last known address. | (blank) |
| how must an insurer notify the producer that their appointment is terminated because he/she has been convicted of a crime involving moral turpitude, violated any regulation promulgated by dept, or willfully deceived/dealt justly with citizens of state, | send a copy of notification to producer at his/her last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier. | (blank) |
| how long does the producer have after receiving notice of termination of appointment to file comments? | within 30 days from date received original or additional notification (conti) | concerning the substance of notificaiton with director. producer shall simultaneously send a copy of comments to reporting insurer and comments become part of director;'s file not subject to Freedom of Information Act. |
| what occurs if the producer's appointment is cancelled due to failure to pay biennial appointment fee? | appointment may be reinstated by insurer making application for reinstatement, paying biennial fee & paying administrative fee levied by director. | (blank) |
| when must producer report any action taken against producer in another jurisdiction or by another governmental agency in SC | within 30 days of final disposition of matter; which must include copy of order, consent to order, or other relevant docs. | (blank) |
| a producer shall report to Director any criminal prosecution of producer taken in any jurisdiction? | within 30 days of the initial pretrial hearing date. | (blank) |
| what does producer have to supply with regard to adress and business mailing? | business mailing & residence street address. | (blank) |
| how soon after changing address or lega name must insd notify? | 30 days. | (blank) |
| when must an insurance producer notify director/designee of assume name? | prior to doing business under any name other than producer's legal name. | (blank) |
| when must producer have completed CE hours? | by May 1 of every even number years. | (blank) |
| how many CE credits required: | 24 with at least 8hrs in his license line. | (blank) |
| does the 40 hour prelicensing educational requirement fulfill the requirement for? | fulfills requirement for first biennial period. | (blank) |
| what is the continuing educaiton record keeping fee? | $10 pr year and must be paid to CE Administrator by May 1 of even numbered years. (cont) | failure to pay fee may result in cancellation of producers license |
| how many hours may be carried forward to next biennial period? | maximum of 18 credit hours. | (blank) |
| when is a licensed producer with minimum of 20 years of continuousl licensure exempt from CE? | if reaches age of 55 for any lines of authority | (blank) |
| when is an agent with a minimum of 20 years of active licensure exempt from CE? | when reaches 60 years of age. | (blank) |
| do exemptions include nonresident agents? | yes if they have successfully satisfied the continuing educaiton requirement of their eresident state & certify this info to continuing education administrator. | (blank) |
| who else is exempt from continuing education requirement? | agents licensed in credit life, credit accident & health, credit property, crop hail, auto physical damage, mortgage guaranty, mortgage, title, travel accident property, crop hail, auto physical damage, mortgage guaranty, mortgage, title, (continued) | travel accident & baggage, federal crop insurance, preneed burial, auto liability and industrial fire. |
| what can occur if after the hearing the Dir/designee determines that method of competition/act/practice is unfair/deceptive & person complained of engaged in method of competition/act/practice in violation of title & reduce findings to writing | or cause an order requiring the person to cease and desist from engaging in competition, act or practice; & an order imposing a fine of $2,500 or suspension or revocation of license or both (cont) | if violation willful fine may be increased to $5,000 |
| what occurs to person who violates cease & desist order> | upon due notice receive a hearing | (blank) |
| what if person is convicted of violating cease or desist order? | pay fine of not more than $50 a day; and if violation is willful, fine may be increased to not more than $100 per day. | (blank) |
| how much notice must be given of cease & desist order hearing? | 30 days notice which shall state subject of inquiry & specific charges | (blank) |
| how must notice for hearing for cease & desist order be served? | by depositing it in US mail postage prepaid, addressed to olast known address of person & registered with return receipt requested. | (blank) |
| how much notice must director/designee give of revocation/suspension? | 10 days notice. (continued) | or may refuse to reissue a license when it appears that producer has been convicted of crime involving moral turpitude, violated any regulation of dept, has willfully deceived or dealth unjustly with citizens of state. |
| conviction also includes? | plea of guilty or nolo contenre or record of it certified by clerk of court or by judge in whose court conviction occurred is also conclusive evidence of conviction. | (blank) |
| what do the words deceived/ dealt unjustly with citizens of state include? | providing incorrect, misleading, incomplete, or materially untrue info in license ap, violating insurance laws/violating any regulation, subpoena/order of director/another's state director; obtaining/attempting to obtain a license through misrep/fraud(cnt | improperly withholding, misappropriating/converting any monies/properties received in course of doing business; intentional misrep terms of actual/proposed insurance contract or app for insurance; convicted of felony; admitting or been found committed(cnt |
| deceived or dealth unjustly w/citizens of state? | any insurance unfair trade practice; using fraud, cooercive/dishonest practices/demonstrating incompetence, untrustworthiness/financial irresponsibilityin conduct of business in state/elsewhere; having ins producer license/equivalent, denied, (cont) | suspended or revoked in any state, province, district or territory; forging another's name to application or to any doc related to ins. transaction; improperly using notes/reference material to complete exam for ins. license; knowingly accepting insurance |
| deceived or dealt unjustly with citizens of state? | business from individual not licensed; failing to comply with adminstrative/court order imposing a child support obligation; failing to pay state income tax/comply with admin/ct order directing payment of state income tax; failing to inform promptly (cont | customer or insured of correct premium or informing him of an incorrect premium based on info furnished the producer by customer/insured; failing to deliver promptly a policy, endorsement, or rider to any insured; fialing to notify cstmr/insured wthr (con |
| deceived or dealt unjustly with citizens of state? | whether or not producer has been able to obtain the requested insurance for him; or failing to maintain adequate records regarding insurance sought/obtained from or through the producer which can be examined by director or his designee or one of his (cont | representatives for & on behalf of a citizen of this state. |
| when may director/designee suspend license immediately? | if finds that producer has obtained license by fraud or misrepresentation. | (blank) |
| when can a license with suspended/revoked license reapply? | within 2 years from effective date of revocation or refusal, or if judicial review before an ALJ Judge is sought within 2 years from date of final court order or decree afirming the revocation or suspension. | (blank) |
| when may direc/designee impose administrative penalty (fine) for each offense or ground in lieu of revocation, suspension, or refusal to issue a license? | if after a notice of hearing or of opportunity for hearing before ALJ Judge, director or designee finds that one or more grounds exist for errevocation or suspension of or refusal to issue or reissue a license. | (blank) |
| how long may direct/designee allow producer or applicant to pay fine? | a reasonable period not to exceed 30 days. | (blank) |
| what administrative penalties apply for each violation of insurance laws of SC? | if violator insured, or health maintenance organization licensed in state, director shall fine violator up to $15,000 or suspend/revoke violator's authority to do business in state or both. (cont) | if violation is willful, director shall fine the violator up to |
| what happens if violation of insurance laws of SC is by person licensed by director? | shall fine person $2,500 or suspend or revoke the license of eahc person or both; | if violation is willful, the director shall fine the perwson up to $5,000 or suspend or revoke the license of person or both. |
| are the only penalties for violation of insurnace law with director of insurance? | additionally any criminal penalties provided by law or any other remedies provided by law. administrative proceedings do not preclude civil or criminal proceedings from taking place before during or after administrative proceeding. | (blank) |
| what are the director's duties/ | supervise and regulate rates and service of every insurer in state and fix just and reasonable standards, classifications, regulations, practices and measurements of service to be observed and followed by insurer doing business in state; (cont) | see that all laws of state governing insurers/relating to business insurance are faithfully executed and make regulations to carry out the insurance laws of this state; report to AG or other law enforcement criminal viol. of ins laws; & sue through/AG sue |
| how does the director determine to grant certificate of authority or license to insurance companies that wish to transact business in this state? | must have evidence insurere is safe and solvent; able to check if qualified to do business in SC; insurer pays all taxes; has adequate reserves; made adequate reinsurance arrangements; none directors/officers convicted of crimes of moral turpitude; (cont) | insurer has adequate training and experience to properly manage its business and affairs and will not render any proceedings that are hazardous to public or its policyholders. |
| when does the Director of insurance confirm insurer is safe and solvent (has assets to meet its financial obligations) | before he issues Certificate of authority | (blank) |
| what is the South Caroliina Life and Health Guaranty Association and Property and Casualty Guarantee Association formed? | South Carolina Guarantee association is a nonprofit legal entity created to maintain public confidences in promises of insurers by providing a mechanism for protecting policy owners, insureds, beneficiaries, annuitants, payees & assignees of (cont) | life insurance, accident & health insurance, annuities, & supplemental contracts vs. failure in performance of contractual obligations due to impairment of insurer. |
| what is the SC Guaranty Association? | an association of insureds is created to enable the guaranty of payment of benefits ot oustanding claims up to certain limits and of continuation of coverage by placing policies of insolvent insurers with other insurers; (cont) | members of asosciation are subject to assessment to provide funds to carry out the purpose of this chapter; asociation authorized to assist Director & dept in detection and prevention of insurer impairements. |
| who are the members of the Guaranty Association? | all licensed insurers are members and must remain members as a condition of their authority to do business in this state. | association exercises its powers through board of directors & under direct supervision of Dept of Insurance. |
| what happens if an insurer is unable to meet its financial obligations? | the Guaranty Association under direction of director will reinsure its policies with other insurers and pay outstanding claims of imapired insurer up to certain limits. | (blank) |
| where are frunds obtained from to pay claims by SC Guaranty Association? | funds will be assessed from other member insurers and agent of insolvent insurer to notify their policyholders of actions taken within 15 days of liqudation. | (blank) |
| what powers does the director have over rates? | director or his designee has the duty to supervise and regulate the rates and services of every insurer in this state. | (blank) |
| when can the insurer not issue or sell a policy in state? | unlawful for insurer to issue or sell any policy, contract, or certificate until filed with and approved by Director or his designee. | (blank) |
| What may director/designee do with a policy? | may disapprove the form; may withdraw approval. | if it: not meet requirements of law; contains provisions unfair, deceptive, ambiguous, misleading/unfairly discriminatory; going to be solicited by means of advertising, communicating, or dissemnation of info deceptive/misleading; |
| unfair claims settlement practices? | no person may in connection w/adjusting any claim, loss or damage under contract or policy of insurance misrepresent to insured or any other person having an interest in proceeds payable under contract/policy terms, coverage/effect of, purpose/(cont) | intent of effecting settlement of claim, loss or damage under Kx or policy on less favorable terms than those provided in and contemplated by Kx/policy. |
| examination of books or records? | Dir may conduct exam of insurer as often as Director considers appropriate but minimum shall conduct exam every 5 years; when director considers it prudent for protection of policyholder of state/may examine an insurer applying for admission in state. | (blank) |
| what can director do in lieu of inspecting books of foreign insurer? | in lieu of exmaitnion of a foreign or an alien insurer licensed in this state, Dir may accept an examination report on insurer prepared by ins. dept for ins. tate of domicile. | (blank) |
| how many agents can be appointed under Certificate of Authority? | certificate of authority or license issued by Director gives the insurer obtaining it right to appoint any number of producers to solicit risks or transact insurance in SC. (cont) | however, director must be notified of appointment before producer takes any risks or transacts any business. |
| how do companies terminate appointments? | companies must notify director of appointments before producer solicits any risks or transacts any business. | (blank) |
| how many days does co have to notify DOI that producers' appointment is cancelled? | within 10 days; | (blank) |
| what must a licensed representative of insurer vouch regarding producer? | agent of good character, trustworthy and qualified to act as agent of insurer. | (blank) |
| how long must agent maintain records? | producers shall make and keep a full and correct record of insurance business they transact showing policy number, term date, amt insured, premiums & person to whom every policy or certificate of renewal is issued for min of 5 years. (cont) | original books or records are to be kept open for inspection by Director and must be furnished to him on demand. |
| what is a fiduciary relationship? | a fiduciary relationship is established when an individual places trust in someone else to perform certain duties or actions. | (blank) |
| what is the agent's role as a fiduciary? | is to hold money belonging to others in trust and to transfer it to its designation within 30 days. an agent who fails to do so charged with embezzlement, fined in discretion of ct or imprisoned not more than 2 years. | (blank) |
| can producers sign blank contracts or policy of insurance? | no producer may sign any blank contract/policy of insurance. (cont) | trip, travel or transportation ticket policies may be countersigned in blank, or facsimilie impression/stamp for issuance only through coin-operated machines. producer guilty of violation upon conviction can be fined for each offense not more than $200 |
| can an agent share commissions? | a licensed agent may not pay directly or indirectly any commission brokerage or other valuable consideration to any nonresident or resident that is not duly licensed to act as an agt or broker for the type of insurance involved. | (blank) |
| can a person represent an unauthorized insurer? | no any person unlawfully soliciting, negotiating for, collecting or transmitting a premium for a contract of insurance with an insurer not licensed to do business in this state, he/she is guilty of a misdemenor. | (blank) |
| unfair and prohibited practices cannot be engaged in. | if after hearing, direct/designee determine unfair/deceptive act of competition engaged in, director shall reduce his findings to writing and issue person charged with violation with an order requiring cease/desist from method of; (cont) | order imposing penalties for violation of insurance laws. |
| what is misrepresentation? | illegal to issue, publish, or circulate any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. also refers to oral statements. | (blank) |
| what is false advertising? | illegal to advertise or circulate any materials that are untrue, deceptive or misleading. | (blank) |
| what is included in specific false or deceptive advertising? | misrep terms, benefits, conditions/advantages of policy; misrep dividends to be received from poolicy or previously paid out; misrep financial condition of person/ins. co; using names/titles tendency to misrep true nature of policy; (cont) | misrep true purpose of assignment or loan against policy; misrep insurance policy as share of stock. |
| what is defamation? | refers to making of oral or written statements that are false, maliciously critical, or derrogatory in nature and intended to injure reputation of another person or co. engaged in business of insurance. | (blank) |
| is it illegal to be involved in any activity of boycott, coercion or intimidation w/intention to restrict fair trade or create a monopoly? | yes. although insurance can be required in certain situations, source of insurance is indiv. chocie. business cannot use sale of insurance from a particular agent/company as condition to a loan/condeition to sale of product. | (blank) |
| are false statements regarding finances illegal? | it is unfair trade practices to make any false statements about an insurer's financial condition w/intent to deceive; also unfair trade practice to make false entry in an insurer's book/statement with intent to deceive an agent/examiner lawfully (cont) | examine its financial condition. also unfair trade practice to willfully omit an entry about insurer's business in any of insurer's books, reports or statements. |
| what is unfair discrimination? | discrimination in rates, premiums, policy benefits, etc for persons within the same class or with the same life expectancy is illegal. | (blank) |
| rebatement? | defined as any inducement offered in sale of insurance products not specified in policy. rebates include money, reductions in commissions, promises & personal services. both offer and acceptance of rebate are illegal. (cont) | since 3/1/99 a producer can give a portion of his commission on auto insurance to the insured. |
| twisting? | it is illegal to misrepresent the true nature or facts of a policy or its benefit in order to induce a policy holder to surrender one policy and replace it with another. | (blank) |
| what are prohibited inducements? | no insurer may issue or permit its agents, officers, or employees to issue agency company stock, other stock or securities, any special or advisory bond or other contract of any kind promising returns and profits as an inducement to taking of ins (cont) | no corp, stock co, acting agent of an insurance co, nor any of agents, officers, and employees will be permitted to sell or give any share or stock, security bond or agreement of any form or nature promising returns and profits as an inducement to insuran |
| purpose of SC Omnibus Insurance Fraud & Reporting Immunity Act? | facilitate detection of insurance fraud, allowing reporting of fraud with immunity, set penalties for fraud, require full restitution for economic disadvantage resulting from fraud, require investigation of alleged fraud by SLED; estab Ins. Fraud Div in | (blank) |
| person making false statement/misrepresentation with intent to injure, defraud or deceive subject to following penalties? | 1st offense econ. advtg gained less than $1,000 charged w/misdemeanor fined up to $500 or imprisoned up to 30 days; 1st offense econ advtg gained $1,000 or more, charged with misdemenor | (blank) |
| insurance fraud act 2nd or subsequent offence? | regardless of amt of economic advantage gained, charged with felony, fined up to $50,000 and/or imprisoned up to 10 years | (blank) |
| an insrurer or person convicted of fraud must make restitution? | full restitution to the victim/victims for any economic advantage or benefit obtained by person or insurer as result of violation. | (blank) |
| what can occur in addition to criminal liability for insurance fraud? | any person found guilty of fraud subject to civil penalty for each violation; up to $5,000 for 1st offence; $5,000-$10,000 to 2nd offense; $10,000-$15,000 for 3rd/subsequent offense.(cont) | revenue must be used for costs of enforcing & administering the provisions of article. |
| what law applies to treatment of nonpublic personal health information and nonpublic personal financial information @indiv. by all licensees of state ins dept? | comply with Gramm Leach Bliley Act (federal law) and SC Insurance Laws. | (blank) |
| what does the privacy regulation provides for: | requires license to provide notice to indiv @privacy policies and practices; descibes conditions under which a licensee may disclose nonpublic personal health info & nonpublic personal financial info @ individuals to affiliates and (cont) | nonaffiliated 3rd parties; & provides methods for individuals to prevent licensee from disclosing info. |
| what does privacy regulation apply to: | nonpublic personal financial information @ individuals who obtain reports/services primarily for person, family, household purposes from licensees; all nonpublic health info. | (blank) |
| what must the privacy notice ? | reasonably understandable and designated to call attention to nature and signifiance of info in the notice. | (blank) |
| who must privacy notice be given to? | notice be given to consumers (an individual who seeks to obtain, obtains or has obtained an insurance product or service from a licensee that is to be used primarily for personal, family, or household purposes and about whom the licensee has nonpublic(cnt | personal info or that indiv legal rep & to customers (someone who has a products or services to consumer used primarily for personal, family/household purposes. |
| what notices are required for privacy? | initial notice, annual notice, and revsied notices if an existing customer obtains new insurance product & privacy policies and practices have changed since the initial or last annual notice. | (blank) |
| what must the notice provide to the consumer? | notice to opt out-meaning a direction by the consumer that licensee not disclose nonpubic personal financial info about consumer to nonaffiliated third party, other than as permitted by regulation. (cont) | partial opt out must also be allowed. A licensee may allow a consumer to select certain nonpublic personal financial information or certain nonaffiliated third parties with respect to which the consumer wishes to opt out. |
| what form must privacy notice come in? | in writing or if customer agrees, electronically. (cont) | oral description of notice is insufficient. a liensee may not provide any notice required by this regulation solely by orally explaining notice, either in person or over phone. |
| what does prohibition does privacy regulation ? | general prohibition on disclosure of account numbers. | licensee not directly/through affiliate, disclose other than consumer reporting agency, policy no /similar form access no/access code for consumer's policy/ transaction acct to any nonqualified 3rd pt telemk , directml mrkt/mk email to consumer. |
| exceptions to limits on disclosures and opt out requirements allowed for? | such things as policy service, reinsurance or stop loss or exess loss insurance or to comply with properly authorized civil, criminal or regulatory investigation or subpoena or summons by fed, state,/local authorities and other such actions. | (blank) |
| What is the fair credit reporting act? | passed on 4/25/71 administered by FTC-to protect consumers vs. circulation of inaccurate or obsolete info and to ensure that consumer reporting agencies are fair and equitable in treatment of consumers. | (blank) |
| how does an underwriter determine accessibility of risk? | by checking individual risk against many factors direclty related to risk's potential ofr loss and then requesting additional info | (blank) |
| reports requested about insureds fallinto 2 categories? | consumer reports and investigative consumer reports? | (blank) |
| consumer reports? | include written/oral info regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports and other public sources | (blank) |
| investigative consumer reports? | similar to consumer reports in that they also provide information on consumer's character, reputation and habits. primary differeence is info is obtained through investigation and interviews with associates, freiends and neighbors of consumer. (cont) | unlike consumer reports, reports cannot be made unless the consumer is advised in writing about report within 3 days of date rpeort was requested. |
| what can the insured request regarding consumer reports? | consumer must be advised that they have a right to request additional information concerning the nature of report and insurer or reporting agency has 5 days to provide consumer with additional info. | (blank) |
| what purposes can credit information be used for? | legitimate purposes including insurance underwriting, employment screening, & credit transactions. | (blank) |
| Fair Credit REporting Act? | passed in 1970 established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used. | (blank) |
| who is subject to civil and criminal penalties for failure to comply with provisions of Fair Credit Reporting Act? | reporting agency and users of information.(cont) | consumers can collect actual damages for neligent use of the reports, and a criminal penalty of $5,000 may be imposed for willful noncompliance of Act in addition anyone who obtains or tries to obtain info from reporting agency false pre sub fine/jail. |
| what occurs if policy is declined/modified due to information contained in either consumer/investigative report? | consumer must be advised & provided with name and address of reporting agency. (cont) | consumer has right to know what in report BUT NOT TO GET COPY. also right to know who got report in past 6 months. |
| what happens if consumer challenges info in report? | reporting agency required to reinvestigate & amend report if needed. | (blank) |
| what happens if a report for credit is found inaccurate and corrected? | must send corrected info to all parties to which they had reported the inaccurate info within last 2 years. | (blank) |
| what type of info cannot be contained in consumer reports in connection with life insurance policy/credit transaction of more than $150k? | certain types of info including bankruptcies more than 10 years old and other negative info more than 7 years old. | (blank) |
| what is considered unlawful insurance fraud ? | any person engaged in business of insurance to willfully with the intent to deceive, make any oral or written statement that contains either false statements or omissions of material fact. (cont) | includes info & statements made on an application for insurance, renewal of policy, claims for payment or benefits, premiums paid, & financial condtion of insurer. |
| What is the violent crime control & law enforcement Act of 1994? | federal law which makes it illegal for any individual convicted of a crime involving dishonesty, breach of trust or violation of act to work in business of insurance affecting interstate commerce without receiving written consent from an insurance (cont) | regulatory official (director of insurance, commissioner of insurance), the consent from the official must specify that it is granted for purpose of 18 USC 1033. |
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jsl122171