Life Insurance Advertising Regulations Quiz

Insurance Regulation

• Insurance policies are covered by regulations unique to each state
• Key terms for the exam include authorized insurer, cease and desist, commission payment, commissioner, domicile, home office, inducement, moral turpitude, reciprocity, and statute
• A person cannot sell, solicit, or negotiate insurance without a license for the appropriate line of authority
• Licensing ensures producers meet educational and ethical standards
• Insurance professionals must be properly licensed for a specific line of authority before transacting insurance
• An insurance license is not required if a person does not receive a commission for transactions
• An executive administrative managerial or clerical person may not be required to get a license
• Life, variable life, variable annuity, health, property, casualty, personal lines, title, credit, travel, and surplus lines are some types of insurance lines of authority
• Producers can be individuals or business entities
• Individual producer qualifications include being at least 18 years of age, residing in the state, having no acts that could lead to denial, suspension, or revocation, and having completed a prelicensing course
• Business entities must obtain a producer's license and members/employees must be registered under the entity's license
• Nonresident producers must be licensed in their home state and complete an application
• Temporary licenses are issued for specific circumstances for a maximum of 180 days
• Temporary licenses may be issued to surviving spouse, next of kin, employee of a deceased or disabled producer, a member or employee of a business entity, a designee of a licensed producer in active service, or any other person deemed fit by the Commissioner
• The Commissioner may require temporary licensees to be monitored

Business Regulation

• A business entity is a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity
• Business entities act as producers if they obtain producer's licenses
• A member or employee must register with the Department of Insurance under the business's license and obtain an individual producer's license

Resident vs. Nonresident

• Individuals not residing in Louisiana can obtain a nonresident producer license
• Current resident license with good standing, requested license with payment of the licensing fees, providing the commissioner with a uniform application or the home-state application, and the producer's home state awarding non-resident producer licenses under reciprocity are qualifications for a nonresident producer license

Temporary Licensing

• Temporary licenses may be issued, are valid for 180 days
• Temporary licenses are issued to certain people, like surviving spouses or family members of deceased insured producers

Expiration

• Producer licenses remain in effect unless revoked, suspended, or non-renewed
• Licenses ending in an even number expire in even-numbered years, and licenses ending in an odd number expire in odd-numbered years
• Renewals must be completed by the last day of the birth month, 90 days before expiration

Renewal

• Producers renew licenses every 2 years
• Renewals are due by the last day of the producer's birth month

Change of Name and Address

• Licensees must notify the Commissioner of any changes to residential, mailing, business, or email address or phone number within 30 days
• Name changes must also be reported within 30 days
• A $50 penalty will be applied for violations

Assumed Names

• Producers must notify the Commissioner before using assumed or trade names
• Unregistered trade names result in a fine of up to $250, with additional fines for sustained use (up to $5,000)

Reporting of Actions

• Insurance producers must report administrative actions or convictions in other jurisdictions to the Commissioner within 30 days
• Conviction reports must be made within 30 days

Continuing Education

• All licensed producers must complete 24 hours of continuing education instruction or self-study and have at least 3 hours in ethics
• Producers who write property, casualty, property and casualty or personal lines must also complete 3 credit hours in flood insurance
• Up to 10 hours of excess CE credits may be carried forward to the next renewal period
• A licensed agent or broker who belongs to and participates in a national insurance association may receive 4 CE credits
• Producers who are 65 or older, and have 15 years, as well as members of the legislature and are renewing their licenses, may be exempt from continuing education requirements

Company Regulation

• Insurance companies need to obtain a Certificate of Authority from the Commissioner
• The certificate indicates the Commissioner has examined financial stability and organization
• Insurers organized in other states can become domestic insurers after meeting organizational and licensing requirements
• Domestic insurers can transfer domicile to another state, but must cease being a domestic, and become a foreign insurer

Producer Appointment

• The insurer must file an appointment notice within 15 days of the agency agreement's execution
• The insurer pays appointment fees.
• The Commissioner has 30 days to verify that the producer is eligible for appointment

Termination of Appointment

• If an insurer terminates a producer's appointment, the Commissioner must be notified within 30 days of the effective date of termination
• Notifications are sent to the producer, along with the opportunity to send comments to the Commissioner

Unfair Claims Settlement Practices

• Misrepresenting policy details or promptly processing claims is considered unfair practices

Policy Forms

• Policy forms in Louisiana must comply with Insurance Code standards
• Policies need to clearly indicate the names of parties, subject, risks, premium, and conditions

Annual Reports

• Insurers in Louisiana must file annual and quarterly financial statements with the Commissioner
• Statements are on Commissioner-required forms, confirmed by 2 company officers, and filed electronically

Advertising

• Insurers must maintain an advertising file for 4 years or any future exam date
• Advertisements must be clear, accurate, and not misleading
• For life insurance advertisements, certain details must be clearly included like identifying an insurer, including life insurance or annuity, identifying the source of statistics, clarifying non-medical policies, prominent display of any limitations on graded or modified policies, and ensuring testimonials must be genuine and state any compensation
• Advertisements for products targeting students cannot imply endorsement by the school

Foreign and Alien Insurers

• Foreign and alien insurers licensed in Louisiana are not examined by the Commissioner. Instead, the Commissioner may accept an examination report provided by the insurer's home state.

Examination of Books and Records

• The Commissioner has the power to examine and investigate insurance company affairs
• Examining insurers to ensure compliance with state laws

State Regulation

• The Commissioner is responsible for enforcing Louisiana Insurance Code provisions
• The Commissioner conducts legal hearings, issues cease and desist orders, examines insurers, and issues/renews/suspends/revokes licenses

Misrepresentation

• False or misleading statements regarding insurance policies, dividends, etc., are illegal
• Insurance businesses cannot make oral or written statements that omit material facts on policy applications, renewals, claims, or insurer financial status

Rebating

• Offering inducements/rebates that aren't in the policy is forbidden
• Illegal rebates include rebates on premiums, special favors, advantages in dividends, or stocks, bonds, profits

Boycott, Coercion, and Intimidation

• Engaging in unfair actions to influence agents or clients, or to create a monopoly is illegal

False Advertising

• Any inaccurate, deceptive, or misleading advertising is prohibited
• Advertisements are about policies, benefits, premium payments, financial conditions, or policy purpose

Discrimination

• Discriminating against individuals based on factors like gender or race for insurance rates, premiums, or benefits is illegal

Refusing to Insure

• Insurers are prohibited from refusing to insure individuals solely due to certain characteristics like sex, marital status, race, religion, or national origin
• Insurers cannot deny insurance for policies where coverage depends on an existing policy

Unfair Financial Planning Practices

• Producers must disclose all their financial planning activities to prospective clients

Insurance Fraud

• Making false statements about insurance policies, premiums, payments, or insurer financial status is illegal

Privacy of Consumer Financial Information

• Consumers' financial records are protected and cannot be accessed without consent.
• Insurance companies disclose their privacy policies annually

Federal Credit Reporting Act

• The Fair Credit Reporting Act mandates that consumer reports are accurate and confidential
• Insurance companies must not use certain information for assessing risk

Fraud and False Statements

• Fraudulent or false statements in policy applications or claims are illegal
• Insurers or producers who commit fraudulent acts may face penalties
• Deliberate omission of fact on policy documents is against the law

National Do Not Call List

• Regulations regarding telemarketing calls and the national do not call list
• Telemarketers must verify and follow rules and regulations

Policy Replacement

• Regulations require the replacing insurer to notify the existing insurer within 5 days of the intent to replace and the policyowner within 5 days of notification
• Insurers must provide a "free-look" period of 30 days to allow policyowners to review replaced policy before a transaction is finalized, and the records need to be maintained for at least 5 years

Test your knowledge on the regulations and requirements for advertising life insurance products. This quiz covers essential topics like disclosures, testimonials, and policy illustrations. Perfect for anyone studying insurance or looking to ensure compliance in their advertising efforts.