Property & Casualty Insurance Flashcards

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Questions and Answers

All of the following are unfair claims settlement practices EXCEPT:

An attempt to settle a claim by arbitration (correct)

Refusing to pay a claim without conducting a reasonable investigation

Refusing to pay persons bringing false or fraudulent claims

Misrepresenting policy provisions

Splitting the commission with the buyer on a sale of insurance is known as?

rebating

False advertising of an insurance policy is considered?

misrepresentation

Misrepresenting a policy for the purpose of inducing a policyholder to change or replace an existing policy is known as?

twisting Signup and view all the answers

All of the following claims settlement practices could initiate a cease and desist order EXCEPT:

Taking time to process all claims thoroughly Signup and view all the answers

Who reports a producer's termination of appointment to the commissioner?

the insurer Signup and view all the answers

Twisting means?

persuading an insured to switch policies to their detriment Signup and view all the answers

Misrepresenting pertinent policy provisions relating to coverage after loss is?

an unfair claims settlement Signup and view all the answers

In what situation can an agent pay commission to another agent not from the same company?

the agent must be licensed for that line of business Signup and view all the answers

What will happen to an agent if they are caught forging or causing the forgery of an application for insurance or any document related to an insurance transaction?

the Superintendent may suspend, revoke, or refuse to issue or renew their license Signup and view all the answers

No agent shall represent that they have the authority to represent an insurer until...

the insurer notifies the Superintendent Signup and view all the answers

An insurer can pay commission to a person who is not licensed.

False Signup and view all the answers

What happens to an agent's appointments if their license is surrendered, revoked, or suspended?

ALL appointments will be void Signup and view all the answers

Who is responsible for notifying the Superintendent if an agent's contract or business relationship is terminated by the insurance company?

the insurance company must notify the Superintendent within 30 days Signup and view all the answers

Placing an advertisement sticker on your car that gives misrepresentation about your insurance company is called?

false advertisement Signup and view all the answers

Giving an estimate or illustration of the terms of the policy, benefits, etc., is an example of what?

misrepresentation Signup and view all the answers

Comparing what your company has to what another insurance company has without all the information and only having intent to switch someone over to your company is called?

twisting Signup and view all the answers

Making a pamphlet or sign that says you have the best rates in town is called?

defamation Signup and view all the answers

Refusing to renew a policy because of someone's sex or marital status is an example of?

unfair discrimination Signup and view all the answers

Taking someone out for a meal in hopes of them considering an insurance policy or quote is called?

illegal inducement Signup and view all the answers

Study Notes

Unfair Claims Settlement Practices

Refusing to pay false or fraudulent claims is not an unfair practice.
Attempting to settle claims through arbitration is acceptable and does not fall under unfair practices.

Unfair Trade Practices

Rebating is the act of splitting commissions with buyers and is prohibited.
Misrepresentation refers to false advertising of insurance policies, which is against regulations.
Twisting involves misrepresenting policies to persuade clients to switch, considered a serious violation.

Claims Settlement Violations

Initiating a cease and desist order can occur if claims are denied without a reasonable investigation.
Misrepresenting policy provisions after a loss falls under unfair claims settlement practices.

Reporting and Licensing

Insurers are responsible for reporting an agent's termination of appointment to the commissioner.
An agent may pay commissions to another agent if both are licensed for that line of business.

Consequences of Misconduct

Forging documents related to insurance transactions can lead to suspension or revocation of an agent’s license.
An agent must wait for the insurer to confirm their authority to represent them before claiming to do so.

Licensing Regulations

Insurers cannot pay commissions to unlicensed individuals, ensuring compliance with licensing laws.
All of an agent's appointments become void if their license is surrendered, revoked, or suspended.

Notification Requirements

Insurers must notify the Superintendent of an agent's contract termination within a 30-day period.

False Advertising and Defamation

Placing false advertisement stickers on vehicles is considered misrepresentation.
Making claims of having the best rates without substantiation can lead to defamation charges.

Discrimination in Insurance Practices

Refusing policy renewals based on sex or marital status is deemed unfair discrimination, violating legal standards.

Illegal Inducement Practices

Offering meals to prospective clients to influence their insurance decisions is classified as illegal inducement, prohibited under trade practices.

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Test your knowledge on Property & Casualty Insurance with these flashcards. Each card highlights key concepts, terms, and practices essential for understanding the field. Perfect for insurance professionals and students alike!