Questions and Answers
All of the following are unfair claims settlement practices EXCEPT:
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?
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All of the following claims settlement practices could initiate a cease and desist order EXCEPT:
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Who reports a producer's termination of appointment to the commissioner?
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Twisting means?
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Misrepresenting pertinent policy provisions relating to coverage after loss is?
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In what situation can an agent pay commission to another agent not from the same company?
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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?
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No agent shall represent that they have the authority to represent an insurer until...
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An insurer can pay commission to a person who is not licensed.
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What happens to an agent's appointments if their license is surrendered, revoked, or suspended?
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Who is responsible for notifying the Superintendent if an agent's contract or business relationship is terminated by the insurance company?
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Placing an advertisement sticker on your car that gives misrepresentation about your insurance company is called?
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Giving an estimate or illustration of the terms of the policy, benefits, etc., is an example of what?
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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?
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Making a pamphlet or sign that says you have the best rates in town is called?
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Refusing to renew a policy because of someone's sex or marital status is an example of?
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Taking someone out for a meal in hopes of them considering an insurance policy or quote is called?
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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!
