Maryland Statutes, Rules, and Regulations - Life and Health Insurance Questions and Answers 100% Pass

Maryland Statutes, Rules, and Regulations - Life and Health Insurance Questions and Answers 100% Pass CommissionerN -Appointed by governor for 4 year term -issues licenses, revokes, cease and desist, conducts hearings Commissioner - examinations -must examine each domestic insurer once every 5 years -records, documents, transactions pertaining to the insurer. Commissioner - Hearings -Must hold a hearing if required by state law or upon written request demanded by a person aggrieved by any act of the commissioner. -hearing must be 30 days after request -at least 10 days in advance notice of time and place of hearing -results must be provided within 30 days after Commissioner - rates must regulate insurance rates so they are not excessive or unfair. Commissioner - criminal penalty - if a person willfully violates a state insurance law, if a greater penalty is not provided by other applicable state law is: -guilty of misdemeanor -subject to a fine not exceeding $10,000 Producer License Requirement -must be 18 -file a licensing application and pay fee -pass a written exam Producer License Requirement - education and experience - unless waiver is obtained (CLU, RHU, AAI) -successfully complete an approved prelicensing course -must have been employed as an employee of Maryland Insurance, an insurer, or a producer for not less than one year out of the past 3 years Producer License Requirement - Licensing Exemptions Following are not required to have a producer's license: -insurer -an officer, director, or employee of insurer who does not receive any commission -A salaried employee who advises the employee's employer relative to the insurance interests of the employer, and does not sell/receive commission Business Entity -Must designate a licensed insurance producer to act as a business entity's principal contract with the administration - Business Entity- change of business entity's designated producer name or address within 10 days to Admin Producer - Must report a change of legal name or address within 30 days to commissioner Appointment of Producer registration Every insurer must maintain a producer register of appointed producers within 30 days of hiring/terminating a producer -30 days must accept/reject the insurance application from producer and update register accordingly Nonresident Producer - may be issued a license in MD if -person is licensed as a resident insurance producer and is in good standing in the person's home state -the person submits the appropriate license app and fee -the person's home state awards nonresident insurance producer licenses to residents of MD on the same basis. Resident Producer License - persons previously licensed for the same lines of authority in another state... -need not comply with the education, experience, and exam requirements if : - the person is currently licensed as an insurance producer in the person's home state OR -the license app is received by the commissioner within 90 days after the cancellation of the applicant's previous license and the prior state issues a certification that the applicant was in good standing with that state. License Renewal -Producers licenses are renewed every 2 YEARS on the last day of the producer's birth month License Renewal - Before it expires Holder of the license may renew it for an additional 2 year term if the holder -files a renewal app -completes the required continuing ed -pays the required renewal fee License Reinstatement -For up to 1 YEAR after the expiration, a person whose license has experienced may reinstate the expired license by: -File reinstatement app -pay the commissioner the applicable renewal fee $100 -submitting proof of continuing education License Reinstatement - effective date -if a person applies for reinstatement within 60 days after the license expired, the reinstatement effective date will be retroactive back to the date the persons' license expired -if a person applied for reinstatement more than 60 days after the license expired, the reinstatement effective date will be the date the license is reinstated. Continuing Education -Producers must complete 24 credit hours of CE during each 2 year license period (must include 3 hours of insurance ethics) -non resident producers are exempt from CE -producers who sell LTC must have 2 hours of LTC CE -producer who sell flood insurance must have 2 hours of flood CE Suspension or Revocation -Commissioner may suspend, revoke, deny issuance, or refuse to renew the license of anyone who has -committed fraudulent or dishonest practices, -suspended or revoked in other state -acted not in good faith -felony in past 10 years Suspension or Revocation - penalties -$100 TO $500 on the producer -commissioner may require restitution of funds to citizen who suffered financial loss Criminal Prosecution -if an insurance producer is prosecuted for a crime in any jurisdiction, the producer must report the prosecution to the commissioner within 30 days after the producer's initial list appearance before the court. -include a copy of the charging document, and an order issued by the court Temporary Producer -A temporary producer's license may be issued to a spouse, next of kin, personal rep, or employee of a deceased or disabled producer -the temp license expires 15 months after its effective date. Other licensing requirements - complaints -every producer or insurer is required to keep a copy of complaints -it is fraudulent insurance act for a person to act as an insurance producer or a public adjuster if the person is not appropriately licensed. Insurance Adviser No person may act as an insurance adviser without an adviser's license. Commissions commission may not be paid, directly or indirectly, to a person OTHER than a licensed insurance producer. Unfair Trade Policies - Defamation making any oral or written statement or literature that is false or maliciously critical of the financial condition of any person that is calculated to injure any person engaged in the insurance business. Unfair Trade Policies - Misrepresentation/twisting -misstating the terms of the statement -illegal misrepresentation designed to induce a person to lapse or surrender an existing policy in favor of a new policy. Unfair Trade Policies - Rebating No person may pay or offer to pay as an inducement to purchase insurance a rebate of premiums nor any valuable consideration or inducement not specified in the contract. Unfair Trade Policies - charging fees No producer may assess an insured any additional fees or charges for services rendered, unless these charges are stipulated in the contract. Unfair Trade Policies - Discrimination No producer may cancel or refuse to underwrite because of race gender religion blindness etc Unfair Trade Policies - discrimination continued -cancellation, nonrenewal, or refusal to underwrite must be based on the insurers reasonable economic and business standards -an insurer may not cancel, nonrenew, or refuse to underwrite automobile liability insurance because of a traffic violation or accident more than three years old on the date the policy or renewal is effective or date of app. Fiduciary Responsibilities -Producers who do not make prompt remittance of premium to insurers must deposit funds in a premium account from which withdrawals may not be made except to pay funds to the insurer or insureds Insurance Guaranty Corporation - MD Life and Health Guaranty Corp Purpose is to provide a mechanism for the prompt payment of covered claims and to avoid financial loss to residents of MD who are claimants or policyholders of an insurer that has become insolvent Insurance Guaranty Corporation - MD Life and Health Guaranty Corp Corps liability is the lesser of - $300k in life insurance death benefits -$100k in cash surrender values for life insurance -$250,000 in the PV of annuity benefits -$500,000 in medical expense of or major medical -$300,000 for disability income insurance -$300k for LTC insurance -$100,000 for health insurance not listed above Privacy - require insurers and producers to provide privacy notices to individuals that describe situations when a licensee may disclose nonpublic personal info to affiliated and nonaffiliated third parties Privacy - initial and annual privacy notices Licensees must provide a privacy notice to customers when a customer relationship is initially established and at least once a year afterwards. Privacy - Opt Out notice A licensee must provide a clear and conspicuous notice to each of the licensees consumers that explains the right to opt out. -opt out notice must state - that the licensee reserves the right to disclose nonpublic personal financial information about the consumer to a nonaffiliated third party. -the consumer has the right to opt out of that disclosure -a reasonable process by which the consumer may exercise the opt out right. Privacy -A licensee may not disclose nonpublic personal health information about a customer or consumer unless the person authorizes the disclosure. Unfair Claim Settlement Practices - Unfair claim settlement practices are subject to a fine of up to $2,500 for each violation and restitution to a claimant NCOIL (national conference of insurance legislators) Members are state legislators, NOT insurance commissioners -oversight of insurance industry.