State of Illinois Property and Casualty Laws with Complete Solutions

Powers and Duties of the Director Correct Answer 1. Approve all policy forms, but cannot approve or disapprove premium rates on most types of insurance. 2. Create rules and regulations that support the law. 3. Conduct investigations, examinations and audits to determine if the law has been violated. 4. Take action to enforce the law, such as, issuing fines, revoke or suspend a license or deny an application for a license. 5. Refer a case to the State Attorney General for criminal prosecution in a court law. The Director of Insurance or a designee can examine (investigate)any of the following Correct Answer 1. Any insurance company doing business in Illinois 2. Any person involved in forming an insurance company in Illinois. 3. Any licensed producer, firm, administrator or applicant for an insurance license. 4. Any person adjusting clanims or financing premium. Examinees may be subpoena Correct Answer 1. If anyone refuses to be examined or ignores a subpoena, he or she can be fined $2,000. 2. Persons being examined have 14 days from the day they receive the report to request a hearing. 3. The Director must provide a 10 days notice of the time and place of the hearing. 4. The Director will issue a final report of the examination within 90 days of the exam or hearing. 5. Violating a written order can be fined up to $20,000. Cease and Desist Orders Correct Answer 1. The hearing must be held between 20 and 30 days from the date of the order. 2. The fine for ignoring a cease and desist order is $100 per day, not to exceed $5,000. 3. After the cease and desist order has become final and is in effect, any person who violates it will be fined $1,000 for each violation. Acting as a producer without a license Correct Answer 1. Is a Class A misdemeanor. 2. If the action results in misappropriation of funds, it's a Class 4 felony. Illinois law allows the following professionals to give insurance advice without having a license Correct Answer CPAs, actuaries, bank trust officers, licensed public adjusters and attorneys. The personal lines P&C license allows an agent to sell personal lines policies only Correct Answer Such as homeowners and personal auto. Prelicensing Exemption Correct Answer Applicants who have earned a college degree in insurance or an advanced insurance designation will be exempt from the prelicensing requirement.