PSI PA Property and Casualty Exam Guide

PSI PA Property and Casualty Exam Guide Broker - According to the insurance law, who is the principal? 90 days - An application as a resident agent must be made in how many days if an individual establishes a principal place of residence within Pa from another state? a temporary license - issued for 180 days for surviving spouse, surviving inactive officer or partner, legal representative. Can be used upon death or incompetency of producer, or when individuals are serving in the military. Endorse Insurers - Commissioner can do all of the following except? provides incorrect or misleading info, been denied in another state or violated commonwealth insurance laws. - Insurance department can deny an application if the applicant.... Cease & Desist order - the insurance department may issue this which requires the insurer or person to stop activity in question the Governor - Insurance commissioner is appointed by... Guaranty Fund - administered by a U.S. state to protect policyholders in the event that an insurance company defaults on benefit payments or becomes insolvent. Producers are prohibited to advertise it's existence to secure business. Rate Regulation - Performed by commissioner to prohibit rates that are excessive, inadequate or unfairly;y discriminatory. 10 working days - Insurance company should acknowledge receipt of claim within... 15 days - Insurance should respond to insurance department inquiry within... Rebating - Bribery, returning a portion of the premium or the agent's/broker's commission on the premium to the insured or other INDUCEMENTS to place business with a specific insurer. Misrepresentation - When producer makes false statements Twisting - When insurance agent makes incomplete comparisons as an inducement to terminate, surrender one's policy for another of similar risks False Advertising - using media with deliberate deceit to defraud Coercion - persuading someone to buy insurance through the use of threats Misappropriation of funds - improper holding, breaking fiduciary obligations Defamation - making false or derogatory statements as to insurance company's financial position Redlining - unfair discrimination based on location of insured's home or business Commingling funds - when a producer is collecting premiums from applicants and adding it to their personal funds, holding out premium Fiduciary responsibility - is a producer's obligation to handle funds of the insured in a responsible and ethical manner The Insurer - Who can terminate a producers appointment Insurance Producer - means any person/entity who or which is licensed to solicit, negotiate, or sell insurance. the department of insurance - Who is allowed to conduct as many examinations of insurance agencies/agents as they want Commissions - can be shared when 2 producers are in the same authority Consulting Fees - allowed, must include a written advance notice of the fee disclosed to the person and must be reasonable in relationship to service provided Gramm-Leach-Bailey Act - purpose is to protect the privacy of consumer financial info (customers can opt out and prohibit insurance agency from disseminating nonpublic personal info to non-affiliated third party) $5000/$10000/$15000 - Insurance Fraud Regulation, criminal prosecution and civil penalty up to? (amounts) Fair Credit Reporting Act - established to protect consumers from unfair and inaccurate info, max penalty of $2500 and/or 2 years in prison protect against the circulation of inaccurate or obsolete personal or financial info. - QOT: Primary purpose of the FCRA (fair credit report. act) is to...? $50,000 and/or 10-15 years in prison - Fraud & False statements---fraud that affects interstate commerce suffers max penalty of... Risk - exposure to or uncertainty of loss Pure Risk - only can be no charge or loss, only type of risk insurance covers (no financial gain) Speculative Risk - can either be lost or have the chance to win from a risk (ex. Gambling) Hazards - conditions that increase the probability of an insured loss Physical Hazard - individual characteristics that increase the chances of the cause of loss---(physical condition, past medical history, birth defect, blindness) Moral Hazard - tendencies towards increased risk (character/reputation) Morale Hazards - arise from state of mind that causes indifference to loss (carelessness) Elements of insurable risk - must be definable, accidental, predictable, law of large #s should apply, create financial hardship, reasonable premiums, not catastrophic Exposure - unit of measurement used to determine rates charged for insurance coverage Homogeneous - large # of units having the same or similar exposure to loss Insurance - transfers the risk of loss from individual or entity to insurance company, which spreads the costs of unexpected losses to many individuals, includes solicitation, negotiations, sale, and advising on individual concerns, coverage or claims Loss - the reduction, decrease, or disappearance of value of the person or property insured in a policy, caused by a named peril Avoidance, retention (reduce premiums), sharing, reduction, and transfer - Methods of Handling Risk include... Avoidance - eliminating exposure for loss (ex. avoid airplane crash by not getting in airplane) Retention - planned assumption of risk by an insured through the use of deductibles, co-payments, or self insurance