Chapter 8: Laws and Rules Questions
and Answers
1. Address Change - ANS-Licensees must report a change of address to the
Insurance Department within 30 days.
2. Assumed Names - ANS-A producer must report to the Commissioner if he/she will
be conducting business under an assumed name.
3. Backdating - ANS-Policies cannot be backdated more than 6 months from the date
of issue. The point of backdating a policy is to make it effective at an earlier date
to preserve a slightly lower premium at that reduced age.
4. Cease and Desist Order - ANS-When the Commissioner believes a producer or
entity has broken an insurance law, the Commissioner has the authority to issue a
cease and desist order at a hearing. Any person or entity found to be in violation
of an insurance law will be notified by the Insurance Department. The notice will
specify the nature of the violation and a hearing date at least 10 days later.
5. Commissioner - ANS-The primary duty of the Insurance Commissioner is to see
that laws are properly executed and enforced. The Commissioner is appointed
insurance by the governor to a four-year term.
6. Commissions and Fees - ANS-Insurers may pay commissions to producers.
Unlicensed persons may not receive commissions, with the following exceptions:
renewal or deferred commissions to retired producers, and referrals.
7. Continuing Education - ANS-Producers must complete 24 hours of continuing
education every two years in order to renew their licenses. In Pennsylvania, the
Commissioner is responsible for Continuing Education (CE) course content
approval.
8. Controlled Businesses - ANS-Controlled business can be defined as policies written
on people that the licensed producer has direct influence over: including family,
employers, and/or any company to which the producer has stock control.
9. Defamation - ANS-It is an illegal practice to make any public statement or
advertisement that contains false information or unsubstantiated criticisms about
an insurance company.
10. Definition of Small Employer - ANS-A small employer is defined as one that employs
between 2-50 employees.
11. Entire Contract - ANS-A provision that the policy and the application shall
constitute the entire contract between the parties
12. Examination of Books and Records - ANS-The Commissioner may examine the
business affairs, books, records, documents, and computer files of any producer
to determine the producer's financial condition and whether the producer is
abiding by insurance laws. The Commissioner must conduct a financial
and Answers
1. Address Change - ANS-Licensees must report a change of address to the
Insurance Department within 30 days.
2. Assumed Names - ANS-A producer must report to the Commissioner if he/she will
be conducting business under an assumed name.
3. Backdating - ANS-Policies cannot be backdated more than 6 months from the date
of issue. The point of backdating a policy is to make it effective at an earlier date
to preserve a slightly lower premium at that reduced age.
4. Cease and Desist Order - ANS-When the Commissioner believes a producer or
entity has broken an insurance law, the Commissioner has the authority to issue a
cease and desist order at a hearing. Any person or entity found to be in violation
of an insurance law will be notified by the Insurance Department. The notice will
specify the nature of the violation and a hearing date at least 10 days later.
5. Commissioner - ANS-The primary duty of the Insurance Commissioner is to see
that laws are properly executed and enforced. The Commissioner is appointed
insurance by the governor to a four-year term.
6. Commissions and Fees - ANS-Insurers may pay commissions to producers.
Unlicensed persons may not receive commissions, with the following exceptions:
renewal or deferred commissions to retired producers, and referrals.
7. Continuing Education - ANS-Producers must complete 24 hours of continuing
education every two years in order to renew their licenses. In Pennsylvania, the
Commissioner is responsible for Continuing Education (CE) course content
approval.
8. Controlled Businesses - ANS-Controlled business can be defined as policies written
on people that the licensed producer has direct influence over: including family,
employers, and/or any company to which the producer has stock control.
9. Defamation - ANS-It is an illegal practice to make any public statement or
advertisement that contains false information or unsubstantiated criticisms about
an insurance company.
10. Definition of Small Employer - ANS-A small employer is defined as one that employs
between 2-50 employees.
11. Entire Contract - ANS-A provision that the policy and the application shall
constitute the entire contract between the parties
12. Examination of Books and Records - ANS-The Commissioner may examine the
business affairs, books, records, documents, and computer files of any producer
to determine the producer's financial condition and whether the producer is
abiding by insurance laws. The Commissioner must conduct a financial
