Michigan Credit Insurance Producer || With Complete Solution.
Producer correct answers licensed person who has the authority to sell, solicit, or negotiate
insurance contracts
Who has permission to cancel the license? correct answers the commissioner
Agent correct answers person or corporation authorized to solicit insurance, collect premiums &
transact insurance business on behalf of an insurance company
Producer is appointed by who correct answers appointed by the agent to represent the insurer &
an insurer can cancel the appointment of agent
DIFS correct answers Dept of Insurance and Financial Services, enforces insurance laws of MI -
DOES NOT ENACT LAWS
Commissioner correct answers appointed by governor for 4 year term, authority to formulate,
amend or repeal rules & admin regulations in order to implement and enforce insurance
regulations
Resident vs. Non-Resident producer license correct answers filing a form and license fee to sell
in MI if residing in another state. States must be reciprocal - mutual exchange between 2 parties
Report of Actions correct answers all agents are required to report within 30 days of occurrence,
any judgments or disciplinary action by the insurance regulatory agency of any other state of the
US
Certificate of Authority correct answers charter or license authorizing the insurer the right to
conduct business as an admitted insurer. The license specifies the lines of insurance which the
insurer is authorized to transact
,Appointments correct answers a producer has the authority to sell and transact insurance w/o
appointment but they cannot act as an agent without an appointment from an admitted insurer
Termination of Appointment correct answers Requires that the insurer notify the commissioner
within 30 days following the effective date of cancelation. Within 15 days of the notification to
the commissioner, the agent must be notified of the cancelation of appointment by the insurer
Prohibited Conduct correct answers selling insurance by means of intimidation, threats whether
express or complied, induce the purchase of insurance by means of promise of goods, money or
services, unfair methods of competition.
Commissions correct answers A person must be licensed before they can receive commissions
Residual/Renewal Commissions correct answers Individual may receive residual commissions
for polices written while formerly licensed and appointed as a producer. (if you lose you license,
you will still receive commission for the policies you wrote)
Misrepresentation correct answers Misrepresents the terms, benefits, advantages, or conditions of
an insurance policy. Incomplete comparison of two company's products for the purpose of
inducing a person to drop an existing policy.
Twisting correct answers Inducing a person to lapse, surrender, or terminate a policy for the
purpose of purchasing a similar policy with another producer or insurer. Insurance is being
illegally or unethically replaced - the inducement is cause by incomplete policy comparison, a
rebate, a misrepresentation, some other illegal act
Defamation correct answers publish or circulate or make statements which are false, malicious,
or derogatory regarding an insurer or any person involved in business of insurance
Boycott, Coercion, and Intimidation correct answers Any acts that result in unreasonable restraint
of trade or monopoly or business is illegal. Cannot force or intimidate people into the purchase
of insurance.
, What are the 3 potential coercive occupations? correct answers Banking industry, Auto sales, and
Funeral Industry
Unfair Discrimination correct answers Refusing to insure or to continue to insure an individual
based on race, color, creed, marital status, sex. Charging a different rate on the same coverage
unless based on sound actuarial principles.
Rebating correct answers An inducement offered in the sale of insurance products that is not
specified in the policy. Similar to a bribe
Illegal Inducement correct answers illegally persuading someone to buy insurance
Fair Credit Reporting Act correct answers Federal law which requires that an applicant for
insurance be advised that a consumer report may be requested. It is designed to protect the
privacy of the applicant. It is to make sure they are charging you correct rates based upon
information provided
Risk correct answers Evolved from uncertainty, the unpredictable chance occurrences of
everyday life, which result in financial or economic loss.
Insurable Risks correct answers Must be predictable and a large enough group of similar risks
Loss must be definite
Cannot be catastrophic (such as war)
Avoidance correct answers the act of avoiding or eluding. Shifting risk to another
Adverse Selection correct answers Accepting more policies that will cause the company to pay
out more, leading to reduced profitability
Producer correct answers licensed person who has the authority to sell, solicit, or negotiate
insurance contracts
Who has permission to cancel the license? correct answers the commissioner
Agent correct answers person or corporation authorized to solicit insurance, collect premiums &
transact insurance business on behalf of an insurance company
Producer is appointed by who correct answers appointed by the agent to represent the insurer &
an insurer can cancel the appointment of agent
DIFS correct answers Dept of Insurance and Financial Services, enforces insurance laws of MI -
DOES NOT ENACT LAWS
Commissioner correct answers appointed by governor for 4 year term, authority to formulate,
amend or repeal rules & admin regulations in order to implement and enforce insurance
regulations
Resident vs. Non-Resident producer license correct answers filing a form and license fee to sell
in MI if residing in another state. States must be reciprocal - mutual exchange between 2 parties
Report of Actions correct answers all agents are required to report within 30 days of occurrence,
any judgments or disciplinary action by the insurance regulatory agency of any other state of the
US
Certificate of Authority correct answers charter or license authorizing the insurer the right to
conduct business as an admitted insurer. The license specifies the lines of insurance which the
insurer is authorized to transact
,Appointments correct answers a producer has the authority to sell and transact insurance w/o
appointment but they cannot act as an agent without an appointment from an admitted insurer
Termination of Appointment correct answers Requires that the insurer notify the commissioner
within 30 days following the effective date of cancelation. Within 15 days of the notification to
the commissioner, the agent must be notified of the cancelation of appointment by the insurer
Prohibited Conduct correct answers selling insurance by means of intimidation, threats whether
express or complied, induce the purchase of insurance by means of promise of goods, money or
services, unfair methods of competition.
Commissions correct answers A person must be licensed before they can receive commissions
Residual/Renewal Commissions correct answers Individual may receive residual commissions
for polices written while formerly licensed and appointed as a producer. (if you lose you license,
you will still receive commission for the policies you wrote)
Misrepresentation correct answers Misrepresents the terms, benefits, advantages, or conditions of
an insurance policy. Incomplete comparison of two company's products for the purpose of
inducing a person to drop an existing policy.
Twisting correct answers Inducing a person to lapse, surrender, or terminate a policy for the
purpose of purchasing a similar policy with another producer or insurer. Insurance is being
illegally or unethically replaced - the inducement is cause by incomplete policy comparison, a
rebate, a misrepresentation, some other illegal act
Defamation correct answers publish or circulate or make statements which are false, malicious,
or derogatory regarding an insurer or any person involved in business of insurance
Boycott, Coercion, and Intimidation correct answers Any acts that result in unreasonable restraint
of trade or monopoly or business is illegal. Cannot force or intimidate people into the purchase
of insurance.
, What are the 3 potential coercive occupations? correct answers Banking industry, Auto sales, and
Funeral Industry
Unfair Discrimination correct answers Refusing to insure or to continue to insure an individual
based on race, color, creed, marital status, sex. Charging a different rate on the same coverage
unless based on sound actuarial principles.
Rebating correct answers An inducement offered in the sale of insurance products that is not
specified in the policy. Similar to a bribe
Illegal Inducement correct answers illegally persuading someone to buy insurance
Fair Credit Reporting Act correct answers Federal law which requires that an applicant for
insurance be advised that a consumer report may be requested. It is designed to protect the
privacy of the applicant. It is to make sure they are charging you correct rates based upon
information provided
Risk correct answers Evolved from uncertainty, the unpredictable chance occurrences of
everyday life, which result in financial or economic loss.
Insurable Risks correct answers Must be predictable and a large enough group of similar risks
Loss must be definite
Cannot be catastrophic (such as war)
Avoidance correct answers the act of avoiding or eluding. Shifting risk to another
Adverse Selection correct answers Accepting more policies that will cause the company to pay
out more, leading to reduced profitability
