Insurance Regulation

Question 1

What is an insurance transaction?

Answer 1

sell, solicit, or negotiate

Question 2

What is an insurance producer?

Answer 2

a person licensed and authorized by Maryland Insurance Administration to sell, solicit or negotiate insurance

Question 3

Who are licenses issued by?

Answer 3

The Commissioner

Question 4

To qualify for a Title Producer’s License, the applicant must be:

Answer 4

must be of good character and trustworthy

at least 18 years old

complete 20 hours of an approved licensing course

pass the required examination

pay the required application fee of $59

Question 5

An insurance producer may be

Answer 5

an individual or business

Question 6

Employees that manage escrow must be

Answer 6

licensed as title producers

Question 7

Employees that perform clerical and similar office duties, that do no solicit, procure or negotiate title insurance contracts for compensation are not considered

Answer 7

title insurance producers

Question 8

A nonresident producer is

Answer 8

an individual or entity that is not a resident of Maryland but does business in Maryland

Question 9

For a business entity to obtain a Maryland license as an insurance producer

Answer 9

the business entity must designate a licensed insurance producer to serve as the primary point of contact with the Insurance Administration

Question 10

Sole Propriertorship

Answer 10

simplest and most common structure people choose to start a business.

It is an unincorporated business owned and run by one individual with no distinction between the business and the owner

Owners are entitled to all profits and are responsible for all business’ debts, losses, and liabilities

Question 11

General Partnership

Answer 11

A single business where two or more people share ownership. Each partner contributes to all aspects of the business including money, property, labor, or skill. Each partner shares in profits and losses of the business

Question 12

Limited Liability Company

Answer 12

Provides limited liability of a corporation, tax efficiencies, and operational flexibility of a partnership.

The owners of an LLC are referred to as members. Depending on the state the members can consist of a one owner or two or more individuals, corporations or other LLCS

Question 13

Limited Partnership

Answer 13

Allows partners to have limited liability as well as limited input with management decisions. Limits depends on each partner’s investment percentage

Question 14

Stock Corporation

Answer 14

Must have at least three officers (President, Secretary, and Treasurer) at least on Director and is owned by shareholders which may be individuals or other business entities.

Not an S-Corp

Question 15

S-Corp

Answer 15

Refers to an election made with the IRS concerning how a business entity is taxed by the federal government

Question 16

Close Corporation

Answer 16

Referred to as a closely held corporation

Permitted to have on individual acting as all required officers and may also elect to have no board of directors

Subject to restrictions on the number and identity of shareholders

Not C-Corps

Question 17

A title insurance companies must be organized as

Answer 17

stock company or mutual insurance company

Question 18

Mutual Insurance Company

Answer 18

owned by policyholders. Provides coverage for its members and policyholders. Members are given right to participate in management selection

Question 19

In order to act as an insurer or title insurer in Maryland, a person must obtain

Answer 19

A certificate of Authority issued by the Commissioner

Question 20

Trust Money

Answer 20

deposit, payment or other money that a person entrusts to a title insurer or its agent to hold for the benefit of the buyer in a real estate transaction or for a beneficial owner in connection with escrow, settlement, closing or title indemnification

Question 21

Trust Money Controller

Answer 21

a person within a title agency who has day to day direct control over trust money

Question 22

Commissioner may deny, suspend, revoke, or refuse to renew/ reinstate a license to an applicant business entity if the person

Answer 22

violated any provision of insurance article

been convicted of felony, crime of moral turpitude, or any criminal offense

had any professional license suspended or revoked for a fraudulent or dishonest practice

Question 23

Temporary License

Answer 23

may be issued to an individual due to death or disability of a producer for 15 months to surviving spouse, court appointed representative, next of kin, or competent employee

Question 24

A title insurance producer acting as an independent contractor may

Answer 24

request a waiver of the bonding requirements at time of application

Question 25

Title agents are required to maintain

Answer 25

$150,00 Surety Bond, $150,000 Fidelity Bond, Errors and Omissions

Question 26

Once all prerequisites of licensing are met,

Answer 26

A license will be issued to the title insurance producer. The license may be issued in electronic or paper format. The license is valid for two years and will remain in effect unless it is revoked, suspended or expired

Question 27

An insurance producer must notify the Commission of any address or name changes within

Answer 27

30 days. It is also considered public information

Question 28

A fictitious name is

Answer 28

commonly referred to as a DBA (doing business as)

Question 29

Continuing eduction is required to

Answer 29

a title producer's license

Question 30

Continuing education requirements

Answer 30

Sixteen hours of continuing education must be complete three hours of the sixteen hours must be in the area of ethics

Question 31

If a title producer allows their license to lapse by failing to renew they may request a

Answer 31

reinstatement within one year of the renew date by paying the reinstatement fee

Question 32

Commissioner may do what with a license

Answer 32

Deny, suspend, revoke, refuse to renew or reinstate a license of a producer

Question 33

Reasons that a commissioner would deny, suspend, revoke, refuse to renew or reinstate a license of a producer

Answer 33

willfully violate insurance laws intentionally misrepresenting or concealing material information during application process intentionally misrepresenting or concealing information on the license application intentionally misrepresenting the provisions of an insurance policy committing a fraudulent act being charged with a felony being convicted of a crime involving moral turpitude being convicted of a felony forging names to insurance documents accepting business from an unlicensed person failure to comply with a court order failure to pay taxes

Question 34

What are the penalty violation

Answer 34

maximum civil penalty for unauthorized insurer violation is $125k maximum monetary penalty for licensed insurance producer for violation is $5k

Question 35

If an insurance producer has been accused of violation of insurance laws

Answer 35

the producer will have an opportunity for a hearing if producer is found guilty the Commissioner can issue a cease and desist order, suspend or revoke the producer's license, or impose fines