MN Laws, Rules, and Regulations Flashcards
(40 cards)
Regulatory authority that oversees the insurance industry. The Commissioner of Commerce heads this department.
Department of Commerce
Duties included:
1. Enforce insurance laws
2. Create rules that assist with the enforcement of insurance laws
3. Conduct investigations and hold hearings
4. Examine and approve policy forms
5. Examine the books, records, and documents of any person or entity engaged in the business of insurance
6. Appoint a staff to assist with enforcement duties
Commissioner of Commerce
Insurers operating in Minnesota must be examined at least once every how many years
5
Order issued if an insurance company’s capital surplus, or reserves become impaired
“Restore any Deficiency” Order
Order issued to prevent an insurer from transacting business that may harm the company’s policyholders or the public
“Cease and Desist” Order
How many days does an insurer or producer have who disagrees with the Commissioner’s findings?
Within 30 days of the order
All forms and rates used for the business of insurance in the state of MN must be filed with Commissioner of Commerce how many days before use?
At least 60 days before use
Includes any of the following activities involving the business of insurance:
1. Solicitation
2. Selling
3. Advertising
4. Taking or transmitting applications
5. Receiving or delivering policies
6. Receiving, paying, collecting, or transmitting a premium insurance
Insurance Transaction
Definition includes the following elements:
1. A mechanism by which a group of people who are fairly and equally exposed to the same risks
2. Shift the risk to the insurer
3. In return for a consideration (premium)
Insurance
Domestic or foreign corporation, indemnity or guaranty company, partnership, fraternal order, association, or individual that transacts insurance business
Insurer
A person licensed to sell, solicit, or negotiate insurance. All agents must be licensed by the Commissioner for each line of insurance they plan to sell.
Must also hold a certificate of authority (appointment) from at least one admitted insurer
Insurance Producer
An applicant for a resident producer license in Minnesota must:
- Be at least 18
- Not have committed any act that is grounds for denial, suspension, or revocation
- Completed a pre-licensing course of study for the lines applied (20 hours per line of authority)
- Have passed the state exam for the lines of authority in which licensure is sought
- Submit the application with fees
- Consent to a criminal background check and fingerprinting
A temporary license may be issued by the Commissioner of Commerce for a maximum of how many days?
180 days
Resident producers must renew their license every how many years to keep their license active by completing at least 24 hours of continuing education credits
2 years
A lapsed producer license may be reinstated withing how many months from the due date of the renewal fee, without taking the written exam with the penalty of twice the unpaid renewal fee?
12 months
How many days prior to termination must a producer appointment notify the Commissioner?
30 days
How many days does a producer have to notify the Commissioner of a change of address?
10 days
How many days does a producer have to report any convictions involving moral turpitude?
10 days
Policies must be delivered or mailed to the insured within how many days?
30 working days
An insurance company’s license to transact business in MN. It certifeis that the company has complied with the requirements of the MN insurance laws and is admitted to transact business in the state.
Certificate of Authority
An insurance company that is owned and controlled by stockholders (shareholders). Stockholders provide the capital and share in profits or losses
Considered nonparticipating because the policyowners do not share in the profits of the company
Objective is to produce profits for the owners, the stockholders
Stock Insurance Companies
An insurance company owned and controlled by its policyowners who elect a board of trustees or governing body to manage the firm.
Considered participating because profits are returned to the policyowners in the form of dividends or retained as surplus to meet future obligations.
Objective is to provide insurance to its owners, the policyowners, at the lowest net cost
Mutal Insurance Companies
All the following are examples of…
1. Misrepresentation
2. False Advertising
3. Defamation
4. False Financial Statements
5. Unfair Discrimination
6. Rebating (offering something of value)
7. Boycotting
8. Twisting (misrepresentation)
9. Suitability
10. Discrimination of Military Personal
Unfair Trade Practices
Acts, omissions, or practices of the following are defined as…
1. Misrepresenting to insured pertinent facts or policy provisions relating to coverage
2. Failing to acknowledge and act reasonably and promptly with communications related to claims
3. Failure to adopt or implement reasonable standards for prompt investigation and processing
4. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss was obtained
5. Denying an insurance claim without indicating the basis of denial under the policy
6. Not attempting in good faith to effect prompt, fair, and equitable settlements of claims
Unfair Claims Methods
