NY State Regulation Flashcards
Superintendent of Insurance:
General Powers and Duties
If a superintendent request information you have how many days to provide it?
Or face a penalty of up to $_______ per day (not more than _________ total)
If you get more than _____ penalties within 5 years you could receive an additional $___________
Instead of paying a civil penalty you can _______________.
[Secs. 201, 2405; Fin. Serv. Secs. 202, 301]
- The Superintendent is the head of the Department of Insurance in New York.
- The governor appoints the Superintendent to a four-year term.
- The Superintendent is responsible for examining and investigating individuals’ affairs to determine whether they have committed any unfair method of competition or deceptive acts or practices.
If the Superintendent requests information during an examination or investigation and a person does not respond within 15 days, he or she may impose a penalty of up to $500 per day (not more than $10,000 total) for each day the person fails to respond.
If the Superintendent imposes five separate penalties against a person within five years for failing to respond to his or her inquiries, the Superintendent may levy an additional penalty of up to $50,000.
The Superintendent also may levy an additional penalty of up to $50,000 against a person for every five subsequent violations within a five-year period.
A person may surrender his or her license instead of paying a civil penalty.
Regulation of Insurers
To transact business in NY an insurer must possess a ________________________ or be fined $_____for the first violation and $______ for each subsequent violation.
An insurer may not transact insurance in New York unless it has a certificate of authority.
An insurer that transacts insurance in New York without a certificate of authority will be fined $1,000 for the first violation and $2,500 for each subsequent violation.
To qualify for a certificate of authority, a stock insurer must show the Superintendent that it possesses the capital and surplus required by law.
A mutual insurer must show that it:
- maintains the required surplus to fulfill its obligations to policyholders;
- has the required number of applications for insurance;
- has a genuine membership list; and
- has received premiums from members and
- will issue policies within 60 days after receiving a certificate of authority.
An insurer must also pay a fee and file a copy of its charter to receive a certificate of authority.
How does the Superintendent monitor Insurer Solvency?
Insurers and fraternal benefit societies must file an _____________________ with the Superintendent by __________.
Fraternal benefit societies that dont file and fail to respond in ____ days face fines up to $______ per day (not more than $_________ )
Insurers and fraternal benefit societies must file an annual statement with the Superintendent by March 1.
The report must show the insurer’s or fraternal benefit society’s condition at the end of the preceding year.
An insurer or fraternal benefit society that fails to file an annual statement or to reply within 30 days to an inquiry from the Superintendent about the report will be fined up to $250 per day of delay (not more than $25,000 total).
Insurers must file the statement within five months after the end of each year, along with an opinion from an independent CPA certified public accountant regarding the insurer’s financial condition.
To appoint a producer as its agent, an insurer must file a notice of appointment with the Superintendent within ___ days of making the producer its agent.
To appoint a producer as its agent, an insurer must file a notice of appointment with the Superintendent within 15 days of making the producer its agent or receiving the first insurance application from the producer.
A producer’s appointment remains in effect until
- terminated by the insurer;
- the producer’s license is suspended or revoked; or
- the producer’s license expires and is not renewed.
When an insurer terminates a producer’s appointment, the insurer must notify the Superintendent within ____ days of the termination.
They must also cite the __________ for dismissal.
Within ___ days after notifying the Superintendent of the termination, the insurer must mail a notice of the termination to the producer.
When an insurer terminates a producer’s appointment, the insurer must notify the Superintendent within 30 days of the termination.
If the producer was terminated for cause (dishonesty, breach of trust or fiduciary duty, or committing an illegal act), the insurer must disclose the reason for the termination.
Within 15 days after notifying the Superintendent of the termination, the insurer must mail a notice of the termination to the producer at his or her last known address.
What is the definition of Controlled Business?
A license will be considered to be used for writing controlled business if more than ___ percent of a producer’s commissions are earned from such business in a year.
Controlled business is insurance that is written primarily on the lives, property, or risks of the licensee or of the licensee’s family members, employer, or business associates.
A license will be considered to be used for writing controlled business if more than 10 percent of a producer’s commissions are earned from such business in a year.
The Superintendent will not grant or continue a license if he or she believes that a producer will use the license primarily to engage in controlled business.
Brokers may receive premiums on behalf of an insurer. A broker must receive premiums from insureds within ___ days after the premium due date.
An insurer or producer may pay or assign fees or other consideration to another party but the payment ______ depend on whether an insurance policy is sold.
Agents, brokers, consultants, and adjusters must file disclosure statements with the Department showing the amount of insurance sold or services provided to the state, its agencies and departments, and other governmental subdivisions.
Brokers may receive premiums on behalf of an insurer. A broker must receive premiums from insureds within 90 days after the premium due date.
An insurer or producer may pay or assign fees or other consideration to another party but the payment cannot depend on whether an insurance policy is sold.
Fiduciary Responsibilities
They may not __________ such funds with their own funds unless the insurer or principal agrees.
Agents and brokers must maintain records showing _________ and _________ for each premium account.
These records must identify:
- 4.
Agents and brokers hold premiums and other funds in a fiduciary capacity. They may not commingle such funds with their own funds unless the insurer or principal agrees.
Agents and brokers are not required to maintain a separate bank account for an insurer’s funds if it is possible to determine the amount of funds held for each insurer from the agent’s or broker’s books and records.
Agents and brokers must maintain records showing receipts and disbursements for each premium account.
These records must identify:
- the date and amount of each transaction
- the name of the insured and insurer
- the policy binder number
- the type of risk involved
License Display
Agents and brokers must display the license of the ___________ person responsible for each place of business in a ____________ location and each __________ office.
Agents and brokers must display the license of the supervising person responsible for each place of business in a headquarters location and each satellite office.
Commissions and Compensation
An insurer or producer _______ pay a commission, fee, or other consideration to a person for selling, soliciting, or negotiating an insurance contract in New York if the person does not have a ________ to transact insurance.
An insurer or producer cannot pay a commission, fee, or other consideration to a person for selling, soliciting, or negotiating an insurance contract in New York if the person does not have a license to transact insurance.
Termination: Responsibilities of Producer
If a producer’s appointment is terminated, the producer may file written comments concerning the termination within ____ days of receiving a notice of termination.
If a producer’s appointment is terminated, the producer may file written comments concerning the termination within 30 days of receiving a notice of termination.
Examination of Books and Records
Insurers must keep records of:
- insurance policies, for ___ years after the date a policy is no longer is in force or until the next examination report, whichever period is longer
- applications when a policy is not issued, for __\_ years or until the next examination report, whichever period is longer
- claim files, for ___ years after a claim is resolved or until the next examination report, whichever period is longer
- Insurers must also maintain licensing records for ___ years after the relationship with a licensee is terminated and
- complaint records for __\_ years after a complaint is resolved.
- financial records verifying an insurer’s financial condition must be kept for __\_ years or until the next examination report is filed, whichever period is longer.
The Superintendent can examine the books and records of an insurer as often as necessary.
Failure to provide records to the Superintendent within a reasonable time is considered a violation of the insurance code, unless there is a reasonable justification for the delay.
Insurers must keep records of:
- insurance policies, for 6 years after the date a policy is no longer is in force or until the next examination report, whichever period is longer
- applications when a policy is not issued, for 6 years or until the next examination report, whichever period is longer
- claim files, for 6 years after a claim is resolved or until the next examination report, whichever period is longer
- Insurers must also maintain licensing records for 6 years after the relationship with a licensee is terminated and
- complaint records for six years after a complaint is resolved.
- Financial records verifying an insurer’s financial condition must be kept for six years or until the next examination report is filed, whichever period is longer.
Insurers may keep records in paper, facsimile, photographic, magnetic, optical, mechanical, or electronic form.
Insurance Frauds Prevention
New York has enacted the __________________ ___________________ to address the problem of insurance fraud in the state by
- giving the Superintendent …
- encouraging …
- granting …
- setting …
New York has enacted the Insurance Frauds Prevention Act to address the problem of insurance fraud in the state by
- giving the Superintendent broad authority to investigate insurance fraud;
- encouraging reports of suspected insurance fraud;
- granting immunity for persons who report suspected insurance fraud; and
- setting penalties for insurance fraud.
In addition to criminal penalties, the Superintendent may impose a civil penalty of up to $5,000 plus the amount of the claim for each fraudulent insurance act.
Insurance applications and claim forms must contain a statement warning policyowners that attempting to defraud an insurer by submitting an application or claim form that conceals or contains false information is a crime and is punishable by a fine.
Civil Sanctions for Insurance Fraud
In addition to any criminal sanctions for insurance fraud, the Superintendent can impose a civil penalty of up to $5,000 for every violation, plus the amount of the claim, for:
- any fraudulent insurance act or fraudulent life settlement act
- intentionally filing, helping to file, soliciting, or conspiring to file an application for a premium reduction on the basis of materially false information
Consumer Privacy Regulation
The Consumer Information Privacy Regulation governs how insurers handles what 2 pieces of information.
When collecting or using nonpublic personal financial or health information, an insurer or producer is require to do what 3 things?
The Consumer Information Privacy Regulation governs how insurers handle:
- all nonpublic personal financial information
- all nonpublic personal health information
When collecting or using nonpublic personal financial or health information, an insurer or producer is
- required to notify individuals about the insurer’s or producer’s privacy policies and practices;
- describe conditions under which an insurer or producer may disclose this information to affiliated companies and nonaffiliated third parties;
- provide methods for individuals to prevent an insurer or producer from disclosing this information by not affirmatively consenting to such disclosure.
