Unit 9 Agent Licensing & Marketing Practices Flashcards
(36 cards)
is to approve the issuance of licenses to agents, customer representatives, and claims adjusters, after having satisfied itself that the applicant is, in good faith, qualified to write and service or adjust claims on property and casualty insurance.
Department of Financial Services (DFS) Division of Agent and Agency Services
paying a rebate of premium in the form of money or other compensation associated with the sale or solicitation of insurance.
Unlawful Rebating
the objective of the license is not for the issuance of controlled business, that is to say, for the sale specifically to the license holder, the holder’s friends, family, or any entity associated with the license holder. The license is issued for the holder to engage the insuring public in general for solicitation, sales, and service.
Controlled Business
– an agent license enables the holder to solicit, sale, and service insurance as prescribed by license type (e.g. 20-44 License is specifically for solicitation, sales, and servicing of Personal Lines of Property and Casualty Insurance).
Agent License
– an adjuster license enables the holder to work on behalf of an insurance company or adjusting firm to adjust a claim per the requirements of the insurance policy (e.g. 6-20 Licensee would determine that amount of loss, reason for loss, review policy coverage and conditions and make a claim’s negotiation, offer, payment and/or settlement based upon the nature and amount of the loss and the insurance contract coverages and conditions).
Adjuster License
– an agency license is required by the department for the operation at any location that an agent engages in the business of insurance (branch locations are allowed to operate under the main agency license).
Agency License
As regards “REFERRAL FEES”, which if any of the following are true?
the statute explicitly prohibits payment to any unlicensed person any fee or compensation for a referral and no referral fee or commission can be paid to a licensed entity if the offer of referral is conditioned upon a sale.
- at lease 18 yrs old
- US citizen/ legal alien lawfully permitted to work
- Florida resident
- not for “controlled business”
- has met pre-licensing education / eperience req
- has passed any required exam for license
- must pass a background check undertaken by
dept
Licensing Requirements
- continuing Education
- communicating with the dept
- record keeping
- criminal & Administrative Actions
- Appointments
maontaining a License
The department requires a “5-Hour update” course every two (2) years.
The department requires an additional nineteen (19) hours in elective subject matter every two years for a total of twenty-four (24) hours every two (2) years.
Continuing Education
The department requires a notice of change within ____ days of any of the following –
- Name Change
- Residence Address
- Principal Business Address
- Mailing Address
- Phone Numbers
- Email Address
Fines for failure to notify the department –
- $250 for the first offense
- $500 for a subsequent offense
30 days
are individuals or organizations that are required to operate under the duties of good faith and fair dealing
Fiduciaries
Fiduciary responsibilities are both _____ (as required by law) and _____ (implied from the relationship).
legal & ethical
_______________ penalties:
(1) Licensees are precluded from any/all unfair methods of competition and/or unfair or deceptive act or practice involving the business of insurance.
(2) Any licensee who violates the law shall be subject to a fine in an amount not greater than $2,500 for each non-willful violation and not greater than $20,000 for each willful violation.
Unfair trade practices
is the unlawful boycott, coercion, and intimidation in the business of insurance.
Coercion
_________ includes –
- unfair methods of competition
- unfair or deceptive acts or practices
- misrepresentations and false advertising of
insurance policies
- misrepresentations of the benefits, advantages,
conditions, or terms of any insurance policy
- misrepresentations of the dividends or share of
the surplus to be received on any insurance policy
- knowingly making a false statement or
representation on an application or negotiation for
an insurance policy
- knowingly making a material omission in the
comparison of a life, health, or Medicare
supplement insurance replacement
Misrepresentation
Misrepresentations and ___________ of insurance policies is evidenced if any of the following are misrepresented or falsely advertised: (this is a small sub-list from the statutes) –
- benefits, advantages, conditions, or terms of any
insurance policy - dividends or share of the surplus to be received
on any insurance policy - dividends or share of surplus previously paid on
any insurance policy - misrepresents any insurance policy as being
shares of stock - false information and advertising generally which
is untrue, deceptive, or misleading
false advertising
A false statement intended to deceive the insurer and induce it to part with something of value or surrender a legal right.
EX:
- knowingly making, publishing, disseminating,
circulating any false material statement
- knowingly making any false entry of a material fact
in any book, report, or statement of any person
- any agent, physician, claimant, or other person
who causes to be presented to any insurer a false
claim for payment
- any agent who represents any insurer without the
authority of the insurer
Fraud
transactions are those for which the agent has a business, family, or pecuniary interest in or for which the agent is associated or bears an interest in.
Florida law precludes an agent from obtaining an insurance license if more than 50% of the agent’s income is anticipated to come from controlled business.
Controlled Business
is characterized by the usage of policy values in an existing life insurance policy to purchase another insurance policy with that same insurer for the purpose of earning additional premiums, fees, commissions, or other compensation for the insurance agent.
- Where no benefit to the policyholder is evident
- Agent is held to be responsible of misleading the
insured - No disclosure to insured of the reduction in cash
value in original policy - No disclosure of future unanticipated cost or the
elimination of a future benefit
Churning
is the misrepresentation by a licensee as to the advantages and disadvantages among two policies for the sole purpose of making a sale of the one over other.
- when an agent is attempting to displace a currently held policy from another agent with one the agent is selling.
- agent or customer representative misrepresenting a “new option” to a current customer most often for the purposes of increased sales commission.
Twisting
Twisting normally involves a policy replacement from a different insurance company with increased commission as the motive.
Churning normally involves a policy replacement that is from the same insurance company; again the motive is increased sales commission.
Twisting versus churning –
Twisting normally involves a policy replacement from a different insurance company with increased commission as the motive.
Churning normally involves a policy replacement that is from the same insurance company; again the motive is increased sales commission.
Twisting versus churning –
_______ requirements –
- Misrepresentation of policy features, benefits, true cost.
- Detriment to the insured when relying on the misrepresentations by the agent or customer representative.
Twisting
