chapter 20: intermediaries

Question 1

definition of an intermediary

Answer 1

any person who earns a commission by soliciting, negotiating, or advising insurance or annuities

Question 2

surplus lines agent/broker

Answer 2

an intermediary separately licensed to place insurance with unauthorized insurers

Question 3

temporary license

Answer 3

may be issued when an intermediary has become disabled or dies, requiring a replacement to service their business

they cannot write new business; they can only receive renewal commissions

Question 4

how long is a temporary license valid?

Answer 4

maximum of 12 months

Question 5

when m/ust a license be renewed

Answer 5

every 2 years on the last day of the licensee’s birth month

Question 6

continuing education requirements

Answer 6

24 hours of continuing education every 2 years prior to the renewal, where 3 of the hours must be in ethics

Question 7

what happens if an agent fails to achieve the continuing education requirements?

Answer 7

their license will be revoked

Question 8

when must an individual apply for reinstatement?

Answer 8

within 12 months of revocation

if after 12 months, they must apply for relicensing and retake the pre-licensing course and state exam

Question 9

a disciplined person is

Answer 9

any agent whose license was revoked or suspended and any affiliate or employee of them of them

Question 10

license fees (how often and when)

Answer 10

bill will be mailed on or before January 15 of every even numbered year

must be paid within 30 days to avoid license suspension

fee of $5,000 per day that the violation continues

Question 11

duties of the commissioner

Answer 11

administering and enforcing wisconsin’s insurance laws

Question 12

wisconsin insurance security fund

Answer 12

a nonprofit legal entity that protects insureds against delay and loss in the event of the insurer’s insolvency

pays claims and other benefits up to $300,000

Question 13

can an agent indicate that the insurance policy is covered by the wisconsin insurance security fund?

Answer 13

no, it is prohibited by law

Question 14

submitting rates to the commissioner

Answer 14

insurer may file or submit proposed premium rates to the commissioner and the commissioner must review and approve/disapprove forms within 30 days

Question 15

readability requirements of the policy

Answer 15

must have a minimum score of the 40 flesch reading ease test, be in 10 point font, be appropriately captioned and divided

Question 16

what is appointment and when to notify the commissioner of appointment

Answer 16

appointment is the authority given to an agent to transact business on behalf of the insurer

if the appointment of an agent is terminated, the insurer must notify the commissioner within 30 days

Question 17

notice of right to file complaint

Answer 17

insurers must notify their insureds of their right to file a complaint with the office of the commissioner of insurance

Question 18

change of information with the commissioner

Answer 18

insurers must notify commissioner of any changes in name, address, place of business within 30 days

Question 19

record maintenance with the commissioner

Answer 19

records must be maintained for 3 years for the commissioner

Question 20

rebating

Answer 20

any inducement offered to the insured in the sale of insurance products

Question 21

illegal inducement

Answer 21

personal financial transaction: where the agent shares in profits or losses with a customer

Question 22

twisting

Answer 22

agent uses misrepresentation to convince a policy owner to drop an existing policy for a new one

Question 23

affirmative warranty

Answer 23

representation which guaranteed an existence of a fact at the time the policy was entered into

Question 24

promissory warranty

Answer 24

warranty that certain things will be done or not done after the policy has taken effect

Question 25

collusion

Answer 25

the insurer is legally protected against actions where an intermediary and a policy holder acted together to deceive the company

Question 26

when is cancellation effective

Answer 26

30 days after the insurance company has given written notice to the insured 60 days after notice for worker's compensation

Question 27

how soon must insurers pay claims

Answer 27

within 30 days of proof of loss overdue payments bear simple interest at 7.5% per year

Question 28

how long can adverse information about late payments stay on an insured's credit report?

Answer 28

7 years

Question 29

when must a notice of replacement be given to applicant?

Answer 29

no later than the application date

Question 30

how long may insurer deny a claim due to a pre-existing condition?

Answer 30

for 2 years 6 months if a medicare supplement, disability, or long-term care insurance policy 12 months for a small employer never, for coverage of a child under 19

Question 31

grievance

Answer 31

an expressed written dissatisfaction of the claims practices or services of a plan or insurer

Question 32

what must insurers do for grievances?

Answer 32

insurers must develop and use an internal grievance procedure, establish a panel to investigate each grievance, and retain records of each grievance for 3 years

Question 33

requirements for group health benefit premiums

Answer 33

insurers cannot increase rates more than 15% yearly because of the group's claim experience insurers cannot charge rates that deviate more than 30% from the average rate charged for all groups with similar characteristics

Question 34

what constitutes a small employer

Answer 34

2-50 employees that work more than 30 hours/week

Question 35

health benefit purchasing cooperatives

Answer 35

a single group health plan covering employees and members of the cooprative 3 year term

Question 36

an intentional criminal violation of wisconsin insurance law may result in a maximum fine of

Answer 36

$5,000

Question 37

ACA penalty if a large employer does not provide health insurance

Answer 37

annual penalty is $2,000 x the number of full time employees minus 30

Question 38

the Commissioner gains office by

Answer 38

being elected by the governor