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81 Cards in this Set
- Front
- Back
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Who enforces the insurance laws of Illinois, and how are they appointed?
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The Director of Insurance, appointed by the governor.
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What powers does the Director have?
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Make reasonable laws, conduct investigations, enforce laws, issue cease & desist orders, revoke or suspend any license, fine up to $1000 for marketing violation
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If the Director issues a cease & desist order, when is the hearing and what is the maximum fine?
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The hearing will be between 20 and 30 days from the date of notice, and the fine is up to $100/day, to maximum of $5000
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If a company does not comply with an order from the Director concerning unfair claims practices, what is the maximum penalty?
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Revocation of certificate of authority for 6 months, $250,000 fine, or both
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Who can the Director examine?
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Any company authorized to do business in IL, any person involved in the formation of a company, any licensed producer or firm, any person or firm seeking a license, and any person engaged in the business of adjusting losses or financing premiums
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How many days notice must a person participating in a hearing be given?
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10 days
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After the hearing, what must the director do?
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Issue a written order based on the examination report within 90 days
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What can happen to a person who does not submit to an examination by the Director?
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Suspension, refusal, or non-renewal of the individual's license or authority
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What class of offense is is if a person violates a written order issued by the Director, and what is the maximum fine?
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A business offense, up to $5000
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What can a person not do without an insurance license?
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Sell, solicit, or negotiate insurance; charge a fee or offer advice
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What type of crime is it if a person with no insurance license does things requiring a licence?
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A Class 4 felony
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How much time can pass between taking each part of the producer exam?
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90 days
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For how long is an insurance licence valid?
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2 years
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What are the qualifications required for a Limited lines producer licence?
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18 Years old, must be considered competent, trustworthy, and of good business reputation by the Director
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For what classes of insurance is a Limited lines producer licence available?
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Baggage, travel health, accident, or trip cancellation insurance; industrial life, accident, and health insurance; insurance issued by a company organized under the Farm Mutual Insurance Company Act of 1986; legal expense insurance; enrollment for recipients of public aid; limited healthcare plans issued by organizations with a certificate of authority under the Limited Health Service Organization Act; credit health and credit accident insurance
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Who can terminate a Limited lines producer licence?
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The licensee or the insurance company
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A limited lines producer licence will remain in effect as long as what is done?
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As long as the appointing insurance company pays the required fee January 1 of every year (unless the licence is revoked or suspended)
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What must be true for a nonresident to receive a nonresidence license?
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Their home state must submit the proper request, the individual must pay a licence fee, and their home state must reciprocate in awarding nonresidence licenses to Illinois residents.
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What must a producer do if they move to a new address?
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Inform the director within 30 days.
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For how long is a temporary licence for non-producers valid?
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Up to 180 days
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What is a temporary licence for non-producers used for?
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Surviving spouse or court-appointed representative of a licenced producer who dies or becomes disabled to allow for the sale of producer's business, recovery of the producer, and/or training & licensing of new personnel to operate the producer's business
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What are the requirements to obtain a temporary licence for producer applicants?
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Must be enrolled in training courses and in process of fulfilling pre-licencing requirements, and their appointing insurer must have submited the application form and fee to Director
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For how long is a temporary licence for producer applicants valid?
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90 days, once in the individual's life
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Within what time after a licence lapses can a producer receive a new license without having to retake an examination, and what is the penalty?
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12 months; double the unpaid renewal fee
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How much is an insurance producer's licence fee?
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$180 / 2 yrs
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How much is an nonresident producer's licence fee?
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$250 / 2 yrs
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How much is an temporary insurance producer's licence fee?
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$50
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How much is an limited line producer's licence fee?
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$50 /yr
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How many hours of study must be done for each line of insurance?
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20 hrs, of which 7.5 in classroom
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For how much must a producer be bonded?
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Either $2500 or 5% of premiums brokered in prev. year, whichever is higher. (Agents acting solely for insurer typically exempt)
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How many hours of continuing education are required to renew a licence?
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24 hrs, of which 3 hrs in classroom ethics courses
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What is the maximum amount of business a producer can have with their own friends and family?
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50%
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Where do fees paid to the Director go?
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The Insurance Producer Administration Fund
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What might cause a business licence to be suspended, revoked, or refused by the Director?
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If the business is found after a hearing that an individual licensee's violation was or should have been known by the partners or managers, and was not reported or corrected
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What are the penalties if money held in a fiduciary capacity is misappropriated?
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If less than $150, Class A Misdemeanor, up to Class 4 Felony for repeat offenses; If more than $150, Class 3 Felony
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??? For how long can an insurance company hold premiums after authorizing a producer to collect them?
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90 days
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Where must funds from applicants or policyholders go if they will be held longer than 15 days?
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A Premium Fund Trust Account (PFTA) with an IL-based financial institution
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For how long must memoranda regarding service fees be kept on file?
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7 years
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The insured must sign memoranda regarding service fees if the fees exceed what percentage of the premium?
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10%
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What must a producer convicted of a felony do, and how long do they have to do it?
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Report conviction to Director and submit copy of judgment, probation, or other court documents within 30 days of judgment
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What are some examples of unfair claims practices?
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Failing to adopt & implement reasonable standards for settling claims; not attempting to settle claims promptly & fairly when insurer's liability is reasonably clear; refusing to pay claims w/out conducting reasonable investigation based on all available information; failing to offer reasonable & accurate reason for denying a claim; delaying an investigation
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Within what amount of time must an insurer affirm or deny liability and offer payment?
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Must affirm/deny "within a reasonable time", then offer payment within 30 days of affirmation; If not solved within 45 days of report, company must provide insured and/or beneficiary with written explanation of delay
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What is rebating, and is it allowed?
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Giving prospective insurance applicant something to induce them to purchase a policy; it is a class B Misdemeanor
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What is one exception to rebating law?
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Offering a child passenger seat or discount on purchase of such system
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In addition to any fines, what punishment is applicable to an individual found guilty of rebating?
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They may not receive commission on policies sold using rebating
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What is "twisting"? What is the fine?
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Misleading representation or comparison between companies or policies to induce insured to change insurance; fine between $200 - $10,000
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What is Defamation, and what is the fine?
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Written or oral statements that are false, maliciously critical, or derogatory to financial condition of insurer, or intended to injure any person engaged in the insurance business. $200 - $10,000
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What is the Illinois Insurance Guaranty Fund?
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Association of insurers to guarantee payment of policy benefits & continuation of coverage. Member companies provide funds.
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For how much is the Illinois Insurance Guaranty Fund liable?
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Up to $500,000, except for workers' compensation claims, and no more than the face amount of the policy
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If an insurance company no longer employs a given producer, can the company cancel policies written by the producer?
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No.
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After what amount of time can a contract between a company and an independent insurance agent be terminated, and how is this done?
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1 year; by signed mutual agreement at time of termination OR by the company with 180 days written notice. (No new business can be written or bound by the agent during the 180 days)
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What are valid ground for cancellation of a policy?
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Nonpayment of premium; misrepresentation of application; violation of policy terms or conditions; fraudulent claims; auto is unfit for use.
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What is the process by which an insured can appeal a cancellation or non-renewal?
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Written request for hearing at least 20 days prior to effective date of cancellation/non-renewal; within 10 days of receipt, Director calls hearing; w/in 20 days of hearing, Director issues findings; cost of hearing assessed against losing party up to $100
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What must an insurer do with unearned premium after cancelling an auto policy, and within what time?
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Refund unearned premum on a pro-rated basis within 30 days of notice of cancellation, without using short rate table or being influenced by prior claims
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How much time is an insurer obligated to give an insured to repair defects in property so that it becomes an insurable risk?
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A reasonable period up to 90 days
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How much advance notice must be given before non-renewing a policy for nonpayment of premium?
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10 days
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How much advance notice must be given before non-renewing a policy for a reason other than nonpayment of premium?
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30 days
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An insurer may not cancel, refuse, or non-renew a policy because of a claim made in the preceding ____ months, if the loss is a result of a ____ crime.
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60 months (5 years); Hate crime
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For how long can premiums collected by agents or brokers be held before being remitted to insurer, and where are they held?
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90 days, Premium Fund Trust Account
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In order for an insured to purchase an insurance policy on a payment plan, what document must be in place?
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A premium financing agreement, dated & signed by insured, with a copy left in their possession
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What information must a premium financing agreement include?
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Total amount of premiums; Amount of down payment; policy/binder number; Finance charge in both dollars and as an annual percentage rate; number of installments with each amount expressed in dollars, due date of each installment
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What is the FAIR plan?
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Fair Access to Insurance Requirements are federally mandated programs to make property insurance available to urban property owners unable to obtain coverage through regular channels
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What four things does the FAIR plan do?
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Require immediate binding of eligible risks; make use of premium installment plans; establish reasonable service standards (as judged by Director); distribute losses & expenses of plan proportionately among members (carriers)
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Who is eligible for coverage under FAIR?
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Any urban property owner who, after 3 attempts, has been unable to get coverage through normal channels
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What is covered under a FAIR insurance plan?
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Fire and Extended coverage
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What is Mine Subsidence?
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Ground movement caused by failure at mine level of man-made underground mines
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What is excluded from Mine Subsidence insurance?
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Earthquake, landslide, volcano, collapse of drains & transit tunnels, soil erosion, root damage; damage to sidewalks, driveways, parking lots, plants, crops, agricultural drainage equipment
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What does the Mine Subsidence Insurance Fund do?
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Establish rates of coverage & amounts of reinsured loss per building; Makes coverage available, collects, sets, & monitors premiums & claims reserves
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Under what conditions can a property not be covered by subsidence insurance?
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The county has or shares a border with another county with a population of greater than 1 million; the county is excepted by the Director; the insured waives in writing their right to subsidence insurance
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What is Uninsured Motorist insurance?
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Allows named insured, resident relative, & passengers in covered auto to collect sums another driver would be legally liable to pay for Bodily Injury
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In Illinois, what is the basic UM coverage?
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25/50 (i.e. $25,000 for bodily injury or death of one person, and $50,000 for two people)
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If an insured is injured by an uninsured motorist while walking, does their auto policy cover bodily injury liability?
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Yes, if they have UM coverage (which is required)
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In Illinois what is the basic Underinsured Motorist Coverage?
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25/50, same as UM
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What is a Defensive driving discount, and who is eligible for it?
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Motorists over 55 must be offered reductions in their auto policy premiums after successfully completing an 8+ hr course such as the National Safety Council's Defensive Driving Course
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Premiums on auto insurance must offer a discount for insured autos equipped with what?
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Anti-theft mechanisms
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What is IL mandatory auto coverage?
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25/50/20 - $25,000 for injury/death per person, $50,000 total for all injury/death, $20,000 for damage to property
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What are the penalties for driving without insurance?
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$500 minimum fine; $1000 minimum if vehicle already suspended
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What are the reinstatement fees and mandatory suspension periods for lack of insurance?
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$100 & suspension until payment for first offense; $100 and 4 months' suspension for 2nd offense within 4 yrs; $200 & 6 months' suspension for false proof of insurance.
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What item inside a car must an auto insurance policy include coverage for replacement?
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A car seat which was in use by a child during an accident in which coverage is applicable
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What is the penalty for providing a fraudulent residential address?
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$1001 - $1200
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How far in advance must workers' compensation rates be submitted, and to whom?
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30 days before effective date, to the Director
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