Shared Flashcard Set

Details

P&C pre-license
property and casualty
84
Insurance
10/11/2012

Additional Insurance Flashcards

 


 

Cards

Term
What is required limits of liability of Michigan?
Definition

20/40/10

20 bi per person/40 bi per accident/ PD per accident

Term

Commercial -

What is the expediting Expense limit paid out on a loss?

Definition

25,000

 

OR

 

25K

Term
HO3 - What is the limit paid out for grave markers?
Definition
5,000
Term
What is paid with no consideration of fault from either the employee or employer?
Definition
Workers Compensation
Term
What amount will PIP pay for funeral expense?
Definition
1,750 and 5,000
Term
What type of liability - maintains your current coverage's of bodily injury and property damage when out of state or in Canada? (Mexico is excluded unless endorsed)
Definition
Residual Liability
Term
What endorsement can be added to the Motor Carrier Act of 1980 to add environmental restoration?
Definition
MCS-90
Term
Can excess hours of CE credits be carried over to the next two year term?
Definition
NO
Term
The regulation of aftermarket parts require that replacements are atleast equal in kind and quality or new parts from the original manufacturer?
Definition
Replacement parts must be equal in kind and quality NOT new parts from the original manufacturer
Term
What benefits does workers compensation law provide?
Definition
Death benefits, medical benefits and rehabilitation benefits
Term
A consumer must be advised within how many days of the date the Investigation Consumer report was requested?
Definition
3 days
Term
Within how many years will a claim be valid after the date the employee or dependent believes that the death was occuptional disease?
Definition
2 years
Term
The requirement that following loss, there is visible signs of forced entry or exit from the premises?
Definition
Burgulary
Term
What is not covered in medical expense that includes bodily injury only?
Definition
Counseling is not covered
Term

Loss must be due to chance

loss must be definite and measurable

loss must be predictable

Loss CANNOT be catastrophic

Loss exposure to be insured must be large

Insurance must NOT be mandatory

 

These are the elements of what type of risk?

Definition
Insurable Risk
Term
What is adverse selection?
Definition
Insuring a risks that are more likely to have a loss.
Term
Applicants for resident license, in Michigan must successfully complete a pre-licensing education course of how many hours for property and casualty?
Definition
40 hours
Term
Applicants must file a certificate of completion of the pre-licensing course and must show that it did not take longer than how many months before the commissioner received the application?
Definition
6 months
Term

1. audit or abstract insurance policies

2.Counsel regarding benefits coverage, terms, advantages and disadvantages of policy annuity

3. advertise and solicit business as a consultant

These are the duties of what?

Definition
Counselor
Term

1. Negotiate or bind re-insurance contracts

2. Manage all or part of the insurance business

3. Produce and underwrite an amount of gross direct written premium not less than 5% of the policyholder surplus

These are the duties of what?

Definition
Managing General Agent (must be licensed and appointed by the company)?
Term
An agent must file an address change within how many days with the commissioner?
Definition
30 days
Term
A producer must report any actions taken against them within how many days to the commissioner?
Definition
30 days
Term
A producer must complete how many CE credits within 2 years?
Definition
24 credits
Term
How many of the 24 CE credits must be in ethics?
Definition
3 credits
Term
How many of the 24 CE credits must be related to state laws?
Definition
6 credits
Term
A temporary license can be given to the spouse of a deceased or disabled agent or a designee if the producer is entering active duty military services and is valid for a maximum how many days?
Definition
180 days
Term
A cease and desist order is issued by the commissioner for violation of?
Definition
Insurance Code
Term
What are the fines for knowingly violating a cease and desist order?
Definition

Not more than 10,000 for each violation not to exceed 50,000 and suspension and revocation of license.

Violations are turned over to the attorney general for procesecution.

Term
What is the penalty and fine for misrepresentating terms of a policy?
Definition
Not more than 1,000 for each violation
Term
What is the penalty and fine for inducing a policy holder to lapse, forefeit, or surrender his etc.?
Definition
Not more than 1,000 for each violation
Term
What are the penalty and fine for rebating or illegal inducement to purchase insurance?
Definition
100 per violations or imprisonment
Term
What is the purpose of the Fair Credit Reporting Act?
Definition
The purpose to protect consumers from the circulation of inaccurate or obsolete information
Term
What does Investigative consumer reports add to just regular consumer report?
Definition
Investigative consumer reports add further investigations, interviews of associates, friends or neighbors
Term
Investigative Consumer Report - How many days does a reporting agency have to respond to a consumers right to request more information?
Definition
5 days
Term
What is the possible penalty for willful criminal compliance carry?
Definition
Up to 2,500 criminal compliance
Term
What is the name of the act? That states:  "Individuals who have ever been convicted on a felony charge involving dishonesty or breach of trust are prohibited from the insurance business in the interstate commerce WITHOUT written consent of an insurance department office who authorized to do it.
Definition
The Violent Control Act
Term
A commissioner can issue a what order to prohibit an agent from continuing to committ unlawful acts and may revoke, suspend, or fine the offender depending on the nature of the offense?
Definition
A cease and desist order
Term
An admitted or non admitted are insurers have been approved by the commissioner and issued a certificate of authority?
Definition
Admitted or authorized
Term
What limit of capital assets must a life insurance company and domestic or foreign stock mutual must have?
Definition
They both must have 200,000 capital assets
Term
What limit of capital assets must a life and disability must have?
Definition
300,000 capital assets
Term
Rates must be submitted to the commissioner before they into effect.  Within 30 days the commissioner will disapprove a form that does not conform.  A commissioner can also withdraw an approval but must provide what?
Definition
The Commissioner must provide in writing the specific reason and effective date
Term
Forms and exceptions must be approved by the commissioner before being issued.  What point font must it not be less than? and what readability score?
Definition

The font must not be less than 8 point font.

It must have a readability score of at least 45

Term
Forms and exceptions - how many days does the commissioner have to approve or disapprove?
Definition
30 days
Term
Unfair claims settlement practices - Insurers must let claimants know what constitutes proof of loss within 30 days.  How many days does must benefits be paid within how days from receiving satisfactory proof of loss?
Definition
60 days
Term
Penalties for unfair methods of competition - commissioner may issue a statement of charges and notice of hearing which must be held withing how many days?
Definition
15 days of notice
Term
What is the possible penalty of violation of the unfair methods of competition?
Definition
500 for each violation not to exceed 5,000
Term
What is the possible penalty of violation of the unfair methods of competition willfully?
Definition
2,500 for each violation not to exceed 25,000 for all violations within a 6 month period
Term
What perils does Standard Fire Policy insure against?
Definition

Fire, Lighting, and removal

 

SFP Cancellation by INSURED is on pro rata basis

Term

How many days does an appointing insurer have to notify the commissioner? 

The commissioner will verify within how many days 30

If the commissioner determines the producer ineligible they must notify the insurer within 5 days. 

Definition
The insurer has 15 days to notify the commissioner of appointing an producer.
Term
A company must notify the Commissioner of the termination of a producer within how days?
Definition
30 days
Term
What is the punishment upons conviction of Insurance fraud?
Definition
A fine up to 1,000 or imprisonment up to 3 months
Term
What association in Michigan is the state's way of paying covered claims for insolvent insurers or companies that have become financially impaired?  All insurers transacting P&C insurance are required to be members of the association.  This does not apply to life and health lines.
Definition

Michigan Property and Casualty Guaranty Association

 

Each member of the association pays an assessment into the fund equal to 1% of the insurers direct written premium and each member is given 30 days notice of how much and the dues are payable.

Term

1. Must be from insurance policies issued or payable to Michigan residents.

2. Are unpaid by an insolvent authorized insurer.

3. Are presented to the Association before the fixed filing date.

4. Existed before or were incurred within 30 days of the appointment of the receiver.

5. Arise out of insurance policies OTHER THAN life or health insurance.

6. Arise out of insurance policies issued ON or BEFORE the last date the insurer was a member insurer

 

NOT COVERED CLAIMS:

1. Claims involving refund of unearned premium OVER $500

2. A refund for an amount LESS than $50 for unearned premium

3. Obligation incurred AFTER the expiration date of the policy, after the policy has been replaced or cancelled.

4. Obligation arising out of fraud.

 

 

Definition

The claims covered and not covered by Michigan Property and Casualty Guaranty Association?

 

Term

Michigan Property and Casualty Guaranty Assoc -

will continue coverage under each policy until the earliest of 30 days AFTER the receiver is appointed OR the policy has expired, been replaced or cancelled.

 

How many days does the association have to mail written notice to the last known insured address?

Definition
10 Days
Term

1. Coverage for ACV of property at the time of loss

2. Coverage for loss by fire and lightning and pro - rata coverage for 5 days for insured property removed to another location to protect it from damage.

3. Language stating that the policy may be VOID upon basis of misrepresentation, fraud or concealment.

4. List of property and perils NOT covered.

5. Language that the policy may be cancelled at ANY time by the insured.

6. Language that if the insured and insurer fail to agree on the ACV or amount of loss then either party may request that ACV be set by appraisal

These must be contained in what type of policy?

Definition
Standard Fire Policy
Term
Standard Fire Policies can be cancelled at anytime by the insured.  But if cancelled by the insurer they must give no less than how many days notice before effective date of cancellation?
Definition
10 days
Term
If there is a disagreement on the value of loss where each party selects a appraiser, who then selects an umpire who will reach an agreement if needed.  What is this procedure called?
Definition
Appraisal
Term
A policy may be voided if what three things are found?
Definition
Concealment, misrepresentation or fraud
Term
What term means any act that is certified by the secretary of the treasury in concurrence with the secretary of state, and the attorney general of the United States?
Definition
"acts of terrorism"
Term

Acts of terrorism must be violent or dangerous to human life, must occur with the US to an air carrier as defined in the US and insured under US laws, the act must have been committed by someone as part of an effort to coerce the US civilian populace to influence US policy or affect the conduct of the US government by coercion. 

 

An act of terrorism must produce a property and casualty insurance over what amount?

Definition
5 million
Term
Terrorism insurance act covers commercial property and casualty insurance, workers compensation and surety.  After insurers pay 5 million for which they are responsible for what percentage of the remaining loss is the insurer responsible for until the aggregate amount 100 billion in losses are reached and insurer will not be liable for further loss payments?
Definition
15%
Term

What act uses the following factors for rating home insurance?

1. amount and type of coverage

2. Security and safety devices

3. repairable structual defects

4. fire protection class

5. construction of structure

6. insured's loss experience

7. use of smoking materials

8. distance to the nearest fire hydrant

9. availability of law enforcement

Definition
Essential Insurance Act
Term
The Essential Insurance Act states that notice of termination mailed or delivered within the first 55 days days after the initial issuance of a policy needs to be made effective no sooner than how many days after the mailing?
Definition
20 days
Term
An insurer whose surplus as of 12/31/1979 was shown and filed under what amount is exempt from Essential Insurance Act?
Definition
4 million
Term
Per the Essential Insurance Act - If a person has been convicted of Arson, conspiracy to commit arson, malicious destruction of property or violations regarding the use of explosives in how many years? to not be eligible for home insurance in Michigan
Definition

5 years

 

Also not eligible:

1. have property that is used for illegal or particular hazardous purposes

2. refuse to purchase 80% of replacement cost (when applying for replacement cost)

3. refuse to purchase 100% of market cost

4. policies that were cancelled for non payment in the last two years.

5. insure dwelling less than 15k for a repair cost policy or 35k for replacement cost

6. have not paid real property taxes for 2 years

7. wish to insure a dwelling that does not meet the commissioners minimum standards of insurability

Term
Definition
Term

Per Essential Insurance Act - Underwriting guidelines used by the insurer must be in writing and filed with who?

 

All underwriting guidelines must apply throughout the state.

Definition
The commissioner
Term
What are the two rating types?
Definition
Class Rating and Individual Rating
Term
What are the four types of Individual Rating?
Definition

1. Judgement Rating - (ocean marine) small groups of similars unusual items

2. Experience Rating - insured's past loss history

3. Schedule Rating - schedule of charges and credits applied on the base rate

4. Retrospective Rating - Pay up front premium deposit and then pay adjusted premium at the end of the policy.

Term
The components of loss reserves, loss adjustment expense, operating expenses and profit are used to factor what?
Definition
These factors are used to determine rates
Term
What DP form includes seperate structures in the Coverage A limit (Not paid in addition)?
Definition
DP1
Term

The following are the elements of what?

1. legal duty

2. Standard of care

3. Proximate cause - an act or event that is the immediate or actual cause of loss

4. actual loss or damage

Definition
Elements of a negligent act
Term
What are the three types of hazard?
Definition

Physical

Moral -misinformation on application

Morale - carelessness

Term
For newly acquired vehicles (collision and OTC) need to be added within how many days?
Definition

If existing vehicle has OTC and collision 14 days

Existing coverage does not have OTC and collision 4 days

A $500 deductible applies to loss before insured is notified.

Term
ho3 - Renting or owned boats need to fit what limits to qualify for physical damage of 1,500, and endorse for liability for bodily injury and property damage?
Definition
Inboard up to 50 hp, outboard up to 25 hp and sailboat/boat under 26 feet long
Term
PAP - what type of payments cover legal obligations on behalf of the insured? This includes bonds limit of 250, interest on judgements (after judgement has been entered, $200 per day for loss of earnings), other reasonable incurred at the request of the insurer.  These payments are in addition to the policy limit.
Definition
Supplemental payments
Term
HO - h02, h03, h05 - Covers dwelling A and Other Structures B at replacement cost and covers personal property on what loss valuation?
Definition
ACV
Term
PAP - What pays all necessary medical and funeral expeses to the insured and/or passengers?
Definition
Medical Payments
Term
What is not covered under Uninsured Motorist Coverage?
Definition
Punitive and exemplary damages
Term
HO - what is the personal property for money?
Definition
$200
Term
HO - what is the personal property limit for securities, watercraft, trailers, jewelry theft, electronics while in vehicle, business electronics?
Definition
$1,500
Term
HO - What is the personal property limit for theft of firearms, theft of gold/pewter ware, and property used for business on the premise?
Definition
$2,500
Term
HO - What is the limit for Fire Department service charge?
Definition
$500
Term

Office buildings not exceeding

 

Definition
these are businesses that are under the BOP?