G9: Market Regulation (Section I)

Pregunta	Respuesta
CA Finanical Information Privacy Act STATE LEVEL Opt In	CA Finanical Information Privacy Act STATE LEVEL Opt In
Cal-GLBA	refers to updated privacy regulations made to the CIC in 2003 in order to incorporate regulations required by the GLBA
Cal-GLBA affected insurance producers business in several aspects	New requirements to ensure policyholder info protected, How client files are secured, how firms market, collect, and share consumer info with 3rd parties, implementation of hybrid version of the optout and optin system
Insurer must accept or deny claim within 40 days of receiving proof of loss.	Insurer must accept or deny claim within 40 days of receiving proof of loss.
If more time is needed to process a claim, insurer must provide a written update every 30 days.	If more time is needed to process a claim, insurer must provide a written update every 30 days.
Claim must be paid within 30 days of acceptance.	Claim must be paid within 30 days of acceptance.
Any violation of the Unfair Trade Practices is a misdemeanor and is subject to penalties:	$5000 each act, $10,000 each act if willful and license can be revoked.
Cease & Desist order	issued by the ODI ordering to refrain from an activity the 1st time someone is found guilty of violating the insurance code.
Violation of Cease and Desist Order	$5000 Nonwillful or $55,000 Willful
Statute of Limitations	It is unfair to mislead a claimant regarding any statute of limitations that apply to a claim.
Insurance Information & Privacy Protection ACt	establishes that insurers must follow regarding collection, usage and disclosure of any information that is obtained about an insured for an insurance transaction.
Pretext Interview	Interview in which the party gathering information refuses to reveal authority, pretends to represent someone else, misrepresents true purpose of interview.
Insurers are NOT allowed to use Pretext Interview. Unless its for investigation	Insurers are NOT allowed to use Pretext Interview. Unless its for investigation
Adverse Underwriting Decisions, refers to any of the following actions taken by an insurer:	declining an application, terminating coverage, increasing a premium based on info NOT provided by applicant
If claimant files a claim, the Agent has 15 days to respond regarding the claim.	If claimant files a claim, the Agent has 15 days to respond regarding the claim.
Adverse Writing Decision CANNOT be based on:	previous adverse U/W decision, info gathered from support organization, inquiry regarding possible coverage for a claim.
Agent must IMMEDIATELY transmit a Notice of a claim.	Agent must IMMEDIATELY transmit a Notice of a claim.
Prior to 1999, Glass-Steagall Act of 1933 PROHIBITED banks from offering	investment services, commercial banking and insurance services
Starting in 1999	The Gramm-Leach-Bliley Act MADE IT LEGAL for Banks and Insurance Companies to consolidate.
Gramm-Leach-Bliley Act Components	Financial Privacy Rule, Safeguard Rule, Pretexting Protection
The insurer has 15 days to acknowledge receipt & begin investigation	The insurer has 15 days to acknowledge receipt & begin investigation
Gramm-Leach-Bliley ACt (GLBA) Privacy ACt FEDERAL OPT OUT	Gramm-Leach-Bliley ACt (GLBA) Privacy ACt FEDERAL OPT OUT
CA Life and Health Insurance Guarantee Association (CLHIGA)	Statutory entity to which admitted insurers must belong created to provide protection for life, annuity and health policyholders of member insurers that become insolvent.
CLHIGA benefits paid on PER LIFE BASIS (NOT PER POLICY)	CLHIGA benefits paid on PER LIFE BASIS (NOT PER POLICY)
CHLHIGA LIFE BENEFITS	Lesser of: 80% OR $300K OR $100K
CLHIGA Annuities Benefits	Lesser of 80% OR $250K
Covered by CLHIGA	Life, Annuities, Health, Disability Income, Accident and Sickness, Long Term Care
NOT COVERED by CLHIGA	Self-funded plans, Stop-loss group plans, Admin. Services Only Contract, HMOs
Insurers are NOT allowed to advertise membership in Guarantee Association	Insurers are NOT allowed to advertise membership in Guarantee Association
Fair Claims Settlement Practices	a subset of the Unfair Trade Practice. It covers several rules relating to claims handling by insurers and agents.
Claimant	any person authorized by operation of law to represent the claimant or any of the following persons properly designated claimant: insurance adjuster, public adjuster, any member of the claimants' family
1st Party Claimant	A claimant against his own insurance policy.
3rd party claimant	a claimant when he makes a claim against someone elses' insurance policy.
Notice of Legal Action	Notice of an action...commenced against the insurer with respect to a claim, against the insured received by the insurer, against the principal under a bond, and includes any arbitration proceedings
Proof of Claim	any evidence or documentations that provides any evidence of the claim and that reasonable supports the magnitude or the amount of the claimed loss.
File and Record Documentation	maintain claim data, and must be avail for all open and close files for the current year and the 4 preceding years (5 years today),
Misrepresentation: it is unfair to misrepresent pertinent facts about policies or contract provisions.	Misrepresentation: it is unfair to misrepresent pertinent facts about policies or contract provisions.
Promptness	Is its unfair to promptly: acknowledge, investigate, process, affrim or deny coverage.
Fair Settlements	it is unfair to not make fair and equitable settlements of claims.
Forcing Litigation	it is unfair to force someone to pursue litigation by offering substantially less than the amounts ultimately recovered.
Altering Applications	it is unfair to attempt to settle a claim on the basis of an application altered without notice to the insured's representative, agent or broker
Advertising Material	It is unfair to attempt to settle a claim for less than what a reasonable person would believe because of reference to advertising material accompanying or made part of the application
Specific Coverage	it is unfair to fail to inform insureds or beneficiaries, upon request, of the coverage under which a claim payment was made.
Delay	It is unfair to delay claim payment, by requiring a formal proof of loss after a preliminary claim report has already been submitted with substantially the same information
Attorney	The claimant ALWAYS has the right to hire an attorney.
CA Insurance Code (CIC)	The primary body of laws that regulates the business of insurance in California.
Insurance is primarily regulated at the state level. Insurance laws are established by State legislatures.	Insurance is primarily regulated at the state level. Insurance laws are established by State legislatures.
State Legislature introduces Bill, Legislature passes Bill, Bill approves Bill, Bill becomes Law	State Legislature introduces Bill, Legislature passes Bill, Bill approves Bill, Bill becomes Law
Policy Provision Interpretation	Interpretation of policy provisions is NOT a primary objective of Insurance Regulations, Judicial Branch renders decisions of meaning of policy provisions.
CA Insurance Commissioner (DAVE JONES)	Elected by citizens of CA, Head of Dept. of Ins (DOI), Enforces Law, serves 2 terms MAX (1year=4 years)
Shall	Shall= Mandatory
May	Optional permissive
Notice by Mail	Any notice required to be given to any person by the CIC, may be given by mail if: Notice mailed to person to be notified, Postage Prepaid, Notice addressed to residence OR principal place of business is in CA.
CA Code of Regulations (CCR)	Rules and regulations instituted by state agencies to administer law, including those adopted by the Commissioner in order to administer the CIC.
National Association of Insurance Commissioners (NAIC)	Association made up of all the state insurance commissioners.
NAIC Mission	Protect public interest, promote competitive markets,promote reliability of insurers, Support and improve state regulation of insurance.
Although highly influential, NAIC had NO authority or jurisdiction over the states.	Although highly influential, NAIC had NO authority or jurisdiction over the states.
Market Conduct Regulation refers to the laws that regulate insurers practices regarding...	Sales, Underwriting, Rate-Making and Claims Handling.
Unfair Trade Practices	Laws and regulations that define and regulate insurance trade practices that are considered to be unfair, deceptive or misleading.ILLEGAL
Misrepresentation	a misdemeanor offense
Deceptive	publicizing untrue or deceptive information about a person engaged in insurance
Boycotting	Refusal to enter into a business transaction with someone until he complies with certain requirements, conditions, or grants specific concessions.
Coercion	Forcing a person to act or think in a certain way as the result of actual or threatened physical or mental force or persuasion.
Intimidation	Inflicting fear upon a person as the result of actual or threatened bodily injury or property damage.
False Financial Statement	Making false statement of the financial condition of an insurer with the intent to deceive
Unfair Discrimination	Unfair Discrimination
Guarantee Association	Guarantee Association
Fair Discrimination	Charging different rates based on sex and life expectancy. LEGAL
Unfair Discrimination	Charging different rates to someone for a reason other than sex or life expectancy.

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G9: Market Regulation (Section I)

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