State Insurance Regulations Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 State Insurance Regulations flashcards as text
Under state insurance regulations, an insurer that engages in 'twisting' is doing which of the following?
Answer: Misrepresenting policy terms to induce a policyholder to replace coverage
Twisting is the unfair practice of using misrepresentation or incomplete comparisons to persuade a policyholder to cancel existing coverage and replace it with a new policy.
What is 'rebating' in the context of state insurance regulations?
Answer: Returning a portion of the premium to the insured as an inducement
Rebating is the prohibited practice of returning part of the premium or providing other valuable inducements to a policyholder to secure business.
Under a state's standard cancellation rules for personal auto policies, which reason typically allows mid-term cancellation without restriction?
Answer: The policy has been in force for fewer than 60 days
Most states allow insurers broader cancellation rights during an initial underwriting period (often 60 days), after which cancellation reasons become restricted.
A state regulation requires insurers to participate in an 'assigned risk plan.' What is the purpose of this plan?
Answer: To provide coverage to drivers or risks that the voluntary market refuses
Assigned risk plans (residual markets) require licensed insurers to accept their proportionate share of applicants rejected by the voluntary market.
Under state claims regulations, 'stacking' of uninsured motorist (UM) coverage refers to what practice?
Answer: Combining UM limits from multiple vehicles or policies to increase total coverage
Stacking allows an insured to combine UM limits from multiple vehicles or policies, increasing the total available coverage; many states restrict or prohibit this by statute.
Which regulatory filing requirement helps state insurance departments monitor insurer financial health on a quarterly basis?
Answer: Quarterly financial statement
Insurers must file quarterly financial statements with the state department so regulators can monitor solvency and financial trends throughout the year.
Under state excess and surplus (E&S) lines regulations, which statement is most accurate?
Answer: E&S insurers are exempt from most rate and form filing requirements but must be licensed in their home state
Surplus lines insurers are non-admitted and generally exempt from rate/form filing requirements but must be eligible in their home state; they are not covered by state guaranty funds.