“Solicit” is to try to sell insurance or to ask or persuade someone to apply for a specific type of insurance from a specific company.
What is the authority given to a producer to sell solicit or negotiate policies on behalf of the insurer?
A person authorized by the insurance commissioner to sell, solicit, or negotiate restricted lines insurance is known as a limited lines producer.
When advertising an insurance company must use it?
All advertisements pertaining to an insurance or its goods must include the insurer’s name. If a specific product is advertised, the insurer must provide the policy number for life products. This also applies to advertisements for health insurance that are regarded a “invitation to contract.”
What must be disclosed when a producer advertises a life insurance policy?
Advertisements must be truthful and not deceptive, either explicitly or implicitly. To avoid deceit, the form and substance of a policy advertisement will be sufficiently thorough and unambiguous. It will not have the ability or desire to deceive or mislead.
Who does a soliciting agent represent?
As a salesperson, the soliciting agent contacts potential insurance consumers. The agent is in charge of clerical duties but does not have the authority to write insurance contracts.
Is soliciting a policy considered an insurance transaction?
Agents are responsible for soliciting business that fits within the guidelines set forth by the insurer they represent. The insurer entrusts the agent with bringing in profitable business. All insurance solicitations should be conducted correctly, keeping in mind that the agent’s responsibilities do not end with the insurer; they must also include their customer and the general welfare of the public.
The attempt to persuade anybody to buy an insurance product is known as insurance solicitation.
- describing the advantages or terms of insurance coverage, such as premiums or return rates;
- comparing insurance products, giving insurance advice, or interpreting insurance plans or coverages; and/or
- Transactions that occur after the completion of an insurance contract and that arise from it.
Please read “What are the general guidelines about solicitation?” for more information (page 422 of the Florida study manual).
When an insured terminates membership in the insured group?
When your group life insurance expires or your coverage is reduced, you have the option of converting your coverage to an individual Whole Life Policy or purchasing a Single Premium Convertible One-Year Term Life Policy.
What entity may be licensed by the state to solicit or negotiate insurance contracts?
Issue: State insurance regulators have made significant progress in streamlining the producer-licensing process over the last 15 years, and technological advancements have removed many of the roadblocks. The National Association of Registered Agents and Brokers Reform Act of 2015 (also known as NARAB II) was passed as part of H.R.26, the Terrorism Risk Insurance Program Reauthorization Act of 2015, on January 12, 2015. The Act mandates the creation of a national clearinghouse to help nonresident insurance producers gain easier access to the market.
The formation of a National Association of Registered Agents and Brokers (NARAB) is an important step toward making insurance producer licensing more straightforward in the United States. The NAIC backed the establishment of a NARAB because it would provide a one-stop shop for nonresident market access while preserving critical state market regulatory responsibilities and consumer protections.
Background: In the United States, anyone who want to sell, solicit, or negotiate insurance must first obtain a “producer” license. Insurance agents and brokers are both considered producers. Producers must abide by a variety of state rules and regulations that control their operations. In the United States, there are currently over 2 million people and 236,000 company organizations licensed to provide insurance services. Producer activities are regulated by state insurance departments as part of a broader regulatory framework aimed at safeguarding insurance consumers’ interests in insurance transactions.
Each state had its own licensing standards in the past. In order to sell, solicit, or negotiate insurance in other jurisdictions, a producer licensed in one state typically required to meet the separate nonresident licensing criteria in those states. Because state licensing requirements differed, producers had to submit the same (or similar) information each time, but in different formats or with different information, depending on the requirements of each state. Producers, their linked agencies, and each state insurance department all faced substantial time and financial expenditures as a result of this.
The federal Gramm-Leach-Bliley Act of 1999 (GLBA) included a clause that required states to enact specific improvements to the insurance producer licensing procedure in order to streamline the process. If greater state producer-licensing uniformity or reciprocity was not achieved, the provision was supposed to create a new organization named the National Association of Registered Agents and Brokers (NARAB) (the federal statute required at least 29 jurisdictions to achieve either reciprocity or uniformity in nonresident producer licensing by November 2002). The passage of the GLBA triggered a nationwide effort to propose comprehensive reforms to streamline and improve the producer-licensing process.
State insurance regulators decided to pursue reciprocity for nonresident agent licensing first, followed by efforts to increase uniformity in the producer licensing procedure, after much discussion. The NAIC established the NARAB Working Group in December 1999 to assist states in implementing the GLBA standards. The NAIC adopted the Producer Licensing Model Act (#218) in February 2000, in accordance with NARAB standards, to assist states in complying with the GLBA’s reciprocity rules. As a result, the NAIC membership judged that 35 jurisdictions1 had met the GLBA standards for nonresident producer license reciprocity, and the GLBA version of NARAB was not developed.
The NAIC selected producer-licensing reform as one of its top strategic priorities in 2007, and undertook a nationwide producer-licensing evaluation to determine compliance with the GLBA’s reciprocity and uniformity provisions. In February 2008, the NAIC released the “Producer Licensing Assessment Aggregate Report of Findings” as a result of the investigation. All 35 states previously certified by the NARAB Working Group were deemed to be in conformity with the 2002 reciprocity standards, according to the report. Additional countries were also deemed to be suitable for certification, according to the report.
The NAIC membership produced reciprocity standards in 2009, which represent a more in-depth examination of certain parts of the original 2020 reciprocity standard, as well as concerns not addressed in the 2002 study. The NAIC’s NARAB (EX) Working Group proposed that 40 jurisdictions be approved for reciprocity in October 2011.
The NAIC began many steps to make producer licensing more standard well before GLBA. In 1996, the NAIC formed the Nationwide Insurance Producer Registry (NIPR) as a non-profit affiliate to build and maintain a national repository for producer-licensing information. NIPR is part of a larger endeavor to modernize and streamline the numerous producer license processes. It’s an electronic system that keeps track of state-by-state licensing changes. NIPR currently gets data from all 50 states, as well as Puerto Rico, the District of Columbia, and the United States Virgin Islands.
While great work has been made in improving uniformity and streamlining nonresident producer licensing, there is worry that the desired uniformity and reciprocity will never be fully realized because some large jurisdictions have yet to become reciprocal. The lack of these important markets has hampered the introduction of national licensing reciprocity and agents’ ability to obtain licenses in all states. This rekindled calls for NARAB, and during the last 15 years, fresh versions of the bill have been proposed in Congress at various periods.
The National Association of Registered Agents and Brokers Reform Act of 2015 (or NARAB II) was approved and signed into law by President Obama on Jan. 12, 2015, as a modified version of the national licensing plan. NARAB will serve as a clearinghouse, allowing an insurance producer licensed in his or her home state to sell, solicit, or negotiate in any other state where the producer wishes to do business, as long as the producer is licensed in his or her home state for those lines of business and pays the state’s licensing fee.
NARAB II is designed to simplify the non-resident producer licensing procedure while still allowing states to protect consumers and regulate producer behavior.
NARAB II does not establish a federal regulator; instead, it establishes NARAB, an autonomous non-profit business governed by its Board of Directors. The bill’s stated goal is to create “a mechanism through which licensing, continuing education, and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws, rules, and regulations, and while preserving the rights of a State, pertaining to” certain producer-related conduct.
A 13-member governing board would oversee the NARAB, which will include eight current or former state insurance commissioners and five insurance industry officials (subject to Presidential appointment and Senate confirmation). On January 11, 2016, then-President Barack Obama nominated four people to the NARAB board: Raymond Farmer, Director of the South Carolina Department of Insurance; Mike Rothman, Commissioner of the Minnesota Department of Commerce; and two executives from insurance brokerages. In July 2016, President Barack Obama nominated former Missouri Insurance Director John Huff for the board of directors, adding to the list. The NARAB shall establish membership standards through its Board of Directors, through which producers can gain nonresident authority to sell, solicit, or negotiate insurance.
An insurance producer must be licensed in his or her home state, have no active license suspension or revocation at the time of application, pass a criminal background check, and pay membership fees to become a member of NARAB. Once NARAB approves a qualified producer’s membership application, the producer is permitted to engage in producer activities (i.e., the sale, solicitation, and negotiation of insurance) in that jurisdiction, as long as the producer is licensed for those lines of business in his or her home state and pays the state’s licensing fee. NARAB must also set continuing education (CE) standards as a condition of membership, according to the law. NARAB membership and participation are completely elective and voluntary; producers are not forced to join.
NARAB has been given some disciplinary authority. State regulators, on the other hand, will continue to regulate marketplace conduct, oversee producer operations, investigate complaints, protect consumers, and prosecute those who break the law. The bill’s provisions take effect when the two-year term beginning on the day of NARAB’s enactment expires, or when NARAB is incorporated, whichever comes first.
1As a result of additional jurisdictions meeting the reciprocity criteria, this number was later increased to 47 jurisdictions.
Which of the following is an example of a producer be involved in an unfair trade practice of rebating?
Which of the following is an example of a producer who engages in rebating as an unfair trade practice? Telling a client that if he or she buys an insurance policy today, the first premium will be waived.
Can insurance company advertise?
“Prohibited advertising of insurance sales; necessary notification” 21.79.160 (a)A person, including a member insurer, an agent, or an affiliate of a member insurer, may not make, publish, disseminate, circulate, or place before the public, or cause to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an The association, or any other entity that does not sell or solicit insurance, hospital or medical service company coverage, or health maintenance organization coverage, is exempt from this section. (As of 07/01/18, it has been updated.)