INSURANCE DIGEST - ceclass.com

1 INSURANCE DIGEST 140 Agents and Consumer Protection, 5 Agent Due Care, 13 Agent Liability, 36 INSURANCE Regulation, 50 Company Safety, 80 The Rating Services, 105 State Guaranty Funds, 138 Reinsurance, 151 Protecting Assets, 162 iPad and Tablet Users See DEMO & Links Above CONTENTS Best / objective of rating Best / rating Best / watch list52 Administrative law / what it allows43 Agent as ERISA Fiduciary41 Agent bad faith14 Agent due care / choosing company13 Agent due care / defined34 Agent illustrations / due care36 Agent liability36 Agent liability / agent status & law39 Agent liability / breach of contract42 Agent liability / contributory39 Agent liability / exist policy breach45 Agent liability / insurer claims & agent47 Agent liability / insurer failure rates36 Agent Liability / Law of Agency39 Agent liability

2 / proofs of center41 Agent liability / torts41 Agent negligence / misrepresentation41 Agent torts / proofs of center38 Agent vs. broker / issues55 Alien reporting info sys / NAIC54 Annual blank statement51 Armstrong report162 Asset protection / agents alert for162 Asset protection / beyond insurance98 Bad faith40 Breach of contract / collateral issues88C-1 surplus req / NAIC151 Ceded amount / insurer's90 Compact approach proposal5 Consumer laws / agent prohibitions42 Contributory liability42 Contributory liability & legal strategies94 Coverage disputes & attorneys10 Deceptive & Unfair Trade Practice Law5 Defamation39 Dual agency / agent liability128 Duff & Phelps131 Duff & Phelps / critical rating130 Duff & Phelps / rating

3 Methodology97 Duty to defend43 ERISA fiduciary / agents as99 Excess INSURANCE claims153 Facultative reinsurance agreement81 Failure rate of insurers / factors6 False financial statements171 Fraudulent conveyance / asset transfers87 Future operational changes / co safety21 Health INSURANCE / agent due care8 Health policy benefits & insurers7 HIV testing & insurance28 Homeowners INSURANCE / agent due care81 INSURANCE company failure rate105 INSURANCE rating services50 INSURANCE regulation / history50 INSURANCE regulation / why important56 INSURANCE Regulatory Info Sys (IRIS)45 Insurer claims against agents47 Insurer failure / agent liability rules86 Insurer regulation / future120 Insurer Z-Score164 Joint tenancy81 Life company problems18 Life INSURANCE analysis169 Limited Liability Corporations (LLC)

4 9 Liquidation of insurers98 Lost policies51 Merrit Committee158 Model Act for Credit Reinsurance92 Model Investment Laws / purpose of127 Moody's / rating methodology122 Moody's / rating process125 Moody's Investor Service55 NAIC / Alien Reporting Info Sys54 NAIC / annual blank statement60 NAIC / approach for solvency54 NAIC / created for56 NAIC / non-admitted info office55 NAIC / what they do92 National catastrophe fund / proposed168 Partnerships50 Paul vs. Virginia112 Performance modifier / Best40 Policy ambiguity / rule of15 Policy replacement155 Premium distribution / reinsurance37 Producer's status / agency relationship39 Proofs of center / agent liability84 Propery casualty troubles162 Protecting assets31 Quotes & illustrations8 Rate discrimination92 Rating service charges & recent events105 Rating services6 Rebates & insurance151 Reinsurance151 Reinsurance / defined153 Reinsurance / excess of loss153 Reinsurance / facultative agreement156 Reinsurance / IBNR reserves151 Reinsurance / purpose of 153 Reinsurance limitations154 Reinsurance marketing154

5 Reinsurance vs INSURANCE / premiums151 Retrocession88 risked based capital / asset default18 risked based capital / due care test88 risked based capital models / NAIC89 Safe-T56 Securities Valuation Office / NAIC60 Solvency analysis / NAIC approach to114 Standard & Poor's117 Standard & Poor's / credit watch117 Standard & Poor's / rating methodology116 Standard & Poor's / ratings voluntary?116 Standard & Poor's / role compared18 State admission / agent due care92 State catastrophe funds144 State guaranbty funds / how run138 State guaranty funds148 State guaranty funds / critics of142 State guaranty funds / exclusions141 State guaranty funds / how started138 State guaranty funds / purpose of149 State guaranty funds / supporters of166 Tenancy in common36 The Law of Agency153 Treaty reinsurance95 Trigger of coverage81 Trouble with life companies84 Trouble with property / casualty co's92 Two-tiered fed/state regulation proposed47 Unfair trade & practice law133 Weiss Research134 Weiss Research /

6 Basis of analysis134 Weiss Research / ratings involuntary?120Z-Score5 AGENTS & CONSUMER PROTECTION by Affordable INSURANCE EducatorsCopyright 1996-1998 INSURANCE rules and regulations vary from state to state. There are, however, widely accepted codes of behaviorexpected from licensed agents that fall under the category of consumer protection. Agents would be wise tomitigate the monetary and legal fallout that can result from consumer violations by practicing due care andcomplying with specific INSURANCE code sections addressing consumer protection, as well as federal and statemandated laws under the title "deceptive or unfair trade practices".

7 UNFAIR COMPETITION & UNFAIR INSURANCE PRACTICES BYAGENTSA gents should not participate in any unfair method of competition or unfair or deceptive act or practice in thebusiness of INSURANCE . Violators are typically subject to a hearing, usually before the State Department ofInsurance, to show cause why a cease and desist order should not be made by the appropriate regulatory agencyor board. If, after a hearing, it is determined that the agent's actions violate the rules of unfair competition andpractices, a formal cease and desist order may be served. Violating such a cease and desist order is typicallysubject to various dollar penalties and administrative penalties such as injunctions, loss or suspension of license,and severe civil penalties such as high dollar fines, damage awards, and court fees to the injured parties.

8 Areasof specific importance include: Misrepresentation & False Advertising of Policy ContractsMaking, issuing, circulating or causing to be made any estimate, illustration, circular or statementmisrepresenting the terms of any policy issued or to be issued is a violation of most INSURANCE laws. Similarinfractions occur in the misrepresenting of benefits or advantages promised or the dividends or share of thesurplus to be received. Likewise, the misrepresentation as to the financial condition of any insurer, the legalreserve system upon which any insurer operates, inappropriate use of any name or title of a policy or class ofpolicies for the purpose of inducing or tending to induce a policy holder to lapse, forfeit, or surrender hisinsurance is not permitted.

9 False Information & AdvertisingMost state INSURANCE laws do not permit a licensed agent to engage in the making, publishing, disseminating,circulating or placing before the public, directly or indirectly, any form of notice, circular, pamphlet, letter orposter, or over any radio or television station an advertisement, announcement or statement containing anyassertion or representation concerning the business of INSURANCE or how another person conducts insurancebusiness which is untrue, deceptive or misleading. DefamationDefamation violations of INSURANCE law occur where an agent is involved in making, publishing, disseminating,directly or indirectly, any oral or written statement, pamphlet, circular, article or literature which is false ormaliciously critical of or derogatory to the financial condition of any insurer or which is designed to injure anyperson engaged in the business of Boycott, Coercion & IntimidationMost states consider it unlawful for licensed agents to enter into any agreement or commit any act of boycott.

10 Coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, thebusiness of INSURANCE . False Financial StatementsRestrictions are very clear that an agent violates the law when filing with any supervisor, public official ormaking, publishing, disseminating, circulating or delivering to any person, directly, or indirectly, any falsestatement of financial condition of an insurer with intent to deceive. This also includes making any false entryin any book, report or statement of any insurer with intent to deceive any agent, examiner or public officiallawfully appointed to examine an insurer's condition or any of its affairs.