Laws, Regulations & Licensing Compliance Flashcards
7 cards from real CALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Laws, Regulations & Licensing Compliance flashcards as text
Under most state insurance codes, a public adjuster must disclose their fee arrangement to the insured within how many days of signing a contract?
Answer: 3 business days
Most states require public adjusters to disclose fee arrangements within 3 business days of executing the contract with the insured.
Which federal law primarily governs the privacy of non-public personal financial information held by insurance companies?
Answer: Gramm-Leach-Bliley Act
The Gramm-Leach-Bliley Act (GLBA) requires insurers to protect consumers' non-public personal financial information and provide privacy notices.
A surplus lines insurer may be used when the required coverage cannot be obtained from how many authorized insurers under typical state law?
Answer: At least three
Most states require a diligent search showing that at least three authorized insurers have declined the risk before placing coverage in the surplus lines market.
Which entity primarily enforces the Unfair Claims Settlement Practices Act at the state level?
Answer: The state Department of Insurance
The state Department of Insurance enforces the Unfair Claims Settlement Practices Act, which is adopted by each state individually.
Under the principle of indemnity, an insured who has collected benefits from two insurers for the same loss has likely violated which doctrine?
Answer: Contribution
The contribution doctrine prevents an insured from collecting more than the actual loss by requiring insurers covering the same risk to share payments proportionally.
A claims adjuster who settles a claim without authority from the insurer may expose the insurer to liability under which legal theory?
Answer: Apparent authority
Apparent authority arises when the insurer's conduct leads a third party to reasonably believe the adjuster had authority to settle, binding the insurer.
Which state regulatory action is triggered when an insurer is found to have engaged in a systematic pattern of unfair claims practices?
Answer: Market conduct examination
A market conduct examination is the regulatory tool used to investigate and address systematic patterns of unfair claims or business practices by insurers.