Insurance Licensing and Regulation Flashcards

Which of the following is considered an unfair trade practice under DC insurance law?

Answer: Misrepresenting the terms of a policy to induce a sale

Misrepresentation of policy terms is a classic unfair trade practice under DC's Unfair Trade Practices Act.

A DC insurance producer who sells a policy to a client and then keeps part of the premium instead of remitting it to the insurer has committed:

Answer: Embezzlement / misappropriation of funds

Keeping premium funds rather than remitting them to the insurer constitutes embezzlement or misappropriation—a serious insurance crime.

What is 'twisting' in DC insurance law?

Answer: Inducing a policyholder to drop an existing policy by misrepresenting the new policy's benefits

Twisting involves inducing a policyholders to replace an existing policy through misrepresentation or incomplete comparisons.

Under DC law, an insurance producer who recommends the replacement of a life insurance policy must provide which document to the applicant?

Answer: Replacement notice and comparison illustration

DC replacement regulations require the producer to provide the applicant with a replacement notice and a comparison of the existing and proposed policies.

Which of the following individuals is NOT required to hold a DC insurance producer license?

Answer: A salaried employee of an insurer who only takes applications for the employer's policies

Salaried employees of an insurer who solicit insurance solely on behalf of that employer may qualify for an exemption from licensure requirements in some states, including DC.

What is the required free-look period for life insurance policies sold in DC?

Answer: 10 days

DC requires a minimum 10-day free-look period for life insurance policies, during which the policyholder may return the policy for a full refund.