Alabama Insurance EXAM Prep CH15 The Commissioner can extend the time you have to complete your continuing education requirements for up to how long 90 days 60 days 30 days A B C D A B C 120 days verified answer A The Commissioner may extend an agents C E requirements for up to 90 days if for a reason deemed appropriate If the Commissioner denies the request the agent has 30 days to get compliant If an insurance company accepts business from a person that is not currently appointed and who is not licensed for that line of business which of the following applies Insurer may be fined up to 10 000 Insurer may be fined up to 3 times the premium received Insurer may be subject to a fine up to 10 000 imprisonment or both Insurer may be fined up to 3 times the commission earned verified answer B An insurance company may be fined up to 3 times the premium received if accepting any business from a person who is not appointed and licensed for that line of insurance A 10 000 fine may only be applied when an agent has violated 1 or more of the grounds for suspension or revocation To confer with or offer advice to a policy buyer about a policy s benefits terms or conditions verified answer Negotiate This definition applies only if the person doing the negotiating sells insurance When a producer agent misleads a person when comparing policies in order to induce the client to lapse forfeit surrender exchange or convert an existing policy the producer agent is engaging in an unfair trade practice known as Coercion verified answer B Twisting is Policy Replacement It usually includes some coercion tactics and pressure to exchange a policy in order to purchase a new policy It is usually not in the insureds best interest Replacement is not illegal but it is not recommended and is highly scrutinized If replacement is done to the insureds detriment the agent would be guilty of Twisting D A B C D Rebating Twisting Intimidation True or False The Commissioner may revoke a producer s or insurer s license for failing to pay the fine verified answer True True or False A person is not allowed to advertise or give free insurance to induce the purchase of property Free insurance includes insurance for which the charge is less than the cost verified answer True Know the following Unfair Trade Practices Prohibited Activities Twisting Defamation Rebating Coercion verified answer May be oral or written Must include all usual policy terms and any applicable endorsements Is valid for up to 90 days until the policy is issued and may with the Commissioner s written approval be extended or renewed Is commonly known as a Temporary Insuring Agreement or a Temporary Insurance Policy Does not guarantee that the policy will be issued and may be cancelled at anytime by the insurance company if the insured is found to be an excessive risk verified answer Binder Which statement concerning a binder is true A A binder is valid for a maximum of 60 days A binder provides only partial coverage of a risk A binder is valid for a maximum of 90 days A binder must be issued in writing to be valid verified answer C A binder is valid for up to 90 days or until the policy is issued whichever is shorter The binder is temporarily the policy until it is issued and the policy effective date is the same as the effective date of the binder It does not guarantee the issue of the policy and may be given orally or in writing A person who for compensation investigates and negotiates claim settlements on the insurer s behalf This term does not include an insurer s salaried employee or an attorney licensed in Alabama verified answer Adjuster To be licensed as an adjuster an applicant must be years old when making application B C D A 20 B 21 C 18 D 19 verified answer D To be a licensed adjuster you must be at least 19 years old when making application True or False To be qualified for an adjuster license an individual must be At least 19 years of age An Alabama resident or a resident of a state that allows Alabama resident adjusters to act as adjusters in that state An attorney a licensed adjuster s full time salaried employee or an individual with claims handling experience education or training Trustworthy and of good character verified answer All true The Commissioner may suspend an adjuster license for up to A 2 years B 3 months C 12 months 1 year D 6 months verified answer C 12 months 1 year If certain insurance coverage cannot be procured from authorized insurers such coverage a k a surplus lines may be procured from unauthorized insurers One of the following requirements must be met The insurance must be procured through a licensed surplus line broker who first makes a diligent effort to get the insurance from authorized insurers The insurance may not be procured solely to secure a lower premium Insurance must be for an industrial insured an insured having at least 25 employees one of whom is a full time insurance consultant manager or buyer and annually paying premiums on all risks except Workers Compensation and group insurance of at least 25 000 verified answer All true A surplus line broker must file a report with the Commissioner within 30 days after the effective date of any surplus line insurance The Commissioner may require the report to be in the form of an affidavit A 10 days B 60 days C 90 days A 50 000 B 30 000 D 30 days verified answer D 30 days True or False A surplus line contract must Be initialed by or bear the name and license number of the procuring broker Bear a stamp stating This contract is registered and delivered as a surplus line coverage under the Alabama Surplus Line Insurance Law verified answer True Any resident property licensee the Commissioner deems competent by virtue of experience may be licensed as a surplus line broker for transacting surplus lines property insurance Such a licensee must apply to the Commissioner on designated forms pay the required license fee and file and maintain a bond of at least C 100 000 D 10 000 verified answer A 50 000 The following are the key points regarding what is required of a Surplus Lines Broker Must maintain a bond in the amount of 50 000 Must file a report with the Commissioner within 30 days of the effective date of surplus lines insurance A contract must be initialed by or have the producer s name and license number A contract must bear a stamp stating the contract is a Surplus Line Coverage under Alabama Law verified answer TEST TIPS Surplus Line Insurance contracts