Alaska Property & Casualty Insurance License Exam — All Questions
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2 questions
Alaska Market Conduct & Ethics
A Alaska producer offers a prospect part of the producer's own commission in cash to induce the purchase of a policy. This practice is:
- a.Prohibited as unlawful rebating under the state's unfair trade practices law✓
- b.Permitted for personal auto policies only
- c.Required to be reported but otherwise lawful
- d.Permitted if the producer discloses it to the insurer
Rebating — giving any part of the premium or commission, or other valuable consideration, to induce a purchase — is prohibited under Alaska's unfair trade practices law because it can create unfair discrimination between similar policyholders.
Alaska Market Conduct & Ethics
Premiums a Alaska producer collects from clients before remitting them to the insurer are:
- a.Automatically forfeited to the state guaranty association
- b.Held in a fiduciary capacity and must not be commingled or converted for personal use✓
- c.Exempt from any trust-accounting requirement
- d.The producer's personal income as soon as they are received
Alaska, like other states, treats collected premiums as fiduciary funds belonging to the insurer or the insured. Commingling or converting them is grounds for license discipline and can be a crime; accurate trust accounting is required.