Idaho Property & Casualty Insurance License Exam — All Questions
3 questions
Which government body licenses resident property and casualty insurance producers in Idaho?
- a.Idaho Department of Insurance✓
- b.Idaho Department of Financial Regulation
- c.Idaho Insurance Commission
- d.Idaho Transportation Department
In Idaho, insurance is regulated by the Idaho Department of Insurance, which licenses producers, reviews insurers, handles consumer complaints, and enforces the state insurance code. The motor-vehicle agency and banking regulators do not license insurance producers.
Under Idaho insurance law, a producer offering a client cash or a gift not stated in the policy as an inducement to buy is:
- a.It is required on every personal-lines sale.
- b.It is regulated only for commercial policies.
- c.It is always permitted as a marketing discount.
- d.It is a prohibited unfair trade practice (illegal rebating).✓
Rebating - giving something of value not specified in the policy to induce a sale - is a prohibited unfair trade practice under the Idaho insurance code. The state's unfair-trade-practices provisions also bar misrepresentation, false advertising, unfair discrimination between like risks, coercion, and unfair claim settlement. The Idaho Department of Insurance can fine, suspend, or revoke a license for violations.
Premiums a Idaho producer collects from clients on behalf of an insurer are treated how?
- a.They are fiduciary (trust) funds that must not be commingled with the producer's personal funds or converted.✓
- b.They belong to the state guaranty association.
- c.They become the producer's personal income once collected.
- d.They may be freely used for office expenses until remitted.
Premium funds a producer collects are held in a fiduciary capacity for the insurer and the insured. Under Idaho law they may not be commingled with personal funds or converted to personal use; misappropriation is grounds for Idaho Department of Insurance discipline and possible criminal liability.