Indiana Property & Casualty Insurance License Exam — All Questions
3 questions
Which government body licenses resident property and casualty insurance producers in Indiana?
- a.Indiana Department of Insurance✓
- b.Indiana Bureau of Motor Vehicles
- c.Indiana Department of Financial Institutions
- d.Indiana Insurance Commission
In Indiana, insurance is regulated by the Indiana 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 Indiana 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 a prohibited unfair trade practice (illegal rebating).✓
- b.It is always permitted as a marketing discount.
- c.It is required on every personal-lines sale.
- d.It is regulated only for commercial policies.
Rebating - giving something of value not specified in the policy to induce a sale - is a prohibited unfair trade practice under the Indiana 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 Indiana Department of Insurance can fine, suspend, or revoke a license for violations.
Premiums a Indiana producer collects from clients on behalf of an insurer are treated how?
- a.They become the producer's personal income once collected.
- b.They may be freely used for office expenses until remitted.
- c.They belong to the state guaranty association.
- d.They are fiduciary (trust) funds that must not be commingled with the producer's personal funds or converted.✓
Premium funds a producer collects are held in a fiduciary capacity for the insurer and the insured. Under Indiana law they may not be commingled with personal funds or converted to personal use; misappropriation is grounds for Indiana Department of Insurance discipline and possible criminal liability.