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