What type of policy would offer a 40 year old the quickest accumulation of cash value? Board members must refrain from personal or professional dealings that might put their own self-interest or that of another person or business above the interest of the company. Insurance- Insurance is the mechanism whereby an insured is protected against loss by a specified future contingency or peril in return for the present payment of premium. A Health Maintenance Organization (HMO) may issue an Evidence of Coverage form after it has been approved by the Commissioner of Insurance. All of these may charge fees for insurance advice EXCEPT legal reserve agents. Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas? Company's mortality table. What values of these unrealized gains and unrealized losses, if any, are reported in its 2008 income statement? Discriminatory. With whom may an agent legally share commissions? Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice? Library of Congress. Two opposing interests can at best be balanced; however, balancing interests is not the same as serving the best interest of a client. Also, hiring a financial or investment expert does not relieve the committee members of all of their duties. An independent agent may have contracts with which of the following? In response to the need for guidance for investment fiduciaries, the nonprofit Foundation for Fiduciary Studies was established to define the following prudent investment practices: The process begins with fiduciaries educating themselves on the laws and rules that will apply to their situations. The premium has not been paid by the insured. Decedent is a legal term used by tax accountants, lawyers, and estate planners to refer to a deceased person. Turning down a claim without providing the basis of denial. Basic Responsibilities. As is the case with most E&O loss exposures, however, an agent can get sued for failing to explain or offer coverages, even if there is no legal duty to do so based on previous court decisions. An insurance company that terminates an agent's appointment must send notice of the termination to the Texas Department of Insurance. An enrollee of a Health Maintenance Organization (HMO) may be cancelled or non-renewed for failure to pay for coverage. All of the following statements about health coverage for newborns are correct EXCEPT. While it may seem as if an investment fiduciary would be a financial professional (money manager, banker, and so on), an investment fiduciary is actually any person who has the legal responsibility for managing somebody elses money. While the term suitability was the standard for transactional accounts or brokerage accounts, the U.S. Department of Labor Fiduciary Rule proposed to toughen things up for brokers. Additionally, the advisor needs to place trades under a best execution standard, meaning that they must strive to trade securities with the best combination of low cost and efficient execution. Under the Texas insurance code, an insurance company must pay death benefits for suicide if the policy has been in force for a MINIMUM of. The criteria against which actions are measured, therefore, are subject to change over time, and the prudent person against whom one is measured is intended to be a peer. A Health Maintenance Organization (HMO) may issue an Evidence of Coverage form after it has been approved by the. Attorneys are held liable for breaches of their fiduciary duties by the client and are accountable to the court in which that client is represented when a breach occurs. Stapleton Manufacturing intends to increase capacity through the addition of new equipment. T has an annuity that guarantees an income payment for the rest of his life. ", If an insured's age was misstated on a life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be, an amount that the premiums paid would have purchased at the current age, When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n). Working with a fiduciary means that you can be assured that a financial professional will always be putting your interests first, and not their own. If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in Texas, which of the following would be liable? this employee's group life contract can be, converted to an individual permanent policy at an individual rate, In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and, How long can a cash surrender value payment be deferred by the insurance company under the nonforfeiture law, Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine, probability of making timely premium payments, In Texas an individual life insurance policy is required to have a grace period of, A Nonforfeiture clause gives the policy owner, guaranteed values even if the policy has lapsed, An individual working part time has an annual income of $25,000. 2 If a fiduciary relationship is . All of the following are defined as doing insurance business EXCEPT, Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT, transportation to and from an outpatient facility. The final step can be the most time-consuming and the most neglected part of the process. 2 years, under the Texas insurance code, an insurance company must pay death benefits for suicide if the policy has been in force for a MINIMUM of two years. countymunicipalityspecialdistrictzoningmarketvaluerealpropertyinfrastructurerevitalizationgentrificationmetropolitangovernment. Importantly, fiduciaries are required to prevent a conflict of interest between the fiduciary and the principal. A trustee is a person or firm that holds or administers property or assets for the benefit of a third party. Any legal resident except those incarcerated. Find the indicated quantities for y=f(x)=3x2y = f (x) = 3x^2y=f(x)=3x2. At the same time, fiduciaries are present across many other business relationships, such as corporate board members and shareholders. which of these is not an example of doing insurance business? The following common legal theories for errors and omissions claims illustrate the degree of care recognized in common law: Does an agent have a duty to explain policy terms and coverages to customers? C) Completing pre-licensing training. If failure to use care results in injury or damage to the insured, the agent can be held liable for the injury or damage. Learn more about RIAs and whether you need one. It also means that the advisor must do their best to make sure investment advice is made using accurate and complete informationbasically, that the analysis is thorough and as accurate as possible. Which of the following is true about an insurance agency? A minimum number of employees is required to participate, during a sales presentation for a participating life insurance policy an agent must, make a prospect understand that dividends are NOT guaranteed, An employee of 20 years recently retired at age 59 1/2. How does a typical Variable Life Policy investment account grow? Insurance agents and brokers may owe a fiduciary duty to both to the companies they represent and to the insurance . countyrealpropertymunicipalityinfrastructurespecialdistrictrevitalizationzoninggentrificationmarketvaluemetropolitangovernment\begin{array}{ll}\text { county } & \text { real property } \\ \text { municipality } & \text { infrastructure } \\ \text { special district } & \text { revitalization } \\ \text { zoning } & \text { gentrification } \\ \text { market value } & \text { metropolitan government }\end{array} Any legal resident, except those incarcerated, can purchase a plan through the Marketplace. B) Underwriters. Under a fiduciary standard, an investment advisor would be strictly prohibited from buying a mutual fund or other investment for a client because it would garner the broker a higher fee or commission than an option that would cost the client lessor yield more for the client. A Medicare Supplement policy may be cancelled for which of the following reasons? an implied contract to procure insurance for the insured. Client Relationships. An insurer is NOT required to provide information on fraudulent claims if requested by. Legislated tort reforms have helped stem the tide, but the overall trend continues upward. send termination notice to the Texas Department of Insurance. It is his duty to keep his clients fully informed so that they can remain safely insured at all times." If the board is voting to elect a new chief executive officer (CEO), for example, the decision should not be made based solely on the boards knowledge or opinion of one possible candidate; it is the boards responsibility to investigate all viable applicants to ensure that the best person for the job is chosen. A newly licensed General Lines agent must complete a MINIMUM of 24 hours of continuing education within 24 months after initial licensure. Delay in forwarding information. The term fiduciary is widely used in the context of financial advising and brokerage relationships, whereby the client's best interests must be put first and foremost. A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of coercion. At an expected volume of 8,300 units, which alternative should be chosen? $25,000. For example, the advisor cannot buy securities for their account prior to buying them for a client and is prohibited from making trades that may result in higher commissions for the advisor or their investment firm. Without this special relationship, however, the courts have fairly consistently refused to blame the agent for a policyholder's failure to read and understand his or her policy, or for not providing coverage for every conceivable loss. The possibility of a trustee/agent who is not optimally performing in the beneficiarys best interests is referred to as fiduciary risk. This does not necessarily mean that the trustee is using the beneficiarys resources for their own benefit; this could be the risk that the trustee is not achieving the best value for the beneficiary. A policy owner may generate taxable income from which of the following dividend options? Some examples of fiduciary relationships are listed below: Not all fiduciary roles are served in relation to financial obligations. At what point does the coverage go into effect? Some fiduciaries do not sense the urgency for monitoring if they got the first three steps correct. Which of these is NOT an example of doing insurance business? To carry out fiduciary duties in a prudent manner. Under a trustee/beneficiary duty, the fiduciary has legal ownership of the property or assets and holds the power necessary to handle assets held in the name of the trust. When is the face amount of a whole life policy paid? Fiduciary Returns. An agent that counsels the insured on needed coverages, thereby creating a "special relationship" with the insured as an insurance consultant, can be held liable for failing to mention a coverage that the insured does not have in effect at the time of a loss. Stockholders. 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