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Oklahoma P&C License Exam State Regulations test questions and answers
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Oklahoma P&C License Exam State Regulations test questions and answers
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Oklahoma P&C License ExamState Regulations test
questions and answers
Legislature ____________ laws, OID ____________ them.
Legislature creates laws, OID enforces them.
Who gives the Insurance Commissioner advice when he is having issues with
something?
National Association of Insurance Commissioners (NAIC)
Insurance Commissioner's general responsibilities
1. Jurisdiction over violations and complaints
2. Adopt rules and regulations
3. Order examinations of insurers
4. Approve and monitor insurer rates
5. Maintain records
6. Provide an annual financial report to the Governor
Anti-fraud Unit
Responsible for investigation of suspected insurance fraud, but the do not
prosecute. Commissioner does not act as judge.
Categories of Insurers
Stock, Mutual, Fraternal, Federal Government, Self-Insurer, (No Bureau Type)
Stock Insurer
Incorporated insurer with capital stock owned by its shareholders.
Mutual Insurer
Incorporated insurer without capital stock owned by its policyholders.
Fraternal Insurer (Fraternal Benefit Society)
Incorporated order or lodge without capital stock. Operates as a nonprofit entity.
Organized for the sole benefit of members.
Self-Insurer
No insurance is purchased. The business assumes the responsibility to pay for
losses. Example: Exxon
Reinsurance
Insurance for the insurer.
, Ceding Insurer
the insurer that transfers a portion of the risk
Reinsurer
the insurer that accepts a portion of the risk
Certificate of Authority
Document used by OID authorizing in insurer to do business in the state. Renew
on March 1 of each year.
Authorized Insurer (Admitted Insurer)
Has a Certificate of Authority. Include: domestic, foreign, and alien insurers
Unauthorized Insurer (Non-Admitted Insurer)
No Certificate of Authority. Surplus lines insurer, sells surplus lines insurance.
Lloyd's of London
always an unauthorized insurer
Surplus Lines Insurance
High risk insurance sold by unauthorized insurers when you can't get insurance
from an authorized insurer. Cannot be used for the purpose of getting a lower
premium. 6% premium tax paid by the insured.
3 types of Performance Ratios
Loss ratio, expense ratio, combined ratio
Loss Ratio
Incurred Losses/Premiums Received
Expense Ratio
Expenses/Premiums Received
Combined Ratio
Incurred Losses + Expenses/Premiums Received
Examination of Insurers
Review of the financial status of a insurer. Ordered by the Commissioner every 5
years or as often as necessary. The insurer being examined pays the cost of the
exam.
3 reasons the Commissioner may order an exam when not required
1. Financial statements including analysis of adequate capital and surplus.
2. Changes in management or ownership.
3. Reports from actuaries and independent financial examiners
NOT ordered because of taxes
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