Iowa Course Update January 2017
Iowa Life & Health and Property & Casualty courses have been updated with outline changes effective January 1, 2017. Continue reading for Life & Health and Property & Casualty Addendums.
Addendum: for use with Iowa Life and Health online ExamFX courses and study guide version 20192en/20193en, per exam content outline updates effective January 1, 2017.
The following are content additions or revisions as indicated to supplement your existing text:
Iowa Laws, Rules, and Regulations Common to All Lines
Definitions – Insurers – new section on the outline
An insurer is any person or company engaged as the principal party in the business of entering into insurance contracts. There are several classifications of insurers depending on the type of ownership, location of incorporation, and other characteristics.
Domestic, Foreign, and Alien
Insurance companies are classified according to the location of incorporation (domicile). Regardless of where an insurance company is incorporated, it must obtain a Certificate of Authority before transacting insurance within the state.
A domestic insurer is an insurance company that is incorporated in this state. In most cases, the company's home office is in the state in which it was formed - the company's domicile. For instance, a company chartered in Pennsylvania would be considered a Pennsylvania domestic company.
A foreign insurer is an insurance company that is incorporated in another state or territorial possession (such as Puerto Rico, Guam or American Samoa). For example, a company chartered in California would be a foreign company within the state of New York.
An alien insurer is an insurance company that is incorporated outside the United States.
Fraternal Benefit Society
A fraternal benefit society is an organization formed to provide insurance benefits for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government. Fraternals sell only to their members and are considered charitable institutions, and not insurers. They are not subject to all of the regulations that apply to the insurers that offer coverage to the public at large.
Authorized vs. Unauthorized Insurers, and Certificate of Authority
Before insurers may transact business in a specific state, they must apply for and be granted a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set by the state. Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer. Those insurers who have not been approved to do business in the state are considered unauthorized or nonadmitted. Most states have laws that prohibit unauthorized insurers to conduct business in the state, except through licensed excess and surplus lines brokers.
Iowa Laws, Rules, and Regulations Pertinent to Life Only
- Individual Life Insurance
Credit Life – new topic on the outline
Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. Credit life is usually written as decreasing term insurance, and it may be written as an individual policy or as a group plan. When written as a group policy, the creditor is the owner of the master policy, and each debtor receives a certificate of insurance.
The creditor is the owner and the beneficiary of the policy although the premiums are generally paid by the borrower (or the debtor). Credit life insurance cannot pay out more than the balance of the debt, so that there is no financial incentive for the death of the insured. The creditors may require the debtor to have life insurance; they cannot, however, require that the debtor buys insurance from a specific insurer.
Iowa Laws, Rules, and Regulations Pertinent to Health Only
- Individual Health Insurance
Credit Disability – new section on the outline:
A credit disability policy is issued only to those in debt to a specific creditor. In case of the borrower's disability, payments to the creditor will be made on the loan until the disabled borrower is able to return to work.
Addendum: for use with Iowa Property and Casualty online ExamFX courses and study guide version 18346en/18347en, per exam content outline updates effective January 1, 2017.
The following are content additions or revisions as indicated to supplement your existing text:
Iowa Laws, Rules, and Regulations Common to All Lines
Definitions – Insurers – new section on the outline
An insurer is any person or company engaged as the principal party in the business of entering into insurance contracts. There are several classifications of insurers depending on the type of ownership, location of incorporation, and other characteristics.
Domestic, Foreign, and Alien
Insurance companies are classified according to the location of incorporation (domicile). Regardless of where an insurance company is incorporated, it must obtain a Certificate of Authority before transacting insurance within the state.
A domestic insurer is an insurance company that is incorporated in this state. In most cases, the company's home office is in the state in which it was formed - the company's domicile. For instance, a company chartered in Pennsylvania would be considered a Pennsylvania domestic company.
A foreign insurer is an insurance company that is incorporated in another state or territorial possession (such as Puerto Rico, Guam or American Samoa). For example, a company chartered in California would be a foreign company within the state of New York.
An alien insurer is an insurance company that is incorporated outside the United States.
Fraternal Benefit Society
A fraternal benefit society is an organization formed to provide insurance benefits for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government. Fraternals sell only to their members and are considered charitable institutions, and not insurers. They are not subject to all of the regulations that apply to the insurers that offer coverage to the public at large.
Authorized vs. Unauthorized Insurers, and Certificate of Authority
Before insurers may transact business in a specific state, they must apply for and be granted a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set by the state. Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer. Those insurers who have not been approved to do business in the state are considered unauthorized or nonadmitted. Most states have laws that prohibit unauthorized insurers to conduct business in the state, except through licensed excess and surplus lines brokers.
Surplus Lines
Insurance that is not available in the regular market place from admitted insurers is referred to as Surplus Lines. It usually involves insurance for high risk individuals and is placed with nonadmitted insurers who specialize in offering insurance to the high risk market. While surplus lines insurers are not admitted, most states require that they be on that state's "approved" list.
Iowa Laws, Rules, and Regulations Pertinent to Property Only
Private-Passenger Automobile Insurance – new section on the outline
Aftermarket Parts Regulation
An insurer cannot require the use of aftermarket crash parts in the repair of an automobile unless the aftermarket crash part is certified by a nationally recognized entity to be at least equal in kind and quality to the original equipment manufacturer part in terms of fit, quality and performance, or that the part complies with federal safety standards.
If aftermarket parts used are equivalent in kind and quality to the original equipment, but an insured insists on using original equipment manufacturer (OEM) parts, the insurer may require that the insured pay the difference in costs.
Guaranteed Auto Protection (GAP)
Guaranteed Automobile Protection (GAP) insurance is used in credit sales transactions to cover the deficiency gap that may exist when the loan balance on a purchased or leased vehicle is greater than the actual cash value of the destroyed or damaged vehicle (collateral on the loan). GAP is not property insurance per se, but is intended to protect against a specific type of risk of credit loss.
This coverage is most often marketed to consumers who put down a low down payment, have a high interest rate loan or have a loan with a term of 60 months or longer. GAP insurance is usually offered by car dealerships at time of purchase, but most auto insurance companies also offer this coverage. Because GAP coverage is usually paid up front, when the vehicle is sold or refinanced, the owner is eligible for a refund. GAPs are regulated by the insurance industry if sold as insurance policies by insurance brokers.