Minnesota State Insurance Licensing Exam
Study Guide; Updated A+ Guide
What is an agent? - Answer-Someone who acts on behalf of another (producer)
/.What is a principal? - Answer-Party for whom action is taken (insurance company)
/.What is an agency agreement? - Answer-Legal agreement that establishes the
relationship between the principal and agent; outlines powers and responsibilities of
agents.
/.What is Express authority? - Answer-Powers given to agent as part of agency
agreement(written)
/.What is implied authority? - Answer-Powers not given by the agency agreement, but
necessary to complete the functions allowed in the agency agreement
/.What is apparent authority? - Answer-Powers not given by the agency agreement, but
that a reasonable person would presume the agent has (between you and consumer)
/.What are producer responsibilities? - Answer-1. Have a fiduciary (trust) responsibility
to the insurer. Means the producer must always protect insurer's interests and follow
any lawful instructions from the insurer
2. Must also uphold high standards of commercial honor when dealing w/applicant.
Must act fairly and honestly, and disclose all info needed by the applicant to make well-
informed buying decision.
/.What is the McCarran-Ferguson Act? - Answer-Individual states, not federal gov,
responsible for regulating insurance industry.
/.Who oversee the MN insurance industry? - Answer-Department of Commerce
/.Who direct the dept of commerce? - Answer-Headed by commissioner of commerce
who is appointed by the governor
/.What does the Dept of Commerce do? - Answer--Enforces all MN insurance laws
-Establishes rules & procedures to ensure the consistent enforcement of the laws
-Conduct investigations and hold hearings
-Examine books, records, documents of any person or entity engaged in regulated
activities at anytime w/no court order
-Publish info collected from investigations, hearings, and examinations
,-Require reports of all sales/transactions that are regulated
/.How frequently are insurance companies audited? - Answer-Once every 5 years
/.How much notice does an insurance company get of an audit? - Answer-30 days
notice identifying scope of investigation.
/.What happens if insurance company fails to obtain a license to sell insurance? -
Answer-Company's policies remain valid, but company faces severe penalties.
/.What is a certificate of authority? - Answer-An admitted or authorized carrier must
obtain a cert of authority to transact business.
/.What is a company appointment? - Answer-Used to grant producers authority to solicit
insurance business for admitted carriers
/.What is a non-admitted carrier? - Answer-Companies w/o cert of auth (unlicensed)
/.What are surplus lines companies? - Answer-May sell insurance in MN w/o a cert of
authority, but may only transact business through a licensed surplus agent.
/.Who is required to have an insurance license? - Answer-Anyone who solicits, or
appoints others to solicit insurance on behalf of insurance company.
/.What is a resident producer? - Answer-Issued to a person who resides in MN or
maintains person's principal place of business in MN.
/.What is a non-resident producer? - Answer-Issued to a person if that person is already
a licensed resident producer in good standing in the person's home state.
/.What is a managing general agent? - Answer-Hires producers, supervises a territory,
manages producer activities. Must be licensed as an insurance producer.
/.What is a temp license? - Answer-A temp 180-day license may be used by
commissioner for:
-To surviving spouse, next of kin, admin/executor of the estate, employee, legal
guardian, court-appointed personal rep of deceased, disabled license producer
-To the designee of a licensed producer entering active service in armed forces of US
-To an employee of a business entity (agency license) licensed as a producer, upon the
death or disability of the indiv designated on the license
-Any other circumstance that serves the public interest
-Can transition to a permanent or just use for transaction to sell policies
/.What are the requirements for licensing a producer? - Answer--18 years old
-Complete ed requirements- 20 hours of ed per major line of authorization
-Pass licensing exam
, -Complete license application online w/Sircon
-Pay applicable license fee- $50 per line and added tech fee of up to $40
-Apply for perm insurance license within 3 years of passing exam
-License lasts 2 years
-License fee of $50 per line plus tech fee must be remitted w/online renewal app
-Indiv producer license expires on last day of producer's birth month
-License issued to business entity expire on 10/31 of renewal year
-24 hours of continuing ed required during each licensing period (No more than 1/2 of
required creds may come from courses offered by, sponsored by or affiliated w/an
insurance company or its producers.
-Must obtain 3 hours per licensing period from class/classes in area of ethics
-Can't carry over credits from one license period to another
-Licensing courses don't count towards continuing ed credit.
-Can take classes via classroom/online
-Sales & marketing, motivation, specific company product knowledge, office
management, use of calculators/machines
/.How long do you have to notify dept of commerce of agent's change of name/address?
- Answer-10 days
/.How long do you have to notify dept of commerce of administration action taken
against producer by another MN gov agency? - Answer-30 days of the final disposition
of the matter- must include copy of order and any other relevant legal docs
/.How long do you have to notify dept of commerce of criminal prosecution? - Answer-
30 day so initial pre-trial hearing date, shall include a copy of initial complaint and any
other relevant legal doc
/.How long do you have to notify dept of commerce of criminal convictions and guilty
pleas? - Answer-10 days of conviction
/.What do you have to do if you're going to do business under an assumed name? -
Answer-Need prior approval for doing business as (DBA) from the Commissioner.
Name must be properly filed w/secretary of state.
/.What is first manifest? - Answer-Sickness must first occur during the policy period to
be covered
/.What is probationary period? - Answer-Period of time beginning on the policy's
effective date during which there is no coverage for sickness.
/.What is occupational coverage? - Answer-Covered on and off job(24 hours)
/.What is nonoccupational coverage? - Answer-Covered off job only
/.What is risk? - Answer-The uncertainty of loss
Study Guide; Updated A+ Guide
What is an agent? - Answer-Someone who acts on behalf of another (producer)
/.What is a principal? - Answer-Party for whom action is taken (insurance company)
/.What is an agency agreement? - Answer-Legal agreement that establishes the
relationship between the principal and agent; outlines powers and responsibilities of
agents.
/.What is Express authority? - Answer-Powers given to agent as part of agency
agreement(written)
/.What is implied authority? - Answer-Powers not given by the agency agreement, but
necessary to complete the functions allowed in the agency agreement
/.What is apparent authority? - Answer-Powers not given by the agency agreement, but
that a reasonable person would presume the agent has (between you and consumer)
/.What are producer responsibilities? - Answer-1. Have a fiduciary (trust) responsibility
to the insurer. Means the producer must always protect insurer's interests and follow
any lawful instructions from the insurer
2. Must also uphold high standards of commercial honor when dealing w/applicant.
Must act fairly and honestly, and disclose all info needed by the applicant to make well-
informed buying decision.
/.What is the McCarran-Ferguson Act? - Answer-Individual states, not federal gov,
responsible for regulating insurance industry.
/.Who oversee the MN insurance industry? - Answer-Department of Commerce
/.Who direct the dept of commerce? - Answer-Headed by commissioner of commerce
who is appointed by the governor
/.What does the Dept of Commerce do? - Answer--Enforces all MN insurance laws
-Establishes rules & procedures to ensure the consistent enforcement of the laws
-Conduct investigations and hold hearings
-Examine books, records, documents of any person or entity engaged in regulated
activities at anytime w/no court order
-Publish info collected from investigations, hearings, and examinations
,-Require reports of all sales/transactions that are regulated
/.How frequently are insurance companies audited? - Answer-Once every 5 years
/.How much notice does an insurance company get of an audit? - Answer-30 days
notice identifying scope of investigation.
/.What happens if insurance company fails to obtain a license to sell insurance? -
Answer-Company's policies remain valid, but company faces severe penalties.
/.What is a certificate of authority? - Answer-An admitted or authorized carrier must
obtain a cert of authority to transact business.
/.What is a company appointment? - Answer-Used to grant producers authority to solicit
insurance business for admitted carriers
/.What is a non-admitted carrier? - Answer-Companies w/o cert of auth (unlicensed)
/.What are surplus lines companies? - Answer-May sell insurance in MN w/o a cert of
authority, but may only transact business through a licensed surplus agent.
/.Who is required to have an insurance license? - Answer-Anyone who solicits, or
appoints others to solicit insurance on behalf of insurance company.
/.What is a resident producer? - Answer-Issued to a person who resides in MN or
maintains person's principal place of business in MN.
/.What is a non-resident producer? - Answer-Issued to a person if that person is already
a licensed resident producer in good standing in the person's home state.
/.What is a managing general agent? - Answer-Hires producers, supervises a territory,
manages producer activities. Must be licensed as an insurance producer.
/.What is a temp license? - Answer-A temp 180-day license may be used by
commissioner for:
-To surviving spouse, next of kin, admin/executor of the estate, employee, legal
guardian, court-appointed personal rep of deceased, disabled license producer
-To the designee of a licensed producer entering active service in armed forces of US
-To an employee of a business entity (agency license) licensed as a producer, upon the
death or disability of the indiv designated on the license
-Any other circumstance that serves the public interest
-Can transition to a permanent or just use for transaction to sell policies
/.What are the requirements for licensing a producer? - Answer--18 years old
-Complete ed requirements- 20 hours of ed per major line of authorization
-Pass licensing exam
, -Complete license application online w/Sircon
-Pay applicable license fee- $50 per line and added tech fee of up to $40
-Apply for perm insurance license within 3 years of passing exam
-License lasts 2 years
-License fee of $50 per line plus tech fee must be remitted w/online renewal app
-Indiv producer license expires on last day of producer's birth month
-License issued to business entity expire on 10/31 of renewal year
-24 hours of continuing ed required during each licensing period (No more than 1/2 of
required creds may come from courses offered by, sponsored by or affiliated w/an
insurance company or its producers.
-Must obtain 3 hours per licensing period from class/classes in area of ethics
-Can't carry over credits from one license period to another
-Licensing courses don't count towards continuing ed credit.
-Can take classes via classroom/online
-Sales & marketing, motivation, specific company product knowledge, office
management, use of calculators/machines
/.How long do you have to notify dept of commerce of agent's change of name/address?
- Answer-10 days
/.How long do you have to notify dept of commerce of administration action taken
against producer by another MN gov agency? - Answer-30 days of the final disposition
of the matter- must include copy of order and any other relevant legal docs
/.How long do you have to notify dept of commerce of criminal prosecution? - Answer-
30 day so initial pre-trial hearing date, shall include a copy of initial complaint and any
other relevant legal doc
/.How long do you have to notify dept of commerce of criminal convictions and guilty
pleas? - Answer-10 days of conviction
/.What do you have to do if you're going to do business under an assumed name? -
Answer-Need prior approval for doing business as (DBA) from the Commissioner.
Name must be properly filed w/secretary of state.
/.What is first manifest? - Answer-Sickness must first occur during the policy period to
be covered
/.What is probationary period? - Answer-Period of time beginning on the policy's
effective date during which there is no coverage for sickness.
/.What is occupational coverage? - Answer-Covered on and off job(24 hours)
/.What is nonoccupational coverage? - Answer-Covered off job only
/.What is risk? - Answer-The uncertainty of loss
