PA Life & Health cheat sheet

The Pennsylvania Insurance Department licenses producers and insurers and may examine, fine, suspend, or revoke licenses for violations.

A person must hold a valid PA producer license to sell, solicit, or negotiate life or health insurance; the insurer files an appointment for the producer.

Premium funds a producer receives are held in a fiduciary capacity; commingling premium money with personal funds is prohibited.

Pennsylvania prohibits rebating: offering any inducement not stated in the policy to persuade a buyer to purchase is illegal.

Twisting, misrepresenting an existing policy to induce a replacement, is an unfair trade practice.

Knowingly submitting a false insurance application or claim constitutes insurance fraud and carries criminal and civil penalties.

Pennsylvania producers complete 24 hours of continuing education every two years, including 3 hours of ethics.

The Pennsylvania Life and Health Insurance Guaranty Association pays covered claims of insolvent member insurers up to statutory limits; it does not protect against market losses.

Producers must report administrative actions and criminal prosecutions to the Department, generally within 30 days.

Department notices interpret and clarify statutes and regulations; they establish enforcement expectations rather than create new law.

Advertising must identify the insurer and must not misrepresent benefits, conditions, or costs; testimonials must be genuine.

Replacement rules require a completed notice and comparison and disclosure to the applicant when an existing policy is being replaced.

Privacy rules require a notice of information practices and an opt-out before nonpublic personal financial information is shared with nonaffiliated third parties.

Insurers must keep complaint records and respond to Department inquiries; market conduct examinations review sales, claims, and underwriting.

Unfair claim settlement practices include failing to acknowledge a claim promptly, unreasonable delay, and offering less than the amount owed.

Annuity sales require a suitability review, disclosure of surrender charges, and consideration of the buyer's financial situation and objectives.

Policy forms and rates are filed with the Department, and sales materials must be retained and available for examination.

Producers must keep continuing education completion records and produce them if audited.

Insurance transfers risk from an individual to a pool of insureds; the law of large numbers makes aggregate losses more predictable.

Insurable interest in life insurance must exist at policy inception; in property insurance it must exist at the time of loss.

Indemnity contracts restore actual loss, while valued contracts pay a stated amount; life insurance is generally treated as a valued contract.

Utmost good faith requires accurate representations; material misrepresentation or concealment can void coverage.

Insurance is aleatory, unilateral, conditional, and a contract of adhesion.

Premium equals expected claims (mortality or morbidity) plus expenses and risk margin, adjusted for interest earnings.

Adverse selection is the tendency of higher-risk people to buy coverage; underwriting, exclusions, and waiting periods control it.

Hazards are physical, moral (dishonest intent), or morale (carelessness); perils are the causes of loss.

Reinsurance transfers risk from a primary insurer to a reinsurer and does not change the insured's contract.

Term insurance provides pure death protection with no cash value; forms include level, decreasing, increasing, renewable, and convertible.

Whole life has level premiums, guaranteed cash value, and coverage for the insured's lifetime.

Universal life separates mortality, expense, and interest components; cash value grows with credited interest and is reduced by policy charges.

Nonforfeiture options are cash surrender, reduced paid-up, and extended term; policy loans accrue interest and reduce the death benefit if unpaid.

Standard provisions include a two-year incontestability period, a grace period, reinstatement, misstatement of age adjustment, and a free-look period.

Beneficiary rules cover primary and contingent designations, revocable versus irrevocable status, and per stirpes versus per capita distribution.

Death benefits are generally income-tax free, cash value growth is tax-deferred, and modified endowment contract status changes distribution taxation.

Settlement options include lump sum, interest only, fixed period, fixed amount, and life income with or without a period certain.

Common riders include waiver of premium, accidental death, guaranteed insurability, child term, and long-term care.

Morbidity is the incidence of illness or injury; disability income replaces a percentage of income rather than the full amount.

Disability policy terms include elimination period, benefit period, own-occupation versus any-occupation definition, and residual or partial disability.

Health plan cost sharing consists of deductibles, coinsurance, copayments, and an out-of-pocket maximum.

ACA rules require essential health benefits, prohibit lifetime and annual dollar limits on essential benefits, cover preventive care with no cost sharing, and allow dependent coverage to age 26.

HIPAA provides portability, limits preexisting-condition exclusions, and creates special enrollment rights.

COBRA continuation generally lasts 18 months, 29 months when disability applies, and 36 months for certain qualifying events.

Coordination of benefits rules determine primary and secondary payers to prevent duplicate payment of the same expense.

Medicare Supplement policies fill gaps in Original Medicare, while Medicare Advantage plans replace Original Medicare delivery.

Common exclusions include preexisting conditions where permitted, self-inflicted injury, war, cosmetic surgery, and injuries covered by workers' compensation.