15.4 Unfair Insurance Trade and Claims Settlement Practices

Rebating

A life insurance company operating in this state may not engage in unfair discrimination among insured individuals of the same class and equal life expectancy. This includes discrimination in premium rates, policy amounts, dividends, benefits, or any other terms and conditions of the insurance contract. Additionally, the insurer may not enter into any agreement with the insured other than those clearly stated in the policy.

An insurer (other than a life insurer), and its officers, agents, or representatives, may not offer or provide any rebate or inducement to encourage the purchase of insurance. This includes:

• Rebates of premiums or special advantages in dividends or other policy benefits
• Paid employment, service contracts, or other incentives
• Inducements involving stocks, bonds, or other financial instruments
• Any valuable consideration not clearly specified in the policy In addition, the insurer or its representatives may not enter into any agreement to provide or arrange a loan of money as an inducement or consideration for purchasing insurance.

No individual may accept or receive from an insurer, agent, or any other person any premium rebate, special favor, or other valuable consideration or inducement that is not clearly specified in the policy.

Licensees must market insurance in a fair and nondiscriminatory manner to similarly situated insureds and prospective insureds, while maintaining a level and competitive marketplace for all participants in the insurance industry.

The following actions are not considered prohibited:

• Providing bonuses to life insurance policyholders or reducing premiums on nonparticipating policies.
• Reducing premiums for industrial life policyholders to reflect decreased collection expenses.
• Paying commissions at customary rates to an authorized officer, agent, or solicitor on policies or contracts they secure for themselves, provided they have been actively engaged in the business in good faith for at least six months prior to receiving such compensation.
• Paying dividends to policyholders of mutual fire insurance companies after those dividends have been earned.

An insurer does not violate Ohio's anti-rebating laws by offering or providing a rate reduction or value-added product or service related to loss control or mitigation—at no cost or a reduced cost—even if it is not specified in the policy, provided that the product or service:

• Is directly related to the type of insurance offered or purchased
• Is intended to reduce risk, lower premiums, or minimize claims, thereby benefiting policyholders
• Is offered in a fair and nondiscriminatory manner to similarly situated policyholders

Premium Refunds and Other Incentives

Refunds must be issued within the applicable timeframe, as follows:

• Within 30 days after the event that triggers the refund obligation
• Within 30 days after the insurer issues a refund check, if the agent is responsible for distributing a portion of the refund; or
• Within 45 days after the refund first appears on the agent's statement of account

False Advertising

False advertising includes the act of making, issuing, publishing, disseminating, or presenting to the public any information that is false, deceptive, or misleading. This also includes knowingly recording false information, omitting material facts from any book, report, or record, or altering, destroying, withholding, or concealing records with the intent to mislead or deceive any examiner or public official to whom the insurer is required to report its financial condition or operations.

False advertising also includes issuing or delivering company stock, capital stock, benefit certificates, securities, or similar instruments, or offering any contract promising returns or profits, when used as an inducement to purchase insurance.

An insurance company or agent authorized to transact insurance in this state may not, through any form of advertising—including newspapers, magazines, circulars, policies, certificates, or renewals—represent that it possesses funds or assets unless those funds or assets are actually held by the insurer, available for the payment of claims, and maintained for the protection of policyholders.

An insurance company authorized to do business in this state may not advertise or publicly represent its financial condition unless the information accurately reflects the most recent verified statement filed with the insurance department of any state.

An unauthorized foreign or alien insurer may not publish, issue, or distribute to residents of this state—through newspapers, other publications, radio, or television—any statements that misrepresent its financial condition, the benefits or advantages of its policies, or expected dividends. If the Superintendent has reason to believe that such unlawful advertising is occurring, the Superintendent will provide notice by registered mail to both the insurer and the appropriate insurance regulatory official in the insurer’s state of domicile or, for an alien insurer, the state where its principal office is located.

No person, firm, association, partnership, company, or corporation may publish or distribute advertising materials to solicit insurance business unless they have complied with Ohio insurance advertising laws and regulations.

Misrepresentation

Misrepresentation is a specific type of false advertising. It involves making, issuing, circulating, or preparing any estimate, illustration, or statement with the intent to use it in a manner that is false, misleading, or deceptive, including:

• Misrepresenting the terms of a policy, the benefits or advantages promised, or the dividends to be received.
• Making false or misleading statements about dividends previously paid on similar policies.
• Misrepresenting the financial condition of an insurer as reflected in its most recent verified statement filed with the insurance department.
• Using a policy name or classification that misrepresents the true nature of the coverage.
• Making misleading or incomplete comparisons to induce a person to purchase, modify, lapse, forfeit, change, or surrender a policy.
• Misrepresenting the terms, benefits, value, cost, or effective dates of any actual or proposed insurance contract or application.

Defamation of Insurer

Defamation is a specific form of false advertising. It involves making, publishing, disseminating, or preparing any statement, article, or material that is false regarding the financial condition of an insurer and is intended to harm the reputation of any person or entity engaged in the insurance business.

Defamation also includes filing with a supervisory or public official, or making, publishing, disseminating, circulating, delivering, or presenting to the public, any false statement regarding the financial condition of an insurer.

No company, officer, director, employee, or agent may make, publish, print, distribute, or circulate any statement—whether oral or written—that is derogatory toward an insurance company operating in this state if it contains false or malicious criticism intended to harm the company’s reputation or business operations.

Unfair Discrimination

Unfair discrimination occurs when an insurer refuses to issue, cancels, or declines to renew a policy based on an individual’s sex or marital status, including applicants, prospective insureds, insureds, or policyholders. It also includes:

• Charging individuals of the same class and risk different premiums, policy fees, or rates for identical coverage, unless the differences are supported by sound actuarial principles or actual experience.
• Offering different benefits, underwriting standards, eligibility requirements, or policy terms and conditions to individuals of the same class and risk.
• Refusing to make disability income insurance available solely because the applicant’s primary occupation is managing a household.

Illegal Inducements

Knowingly offering or entering into any contract for life insurance, life annuities, or accident and health insurance that includes terms not clearly stated in the policy, or offering any premium rebate, special favor, or other valuable consideration as an inducement, is prohibited. However, the following practices are permitted:

• Paying bonuses to policyholders or reducing premiums from surplus on nonparticipating policies, provided such actions are fair and equitable.
• Granting premium allowances to policyholders under industrial debit plans who have maintained continuous premium payments for a specified period, reflecting savings in collection expenses.
• Adjusting group insurance premium rates based on actual loss or expense experience at the end of a policy year, with such adjustments applied retroactively for that policy year only.

It is not a violation to offer or provide promotional or advertising items, including meals, to an insured or prospective insured, provided the total market value does not exceed $50 per calendar year. Additionally, such items are not considered a prohibited inducement if they are offered solely to encourage a person to obtain an insurance quote and are not contingent upon the purchase of a policy.

A licensee may conduct a contest, raffle, or drawing open to the general public in which all participants receive a free opportunity to win a prize, provided that the promotion is not connected to the sale or solicitation of insurance, and no purchase or renewal of insurance is required to enter, win, or claim a prize.

Penalties

A person is guilty of a fourth-degree misdemeanor if they engage in any of the following unfair trade practices:

• Rebating
• Inducements
• Failure to issue required refunds in a timely manner
• Misrepresentation
• Defamation of an insurer

A person who commits an act of false advertising is subject to a fine of $500 for a first offense and $1,000 for each subsequent offense.

An agent is justified in refusing to follow an insurer’s instructions when those instructions would require the agent to engage in an illegal act.

Unfair or Deceptive Trade Practice Penalties

If the Superintendent determines, by written order, that a person has engaged in an unfair or deceptive business practice, the Superintendent will issue a cease and desist order requiring the individual to stop the violation. In addition, the Superintendent may:

• Suspend or revoke the individual’s license.
• Prohibit an insurer or insurance agency from employing the individual or allowing them to serve as a director, consultant, or in any other capacity for a period deemed appropriate to protect the public interest. If the restriction is indefinite, no application for termination may be submitted until at least two years after the effective date.
• Order the individual to return any payments received as a result of the violation and require payment of statutory interest on those amounts.

Each unfair or deceptive act may result in a civil penalty of up to $3,500, with a maximum aggregate penalty of $35,000 within any six-month period. Multiple similar acts or practices committed by the same individual within a single insurance transaction are treated as one violation.

Failure to comply with a cease and desist order may result in a civil penalty of up to $10,000 for each violation.

Unfair Claims Settlement Practices

The following actions are considered unfair or improper claims settlement practices under Ohio law:

• Failing to retain claim-related data for at least three years or until the completion of the state’s next financial examination, whichever is later.
• Misrepresenting relevant facts or policy provisions related to the coverage at issue.
• Denying a claim based on a specific policy provision, condition, or exclusion without clearly identifying and referencing the applicable provision.
• Failing to investigate and respond to a claim—either by accepting or denying it—within 21 calendar days after receiving notice.
• Attempting to force insureds to initiate legal action by offering settlements that are substantially less than the amount owed.
• Failing to establish and implement reasonable standards for the prompt investigation and settlement of claims.
• Failing to make a good faith effort to promptly, fairly, and equitably settle claims when liability has become reasonably clear.
• Failing to notify the claimant when additional time is needed for investigation. The claimant must be notified within the initial 21-day investigation period, and thereafter at least every 90 calendar days regarding the status of the claim.
• Attempting to settle a claim for less than what a reasonable person would expect based on written or printed advertising materials.
• Attempting to settle a claim using an application that has been altered.
• Communicating to insureds or claimants a policy of routinely appealing arbitration awards.
• Delaying claim processing by requiring a preliminary claim report and subsequently requesting a formal proof of loss containing the same information.
• Failing to promptly settle a claim under one portion of a policy where liability is reasonably clear in order to influence settlement under other portions.
• Failing to issue payment of an agreed-upon settlement within five working days after the agreement is reached.
• Reducing a claim payment for betterment without clearly itemizing the deductions in a written estimate.

The following actions are not considered unfair claim settlement practices:

• Not paying a claim before receiving a required proof of loss.
• Denying payment for services rendered prior to the policy’s effective date.
• Denying a claim when the policy is in a lapsed status.
• Resolving a claim through arbitration.

An insurer must, within 15 working days of receiving a first-party claim, acknowledge receipt, provide any necessary claim forms, and respond to all other relevant communications from the claimant.

An insurer may request that the insured submit a proof of loss, which is a statement detailing the nature and extent of the loss and includes any supporting documentation. The insured must provide the proof of loss within 60 days of the request.

After receiving a proof of loss, the insurer must, within 21 days, either accept or deny the claim, or notify the claimant that additional time is required to complete the investigation.

Insurers must respond to Department of Insurance requests for claim-related information within 21 days.

If a person seeks to be excused from participating in a hearing on the basis that their testimony or evidence may incriminate them or expose them to penalties or forfeiture, but is nevertheless directed to testify or produce evidence, the person is required to comply with that directive.

A person who is compelled to provide testimony or evidence will not be prosecuted or subjected to penalties or forfeitures based on that testimony or evidence. However, this protection does not apply to perjury—the individual remains subject to prosecution and punishment for any false statements made under oath.

Any unauthorized foreign or alien insurer that engages in an insurance transaction in Ohio is deemed to have appointed the Superintendent as its lawful attorney for service of process. Accordingly, all charges, notices, and legal documents in proceedings related to misrepresentation may be served on the Superintendent.

Examination of Books and Records

Before issuing a license, the Superintendent may examine the financial affairs of any insurer.

Whenever the Superintendent considers it necessary—and at least once every three years—the Superintendent may conduct, or order to be conducted, an examination of the affairs and financial condition of any insurance company that is organizing, seeking admission, or conducting business in Ohio. If necessary, the examination may be deferred for up to five years.

The Superintendent, or any appointed examiner, must be granted free access to all books, records, and documents related to the insurer’s business, including records maintained by the insurer’s agents. If the records are found to be inadequate for examination purposes, the insurer may be required to hire experts to rewrite, post, or balance the records or accounts. All costs and expenses associated with the examination must be paid by the insurer being examined.

Insurance companies, along with their directors, officers, agents, and employees, may be required to submit to examination under oath. Refusal to comply with an examination may serve as grounds for the suspension, denial, or nonrenewal of any license or certificate of authority held by the insurer.

After the examiner issues the examination report, the insurer has 30 days from the postmark date of the mailing envelope to submit any written objections to the Superintendent.

The Superintendent has the authority to administer oaths, summon witnesses, and compel their attendance through an order or subpoena to testify regarding any matter subject to inquiry or investigation under state insurance laws. The Superintendent may also require the production of any books, records, papers, or documents relevant to the matter under investigation.

Insurance Fraud Regulation

Insurance fraud occurs when an individual knowingly provides false material information or conceals material facts from an insurer, agent, or broker with the intent to obtain insurance coverage, secure an improper rating, or receive unwarranted claim payments. Examples of insurance fraud include:

• Transferring or concealing property belonging to an insured or insurer to avoid an unfavorable claim settlement.
• Concealing, destroying, mutilating, altering, or making false entries in documents related to the property or affairs of an insurer.
• Withholding documents relating to an insurer’s property from a receiver, trustee, or other court-appointed official entitled to possession of those records.
• Giving, receiving, or obtaining anything of value for acting, or attempting to act, in a judicial proceeding when the conduct contributes to the impairment or insolvency of an insurer.

These provisions apply not only to the individual who directly commits the act, but also to any person who aids, abets, assists, or otherwise participates in the unlawful conduct.

Every insurer is required to establish an anti-fraud program and maintain a written plan outlining the procedures to be followed when actual or suspected insurance fraud is identified or reported. The written plan must also identify the individual or individuals responsible for administering and overseeing the insurer’s anti-fraud program.

An insurer must develop its written anti-fraud plan within 90 days after obtaining a license to transact business in this state, or within 90 days after beginning insurance operations in the state. The insurer must thereafter maintain and keep the plan current.

If an insurer changes its procedures for handling actual or suspected insurance fraud, or if there is a change in the individual or individuals responsible for the anti-fraud program, the insurer must update and revise the written anti-fraud plan accordingly.

Insurance fraud is generally classified as a first-degree misdemeanor. However, the offense becomes a felony based on the amount involved in the false or deceptive claim:

• $1,000 to less than $7,500 — Fifth-degree felony
• $7,500 to less than $150,000 — Fourth-degree felony
• $150,000 or more — Third-degree felony

In the absence of fraud or malice, no individual—including the Superintendent or employees of the Superintendent—is subject to civil liability, such as claims for libel or slander, for filing reports or providing information as required under insurance laws. Likewise, no liability for damages arises from providing or receiving information concerning suspected fraudulent insurance acts when the information is shared with or received from:

• Any law enforcement official, employee, or agent
• The Superintendent, employees of the Superintendent, any Insurance Fraud Bureau, or the National Association of Insurance Commissioners (NAIC)
• Any other individual or entity involved in the detection or prevention of insurance fraud

All documents, reports, and evidence held by the Superintendent or the Superintendent’s designee that relate to an insurance fraud investigation are considered confidential law enforcement investigatory records. As a result, these materials are not subject to subpoena in civil proceedings by any court within the state.

Notice of Warning

All insurance applications and claim forms must prominently include a warning substantially similar to the following:

1. “Any person who, with intent to defraud or knowing that they are facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud.”

Fraud Notification

If an insurer has a reasonable belief that an individual is committing insurance fraud, the insurer must report the suspected fraud to the Department of Insurance. However, reporting is not required when the suspected fraud involves a claim amount of less than $1,000.

Insurance Information Privacy

Personal information refers to any individually identifiable information collected in connection with an insurance transaction from which conclusions may be drawn about an individual’s character, habits, interests, finances, occupation, reputation, credit, health, or other personal characteristics. This includes information such as an individual’s name, address, and medical record information, but does not include privileged information.

An insurance company or agent must provide all applicants and policyholders with a notice of information practices relating to insurance transactions.

For insurance applications, the notice of information practices must be provided no later than:

• At the time the policy is delivered, when personal information is collected only from the applicant or from public records; or
• At the time collection of personal information begins, when the information is obtained from sources other than the applicant or public records.

In the case of a policy renewal, the notice of information practices must be provided no later than the policy renewal date. However, no notice is required if either of the following conditions applies:

• Personal information is collected only from the policyholder or from public records; or
• A notice of information practices has been provided within the preceding 24 months.

In the case of a policy reinstatement or a change in insurance benefits, the notice of information practices must be provided no later than the time the insurance institution receives the request for reinstatement or change in benefits. However, no notice is required if the personal information collected is obtained solely from the policyholder or from public records.

The required notice must be provided in writing and must include all of the following:

• Whether personal information may be collected from sources other than the individual or individuals proposed for coverage.
• The types of personal information that may be collected, along with the sources and investigative methods that may be used to obtain the information.
• The types of disclosures permitted and the circumstances under which disclosures may be made without prior authorization. Only those disclosure practices that occur frequently enough to constitute a general business practice are required to be described.
• A description of the insured’s rights and an explanation of how those rights may be exercised.
• A statement that information obtained through a report prepared by an insurance support organization may be retained by that organization and disclosed to other parties.

An abbreviated notice of information practices may be used if it contains all of the following disclosures:

• Personal information may be collected from sources other than the individual or individuals proposed for coverage.
• The information collected, along with other personal or privileged information later obtained by the insurance institution or agent, may under certain circumstances be disclosed to third parties without authorization.
• Individuals have the right to access and request correction of all personal information collected.
• A complete notice of information practices will be provided to the applicant or policyholder upon request.

No person may knowingly obtain information about an individual from an insurance institution, agent, or insurance support organization through false pretenses or deceptive means. A violation of this provision constitutes a fourth-degree felony.

Cybersecurity Requirements

Cybersecurity Event: An event involving unauthorized access to or disruption of an information system that has a reasonable likelihood of causing material harm to an Ohio consumer.

Nonpublic Information: Information that is not publicly available and can be used to identify a consumer, such as Social Security numbers, credit card numbers, account passwords, and health care information.

Encryption: The process of converting data into a form that cannot readily be understood or assigned meaning without the use of a specific protective process, code, or encryption key.

Each licensee (insurer) must establish and maintain a comprehensive written information security program based on the licensee’s risk assessment. The program must evaluate and protect against threats to the confidentiality of nonpublic information. The program must also:

• Establish and periodically review a retention schedule for nonpublic information, along with procedures for securely destroying information that is no longer needed.
• Protect against unauthorized access to or use of nonpublic information and reduce the likelihood of harm to consumers.

As part of its information security program, each licensee must develop and maintain a written incident response plan designed to enable the prompt response to and recovery from any cybersecurity event that compromises:

• The confidentiality, integrity, or availability of nonpublic information in the licensee’s possession
• The security of the licensee’s information systems
• The ongoing functionality of any part of the licensee’s business operations

If a licensee becomes aware that a cybersecurity event has occurred or may have occurred, the licensee must notify the Superintendent as soon as possible. The licensee must also maintain records relating to all cybersecurity events for at least five years from the date of the event and must provide those records upon request by the Superintendent of Insurance.

Individual Underwriting by the Insurer

Medical Examinations and Lab Tests Including HIV

When underwriting an individual life or accident and health insurance policy, an insurer may require an applicant to undergo an HIV test only when the test is administered together with tests for other health conditions. An applicant may not be required to submit to an HIV test based solely on the applicant’s sexual orientation.

An insurer that requests an applicant or insured to undergo an HIV test must first obtain the individual’s written consent and inform the individual of the purpose of the test.

The consent form must include all of the following:

• Information describing the tests to be performed
• An explanation of the confidentiality protections applicable to the test results
• The procedures that will be used to notify the applicant of the results
• A general explanation of how the test results will be interpreted

An insurer may disclose the results of a positive HIV test only to the following individuals or entities:

• The applicant
• The applicant’s physician, if the applicant has provided consent
• Any other person specifically authorized in writing by the applicant
• A medical information exchange used by insurers that operates under procedures designed to maintain confidentiality

Applicants for group life or health insurance coverage may not be required to undergo an HIV test, except when applying for coverage under policies sponsored by membership organizations.

Ohio Life and Health Insurance Guaranty Association (OLHIGA)

The Ohio Life and Health Insurance Guaranty Association (OLHIGA) is a nonprofit organization made up of all insurers licensed and admitted to transact life and health insurance business in Ohio. The association exists to help protect policyholders by covering certain claims of insolvent member insurers. Membership in OLHIGA is required for all authorized insurers as a condition of being permitted to conduct insurance business in Ohio.

OLHIGA covers claims that existed before an insurer was declared insolvent, as well as claims arising within 30 days after the determination of insolvency. All terms, conditions, and provisions of the policy contract between the insured and the insolvent insurer remain in effect.

OLHIGA is funded through assessments imposed on its member insurers. Each insurer authorized to do business in the state is assessed an amount necessary to meet the association’s obligations, based on the volume of premiums written by that insurer.

Benefits

The association is legally responsible for covered contractual obligations that a member insurer is or would have been obligated to pay if the insurer had not become impaired or insolvent, subject to the following coverage limits:

Life

• Up to $300,000 in life insurance death benefits
• Up to $100,000 in net cash surrender values and net cash withdrawal values for life insurance policies

Health

• Up to $300,000 in disability insurance benefits
• Up to $300,000 in long-term care insurance benefits
• Up to $500,000 in basic hospital, medical, surgical, or major medical insurance benefits
• Up to $100,000 in other health insurance benefits not classified as basic hospital, medical, surgical, major medical, disability, or long-term care insurance, including any associated net cash surrender or net cash withdrawal values

Annuities

• Up to $250,000 in retirement annuity benefits, including net cash surrender and net cash withdrawal values
• Up to $250,000 in the present value of structured settlement annuity benefits, including net cash surrender and net cash withdrawal values
• Up to $1 million in other unallocated annuity benefits

OLHIGA does not provide coverage for variable contracts or for any insurance plan that is self-funded or uninsured.

Obligations

OLHIGA is required to:

• Provide member insurers with at least 30 days’ notice to pay assessments.
• Undergo an audit each year in which an insurer becomes insolvent.
• Submit an annual financial report to the Superintendent and provide a copy of the report to each member insurer.
• Protect individuals who act in good faith while carrying out authorized duties on behalf of the association.

A member that is aggrieved by an action of OLHIGA must first submit an appeal to the association’s Board of Directors and wait 30 days before filing an appeal with the Superintendent.

Summary Document

OLHIGA must prepare a summary document explaining the association’s general purpose and existing limitations. This document must be submitted to the Superintendent for review and approval.

Ohio insurers are required to provide the OLHIGA summary document to all policyholders before or at the time a policy is delivered. Insurers must also furnish the document whenever it is requested by a policyholder.

The front page of the OLHIGA summary document must contain a prominent disclaimer that:

• Identifies the name and address of OLHIGA and the Department of Insurance.
• Clearly warns policyholders that OLHIGA may not provide coverage for the policy and, if coverage is available, it may be subject to significant limitations, exclusions, and residency requirements.
• States that insurers and their agents are prohibited by law from using the existence of OLHIGA as a sales tool, solicitation device, or inducement to purchase insurance.
• Emphasizes that policyholders should not rely on OLHIGA coverage when choosing an insurer.
• Includes any additional information required by the Superintendent.

General Insurance

Surplus Lines

Surplus Lines insurance provides coverage for risks that cannot be obtained through admitted insurers. However, it may not be used solely for the purpose of obtaining coverage at a lower cost than what is available from an admitted insurer. Each state regulates the placement of Surplus Lines insurance within its jurisdiction. Surplus Lines coverage may be placed through non-admitted insurers, but all non-admitted insurance business must be conducted through a properly licensed Surplus Lines broker or producer.

Do Not Call List

The Federal Trade Commission amended the Telephone Consumer Protection Act (TCPA) to give consumers greater control over unwanted telemarketing calls. Under the law, most telemarketers and sellers are prohibited from calling telephone numbers listed on the National Do Not Call Registry. Companies are required to update their Do Not Call lists at least once every 31 days. In addition, the TCPA restricts telemarketing calls to noncustomers at their homes to the hours between 8:00 a.m. and 9:00 p.m.

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Quiz

1. Which of the following is considered an unfair claims settlement practice in Ohio?

A. Settling a claim through arbitration

B. Failing to investigate and respond to a claim within 21 calendar days

C. Denying a claim when the policy is lapsed

D. Requesting a proof of loss from the insured

Correct Answer: B

Rationale: Ohio law considers it an unfair claims settlement practice to fail to investigate and respond to a claim within 21 calendar days after receiving notice of the claim.

2. Which statement regarding OLHIGA coverage is correct?

A. OLHIGA covers self-funded insurance plans

B. OLHIGA covers all variable contracts

C. OLHIGA provides up to $300,000 in life insurance death benefits

D. OLHIGA guarantees unlimited annuity benefits

Correct Answer: C

Rationale: OLHIGA provides coverage of up to $300,000 for life insurance death benefits for covered policies issued by insolvent member insurers.

3. Under Ohio insurance privacy laws, an abbreviated notice of information practices must include which of the following?

A. A copy of all underwriting guidelines

B. A guarantee that information will never be disclosed

C. Notice that individuals have the right to access and correct personal information

D. A list of all policy exclusions

Correct Answer: C

Rationale: An abbreviated notice must inform individuals that they have the right to access and request correction of personal information collected by the insurer or agent.

4. Which of the following actions is prohibited under Ohio anti-rebating laws?

A. Providing a promotional item valued at $25

B. Paying earned dividends to mutual fire insurance policyholders

C. Offering a premium rebate not specified in the policy as an inducement to purchase insurance

D. Conducting a raffle open to the public with no purchase required

Correct Answer: C

Rationale: Ohio anti-rebating laws prohibit offering premium rebates or other valuable inducements not clearly specified in the policy to encourage the purchase of insurance.

5. Which statement regarding HIV testing in insurance underwriting is correct?

A. Applicants for group life insurance must always submit to HIV testing

B. An insurer may require HIV testing based solely on sexual orientation

C. HIV test results may be disclosed to anyone employed by the insurer

D. An insurer must obtain written consent before requiring an HIV test

Correct Answer: D

Rationale: Before requiring an applicant or insured to undergo an HIV test, the insurer must obtain the individual’s written consent and explain the purpose of the test.