Group 14 Regulation Priciples

Question 1

Regulatory Enforcement Activities of Legal Framework

Answer 1

1. Licensing
2. Information Gathering
   
   2. 1 monitoring financial soundness
   3. 2 confirming compliance with regulation
   4. 3 providing information to consumers
3. Prior approval: policy forms, Prems, reinsurance, dividends, mergers, investment
4. Enforcement
   
   4. 1 requires the company to make the consumer whole
   5. 2 impose fines or other penalties
   6. 3 may withdraw company’s license
5. Receivership: regulator manages co., Co. Is liquidated

Question 2

Goals of regulation

Answer 2

1. Prevent carrier insolvency
   
   1. 1 Monetary loss to policyholder
   2. 2 Delay in necessary medical treatment
   3. 3 Anxiety and stress of dealing with loss of coverage
2. Ensure products are a good value
   
   2. 1 Benefits don’t match consumer’s needs
   3. 2 premiums too high
3. Maintain fairness between competing companies
4. Raise tax revenue
5. Advance social goals
6. Constraints on regulation include budgets and social acceptance