Insurance Regulation Levels

Question 1

Most insurance is written through _____ insurers. However, there are instances where _____ insurers step in to offer an insurance alternative when private insurers are unable to provide protection, usually related to the catastrophic nature of the risk, capacity to handle the risk, and lack of desire to engage in a line of insurance where experience to evaluate necessary premium intake to offset potential loss is lacking.

Answer 1

1. Private

2. Government Based

Question 2

In the aftermath of the Supreme Court decision in U.S. v. South-Eastern Underwriters (1944), the McCarran-Ferguson Act of 1945 established that the federal government will not regulate the business of insurance in areas which the states have historically had the authority to do so (such as producer and company licensing) unless the states fail to cooperate. Congress created these _____ agencies to provide regulatory oversight impacting insurance practices.

Answer 2

Insurance Regulation at the Federal Level

Question 3

The insurance industry is regulated primarily at the _____ level. The legislative branch writes and passes insurance laws, or statutes, to protect the insuring public. The judicial branch is responsible for interpreting and determining the constitutionality of the statutes. The role of the executive branch is to enforce the existing statutes that have been put in place. The Commissioner, Director, or Superintendent of Insurance is typically appointed (or in some jurisdictions elected) by the Governor, and the Commissioner has the power to issue rules and regulations to help enforce these statutes.

Answer 3

Insurance Regulation at the State Level