Laws to Remember

Question 1

Fair Credit Reporting Act of 1970 (FCRA)

Answer 1

A federal act aiming to promote the fairness and accuracy of information contained in consumer reports like credit reports, creating legal standards for the collection, use and dissemination of the info.

Amended in 2003 by FACTA (Fair and Accurate Credit Transactions Act)

• if the credit is the reason someone is denied, the company must tell the individual
• consumers are entitled to 1 free disclosure every 12 months

This is used as an underwriting tool to determine likelihood of a future loss. Credit scores are an indication of how a person manages their money and not an indication of income!

Question 2

Gramm-Leach Bliley Act of 1999 (GLB)

Answer 2

Eliminates restrictions that had previously barred companies in different financial sectors from engaging in each other’s business. Also addresses information privacy.

1. Cannot share information to unaffiliated 3rd party unless provides notice to consumer
2. Requires privacy note at the start of customer relationship and once annually thereafter
3. Requires each federal regulatory agency to establish standards for financial institutions under their care implement safeguards

Question 3

Terrorism Risk Insurance Act of 2002 (TRIA)

Answer 3

Federal legislation enacted in 2002 to gaurantee the availaibility of reinsureance coverage against acts of terrorism. Commercial insurers are required to offer insurance coverage against such terrorist incidents and are remibursed by the govt for paid claims. Modified in 2005 by the Terrorism Risk Insurance Extension Act (TRIEA) to define an act of terrorism as:

1. an act of terrorism
2. a violent act or an act that is dangerous to human life, property or infrastructure
3. Results in damage within the USA or outside the US in the case of US air carriers as vessels or missions
4. committed to influence the people or affect the conduct of the US govt by coercion

No act will be certified by the secretat as an act of terrorism if property and casualty losses do not exceed $5million

Question 4

Biggert-Waters Reform Act

Answer 4

The reform to NFIP led to the passage of the Homeowner Flood Insurance Affordability Act of 2014. Intent was to provide lower premiums due to previous legislation.

Question 5

McCarran-Ferguson Act

Answer 5

State regulation of insurance is in public interest - Federal Law since 1945