NAIC Solvency

Question 1

US Insurance Regulatory Mission

Answer 1

Protect the interests of the policyholder and those who rely on the insurance coverage provided to the policyholder first and foremost, while also facilitating the financial stability and reliability of insurance institutions for an effective and efficient marketplace for insurance products.

Question 2

Achieve mission with

Answer 2

Financial and Market Regulation

Question 3

3 stages of financial regulation

Answer 3

i. Mitigate / eliminate risks via restrictions on insurer’s activities

ii. Use financial tolls and oversight to implement corrective actions

iii. provide a backstop of financial protection in receivership (conservation, rehabilitation, liquidation)

Question 4

We can make the argument that the US regulatory system has been “successful”

Answer 4

-Capacity of guaranty funds (protects policyholders if company was to go insolvent)

-Strong track record of protecting consumers and overseeing solvency (during financial crisis, insurance sector did a lot better than other financial sectors)

-Strong depth & breadth of the US insurance industry