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Exam 6 > Section G > Flashcards

Section G Flashcards

1
Q

fwhat happened in 1752

A

first american property insurer in philadelphia

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2
Q

what happened in 1792

A

pennsylvania was the first state to chrater insurers

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3
Q

3 things about New York as a leader in regulating insurance

A

10% retaliatory premium tax
required insurers to maintain reserves for unearned premiums
1859 created first DOI

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4
Q

what happened in 1871

A

national insurance convention formed (NIC)

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5
Q

early 1900s insurers also started writing auto, but

A

DOIs did not allow multiline insurers until after 1945

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6
Q

in 1923 NCIC passed

A

resolution to bring about repeal of state anticompact laws, trying to deal with ineffective competition leading to insolvencies

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7
Q

amendment of the Clayton act requiring price differences to be justified by reduced operating costs

A

Robinson-Patman Act

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8
Q

6 state surplus lines laws

A
  • surplus lines broker is accountable for placing business with eligible nonadmitted/unauthorized companies
  • set forth the rqeuirements for nonadmitted/unauthorized companies
  • domiciliary jurisdiction reviews insurers for solvency
  • licensicng only available to producesers who already have PC licenses
  • licensee must place business with insurer with adequate capital and surplus
  • diligent search
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9
Q

GLB prohibits national banks from

A

forming subsidiaries to underwrite insurance

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10
Q

What case says that licensing of insurance companies and agents is part of the business of insurance

A

Robertson v California (1946)

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11
Q

What case says that selling and advertising of insurance policies is part of the business of insurance

A

FTC v National Casualty co (1958)

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12
Q

NFIP established in ___ as ____

A

1968 as a federal response to a private insurance industry uninsurable risk

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13
Q

ERISA was enacted to

A

curb abuse in private pension system and in employee benefit plans

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14
Q

3 federal agencies that affect the insurance industry

A

FBI (detect and prosecute fraudulent activities)
Environmental Protection Agency
Interstate Commerce Commision (minimum policy limits, forms & endorsement layout, thirty days’ written notice before canceling)

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15
Q

a couple examples of additional requirements for the commissioner’s annual report

A

annual report of fraudulent claims

annual report on the profitability of a specific line of insurance

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16
Q

Role of the NAIC

A

coordinate the regulation of insurers operating in multiple jurisdictions

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17
Q

day to day regulation of insurance is done by

A

the executive branch, either by a separate department/division or buy a unit that is responsible for more than just the admin of insurance laws

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18
Q

9 regulatory departments and functions

A 
licensing
regulating coverage and pricing
conducting examinations
licensing producers
regulating claim adjusters
fraud
determining the need for insurer receivership
providing consumer services
monitoring the investment activities of insurers
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19
Q

most states have prior approval for

A

coverage filigns

20
Q

about half of the states have prior approval for

A

rate filings

21
Q

two examples of statistical agents and their services

A

ISO (insurance services office) : auto, HO, commercial fire & FL
NCCI (national council on compensation insurance) : WC

statistical agent/ prospective loss filings / actuarial services

22
Q

interstate compacts

A

binding agreements among states that subordinate individual state lawmaking

23
Q

how many states have taken some action limiting use of credit scoring

A

48 states (transparency, prohibiting use for cancel, banning use for existing costumers)

24
Q

how many states have banned the use of credit history info

A

4

25
Q

UBI participation agreements could clearly identify these 3 things

A

the driving factor being measured
why is it being measured
explanation of the factors that impact safety

26
Q

ACORD is working on

A

standardizing the data elements of UBI in order to improve analytical consistency and reduce the need to support multiple data interfaces

27
Q

Progressive UBI

A

snapshot

wireless device plugged in, does not record location or have GPS

28
Q

Allstate UBI

A

Drivewise

installed into the port

29
Q

most expansive intervention into insurance regulation by the federal government

A

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

30
Q

insurers were likely included in the scope of Dodd Frank because

A

the “Financial Products” division of the insurer AIG was heavily involved in the crisis

31
Q

Reason why the Fed’s set of requirements for the insurers is not yet complete

A

quantitative liquidity requirements have not yet been established

32
Q

what removed the Dodd-Frank mandate that the regulated insurers maintain the same capital standards as banks

A

Insurance Capital Standards Clarification act (2014)

33
Q

NRRA

A

Nonadmitted and Reinsurance Reform Act (part of the dodd-frank)

34
Q

export lists

A

lists of coverages that are considered to be unavailable from the admittted market

35
Q

a state may not prohibit a surplus lines broker from placing non-admitted insurance with a non US non-admitted insurer that is listed in the

A

quarterly listing of alien insurers

36
Q

surplus lines carriers need to be approved as a Domestic Surplus Lines Insurer to

A

issue surplus lines insurance in their state of domicile

37
Q

all members insured must be owners of the RRG, and

A

all owners of the RRG must be insured by the RRG

38
Q

NAIC accreditation standards for RRGS require them to

A

comply with filing requirement including:

  • financial statements
  • Management’s discsusison and analyais
  • audited statements
  • actuarial opinions
39
Q

rating agencies do not respond as quickly as

A

the bond and stock markets

40
Q

surety insures that

A

construction firm will complete project

41
Q

AM best credit ratings- investment grade

A

exceptional aaa
very strong aa+, aa, aa-
strong a+, a, a-
adequate bbb+. bbb. bbb-

42
Q

AM best credit reatings- non-investment grade

A

speculative bb+. bb. bb-
very speculative b+ b b-
extremely speculative ccc+, ccc, ccc-, cc, c
in default d

43
Q

RBC was designed to provide these four things

A

capital adequacy standard that is based on risk
safety net for insurers
uniformity among states
regulatory authority for timely action

44
Q

value of duplicaiton illustrated by

A

Martin Frankel case (MS catching the fraud even though several regulators did not)

45
Q

3 areas of improvement identified by regulators

A

revisiting reliance on rating agencies in RBC calc
new reporting and other requirements applying to securities lending
more attention to pottential impact of unregulated affiliates of insurers

Exam 6 (8 decks)

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