State Supervision And Regulation
Primary responsibility for overseeing the insurance industry that has rested with individual states since 1945, after Congress passed the MCCARRAN-FERGUSON ACT (PUBLIC LAW 15). In addition to supervision and regulation, states receive taxes and fees paid by the industry that amount to several billion dollars a year. State insurance laws are administered by state insurance departments that are responsible for making certain that (1) rates are adequate, not unfairly discriminatory, and not unreasonably high, and (2) insurance companies in the state are financially sound and able to pay future claims. To this end, states set requirements for company reserves, require annual financial statements, and examine company books. Each state has an insurance commissioner or superintendent who is either elected or appointed by the governor, with responsibility for investigating company practices, approving rates and policy forms, and ordering liquidation of insolvent insurers. The NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) has drafted model legislation and worked for policy uniformity, but regulations vary widely from state to state.
Whether insurers should be regulated by the states or the federal government remains at issue, but so far insurers and the NAIC lobbying have been effective in resisting federal regulation. Nevertheless, the federal government has a profound effect on the insurance industry through its taxes and a variety of regulations.
Popular Insurance Terms
Coverage tailored to the particular requirements of an insured, when a standard policy cannot be used to provide coverage for real or personal property. A manuscript policy is often written ...
Reinsurance term under which the reinsurer exercises its faculty or prerogative to insure a risk or reject a risk from a ceding company. ...
Length of employment as measured to determine eligibility, vesting, and benefit levels for employee participants in tax qualified pension plans. There is often a requirement that years of ...
Coverage through an endorsement to the personal automobile policy (pap) to extend its protection against accidents within a 25 mile radius of the U.S. border. This coverage is excess over ...
Cost of the assets listed on the accounting records of the company. These assets include the following: real estate (to include any adjustments for depreciation), transportation equipment ...
Legal decision wherein proceeds of a life insurance policy on which the decedent's corporation paid the premiums within three years of his or her death are not includable in the decedent's ...
Coverage that will indemnify the insured for the expenses, up to the limits of the policy, if a building is damaged by a peril such as fire, and zoning requirements and/or building codes ...
Number of times a loss occurs. ...
Same as term Application: written statements on a form by a prospective insured about himself, including assets and other personal information. These statements and additional information, ...
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