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
Person other than the annuitant as designated by the policyholder on whose life expectancy the annuity payment is also based. ...
Policy providing businesses with coverage for negligence based civil liability in: (1) Bodily injury and property damage liability, on an occurrence basis, resulting from the ownership, ...
Government-supervised health care system with economic incentives for providers and consumers. ...
One of four SEC divisions that enforces the federal securities laws in federal courts and before SEC's administrative law judges by bringing actions for violations. ...
Conducting of maritime suits involving ocean marine insurance policy claims before an admiralty court. ...
Process of forming a large group of homogeneous lives that in order to allow the law of large numbers to operate, thereby projecting a probable rate of mortality or morbidity whose ...
Insurance on the life of the employee, paid for by the company, with the company being the beneficiary under the policy. This insurance vehicle is being used more and more to fund ...
Attachment to a general liability policy thereby eliminating the exclusion of property under the care, custody, and/or control of an insured. Without this endorsement there would be no ...
Coverage on an all risks basis whether the airplane is on the ground or in the air; also called hull aircraft insurance. Exclusions, although none are standard, include illegal use of an ...
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