Chapter 6 - Insurance Industry Regulation

Question 1

NAIC (National Association of Insurance Commissioners)

Answer 1

State regulators that band together and greatly influence the insurance laws and regulations.

Question 2

Fair Credit Reporting Act (FCRA)

Answer 2

Created by federal government to help ensure privacy and fair treatment for consumers. FCRA is a federal law that regulates both insurance companies and Consumer Reporting Agencies to ensure fair and accurate reporting of consumer information.

Credit Reports: Under federal law the insurer doesn’t require consent for a credit report. If the insurer is going to use the credit report as part of the underwriting piece, they must notify the applicant.

Consumer investigative report: If the insurer order this, the applicant must be notified.

FCRA requires insurers to share the credit report information with the applicant. The applicant must give consent before an insurer can access any consumer reports.

The applicant can obtain the address and name of the consumer reporting agency and the applicant can then obtain information gathered from the consumer reporting agency. They cant get any reporting from the agent/insurer. The applicant can insert a corrective statement in a consumer report.

If the state or insurer requires these report, they will typically use a Consumer Reporting Company to handle this, keeps the insurer out of the details. They can basically get this information from anyone, friends, family, associates.

Question 3

Adverse Underwriting Action

Answer 3

Due to credit or investigative reports, the premium is either higher or the applicant is rejected. The applicant can ask for the report from the consumer reporting agency. The rule of 7 years applies here.

Question 4

MIB (Medical Information Bureau)

Answer 4

Private, non profit company created by insurance companies to share medical information between Insurers. An MIB company cannot obtain an applicants MIB record unless the applicant is first provided with an MIB Pre Notice.

MIB report DOEST NOT include the members underwriting decision, insurance applied for, where a policy was issued.

Question 5

HIPPA / PHI

Answer 5

Health Insurance Portability and Accountability Act

Protected Health Information

Question 6

Notice of Privacy Practices

Answer 6

Explains how the covered entity will use the PHI for treatment, payment and operations (TPO) only.

Question 7

Telephone Consumer Protection Act (TCPA)

And

Do Not Call Act or the Do Not Call List

Answer 7

Administered by the FTC (Federal Trade Commision) not the NAIC. Allows consumers to place their names on a national do not call list. Can be multiple or one company.

If you remain on the list, they can call between 8am-9pm. Only your number is on the list, not your name.

Once requested to be off the list, it will last 5 years and implemented within 31 days.

Companies must compare its records against the National Do Not Call Registry at least every 31 days.

Exemptions:
You had a transaction within the last 18 months
Charities
Telephone research companies
You made an inquiry or submitted an application in they can call you for 90 days.

Question 8

Replacement Regulations

Answer 8

Agent must find out if the policy is new or being replaced with a new company. Old company must be notified. The old company must provide a POLICY SUMMARY and an OUTLINE OF COVERAGE which explains the existing policy.

The replacing agents will furnish the customer with a BUYERS GUIDE which includes general consumer info and a Policy Summer/Outline of Coverage.