History/Dates Flashcards
1868-Paul v. Virginia
The sale and issuance of insurance is not interstate commerce, thus upholding states’ right to regulate insurance.
1944-United States v. Southeastern Underwriters Association (SEUA)
the insurance industry is a form of interstate commerce. As such, the insurance industry should be regulated by the federal government and subject to a series of federal laws, many of which conflicted with existing state laws. This decision did not affect states’ power to regulate insurance, but it did nullify state laws that conflicted with federal legislation. The result of the SEUA case was to shift the balance of regulatory control to the federal government.
1945-The McCarran-Ferguson Act
This law made it clear that the states’ continued regulation of insurance was in the public’s best interest. However, it also made possible the application of federal antitrust laws to the extent that [the insurance business] is not regulated by state law. This act led each state to revise its insurance laws to conform to the federal laws. Today, the insurance industry is considered to be state regulated. Any person who violates the McCarran-Ferguson act faces a fine of $10,000 or up to one year in jail.
1958-intervention by the FTC
In the mid-1950s, the Federal Trade Commission (FTC) sought to control the health insurance industry’s advertising and sales literature. In 1958 the Supreme Court held that the McCarran-Ferguson Act disallowed such supervision by the FTC, a federal agency.
1959-intervention by the SEC
federal securities laws applied to insurers that issued variable annuities and, thus, required these insurers to conform to both SEC and state regulation. The SEC also regulates variable life insurance.
1970-Fair Credit Reporting Act
which is the authority that requires fair and accurate reporting of information about consumers, including applications for insurance. Insurers must inform applicants about any investigations that are being made upon completion of the application. If any consumer report is used to deny coverage or charge higher rates, the insurer must furnish to the applicant the name of the reporting agency conducting the investigation. The maximum penalty for obtaining Consumer Information Reports under false pretenses is $5,000- and 1-year imprisonment.
1994-United States Code (USC) Sections 1033 and 1034
it is a criminal offense for an individual who has been convicted of a felony involving dishonesty or breach of trust to willfully engage or participate (in any capacity) in the business of insurance without first obtaining a “Letter of Written Consent to Engage in the Business of Insurance” from the regulating insurance department of the individual’s state of residence.
1999-Financial Services Modernization Act
allowed commercial banks, investment banks, retail brokerages, and insurance companies to engage in each other’s lines of business. protect the privacy of their customers’ personal information. The main components of the rule are that financial institutions must:
Notify consumers about their privacy policies.
Provide consumers with the opportunity to prohibit the sharing of their protected financial information with non-affiliated third parties.
Obtain affirmative consent from consumers before sharing protected health information with any other parties, affiliates, and non-affiliates.
2001-Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
The Patriot Act is intended to strengthen U.S. measures to prevent, detect, and deter terrorists and their funding. The act also aims to prosecute international money laundering and the financing of terrorism. These efforts include anti-money laundering (AML) tools that impact the banking, financial, and investment communities.
2003-Do Not Call Implementation Act
The Do Not Call Registry allows consumers to include their phone numbers on the list to which telemarketers cannot make solicitation calls. Calls made on behalf of charities, political organizations, and surveys are exempt. Insurance calls are not exempt from the do not call registry.
2003-CAN-SPAM Act
outlines the right for a consumer to request a business to stop sending emails, the requirements for businesses to honor such requests, and the penalties incurred for those who violate the Act Don’t use false or misleading header information (i.e., “From,” “To,” “Reply-To,” etc.)
Don’t use deceptive subject lines (i.e., the subject line must accurately reflect the content of the message.
Identify the message as an advertisement.
Include the companies valid physical postal address in every email
Tell recipients how to opt out of receiving future emails (i.e., a return email address or another easy Internet-based way to allow people to communicate their choice to opt out).
Honor opt-out requests promptly (i.e., within 10 business days.
Don’t charge a fee, require the recipient to give personally identifying information beyond an email address, or make overcomplicate the process.
2010-Patient Protection and Affordable Care Act (PPACA)
Affordable Care Act (ACA), it represents one of the most significant regulatory overhauls and expansions of health insurance coverage in U.S. history.
NAIC has four broad objectives
To encourage uniformity among the state insurance laws and regulations.
To assist in the administration of those laws and regulations by promoting efficiency.
To protect the interests of policyowners and consumers.
To preserve state regulation of the insurance business.
Unfair Trade Practices Act
This act gives the head of each state insurance department power to investigate insurance companies and producers, to issue cease and desist orders, and to impose penalties. The act also gives officers the authority to seek a court injunction to restrain insurers from using any methods believed to be unfair.
Advertising Code
The Code specifies certain words and phrases that are considered misleading and, as such, cannot be used in advertising of any kind. Also required under this Code is the full disclosure of policy renewal, cancellation, and termination provisions.
