Flashcards in Insurance Regulation, Basic Compliance, MIB Deck (98)
what 2 practices does the market conduct regulations address?
what are the four pillers of the financial sector in canada ?
who regulates the financial industry?
state/provincial and federal government in both Can and US.
what are the two associations (us/ can) that uniformy maintain laws and regulations to all insurances companies?
1. US= NAIC
2. CA= CLHIA
whos is directly responsible fo the regulation and auditing of the insurance companies?
a commisioner, often known as the office of the superintendent of insurance
who makes recommendations on regulatory issues to promote consistancy throughout the insurance industry?
the superintendents along with the federal government comprise the CCIR- they work on the regulations.
each province has adopted a common law with minor variations, except for?
what has shapped the life insurance industry in the united states?
what happened from the paul vs. virgina case
gave authority to regulate the life insurance industry
what happened in the US vs. South-Eastern U/W association?
courts stated that insurance was in fact, subject to federal regulation.
what happened in the McCarran-Ferguson Act of 1945?
due to conflicting ruling, the government stated that if a states regulation is adequate than the state would be able to regulate the life insurance industry. if the state regulation is felt to be inadequate or not in the publics interest, then congress can enact regulatory legislation.
who regulated how the life insurance industry handles public retirement plans and how the individual companies procide benefits to their employess?
ERISA (employee retirement income security act)
this act also encompasses the HIPAA
what did the Fair credit reporting act of 1970 accomplish?
impacted how the insurance industry obtrains the informaiton necessary to u/w life insurance applications
who governs the sale and advertising of variable securities?
SEC and FINRA- (formaly NASD.
what does the FINRA rule 2210 require?
companies to file all variable life advertisements and sales literature prior to first use of publication.
does the life insurance regulation vary from state to state?
yes, each has its own commissioner.
how does the NAIC work to promote uniformity in state regulation?
through the development of model laws. - they are not actual laws but provide the states with a working document on which they can pattern their individual states' regulations
can a state just sell an insurance product?
no they need approval from the state insurancce department
what is the purpose of the intertate insurance product compact model law, created byu the NAIC?
in effort to standardize the approval of life insurance, annunity, disability income and long term care products. IT provides uniform standards amount the states.
what will be the purpose of the SERFF (systems for electronic rate and form filling) created by the NAIC?
to improve the efficiency of filling in multiple states.
each state is required to be audited and belong to its Guaranty Association. What is Guaranty Association?
helps cover losses to some extent is a company has financial difficulites
what is the purpose fo the NAIC's financial regulation standards and accreditation program?
desgined to review the solvency regulation of the states. it monitors the states solvency laws and examination process
what are the responsibilities of each of the 4 zones of the NAIC.
for auditing companies domiciled in its area.
unlike the US, what level of government regulates the insurance companies?
federal and provincial. the act is the primary legislation, which governs insurance companies, and fraternal benefits societies in canada.
what percentage of companies are regulated by the canadian federal governement?
who regulates the province of quebec?
regulated by the quebex civil code that came into effect in 1999.
who is responsibl for the supervison of the company's financial condition and general compliance?
OSFI- measures condition of life insurance companies by comparing the total capital of the company to the MCCSR.
what does the MCCSR do?
determines the amount of capital a company must have on its balance sheet.
what is the purpopse of the capital requirement?
to ensure the company is financially stable in the event of unexpected experience.