Porter Ch. 3: Federal Role in Insurance Regulation Flashcards Preview

Exam 6 > Porter Ch. 3: Federal Role in Insurance Regulation > Flashcards

Flashcards in Porter Ch. 3: Federal Role in Insurance Regulation Deck (23)
1

Robertson v. California

1946 - licensing of insurance companies and agents part of business of insurance

2

FTC v. National Casualty Co.

1958 - selling and advertising of insurance polices part of business of insurance

3

SEC v. Variable Annuity

1959 - risk UW distinctive feature within business of insurance; variable annuities not part of this

4

SEC v. National Securities

1969 - company-stockholder relations not part of business of insurance

5

NOT business of insurance

If an activity affects the insurer as it would any other business

6

Group Life v. Royal Drug

1979 - Blue Shield fixing prices, not business of insurance

7

Characteristics of business of insurance

Spreading and UW of risk
Direct connection between insurer and insured
Unique to insurers
Only need one to be exempt from McCarran

8

Product Liability Risk Retention Act of 1981

Addressed price and availability crisis; enabled manufacturers, wholesalers, etc to form own RRG to spread exposures; 1986 allowed for other CI exposures

9

Causes of Product Liability insurance price and availability crisis

Questionable reserving / ratemaking
Unsafe products
Uncertainties in tort / legislation system

10

Securities Exchange Act of 1934: Obligations

Annual reports to shareholders
5 years financial data
Liquidity / capital plans
Industry segment information for three years

11

Employee Retirement Income Security Act of 1974

Designed to ensure plan participants become more informed about benefits; insurers became subject to responsibilities of compliance

12

OSHA

Requires both employers and employees to comply with safety / health standards

13

"Other" Federal Regulation affecting insurance industry

OSHA
FBI
EPA
Interstate Commerce Commission

14

Interstate Commerce Commission

Dictates acceptable minimum policy limits / conditions; forms must be approved; insurer must give ICC 30 days' written notice before cancellation

15

Contract of adhesion

Drawn up by insurer; ambiguous language favors insured

16

Doctrine of reasonable expectations

Insured's reasonable expectation of coverage is honored

17

Insurance Industry Trade Association

Exerts influence on NAIC, state/federal legislators and regulators, becomes source of information

18

Insurance Advisory Organizations

Primarily deal with filing rates or prospective loss costs; provides forum for discussion, researches topics, education

19

Consumer groups

Voice of the customer; alert regulators to industry problems

20

Priority for insurance regulators, by line

Private auto
Homeowners
Commercial Auto
CMP

21

Priority for insurance regulators, by topic

Price
Market
Availablilty
Solvency
Licensing
Corporate Org

22

Federal intervention in "business of insurance"

NFIP
TIRA
Risk Retention Acts

23

Federal intervention in activities that are not "business of insurance"

ERISA
Federal Taxation
SEC requirements