Porter Ch. 4: Roles of State Regulators / NAIC Flashcards Preview

Exam 6 > Porter Ch. 4: Roles of State Regulators / NAIC > Flashcards

Flashcards in Porter Ch. 4: Roles of State Regulators / NAIC Deck (25)
Loading flashcards...
1

Legislative Branch

Enacts statutes resulted in statutory law

2

Executive Branch

DOI enforces state code; Attorney General provides legal advice; administers and enforces law; law is administrative law

3

Judicial Branch

Adjudicates disputes resulting in case law

4

Typical state insurance regulatory system

Licensing requirements
Reporting/filing requirements
Periodic examinations
Power to impose sanctions

5

State Legislatures as Insurance Regulators

Directly control DOI budgets
Pass the laws commissioners must enforce

6

NCOIL

Educate, mediate, improve regulation, asserting legislators' prerogative in making policy

7

NCSL

Main purpose is to inform legislators about insurance

8

DOI Annual Reports

Commissioner summarizes activities of department and status of industry in state

9

Requirements of DOI Annual Reports

Statement of income and expenses of DOI; insurers closed that year and in receivership; summary of financial status and business transactions; fraudulent claims

10

Legislative insurance through noninsurance laws

Truth in Lending Act
Contract Law
Premiums
Fraud
Investments
Lobbying

11

NAIC fundamental insurance regulatory objectives

Protect public interest
Promote competitive markets
Facilitate fairness
Promote reliability and solvency
Support and improve state regulation
(Instituted uniform financial reporting)

12

NAIC staff support for state insurance regulators

Expert advice
Publications about insurance issues
Valuing securities
Scrutinizing alien E&S insurers
Track insurance issues at federal level

13

Model law objective

Help legislative bodies streamline legislative development process

14

Model law benefits

Help guide states in adopting same or similar laws, regulations, and guidelines; states can adopt or modify

15

Benefits of legal uniformity among states

Licensing standards, pricing, coverage requirements; less costly for multistate insurers

16

Model Laws, Regulations, and Guidelines

Includes record of whether state government has taken action

17

Reasons for rejection / non-acceptance of model laws

Inappropriate or unnecessary
Modified to meet states' particular needs
May see NAIC model law as just another agenda item

18

Financial Accreditation of DOIs

Request review by NAIC
NAIC review team visits
Review team meets with Financial Regulation Standards Accreditation Committee
Yes or make required changes and restart

19

NAIC review team

Interviews, review laws, prior exam reports, inspecting regulatory files, reviewing organizational and personnel policies, gain understanding of document and communication flows

20

Criteria to be Financially Accredited

Laws/regulations must meet basic standards of NAIC models
Acceptable regulatory methods
Adequate department practices

21

Concerns with NAIC accreditation program

Budget out of hands of NAIC
Resentment with legislators who believe this goes over their head
Revisions by NAIC creates continual need for new legislation

22

Techniques used by DOIs or NAIC in regulating solvency

RBC ratio
IRIS ratios
Financial exams

23

Model law

To streamline regulatory process, NAIC drafts model laws and state regulators modify or adopt as is

24

Model law benefits, states

Streamlines legislative process
Saves time and money
Helps for accreditation
Easier to pass law

25

Model law benefits, insurers

Compliance with multiple states less costly if standards are uniform
Alleviates insurers from excessive costs for filing