Property Chapter 4: State Regulatory Jurisdiction Flashcards
(24 cards)
Legislation: INS is regulated by
regulated primarily by state law, not federal.
Legislation: The state ins. code
a body of laws (statutes) passed by the Legislature.
Legislation: Paul v Virginia (1869(
the U.S. Supreme Court ruled that insurance was not commerce and was not subject to federal regulation under interstate commerce laws.
Legislation: In U.S. vs. South-Eastern Underwriters Association (1944)
the Supreme Court reversed itself and ruled that insurance was a matter of interstate commerce and was subject to federal regulation.
Legislation: The McCarran-Ferguson Act (P.L. 15 of 1945
reaffirmed the right of the federal government to regulate insurance while declaring that it would not do so if the states did an adequate job.
Department of Banking and Insurance: Broad Powers of Commissioner:
The Commissioner of Banking and Insurance is appointed by who?
by the Governor, with the consent of the Senate.
What is the Commissioner RESPONSIBLE for?
responsible for
enforcing the state Insurance Code in order to protect the insurance buying public.
Who is the Commisioner?
the chief executive officer of the Department of Insurance.
What does the Commissioner have AUTHORITY to pass?
has the authority to pass
administrative rules and regulations as necessary to enforce and administer the state Insurance Code.
Notice of Hearing: What does the Commissioner have power to? (4)
power to conduct investigations,
to administer oaths,
to interrogate licensees
in connection with any investigation or hearing.
Notice of Hearing: When the Commissioner believes any person is engaging in unfair or deceptive practices
he may issue a notice of a hearing.
Notice of Hearing: When shall a notice be given?
at least 10 days prior to the time the hearing is scheduled.
Notice of Hearing: After a hearing, the Commissioner may (5)?
may place on
probation,
suspend,
revoke or
refuse to renew an insurance producer’s license.
Notice of Hearing: If an alleged violator fails to respond to such notice
it shall be deemed to be an admission of all of the allegations contained in the notice.
Notice of Hearing: Before imposing an administrative penalty, the Commissioner must send notice to the violator stating (4)
the alleged violation
a statement of facts regarding the violation,
the penalties sought to be imposed
notice that the violator may request a hearing.
Penalties: After a hearing, the Commissioner may issue an order requiring such person to
cease and desist from engaging in such practices.
Persons who violate a cease and desist order may be fined
up to $5,000 for each violation.
In addition to a cease and desist order, the Commissioner may order the payment of a penalty
not to exceed $1,000 for each violation, unless the person knew they were in violation
Any person who violates the regulations regarding claims settlement practices may?… Unless?
be penalized up to $1,000 for each violation,
unless the person knew they were in violation, in which case the penalty may be up to $5,000 per violation.
In addition to, or in lieu of any other penalty, the Commissioner may impose a fine of up
$5,000 for the first violation and up to $10,000 for each subsequent violation.
The Commissioner may also order
restitution of monies owed any person and reimbursement of the costs of investigation and prosecution
A person whose application for an insurance license is denied by the Commissioner
may appeal to the Office of Administrative Law.
In addition, the Commissioner may request that
the Attorney General bring criminal action under the applicable criminal statutes.
If an alleged violator consents to an administrative penalty,
the Commissioner may require that their license be returned for cancellation,
the payment of a penalty and the reimbursement of the costs of the investigation and prosecution.
