Section G Reg. of Ins.: Porter: Ins. Reg. 4 Flashcards
Law requires commissioner to submit an annual report to legislature which summarizes activities of department and status of insurance industry in state.
Describe the five requirements of this report.
- Statement of income and expenses of the insurance department
- Exhibit summarizing the financial status and business transactions of licensed insurers in state
- Listing of insurers closed for that business year
- Names of insurance companies in receivership or other official financial difficulty with a brief explanation of status
- Recommendations by insurance commissioner about insurance laws and the department’s operations
List four sources of State Insurance Law
- Legislative Branch
- Executive Branch (DOI and Attorney General)
- Judicial Branch (State Court System)
- State Insurance Regulatory Systems
List four features of a typical State Insurance Regulatory System
- Licensing requirements
- Reporting and filing requirements
- Periodic examinations
- Power to impose sanctions
How do State Legislatures influence regulation
- Often directly control DOI budgets
- Pass the insurance laws that insurance commissioners must enforce
List some activities of the National Conference of Insurance Legislators (NCOIL)
- Educating legislators on insurance issues
- Helping communications between state legislators on insurance issues
- Improving insurance regulation
- Asserting legislators’ prerogative in making state insurance policy
- Speaking about Congressional initiatives that might affect state insurance regulation
List of Legislative Influence through Non-insurance Laws
- Banking
- Contracts
- Premiums (e.g. premium financing)
- Fraud
- Investments
- Lobbying
List the NAIC fundamental insurance regulatory objectives
- Protect the public interest
- Promote competitive markets
- Facilitate the fair and equitable treatment of insurance consumers
- Promote the reliability, solvency, and financial solidity of insurance institutions
- Support and improve state regulation of insurance
List some examples of ways that NAIC staff supports state insurance regulatory officials
- Supporting NAIC’s committees and task forces
- Maintain databases to help regulators track financial adequacy of insurers
- Scrutinizing alien E&S insurers seeking to do business in U.S.
- Supporting individual state insurance regulators in court cases by issuing “friend of the court” supportive briefs
- Valuing insurers’ securities
Three Advantages of Model Laws, Regulations and Guidelines
- Model laws help legislative bodies streamline their legislative development process
- NAIC model laws help guide state in adopting the same or similar insurance laws, regulations, and guidelines
- Insurers can benefit from legal uniformity among the states
Three reasons some model laws are changed or never adopted by states
- State may view as inappropriate or unnecessary due to coverage in other state laws
- Legislators might decide to modify a model law to meet their states’ particular needs or better match other laws
- Legislature considers many matters and may see NAIC model law as just another agenda item
What does the NAIC Review of a state seeking accreditation involve
- interviewing department personnel
- reviewing laws and regulations
- reviewing prior examination reports
- inspecting regulatory files for selected companies
- reviewing organizational and personnel policies
- gain understanding of document and communication flows
- discussing comments and findings from the review
- conducting closing conference with the state to discuss findings and prepare a report
List three standards of Financial Regulation that need to be met to be accredited
- laws and regulations used by the state must meet certain basic standards of NAIC models
- regulatory Methods of State must be acceptable
- department practices must be adequate
