The document discusses the history and current structure of insurance regulation in the United States, noting that states currently regulate insurance through departments coordinated by the NAIC, but there has been ongoing debate around greater federal oversight. Recent proposals have suggested establishing a Federal Office of Insurance Oversight or modernizing regulation based on principles like effective systemic risk oversight and increased national uniformity.
The necessity for international harmonization of competition lawAbhimanyu Singh
Co-operation in the enforcement of competition law has improved significantly since 1990. More countries are actively co-operating and efforts to converge in substantive approaches to competition law enforcement have borne fruit. While bilateral co-operation provides many satisfactory results at the moment, with rapid change in competition law enforcement and increasingly more connected economies, it is appropriate to consider whether new approaches to co-operation will be needed in the future. Future challenges for co-operation arise from the significant increases in the complexity of cooperation as the world economy continues to globalize and as the newer competition authorities in fast growing emerging economies become more active. Methods and tools of co-operation could usefully evolve in order to address future challenges. From 1990 to 2011, while the complexity of co-operation has increased 20 times or more, the legal mechanisms for co-operation have hardly evolved. The need for effective co-operation could outstrip the ability of existing, bilateral, mechanisms to cope.
HospitalityLawyer.com | Linda K. Enghagen Lawsuit Study | Compliance With Sam...HospitalityLawyer.com
A series of discrimination lawsuits brought against hospitality industry businesses under state public accommodation discrimination laws highlight the ways in which some state’s laws afford protection to a broader range of protected groups than those covered by federal law. Given the relatively recent advent of legalized same-sex marriage and civil unions under some state laws, hospitality industry businesses need to ensure they are compliant with the relevant anti-discrimination laws in their respective states. In addition, research demonstrates a positive economic impact on wedding related spending in states permitting same-sex marriage and civil unions with a significant portion of that spending going to hospitality industry businesses for wedding related tourism.
This is the second session of a three day course on economic sanctions related to Russia. It covers the financing restrictions from the US and EU sanctions generally.
The necessity for international harmonization of competition lawAbhimanyu Singh
Co-operation in the enforcement of competition law has improved significantly since 1990. More countries are actively co-operating and efforts to converge in substantive approaches to competition law enforcement have borne fruit. While bilateral co-operation provides many satisfactory results at the moment, with rapid change in competition law enforcement and increasingly more connected economies, it is appropriate to consider whether new approaches to co-operation will be needed in the future. Future challenges for co-operation arise from the significant increases in the complexity of cooperation as the world economy continues to globalize and as the newer competition authorities in fast growing emerging economies become more active. Methods and tools of co-operation could usefully evolve in order to address future challenges. From 1990 to 2011, while the complexity of co-operation has increased 20 times or more, the legal mechanisms for co-operation have hardly evolved. The need for effective co-operation could outstrip the ability of existing, bilateral, mechanisms to cope.
HospitalityLawyer.com | Linda K. Enghagen Lawsuit Study | Compliance With Sam...HospitalityLawyer.com
A series of discrimination lawsuits brought against hospitality industry businesses under state public accommodation discrimination laws highlight the ways in which some state’s laws afford protection to a broader range of protected groups than those covered by federal law. Given the relatively recent advent of legalized same-sex marriage and civil unions under some state laws, hospitality industry businesses need to ensure they are compliant with the relevant anti-discrimination laws in their respective states. In addition, research demonstrates a positive economic impact on wedding related spending in states permitting same-sex marriage and civil unions with a significant portion of that spending going to hospitality industry businesses for wedding related tourism.
This is the second session of a three day course on economic sanctions related to Russia. It covers the financing restrictions from the US and EU sanctions generally.
Breathe See Touch the Difference. The Cushman & Wakefield Headquarters Project Registers for LEED as part of the LEED EB&OM Project at 1290 Avenue of the Americas.
Daftar pembagian tugas presentasi kelompok kelas a bDasrieny Pratiwi
Pembagian tugas kelompok matakuliah Zoologi Vertebrata mulai dari pertemuan 3-16 (Kec UTS dan UAS). Dalam pembuatan makalah, gunakan kolom materi sebagai panduan untuk isi makalah yang akan dibuat, sehingga tidak keluar dari topik yang telah di tentukan...selamat bekerja, semoga selalu diberi kemudahan dan kelancaran untuk menyelesaikannya. Aamiin.
Despite the global quest for work-life balance, many people still regularly work over the weekend and don't use all of their vacation days. So if you dream about a 25th hour in the day to be fully productive and dedicate some time for yourself, we've got something for you! Since having an extra hour in the day is still impossible, we decided to give you some tips on how to work on things smarter. Here's a neat presentation with tips for saving heaps of time for leisure! www.wrike.com/
2020 Social Workshop on Social Media for Non-Pofits2020 Social
Slides from the 2020 Social workshop on Social Media for Non-profits.
This deck has been used for the following workshops:
- NASSCOM Foundation workshop, New Delhi, April 2010.
Update history:
- April 2010
Life and Health Insurance FIN 3660 Chapter 2 The Life and .docxSHIVA101531
Life and Health Insurance FIN 3660
Chapter 2
The Life and Health Insurance Industry
Objectives
Distinguish among the three types of business organizations and explain why insurance companies must be organized as corporations.
Distinguish among stock insurers, mutual insurers, and fraternal benefit societies.
Describe the financial services industry and explain how insurance companies function within that industry.
Identify two primary types of insurance regulation in most countries.
Describe the roles that the federal and state governments play in U.S. insurance regulation.
2
Types of Business Organizations
Businesses are structured in three basic ways.
A sole proprietorship is owned and operated by one person. The owner receives all profits and is responsible for all the debts of the business.
A partnership is a business that is owned by two or more people known as partners. They divide the profits, and generally each of them is personally responsible for all the debts of the business.
A corporation is a legal entity that is created by the authority of a governmental unit and is separate and distinct from the people who own it. Corporations are different from other businesses in two ways. First, because they can be sued, can enter into contracts, and can own property. The assets and liabilities belong to the corporation itself, not the owners; thus, a corporation continues beyond the death of any or all of its owners.
An asset is an item of value, such as cash, buildings, or investments.
A liability is a company’s debt or future obligation.
Equity represents the owners’ interest; the amount on which owners have a claim.
3
Types of Insurance Company Organizations
1. Stock Corporations
Most corporations, including most life and health insurers, are stock corporations, a corporation whose ownership is divided into units known as shares, or shares of stock. A stockholder, or shareholder, is a person or organization who owns stock in the corporation.
Stock insurance companies are insurers organized as stock corporations.
Stockholders elect a board of directors, who are responsible for overseeing the company’s management.
Stockholder dividend is a portion of the corporation’s earnings paid to the owners of its stock.
4
Mutual Insurance Companies
2. Mutual Companies
This is an insurance company that is owned by its policyowners, who elect the company’s board of directors.
Mutual insurers historically have been older and larger than stock insurers and thus provide a significant amount of the life insurance in force.
5
Fraternal Benefit Societies
3. Fraternal Benefit Societies
Fraternals are nonprofit organizations that are operated solely for the benefit of their members and provide social, as well as insurance, benefits to their members.
Members of such societies share ethnic, religious, or vocational backgrounds, although some allow membership to the general public.
Members elect the officers of a fraternal society who manage its ...
CBI Comments to FinCEN on Beneficial Ownership of CpativesJasonSchupp1
In response to this ANPR, CBI draws FinCEN’s attention to how U.S. domiciled captive insurance companies may interact with the provisions and intent of the Corporate Transparency Act (CTA).
Broad Application of Medicare’s Mandatory Insurer Reporting Requirements to N...NationalUnderwriter
Broad Application of Medicare’s Mandatory Insurer Reporting Requirements to Non-U.S. Property & Casualty Carriers Flouts Supreme Court Limitations on Extraterritorial Reach of U.S. Law By Richard L. McConnell and Kathryn Bucher
This article attempts to demystify some of the issues regarding possible extraterritorial application of the
requirements under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007, comments on
claim situations that frequently may confront non-U.S. insurers, and alerts readers to the need to evaluate the potential Section 111 ramifications of claim payments to Medicare beneficiaries.
Full text of the Supreme Court's 6-3 Obamacare rulingDaniel Roth
Chief Justice John Roberts: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.. IIf at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”
Scalia: "“We should start calling this law ‘SCOTUScare"
FIN 3610 General InsuranceChapter 6 – Insurance Company Operatio.docxssuser454af01
FIN 3610 General Insurance
Chapter 6 – Insurance Company Operations
Chapter 8 – Government Regulation of Insurance
Lecture Overview – Comments from Dr. Zietz
Insurance Company Operations and Government Regulation of InsuranceInsurance Company Operations
The information contained in this next lesson, which comes from Chapters 6 and 8, may be more fascinating to some of you if you already have a specific interest in a particular field of insurance. For example if you're in actuarial science major, you will like the right making section. Many students found they want to go into underwriting and there's a good portion of the chapter on the underwriting steps and different types of consideration to beginning the underwriting process. Some students know right away that they're interested in sales while others know for certain that is not their strong interest. The production side of insurance covers again some of the marketing topics that we had earlier, but it will also tell you how professional organizations, such as the CPCU Chartered Property and Casualty Underwriter and the CLU Chartered Life Underwriter, are among others that encourage professionals within the industry to continuously improve their skills and knowledge by completing professional designations.
Another area within the insurance industry that is fascinating and offers a great insight into many facets of the insurance process is claims settlement. There are various types of adjusters that are discussed in this chapter and the steps to the adjusting process is fairly structured. Entering the insurance industry through a claims position will provide insight into how the insurance industry can operate successfully.
Reinsurance is kind of a term that many young professionals are not fully able to grasp but it is a very key tool used to sustain the insurance industry. Reinsurance, as noted on slide 15, is an arrangement by which the primary insurer that initially writes the coverage transfers to another insurer part of those potential losses. The primary insurer is called the seating company, and the company that accepts that seeded risk is the reinsure. This process allows companies to increase their underwriting capacity and reduce their reserves which may be more optimally invested elsewhere.
Insurance Regulation
Chapter 8 brings up several very interesting topics concerning the purpose of regulating the insurance industry and how the regulation may be efficiently accomplished. I typically ask the classroom students “what is the main reason for insurance regulation?” Most of them, being new in their study of insurance, say it is to keep the prices down. Then I respond by asking: do you think we need regulation to ensure the price of groceries is kept at a certain level? Do you think the price of a car should be regulated by the federal government? So what makes insurance different that results in needing regulation that other industries do not need?
If you b ...
Blue Sky Laws are state regulations and their purpose is to safeguard investors from securities fraud. And these being the laws promulgated by the states, there may be some variations in the rules and regulations state-wise for these blue sky laws.
To know more about it, click on the link given below:
https://efinancemanagement.com/investment-decisions/blue-sky-laws
federalism A system ofgovernment in which power isdivided .docxlmelaine
federalism A system of
government in which power is
divided between a central
authority and constituent
political units.
99
5
Constitutional Principles
! THE CONSTITUTION
! FEDERALISM
! SEPARATION OF POWERS
! THE IMPACT OF THE COMMERCE CLAUSE ON BUSINESS
! THE TAXING AND SPENDING POWERS OF THE FEDERAL
GOVERNMENT
! THE IMPACT OF THE AMENDMENTS ON BUSINESS
F
iercely independent, highly individualistic, and very proud of their country
would be a good characterization of Americans. Many say there is no place
they would rather live than the United States. Much of their pride stems from
a belief that they have a strong Constitution, which secures for all individuals
their most fundamental rights. Most people, however, are not aware of precisely
what their constitutional rights are or of how to go about enforcing those rights.
This chapter provides the future business manager with basic knowledge of the
constitutional framework of our country, as well as an overview of the signifi-
cant impact of some of the constitutional provisions on the legal environment of
business.
The Constitution
The Constitution provides the legal framework for our nation. The articles of the
Constitution set out the basic structure of our government and the respective
roles of the state and federal governments. The Amendments to the Constitution,
especially the first 10, were primarily designed to establish and protect individ-
ual rights.
Federalism
Underlying the system of government established by the Constitution is the prin-
ciple of federalism, which means that the authority to govern is divided be-
tween two sovereigns or supreme lawmakers. In the United States, these two
sovereigns are the state and federal governments. Federalism allocates the power
to control local matters to local governments. This allocation is embodied in the
U.S. Constitution. Under the Constitution, all powers that are neither given ex-
clusively to the federal government nor taken from the states are reserved to the
states. The federal government has only those powers granted to it in the Con-
stitution. Therefore, whenever federal legislation that affects business is passed,
the question of the source of authority for that regulation always arises. The
Commerce Clause is the predominant source of authority for the federal regula-
tion of business, as we will see later.
C H A P T E R 5 " Constitutional Principles 101
Does the state law directly
conflict with a federal law?
If yes, the state law is
invalid under the
Supremacy Clause.
If no, does the state law
attempt to regulate in an
area where federal law is
so pervasive that it appears
that Congress intended
only federal regulation in
that area?
If yes, the state law is
invalid under the doctrine
of federal preemption.
If no, the state law is valid.
EXHIBIT 5-1
APPLICATION OF THE
SUPREMACY CLAUSE TO
STATE REGULATION
pertaining to interstate commerce, such as when a local regulation imposes a sub-
stantial burden on ...
Presented to 4th year Pharmacy students at UBC Pharmaceutical Sciences in the Phar400 Pharmacy Business Management course.
As part of the curriculum students are required to work in teams to create a new sustainable professional clinical service supported by a business plan. At the end of the semester the teams present in a "pitch" to classmates and a panel of judges. Winners are determined by their peers.
In this third presentation of the semester we review Employment Law and the rules that govern the workplace in Canada and in particular British Columbia.
Learning objectives:
>Human Rights Act and BC Human Rights Code
>Employment Standards Act
>Labour Relations
>Workers Compensation Act
>Personal Information Protection Act (PIPA)
>Employment interviews
Using Unfair and Deceptive Acts and Practices Statutes to Challenge Reinsurer...NationalUnderwriter
Although the viability of a claim for violation of an unfair and deceptive acts and practices statute in the reinsurance
context is still in its infancy, the possibility of those claims must be considered by cedents and reinsurers alike in their claims activities, at least in jurisdictions where such claims are viable.
A California federal court recently granted a life insurance carrier's motion to dismiss a putative class action claiming that the carrier charged compound interest on life insurance policy loans without proper authorization and in violation of California state law...
Securities Law: An Overview (Series: Securities Law Made Simple (Not Really)) Financial Poise
Stocks and bonds are easily recognizable as securities, but did you know that promissory notes may also be securities? So can certain joint venture interests and many other types of investment contracts. Then there are cryptocurrency altcoins, which are sometimes securities and sometimes not. How do you identify a security? What are some of the requirements related to offering and selling securities? How do they differ between private and public companies? What happens if you fail to comply with securities laws? How has legislation like the JOBS Act, the FAST Act changed the way in which companies offer and sell their securities? In this webinar our expert panel provides you with a high-level overview of the federal securities laws as well as tangible examples and practical advice in answer to these and many more questions.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/securities-law-an-overview-2020/
United Corporate Services provides search and filing results tailored specifically to our clients’ needs. Reports sorted by individual debtor per page, or a more comprehensive summary report of all search results on one page, both are easily provided in either .pdf format for secure closings or in Excel format for easy manipulation into your existing closing binder. United Corporate Services files and searches in over 3,000 jurisdictions in the U.S. Understanding their unique requirements ensures accurate processing of all your UCC transactions. Revised Article 9 is once again being “revised,” and we have done the legwork necessary to walk with you through your projects to ensure they are completed timely and accurately.
Similar to The Federal Regulation Of Insurance (20)
1. The Federal Regulation
of Insurance
Association of Insurance
Compliance
Professionals –
Gulf States Chapter
Education Day 2009
Atlanta, Georgia
1
2. Tony Roehl is an Associate in the firm’s Insurance
and Reinsurance and Corporate Practices. Mr.
Roehl’s principle areas of concentration are
insurance regulation and corporate matters involving
entities within the insurance industry. Mr. Roehl
received his bachelor’s degree from the University of
Florida and his law degree from the University of
Michigan.
Tony Roehl
Phone: 404.495.8477
troehl@mmmlaw.com
http://www.linkedin.com/in/tonyroehl
2
3. Disclaimer
This presentation is provided as a general informational service to
clients and friends of Morris, Manning & Martin, LLP. Therefore, it
should not be relied upon as a complete record for purposes of
regulatory compliance, nor is it intended to furnish legal advice
adequate to any particular circumstances. This presentation does
not create an attorney-client relationship. Any opinions
expressed herein are solely those of the speaker and do not
represent the opinion of Morris, Manning & Martin, LLP or the
opinions of any of our clients.
3
4. Overview
1. The Current Structure of Insurance Regulation
2. How Did We Get Here
3. Recent White Papers and Federal Review of the Regulation of the
Insurance Industry
4. Status of Major Federal Insurance Legislation in the 111th Congress
(excluding health insurance legislation)
5. State/NAIC Response to Federal Interest
6. Behold, the World of Tomorrow!
4
5. The Current Structure
of Insurance Regulation
– States regulate insurance and coordinate national issues through the
NAIC - there is historically little direct federal involvement
– The mission of the NAIC is to assist state insurance regulators,
individually and collectively, in serving the public interest and achieving
the following fundamental insurance regulatory goals in a responsive,
efficient and cost effective manner, consistent with the wishes of its
members:
• 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; and
• Support and improve state regulation of insurance.
5
6. The Current Structure
of Insurance Regulation
– NAIC initiated an accreditation process for insurance departments in 1990 as a
way to encourage states to enact a core set of NAIC model solvency regulations
and maintain minimum standards of solvency regulation. All states except New
York are accredited and New York is now working towards accreditation.
– Regulation of insurance industry is almost exclusively through state Departments
of Insurance
– 12 Commissioners of Insurance are elected and the remainder are appointed (11
states and USVI)
– State regulatory focus is on five areas:
1. Rate regulation
2. Insurer Solvency
3. Unfair trade and claims settlement practices
4. Coverage requirements
5. Licensing and regulation of service providers and related parties
6
7. How Did We Get Here
– The early years (1780 to 1860) - agitation for
federal involvement.
– Insurance was originally regulated by the states -
but very lightly so.
– By the 1860s insurers were already agitating for a
federal based system of regulation to replace the
disparate state regulatory scheme. By this time,
banks were already federally regulated through
the National Bank Act.
7
8. How Did We Get Here
– Paul v. Virginia, 75 U.S. 168 (1869) – Affirms state regulation
– the industry loses
• Attempt by proponents of federal regulation (NY
insurers) to force the Supreme Court to reject the state
based regulatory system mainly under the commerce
clause - which states generally that Congress is the
sole regulator of interstate commerce.
• The plan didn’t work -- Homer Simpson moment (d’oh!)
-- the Court held that “issuing a policy of insurance is
not a transaction of commerce,” which left regulation of
insurance to the states and outside of Congress’
powers under the Commerce Clause.
• NAIC formed in 1871 in response to this decision.
8
9. How Did We Get Here
– By 1919, thirty-six states had separate departments of
insurance to administer insurance statutes.
– By 1930, most insurance departments were given greater
authority to collect financial information from insurers and
tasked with preserving insurer insolvency.
• Some authority was granted over policy forms and unfair trade
practices.
– By 1944, comprehensive insurance regulation was in place
in all areas but ratemaking.
9
10. How Did We Get Here
– United States v. South-Eastern Underwriters Assoc., 322 U.S.
533 (1944) - Upends Paul v. Virginia and state based
regulation – the industry loses…again.
• Brought by Attorney General of Missouri - who was frustrated
with the ineffectiveness of state ratemaking regulation and
wanted federal involvement - sought a ruling that insurance
was commerce and subject to federal antitrust laws.
• By a 4-3 decision, ruled that insurance was commerce and
thus subject to congressional authority under the Commerce
Clause.
• Homer Simpson moment (d’oh!) - ironically, the industry now
preferred the generally lax regulation of the state authorities.
• No way to overturn the Supreme Court - but Congress could
refuse to regulate insurance.
10
11. How Did We Get Here
– McCarran-Ferguson Act - 15 U.S.C. §§ 1011 et seq. (1945) - Legislation
proposed by the NAIC to preserve the state based regulatory system unless
a federal law specifically applies to insurance. The industry wins!
• Congress hereby declares that the continued regulation and taxation by the several
States of the business of insurance is in the public interest, and that silence on the part
of the Congress shall not be construed to impose any barrier to the regulation or
taxation of such business by the several States. - 15 U.S.C. § 1011.
(a) State regulation
The business of insurance, and every person engaged therein, shall be
subject to the laws of the several States which relate to the regulation or taxation of
such business.
(b) Federal regulation
No Act of Congress shall be construed to invalidate, impair, or supersede any law
enacted by any State for the purpose of regulating the business of insurance, or which
imposes a fee or tax upon such business, unless such Act specifically relates to the
business of insurance: Provided, That [the Sherman Act], and [Clayton Act], and [the
Federal Trade Commission Act], shall be applicable to the business of insurance to the
extent that such business is not regulated by State Law. - 15 U.S.C. § 1012 (emphasis
added).
• Nothing contained in this chapter shall render the said Sherman Act inapplicable to any
agreement to boycott, coerce, or intimidate, or act of boycott, coercion, or intimidation. -
15 U.S.C. § 1013(b).
11
12. How Did We Get Here
– What does it all mean?
• Essentially, the McCarran-Ferguson Act gave state regulation of insurance
supremacy over federal laws to the extent that states choose to regulate
insurance.
• State action has typically been prodded by federal interest, but feds have not
been afraid to act when sufficiently prompted:
– Mid-1950s FTC began looking at insurer advertising - by 1963 all states adopted
unfair trade practices laws.
– 1960s and early 1970s - DOT inquiry over automobile insurance rates - majority of
states adopt some kind of no-fault statute and about half reform tort system.
– National Flood Insurance Act - 1968 – Established the National Flood Insurance
Program (“NFIP”) to enable property owners in participating communities to
purchase insurance protection from the government against losses from flooding.
– Employee Retirement Income Security Act (“ERISA”) - 1974 - ERISA established
minimum standards for pension plans in private industry and provides for extensive
rules on the federal income tax effects of transactions associated with employee
benefit plans.
– 1990s Risk Based Capital framework developed in response to congressional
criticism of state regulation of insurer solvency.
12
13. How Did We Get Here
– Gramm-Leach-Bliley Act (“GLBA”) - 1999 - repealed part of the Glass-Steagall Act of
1933, opening up the market among banks, securities companies and insurance
companies. The Glass-Steagall Act prohibited any one institution from acting as both
an investment bank and a commercial bank, or as both a bank and an insurer.
» Section 321 of the GLBA required at least 29 states to meet either its
uniformity or reciprocity requirements by November 12, 2002, in order to avoid
state law preemption and the formation of a national body for licensing of
insurance agents, the National Association of Registered Agents and Brokers
(NARAB).
» States, through the NAIC, elected to pursue the reciprocity option which
requires states to enact reciprocal laws and regulations governing the
licensure of nonresident individuals and entities, and largely defer to the home
state's requirements. The NAIC certified whether states achieved reciprocity
based on a four-pronged standard developed by the NAIC's NARAB Working
Group. The Producer Licensing Model Act (PLMA) was adopted and
consequently enacted in 39 states. In August 2002, the NARAB Working
Group issued its report and certified 35 states with the GLBA reciprocity
certification. Currently, all states accept the National Insurance Producer
Registry non-resident licensing uniform applications. As of March 2009, 47
states were certified as meeting the GLBA reciprocity requirements (California,
Florida, New York and Washington were not certified).
– Terrorism Risk Insurance Act (“TRIA”) - 2002 - TRIA created a federal "backstop" for
insurance claims related to acts of terrorism. Renewed in December 2005 and
2007. TRIA now extends until December 31, 2014.
13
14. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
– Bush Treasury Blueprint for a Stronger Regulatory Structure - June 2008
• “We should and can have a structure that is designed for the world we live in,
one that is more flexible, one that can better adapt to change, one that will allow
us to more effectively deal with inevitable market disruptions and one that will
better protect investors and consumers. The challenge is to evolve to a more
flexible, efficient and effective regulatory framework – and that is the purpose of
this Blueprint.” - Treasury Secretary Henry M. Paulson, Jr.
• The main concern was that the lack of uniformity across state insurance
regulation can lead to inefficiencies and undue regulatory burden, and can
directly limit insurers’ ability to compete across state boundaries and
international borders.
• Recommended the establishment of a federal regulatory structure to provide for
the creation of an optional federal charter.
• As an intermediate step, recommended the formation of the Federal Office of
Insurance Oversight within Treasury to establish a federal presence in
insurance for international and regulatory issues.
• Federal regulatory structure would not include rate regulation - which was
criticized as being inefficient when the regulatory focus was on solvency.
14
15. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
– GAO Report – Insurance Reciprocity and Uniformity: NAIC and State Regulators Have
Made Progress in Producer Licensing, Product Approval, and Market Conduct
Regulation, but Challenges Remain – April 2009
• GAO was asked to review the areas of (1) producer licensing, (2) product
approval, and (3) market conduct regulation, in terms of progress by NAIC and
state regulators to increase reciprocity and uniformity, the factors affecting this
progress, and the potential impacts if greater progress is not made.
– Reciprocity of producer licensing among states has improved, but consumer
protection and other issues present challenges to uniformity and full reciprocity.
– State regulators’ processes to approve insurance products have become more
efficient, but barriers exist to greater reciprocity and uniformity.
» Positive gains from use of SERFF, with limited gains from the Compact. It was
noted that the Compact will not likely apply to P&C due to differences in state
laws.
– NAIC and the states have taken steps to improve reciprocity and uniformity of market
conduct regulation, but variation across states has limited progress
15
16. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
– GAO Recommendations:
1) As Congress considers changes to its oversight of the insurance
industry, it explore ways to ensure all states and jurisdictions can
conduct nationwide criminal background checks as part of their
producer licensing and consumer protection functions.
2) The NAIC and state insurance regulators work with the insurance
industry to identify product approval differences among state
regulators and improve how consistently state regulators review and
approve product filings once received through SERFF.
16
17. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
– Obama Treasury Financial Regulatory Reform A New
Foundation: Rebuilding Financial Supervision and Regulation –
June 2009
• Organized around five key objectives:
1. Promote robust supervision and regulation of financial firms
2. Establish comprehensive supervision of financial markets
3. Protect consumers and investors from financial abuse
4. Provide the government with the tools it needs to manage
financial crises
5. Raise international regulatory standards and improve
international cooperation
17
18. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
• Would establish the Office of National Insurance (ONI) within
Treasury
– ONI would be responsible for monitoring all aspects of the
insurance industry and would be responsible for identifying the
emergence of any problems or gaps in regulation that could
contribute to a future crisis. ONI would also recommend to the
Federal Reserve those insurance companies that are so large
that their failure would create a systemic risk to financial stability
(a so called Tier 1 FHC). Tier 1 FHCs would be regulated by the
Federal Reserve and subject to the Bank Holding Company Act.
– ONI would be responsible for administering TRIA.
– ONI would represent the United States in the International
Association of Insurance Supervisors.
– Does not call for an optional federal charter.
18
19. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
• Treasury will support proposals to modernize insurance
regulation based on six principles:
1. Effective systemic risk regulation with respect to insurance. The
steps proposed in this report, if enacted, will address systemic
risks posed to the financial system by the insurance industry.
However, if additional insurance regulation would help to further
reduce systemic risk or would increase integration into the new
regulatory regime, we will consider those changes.
2. Strong capital standards and an appropriate match between
capital allocation and liabilities for all insurance companies.
Although the current crisis did not stem from widespread
problems in the insurance industry, the crisis did make clear the
importance of adequate capital standards and a strong capital
position for all financial firms. Any insurance regulatory regime
should include strong capital standards and appropriate risk
management, including the management of liquidity and
duration risk.
19
20. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
3. Meaningful and consistent consumer protection for insurance products
and practices. While many states have enacted strong consumer
protections in the insurance marketplace, protections vary widely among
states. Any new insurance regulatory regime should enhance consumer
protections and address any gaps and problems that exist under the
current system, including the regulation of producers of insurance.
Further, any changes to the insurance regulatory system that would
weaken or undermine important consumer protections are unacceptable.
4. Increased national uniformity through either a federal charter or effective
action by the states. Our current insurance regulatory system is highly
fragmented, inconsistent, and inefficient. While some steps have been
taken to increase uniformity, they have been insufficient. As a result there
remain tremendous differences in regulatory adequacy and consumer
protection among the states. Increased consistency in the regulatory
treatment of insurance – including strong capital standards and consumer
protections – should enhance financial stability, increase economic
efficiency and result in real improvements for consumers.
20
21. Recent White Papers and Federal Review of
the Regulation of the Insurance Industry
5. Improve and broaden the regulation of insurance companies and
affiliates on a consolidated basis, including those affiliates
outside of the traditional insurance business. As we saw with
respect to AIG, the problems of associated affiliates outside of a
consolidated insurance company’s traditional insurance
business can grow to threaten the solvency of the underlying
insurance company and the economy. Any new regulatory
regime must address the current gaps in insurance holding
company regulation.
6. International coordination. Improvements to our system of
insurance regulation should satisfy existing international
frameworks, enhance the international competitiveness of the
American insurance industry, and expand opportunities for the
insurance industry to export its services.
• OFC may still be an option, the white paper calls for
“increased national uniformity through either a federal charter
or effective action by the states.”
21
22. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– National Insurance Consumer Protection Act (H.R. 1880) –
OFC Bill.
• Summary:
– Creates an optional parallel, national system of regulation
for insurers, agencies and producers similar to the dual
banking regulatory system.
– Companies that pose a systematic risk would be forced to
be regulated by the feds.
– Establishes in the Department of the Treasury the Office
of National Insurance (ONI), headed by a Commissioner,
with regulatory oversight over national insurers and
national insurance agencies.
22
23. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Authorizes the Commissioner to: (1) examine national insurers or
national insurance agencies; (2) impose fees on national insurers,
national insurance agencies, and national insurance producers; (3)
revoke the charter of a national insurer or national insurance agency for
specified cause, (4) implement enforcement powers, including
cooperation with foreign governments; (5) secure bilateral and
multilateral agreements with foreign insurance regulators and regional
and global regulatory organizations; and (6) license individual persons
as a national insurance producer.
– Establishes: (1) the Coordinating National Council for Financial
Regulators; and (2) the National Insurance Guaranty Corporation.
– Prescribes procedures for conservatorship, receivership, benefits and
claims payments, and assessments on national insurers.
• Status - Introduced on April 2, 2009 and referred to committee.
23
24. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Insurance Information Act of 2009 (H.R. 2609).
• Bill is based on March 2008 recommendations in Treasury Blueprint
• Would create the Office of Insurance Information within Treasury to:
– Collect and analyze data on insurance;
– Advise the Secretary of the Treasury on major domestic and
international policy issues;
– Report to Congress every two years;
– Establish federal policy on international insurance matters; and
– Ensure that state insurance laws remain consistent with federal policy in
coordinating international trade agreements.
• Status - Voted out of committee but stalled on the House floor in
110th Congress by direction of Speaker Pelosi. Reintroduced on
May 21, 2009 and referred to committee.
24
25. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Nonadmitted and Reinsurance Reform Act of 2009 (H.R. 2571 / S. 1363)
• Summary:
– Prohibits any state except the insured’s home state from requiring a
surplus lines tax payment.
– Authorizes states to establish procedures to allocate surplus lines taxes
among themselves for multi-state risks such as an interstate compact.
– The regulators in the insured’s home state would be the sole regulators
of the surplus lines transaction - including for broker licensing.
– Prohibits states from establishing criteria for nonadmitted insurers
domiciled in a U.S. jurisdiction except in conformance with the Non-
Admitted Insurance Model Act (currently adopted in some form by every
state except D.C. and Massachusetts).
– Requires states to accept all Alien insurers listed on NAIC International
Insurers Department Quarterly Listing of Alien Insurers.
25
26. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Prohibits a state from denying credit for reinsurance if the state
of domicile of an insurer purchasing reinsurance (ceding insurer)
recognizes credit for reinsurance for the insurer's ceded risk,
and: (1) is either an NAIC-accredited state; or (2) has financial
solvency requirements substantially similar to NAIC
accreditation requirements.
– Reserves to reinsurer's state of domicile the sole responsibility
for regulating the reinsurer's financial solvency if such state is
either NAIC-accredited, or has financial solvency requirements
substantially similar to NAIC.
– Prohibits a state from requiring a reinsurer to provide financial
information other than that required to be filed with its NAIC-
compliant domiciliary state.
• Status - Introduced on May 21, 2009. Referred to committee.
Similar bills passed the House during the previous two
sessions.
26
27. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– National Association of Registered Agents and Brokers Reform Act of
2009 (NARAB II) (H.R. 2554)
• Summary:
– The intent is to establish a single point of licensure for national non-
resident licensing reciprocity.
– Establishes the National Association of Registered Agents and Brokers
(“NARAB”) which would be a non-profit association that would act as a
central clearing mechanism through which licensing, continuing
education, and other nonresident insurance producer qualification
requirements and conditions can be adopted and applied on a multi-
state basis.
– The States’ rights to license, supervise, discipline, and establish
licensing fees for insurance producers would be preserved, along with
the ability and to prescribe and enforce laws and regulations with regard
to insurance-related consumer protection and unfair trade practices.
• Status - Introduced on May 21, 2009. Referred to committee. A
similar bill passed in the House last session.
27
28. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Fixed Indexed Annuities and Insurance Products
Classification Act of 2009 (H.R. 2733 / S. 1389)
• Summary:
– Seeks to repeal by legislation the SEC’s adoption of Rule
151A, entitled “Indexed Annuities and Certain Other
Insurance Products”, 74 Fed. Reg. 3138 (January 16,
2009).
– Clarifies that equity indexed insurance and annuity
products are not subject to SEC regulation.
• Status - Introduced in the House on June 4, 2009
and June 25, 2009 in the Senate. Referred to
committees.
28
29. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Homeowners Defense Act of 2009 (H.R. 2555 / S. 505)
• Summary:
– Establishes a national cat pool through the establishment of a National
Catastrophe Risk Consortium, which would inventory catastrophe risks
of state reinsurance and residual plans, issue catastrophe bonds linked
to the risks of its members and provide research and analysis.
– State residual plans, reinsurance plans and state-sponsored insurers
would be eligible to join. The bill also would provide state plans with
access to liquidity loans through the U.S. Treasury should liabilities not
be fully funded after a catastrophe and if the plans were unable to
access capital in the private markets.
– Catastrophic loans also would be available to these state-run plans
through the Treasury if insured losses exceed the plan’s coverage level.
• Status - Introduced February 27, 2009 in the Senate and on May
21, 2009 in the House. Referred to committees. Passed the House
in 110th Congress.
29
30. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Insurance Industry Competition Act of 2009 (H.R. 1583)
• Summary:
– Amends the McCarran-Ferguson Act to make the Federal Trade
Commission Act, as it relates to areas other than unfair methods
of competition, applicable to the business of insurance to the
extent that such business is not regulated by state law.
– Authorizes the Department of Justice (DOJ) and the Federal
Trade Commission (FTC) to issue joint statements of their
antitrust enforcement policies regarding joint activities in the
business of insurance.
• Status - Introduced on March 18, 2009. Referred to
committee.
30
31. Status of Major Federal Insurance
Legislation in the 111th Congress
(excluding health insurance legislation)
– Financial System Stabilization and Reform Act of 2009
(H.R. 3126)
• Summary:
– Seeks to enact Obama Administration New Foundation.
– Establishes the Consumer Financial Protection Agency
with the power to regulate credit, title and mortgage
insurance.
– Does not establish an Office of Insurance Information /
Office of National Insurance.
• Status - Introduced on July 8, 2009. Referred to
committee.
31
32. State/NAIC Response to Federal
Interest
• Interstate Insurance Compact
– Established a multi-state public entity, the Interstate
Insurance Product Regulation Commission (IIPRC) which
serves as an instrumentality of the 34 Member States.
The IIPRC serves as a central point of electronic filing for
certain insurance products, including life insurance,
annuities, disability income and long-term care insurance
to develop uniform product standards, affording a high
level of protection to purchasers of asset protection
insurance products.
– The IIPRC does not yet allow for filing of P&C products.
32
33. State/NAIC Response to Federal
Interest
• Reinsurance Regulatory Modernization Framework Proposal - The
proposal creates two new classes of reinsurers in the United
States: U.S.-domiciled national reinsurers and non-U.S.-based port
of entry (POE) reinsurers, and introduces modified collateral
requirements for eligible reinsurers. The proposal also establishes
a new framework for state-based reinsurance regulation based on
the concepts of supervisory recognition, single-state licensure for
U.S. reinsurers and single-state certification for non-U.S.
reinsurers from approved jurisdictions.
33
34. State/NAIC Response to Federal
Interest
• Producer Licensing Task Force
– The Mission of the Producer Licensing Task Force is to (1)
develop and implement uniform standards, interpretations and
treatment of producer and adjuster licensees and licensing
terminology; (2) monitor and respond to developments related to
licensing reciprocity; (3) coordinate with industry and consumer
groups regarding priorities for licensing reforms; and (4)
coordinate and consult with the National Insurance Producer
Registry (NIPR) Board of Directors to develop and implement
uniform producer licensing initiatives, with a primary emphasis
on encouraging the use of electronic technology.
– Subcommittees:
» NARAB Working Group
» Producer Licensing Working Group
34
35. State/NAIC Response to Federal
Interest
• Solvency Modernization Initiative Task Force
– The Task Force will provide oversight to the Principles-
Based Reserving Working Group and its charges to
accomplish a principles-based approach to reserving.
– The Task Force will provide oversight to the International
Solvency and Accounting Working Group and its charges
to perform the analysis of other countries’ solvency
regulation for use in the Solvency Modernization Initiative
and to identify areas for potential adoption in the U.S.
solvency framework.
35
36. State/NAIC Response to Federal
Interest
• The Task Force will provide oversight to the Group Solvency Issues
Working Group and its charges to identify any necessary changes
to the Holding Company Model Act resulting from a study of the
current model’s limitations evident in the U.S. regulatory system
during the current economic crisis and/or from international
initiatives related to group-wide supervision. The working group will
also study the need to develop group-wide regulatory requirements,
including the need for group-wide capital adequacy requirements,
enhanced group-wide reporting, and consideration of non-regulated
entities. In addition, the working group will recommend courses of
action to improve cross-border communication and coordination
(both internationally and across U.S. state borders) among
supervisors, including supervisors of other financial sectors where
appropriate.
36
37. State/NAIC Response to Federal
Interest
– The Task Force will monitor solvency-related work
products of the International Association of Insurance
Supervisors (IAIS) and assign papers to working groups to
submit comments to the IAIS. Additionally, the Working
Groups should review the papers and recommend whether
and/or how the ideas in those papers should be
implemented in the U.S. regulatory solvency system.
– The Task Force will communicate and coordinate with the
International Insurance Relations (G) Committee and
provide technical support to the Committee as needed.
37
38. State/NAIC Response to Federal
Interest
– Subcommittees:
» Group Solvency Issues Working Group
» International Solvency and Accounting
Working Group
» Principles-Based Reserving Working Group
» Corporate Governance Subgroup
38
39. State/NAIC Response to Federal
Interest
• Speed to Market Task Force
– The mission of the Speed to Market (EX) Task Force is to
serve as the NAIC’s focal point for modernization of the
insurance product filing and review processes. The Task
Force will monitor the development and implementation of
Speed to Market operational efficiencies and will support
the development of national standards in conjunction with
the Interstate Insurance Product Regulation Commission
(IIPRC). The Speed to Market Task Force will also
support IIPRC initiatives that require uniformity and policy
changes within the states.
39
40. State/NAIC Response to Federal
Interest
– Subcommittees:
» National Standards (EX) Working Group
» Operational Efficiencies Working Group
» Personal Lines Framework (EX) Working Group
» Product Requirement Locator Subgroup
40
41. Behold, the World of Tomorrow!
– Moving generally towards a more activist federal
government.
– Expect to see greater federal involvement in
insurance - although not an optional federal
charter - yet.
• This position has already largely been accepted by
the NAIC, as evidenced by the move of the NAIC
executive offices to D.C.
• NAIC has been generally accepting of the New
Foundation and openly accepted the OII.
41
42. Behold, the World of Tomorrow!
– Federal legislation that is likely to pass this year, at least in the
House:
• Nonadmitted and Reinsurance Reform Act of 2009 (H.R.
2571 / S. 1363)
• Either Systematic Risk Bill (ONI) or Insurance Information Act
of 2009 (H.R. 2609)
• National Association of Registered Agents and Brokers
Reform Act of 2009 (NARAB II) (H.R. 2554)
• Pending the outcome in court - Fixed Indexed Annuities and
Insurance Products Classification Act of 2009 (H.R. 2733 / S.
1389)
42
43. Behold, the World of Tomorrow!
– The NAIC and states will have to find a way to move faster,
in a more coordinated fashion, and show more results to
placate Congress and a skeptical Administration.
– Reform of the insurance industry may well become a focus
of interest once the immediacy of the current economic crisis
abates.
– The long-term expectation is that ultimately the feds will
monitor solvency and rate and form while the states will
handle consumer protection and market conduct. The
allocation and amount of taxes and fees remains to be
resolved.
43