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RMI 3011 ch 8 & 19 RMI 3011 Florida State University -Question and answers rated A+ $13.49   Add to cart
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RMI 3011 ch 8 & 19 RMI 3011 Florida State University -Question and answers rated A+

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RMI 3011 ch 8 & 19 RMI 3011 Florida State University -Question and answers rated A+ insurance is regulated - correct answer at the state level Reasons for Insurance Regulation - correct answer 1. maintain insurer solvency (financial stability) 2. compensate for inadequate consumer knowledg...

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  • November 30, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • rmi 3011 ch 8 19
  • rmi 3011 ch 8 19 question and answers rated a
  • rmi 3011 ch 8 19 rmi 3011 florida state universi

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RMI 3011 ch 8 & 19 Question and
answers rated A+
insurance is regulated - correct answer ✔at the state level


Reasons for Insurance Regulation - correct answer ✔1. maintain insurer
solvency (financial stability)
2. compensate for inadequate consumer knowledge
3. ensure reasonable rates
4. make insurance available


Methods for Regulating Insurers - correct answer ✔1. Legislation
2. Courts
3. State insurance laws


Regulated Areas of Insurance - correct answer ✔1. formation and licensing
2. solvency regulation
3. rate regulation
4. policy forms
5. sales practices/consumer protections
6. taxation of insurers
7. investments


solvency regulation - correct answer ✔-admitted assets, cannot count
everything as assets, restrictions
-reserves

, -surplus
-risk based capital


rate regulation - correct answer ✔-Prior-approval laws
-Modified prior-approval law - once rated it can go up/down 10% ish
-File-and-use law
-Use-and-file law
-Flex-rating law
-State-made rates
-open rating - you can charge what you want, market will regulate itself, does
not exist


Sales Practices and Consumer Protection - correct answer ✔- Licensing of
agents and brokers
- Unfair Trade Practices - twisting, churning, rebating (gifts/portion of
commission)


reasons for insolvency of insurers (financially unstable) - correct answer
✔mismanagement of $ or if the company grows too fast = underwriting
standards are too relaxed (adverse selection) or product price is too low


methods of ensuring solvency (financial stability) - correct answer ✔capital
standards, reserve requirements, annual financial statements, field
examinations, early warning system, FAST system (point system/grade
carries)


McCarran-Ferguson Act - correct answer ✔exempts the business of
insurance from most federal regulation, including federal antitrust laws to a
limited extent - insurance is regulated at STATE LEVEL

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