Solvency regulation in many countries other than the US.
Certificate of Authority
In the US a document issued by state ins dept that grants right to do ins business in that state. AKA license.
State Insurance Code
In the US, state laws that regulate the business of ins in a state.
State Insurance Dept.
Issues certificates of authority and admisters the state ins code.
National Association of Insurance Commissioners (NAIC)
Private, nonprofit association of the ins commissioners of all 50 states, DC, the 4 US territories that promotes uniformity of state regulation by devloping model laws.
Entire Contract Provision
Entire contract consists of the the life ins policy, the app if attached to the policy and any attached riders & endorsements.
Gives PO a specified period, usually 10 to 30 days, to cancel and get a refund.
Provision in life ins contract stating amount of benefits that the insurer will pay if the PO stops making required premium payments on or surrenders a policy that has a cash value, how those benefits are calculated, and what options the PO has regarding the types of benefits available.
Standard Nonforfeiture Law for Life Insurance
NAIC model law that requires individ life ins policies to provide specified minimum nonforfeiture values.
Document filed with SEC to register a variable ins product that has detailed info about the product, the insurer, including specified financial statements.
A written document describing aspects of a security, variable life ins product or variable annuity being offered for sale that acording to SEC rules must be provided to a potential purchaser of any such product.
Unfair Trade Practices Act
NAIC model law identifies practices that are prohibited if committed (1) flagrantly, in conscious disregard of the law or (2) so frequently as to indicate a general business practice.
Advertisements of Life Insurance and Annuities Model Regulation
NAIC model regulation establishes minimum standards of accuracy and fairness and requires insurers to disclose to the public all relevant info in adverts for life ins and annuities.
Advertisements of Accident and Sickness Insurance Model Regulation
NAIC model regulation estabishes minimum standards of accuracy and fairness and requires insurers to disclose to the public all relvant info in adverts for health ins.
Advertisements Rule (FINRA Conduct Rule 2210)
A FINRA rule that imposes a number of req's on adverts and sales lit about securities, including variable products, that are used to communicate w/the public.
Life Insurance Disclosure Model Regulation
NAIc model regulations requires insurers to provide prospective buyers of individ life ins w/info to help them select an appropriate policy.
Annuity Disclosure Model Regulation
NAIC model requires insurers to provide prospective buyers of annuities with info to help them pick an appropriate annuity.
Illegal misuse of a customers or an insurers money.
Commingling of Funds
Unfair trade practice, when producer combines moneies belonging to others with her own funds, even on a temproary basis.
Illegal sales practice, where insurer or producer offers a prospect an inducement to buy a policy/annuity, and its not offered to ALL applicants in similar situations and isnt stated in the policy itself.
illegal trade practice; producer misrepresents the features of a policy to get a customer to replace an existing policy.
Unfair trade practice, when producer induces a customer to replace one policy with another multiple times so that the producer can get a series of high first year commissions on the replacements.
Supervisory Rule (FINRA Conduct Rule 3010)
FINRA rule requires broker dealers to establish and maintain, by written procures, a system to supervise the activities of their registered reps and registered principals.
Life Insurance and Annuities Replacement Model Regulation (Model Replacement Regulation)
fair and accurate info about policies.
PO pays for new policy using funds taken from another policy.
Requirement that imposes a duty on producers to have reasonable grounds to believe that a specific product is suitable for a particular customers needs.
Suitability in Annuity Transactions Model Regulation
ensure suitability of purchase or exchange of annuity
Suitability Rule (FINRA Conduct Rule 2310)
FINRA rule, reasonable grounds for making investment recommendation to customer based on facts disclosed by customer as to other security holdings, financeal sittuation and needs.
FINRA Conduct Rule 2821
Expands req's of the Suitabilty Rule by specifying criteria to taken into consideration in making a suit. determination for the purchase or exchange of a deferred variable annuity.
Market Conduct Examination
Formal investigation of an insurer by state ins dept to see if the market conduct complies with laws//regs.
Full scop exam of all nonfinancial aspects of insurers operations by state ins dept.
Limtd scope exam by state ins dept of 1 or more lines of business or specific areas of an nonfinancial ops, like advertising materials.
Cease and Desist Order
Legally enforceable declaration by state ins dept that offender must stop doing prohibited conduct.
The principle that a single regulatory body should oversee similar financial activities, regardless of which type of financial institution engages in the activity.
An org. conditioning the sale of one product on the sale of one or more of the org's other products.