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The right of the states to regulate the business of insurance was first established by?
Paul v. Virginia
The basis for current state regulation of insurance is?
the McCarran-Ferguson Act
An insurance company incorporated in another state has been licensed to operate in your state. In your state, the insurer would be considered a(n)?
Which of the following is considered a non-admitted asset for an insurer?
By misrepresenting the true facts, Gretchen was able to convince a client to drop a life insurance policy with another company and to purchase a policy from the company that Gretchen represents. Gretchen has engaged in an illegal sales practice called?
ABC Insurance Company would like to purchase a bank. For many years, ABC was not permitted under federal law to enter into banking operations. Which of the following legislative acts eliminated the prohibition that prevented banks, insurers, and investment firms from entering into one another's markets?
The Financial Modernization Act (Gramm-Leach-Bliley Act)
The National Association of Insurance Commissioners (NAIC) administers an "early warning system" to help ensure insurance company solvency. This system uses data provided in the annual statement to identify companies that may pose a solvency risk. This early warning system is called?
the risk-based capital requirements.
Jasper Company suffered a large, uninsured, liability loss. The company was ordered to pay $25 million in damages. After filing an appeal, Jasper Company purchased a multiple-year, high premium, insurance policy to cover this potential loss. The net effect of the insurance purchase is that it will allow Jasper to pay premiums for five years, which will smooth the company's reported earnings instead of the company recording a large loss in one year. The type of insurance that Jasper purchased in called?
finite risk insurance
Some insurance companies offer higher compensation to insurance brokers based on the premium volume the broker generates with the insurer. Thus a broker may have an incentive to place business with an insurer offering this form of compensation even though placing the insurance with another insurer may be in a client's best interest. This type of compensation is known as?
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