RMI-4292 Chapter 2: Property Ch2 Textbook
11 Feb 2019
School
Course
Professor
Document Summary
Reasons for insurance regulation: protect consumers, maintain insurer solvency, protects insureds against the risk that insurers will be unable to meet their financial obligations, prevent destructive competition. Insurance regulatory activities: licensing insurers and insurance personnel: licensing insurers, a license indicates that the insurer has complied with the state"s insurance laws and is authorized to write certain types of insurance in the state. Insurance regulatory activities: monitoring insurer solvency: liquidation of insolvent insurers. If an insurer falls into insolvency, the insurance commissioner places it in receivership. Inadequate reserves: excessive expenses, lax controls over managing general agents, uncollectible reinsurance, fraud. Unofficial regulators in insurance: financial rating organizations, because good financial ratings help attract and retain customers, insurer try to conduct business in ways that maintain good ratings. Insurance advisory organizations: they provide services to member insurers and insurers that purchase or subscribe to their services.
