Fundamentals of Insurance Regulation: The Rules and the Rationale

All regulatory systems are shaped by the subject matter they regulate, and insurance is certainly no exception. Providing a clear explanation and analysis of the complex state-based regulatory system that governs the U.S. insurance industry, Fundamentals of Insurance Regulation presents the applicable statutes, regulations, and judicial decisions, as well as information about the industry’s products, its operating procedures, distribution channels, and financial characteristics and performance. To round out the picture the book describes the regulatory process—its core objectives, how and by whom policy is formulated, and how the rules are enforced.

This enormous topic is presented on a manageable scale by using a combination of edited versions of key model laws developed by the National Association of Insurance Commissioners (NAIC), case law, and secondary materials. It also includes materials that reflect the increasing importance of international insurance rules. Each chapter provides an overview of the topic. Issues examined include:

The U.S. insurance regulatory system

The limits of state authority on insurers and the impact on competition

Rate setting and regulation

Solvency regulation

Secondary and alternative markets

Insurance intermediaries

Consumer protection

Preemption under the McCarran-Ferguson Act and the EU’s insurance directives

Health insurance

The NAIC and the future of insurance regulation