15. property and casualty insurance- property and casualty insurance basics- insurance regulation
what is the NFIP
National Flood Insurance Program
Which of the following laws did Congress enact in response to the catastrophic losses resulting from the terrorist attacks on September 11, 2001? Terrorism Risk Insurance Act (TRIA) Gramm-Leach-Bliley (GLB) Act Fair Access to Insurance Requirements (FAIR Plan) Act Federal Emergency Management Act (FEMA)
Terrorism Risk Insurance Act (TRIA) TRIA was established in 2002 to guarantee the availability of insurance coverage against acts of international terrorism.
what is FTCA and what does it impose
The Federal Trade Commission Act (FTCA) makes deceptive or unfair trade practices illegal. Alleged violations of an organization's stated privacy policy may be prosecuted as a deceptive or unfair trade practice
Which of the following incidents would be covered under the Terrorism Risk Insurance Act? A crew's negligence causes a passenger train to derail in California, resulting in losses of $249 million A bombing at a U.S. embassy leads to damages of $90 million. A U.S. manufacturing plant is sabotaged, resulting in a loss of $220 million. A U.S. cargo ship is attacked by pirates and suffers losses of $188 million.
A U.S. manufacturing plant is sabotaged, resulting in a loss of $220 million. To be covered under TRIA, an act must be intentionally violent or dangerous to human life, property, or infrastructure; have resulted in damage within the U.S., to an air carrier, to a U.S. flag vessel, or on the premises of a U.S. mission such as an embassy or consulate; and produce total losses of over $200 million.
All the following are federal laws impacting property and casualty insurance EXCEPT: Gramm-Leach Bliley Act Fair Credit Reporting Act Affordable Care Act Terrorism Risk Insurance Act
Affordable Care Act The Patient Protection and Affordable Care Act deals with medical (health) insurance. It has no impact on property and casualty insurance.
what is the McCarran-Ferguson Act of 1945
Exempt insurance from federal regulation as Interstate commerce, to the degree that effective regulation is undertaken by the individual states
what is the FCRA and what is it
Fair Credit Reporting Act (FCRA) of 1970 is an important consumer protection law that allows insurers to use credit reports in determining whether an applicant is eligible for insurance. It also requires that insurance applicants be informed in advance that a credit report might be ordered.
Excalibur Insurance Company sends periodic privacy notices to all customers to comply with which of the following federal laws? Federal Trade Commission (FTC) Act Gramm-Leach-Bliley (GLB) Act Fair Credit Reporting Act (FCRA) Health Insurance Portability and Accountability Act (HIPAA)
Gramm-Leach-Bliley (GLB) Act GLB requires financial institutions to provide customers with a privacy notice at the start of a customer relationship and annually thereafter.
Through which of the following does the federal government regulate medical information used in life, health, property, and casualty insurance? Fair Credit Reporting Act Terrorism Risk Insurance Act Federal Trade Commission Act Health Insurance Portability and Accountability Act
Health Insurance Portability and Accountability Act Because medical information is often involved in underwriting auto insurance or settling bodily injury or workers compensation claims, HIPAA affects property and casualty insurers as well as health insurers.
Federal legislation which protect privacy of information relevant to insurance transactions include all of the following EXCEPT: Gramm-Leach-Bliley Act Health Insurance Portability and Accountability Act Federal Trade Commission Act McCarran-Ferguson Act
McCarran-Ferguson Act The McCarran-Ferguson Act of 1945 granted states principal jurisdiction to regulate the insurance industry.
Although the Health Insurance Portability and Accountability Act (HIPAA) applies most directly to health insurers and health care providers, it also affects property and casualty insurers. Why? Medical information is often involved in settling workers compensation claims. HIPAA requires property and casualty insurers to provide health care services to all employees. HIPAA violations may be prosecuted as a deceptive or unfair trade practice. Property insurers are not required to comply with HIPAA.
Medical information is often involved in settling workers compensation claims. HIPAA's privacy rules apply to medical information that insurers use in underwriting auto insurance or settling workers compensation bodily injury claims.
what does NCOIL stand for and what is its function
National Council of Insurance Legislators—Comprised of state legislators from every state, NCOIL works in tandem with the NAIC to help state legislators understand the importance of NAIC model regulations.
what is TRIA and what are the requirements to be covered when a loss occurs
Terrorism Risk Insurance Act (TRIA) of 2002 to guarantee the availability of insurance coverage against acts of terrorism. In 2019, the Act was extended through Dec. 31, 2027. To be covered under TRIA, an act must: be intentionally violent or dangerous to human life, property, or infrastructure have resulted in damage within the United States, or to an air carrier as defined in the U.S. Code, or to a U.S. flag vessel or other vessel based principally in the United States and insured under U.S. regulation, or on the premises of any U.S. mission (e.g., an embassy or consulate) and produce aggregate losses exceeding $200 million
what is GLB and what is its function
The Gramm-Leach-Bliley Act of 1999 it bars a financial institution from disclosing a consumer's nonpublic personal information to an unaffiliated third party unless it provides consumers with notice and the ability to opt out. It requires that financial institutions provide customers with a privacy notice at the start of the customer relationship and annually thereafter. To ensure that privacy policies are followed, a company must successfully communicate its policies to employees and train its staff regarding privacy policies and practices—particularly employees who collect and have access to personal information.
XYZ Insurance Company's auto insurance application includes a Fair Credit Reporting Act Notice. What does this notice inform consumers about? The insurer might order a credit report on the applicant that includes personal information. They are entitled to opt out of a credit investigation. The insurer's privacy policy complies with legal requirements. Any information they provide in the application may be used against them in a court of law.
The insurer might order a credit report on the applicant that includes personal information. The written notice informs applicants of their rights with regard to a credit report that the insurer might use in underwriting the application.
Which federal law prevents certain convicted felons from engaging in the insurance business unless they obtain a waiver from the Department of Insurance? McCarran-Ferguson Act Violent Crime Control and Law Enforcement Act Terrorism Risk Insurance Act (TRIA) Federal Trade Commission Act (FTCA)
Violent Crime Control and Law Enforcement Act The Violent Crime Control and Law Enforcement Act makes it a criminal offense for a person convicted of a felony involving breach of trust or dishonesty to participate in the business of insurance without first obtaining a Fraud and False Statements 1033 waiver from a state insurance regulatory official.
The Terrorism Risk Insurance Act (TRIA) requires insurance companies to make coverage for certified acts of terrorism available for all the following lines of insurance EXCEPT: homeowners commercial property commercial liability workers compensation
homeowners TRIA requires that property and casualty insurers selling insurance in the United States make terrorism coverage available under commercial property, commercial liability, and workers compensation insurance policies.
Under the Terrorism Risk Insurance Act, all of the following lines of insurance are covered EXCEPT: commercial property insurance homeowners and dwelling insurance commercial liability insurance workers compensation insurance
homeowners and dwelling insurance Lines of insurance covered by TRIA include commercial property, commercial liability, and workers compensation insurance.
Who is primarily responsible for ensuring that applicants receive the appropriate notices about their rights under the Fair Credit Reporting Act? governor producer insurer Insurance Commissioner
producer Although many insurance applications notify the applicant of his or her rights under the FCRA, it is ultimately the producer's responsibility to ensure that applicants receive the notice and to answer any questions they have about it.
What does "NAIC" stand for, and what is its function?
the national association of insurance commissioners represents the insurance department of every state, the District of Columbia, and several U.S. territories. It meets to promote uniformity through development of model insurance regulations. While states are not required to adopt NAIC model regulations, most do adopt them in some form.
What is the purpose of the notice to consumers required by the Fair Credit Reporting Act? to advise that the insurer may order a credit report on the applicant that includes personal information to confirm that an insurer's privacy policy is legal to advise that consumer information in an application may be used as evidence in court to give the opportunity to opt out of a credit investigation
to advise that the insurer may order a credit report on the applicant that includes personal information The written notice required under the FCRA advises applicants of their rights with regard to a credit report that the insurer may use when underwriting an insurance application.