LOMA 311 Module 1

prospective damages

- civil action damages that have not occurred at the time of the trial of a case but that are reasonably likely to occur as a result of the defendant's conduct

three basic types of legal systems

- common law systems - civil law systems - mixed legal systems

some m/a regulatory issues companies must address

- comply with red and state securities laws when stock will be issued - regulatory approvals must be obtained before the transactions are compelted - antitrust laws may prohibit the transaction if deemed to lessen comp

laws that affect how life insurers conduct business

- contract law - agency law - property law

which of the following is not an example of an intentional tort?- slander- libel- contributory negligence- fraudulent misrepresentation

- contributory negligence

trial

formal court proceeding at which the parties appear in court along with their respective attorneys and present their cases to the court. A judge may try an action alone or with jury

domicile (domiciliary state)

from the point of view of a given State an insurer that incorporates: - on that state is a domestic insurer - under the laws of another state is a foreign insurer - under the laws of another country is an alien insurer

federal law requires

parties to certain mergers or acquisitions notify the FTC and DOJ before completing proposed transaction after notified a certain time to evaluate

Cause of action

to file a successful civil lawsuit, a person or biz involved in a dispute must have a valid cause of action which is a set of facts that gives a person the right to judicial relief.

Deposition

attorneys questioning each party. the person orally testifies under oath

perjury

lying under oath which is a crime in all jurisdicitons

Which of the following courts are found in the U.S. Federal court system

- District Courts - Circuit Courts of Appeal - The Supreme Court

Federal Administrative Agencies

- Federal insurance office: administrative office within the department of Treasury that monitors the insurance industry an represents the US on international insurance matters - Department of treasruy: the federal agency that has primary responsibility for administering federal banking and tax laws - Securities and Exchange commission (SEC): The federal agency that administers federal laws governing securities and the investment industry - Department of Justice (DOJ) : The federal agency that is responsible for enforcing federal criminal laws, representing the US in federal cases, and providing legal advice to other federal officials and departments

State Administrative Agencies

- Insurance department: A state administrative agency that is responsible for enforcing the state insurance code and making certain that insurers conducting business within the state comply with all state insurance laws - Office of the Secretary of State: A state agency that is responsible for licensing corporations and business - Office of the attorney general: A state agency that is authorized to enforce the legal state's criminal laws, represent the state in all legal matters, and provide legal advice to the governor and other state administrative officials

US antitrust regulations

- Sherman act - Clayton act Federal trade commission act

a life insurance company's stakeholders include

- board of directors - potential customers - regulators

common law provides two types of civil cause of action

- breach of contract actions - tort actions

Liquidated damages:

- civil action a sum of money that the parties to a contract have specified in their agreement as the amount of damages to be recovered by a party if the other party breaches the contract

Statutory damages

- civil action damages that are awarded under the provision of a statue rather than under the common law rules governing damages for civil wrongs

Statutory law

- declare - comand - or prohibit something

common elements of a cause of action

- defendant had a legal duty to the plaintiff to act in accordance with a prescribed standard of care- the defendant breached his legal duty- the plaintiff suffered a loss- the defendants conduct was the cause of the plaintiff's loss

antitrust law violations

- divide markets by allocating customers, suppliers, or territories - price fixing occurs when competitors act together to affect the price of a product or service - rig bids in situations in which purchasers obtain goods or services by soliciting comeptitingbids, bid rigging occurs when competitors agree in advance who will submit the winning bid and thus raising price

agreements between competitors that aren't allowed

- dividing market geographically by territory or customer - competitors may not agree to restrict output or production of prodicts - competitors may not enter agreements to set minimum or max price for goods, limit production, elmimante competitive biding

directors have the following duties

- duty of loyalty and good faith - duty to exercise due care in carrying out responsibilities

antitrust laws and insurance company employees

- employees must be careful about info they share outside org - depends upon classified info nonpublic info: marketing strategy or product pricing

maintaining a high standard of ethics contributes to an insurer's overall success in which of the following ways

- enhances reputation - gains the trust of stakeholders - acquires and conserves more business - more likely to avoid lawsuits, regulatory actions, and criminal prosecutions

The organization must promote ethical conduct

- establish standards and proceeds to prevent and detect criminal conduct - place responsibility for overseeing compliance on high level executives who are knowledgeable about the program. Many companies have an ethics officer or compliance officer who oversees the compliance and ethics program - ensure that individuals who have substantial discretionary authority act on behalf of the company are of high character - Effectively communicate the organizations standards and procedures to all personnel through training programs and documented procedures - take reasonable steps to ensure adherence to the compliance and ethics program

things different for biz around world

- in philpines biz for 50 years and can be renewed - typically owners are stockholders laws around the world differ - some countries impose minimum capital requirements - company limited by shares: company who's owners liability is limited to their investment in company stock - company limited by guarantee: company who'se owners agree to pay up to stated amount if the company is liquidated

business or representatives cannot (unfair trade practices)

- indicate that goods or services belong to another party - cause the likelihood of confusion as a source sponsorship or certification fo goods - represent that goods or services have charteristcs that they dont disparage goods or services of another party by misrepresenting facts

some of the requirements of. state insurance holding company laws:

- insurance department of the insurer's domiciliary state must approve any transaction 1. the insurers financial stability would be threatened 2. the transaction is unfair to the insures policy owners 3. conception in insurance would be lessened substantially - to protect an insurers financial stability the amount that an insurer may invest in subsidiaries is limited - transactions between companies affiliated with an insurer must be reported to the insurance department of the insurer's domiciliary state - domestic insurers that are part of a holding company system are subject to registration and periodic filing and reporting requirements

three branches of government

- legislative branch - executive branch - judicial branch

Speculative damages

- not a civl action damages that may occur in the future as a result of the defendants actions but that also depend on the occurrence of other uncertain contingencies

remote damages

- not civil action damages for losses that the defendant could not reasonably have anticipated resulting from a given set of facts

Civil action 3 stages

- pleading stage - discovery stage - trial stage parties can settle dispute at any stage before court reaches verdict

a third party that takes an adverse action based on consumer credit must

- provide the consumer with info about the consumer reporting agency - notify the consumer of her right to dispute with the reporting agency - notify the consumer that she has the right to obtain free copy of the credit report from the agency

Civil law has two jurisdictions

- public law - private law

possible equitable remedies in breach of contract

- reformation - recission - specific performance

rules of evidence

- the party that alleges that a certain fact is true has the burden of proof and is therefore responsible for providing that the fact is true - a conclusive presumption is rare because it is a presumption that cannot be refuted - degree of proof generally required in a civil action is known as a preponderance of the evidence

agreements between buyer and seller are prohibited

- unfair price discrimination: selling different price to different buyers - tying arrangements: only sell product if purchaser buys another - boycots: competitors agree to not do biz with another. using intimidation to join boycott

executive branch head

- us is by president - state is by governor

Sources of law

1. Constitutions 2. Statutes 3. administrative regulations 4. treaties and international agreements. In many countries, including the US, another primary source of law is case law created by the Courts

precedent remains in force until

1. a court overturns the precedent 2 the legislature enacts a statue that changes legal principle that underlies the precinct. Thus, the courts and the legislature are able to modify and change the law to keep pace with changing times and circumstances

three functions that governments carry out

1. create laws 2. Administer and enforce laws 3. resolve disputes

a legal system includes two major components:

1. laws and regulations that regulate conduct 2. legal processes to enforce those laws and regulations. The laws and regulations provide guidelines and rules to help peoples, combines, and governments interact in an orderly way. legal process are used to resolve disputes, provide remedies for victims, and punish those who break laws

Constitution

A document or group of documents that sets out the fundamental principles that determine the powers and duties of the governments and the rights of the people. It is a basic part of a country's legal system and is intended to be a relatively permanent and primary source of law. A constitution typically is considered the supreme law of the land. any laws found to violate a country's constitution generally are invalid - constitution establishes the organization structure of the government - the us constitution establishes a system of checks and balances. helps prevent concentration of power in one branch

A breach of contract

A failure of a party to preform a contractual obligation ex- insurer did not pay claim

required levels to act

A fiduciary- held to highest standard of care a professional- such as physicians, attorneys, and accountants, generally are held to a higher standard of care than non professionals. They are required to have the special knowledge and skills needed to carry out their professions and use reasonable care average person- legal duty to act as a reasonably prudent person of like knowledge or skill children - generally held to a lower standard of care than adults. A child generally is required to act like a reasonable person of the Childs age experience and intelligence. Certain actions when taken by a child might not be negligent that are for an adult

the executive branch of gov consist of a variety of departments, generally known as administrative agencies, that issue rules or orders to fill in the details of the law - codes - regulations - substantive laws - customary laws

B. - regulations

T/F: although some employees of a life insurer are considered agents of the company, the vast majority of employees are not considered agents. Thus, their communications and activities cannot create legally binding obligations on the company

False- In many cases employees are considered agents of the company and their communications and activities create legally binding obligations on the company fl

The federal sentencing guidelines are us federal rules

Individuals and organizations are required to follow but, regulators voluntarily follow

Fraudulent misrepresentation

Occurs when a person knowingly or willingfully makes a false statemetn with the intent that another person will rely on the statement and will be harmed as a result of the reliance. to prove a defendant knowingly or willfully made such a false statement, the plaintiff must prove that the defendant made a misrep either 1 with knowledge of it being false 2 without belief in its truth, or 3 with reckless or careless disregard for its truth

General Agreement on Trade in Services (GATS)

Promotes the international flow of services, including insurance and other financial services 1. services supplied across borders 2. consumption of services from another country 3. establishing a commercial presence in another country and 4 individuals traveling from one country to provide services in another

The NAIC Uniform Certificate of Authority Application

Standadized application created by the NAIC that allows an insurer to submit the same application to all states where it intends to do business.

Service of process

The act of delivering the complaint to the defendant, provides the defendant with official notification of the proceeding. Thus the defendant has the opportunity to appear and be heard. Once complaint served defendant has so many days to file an answer with the court

The prime minister

The individual who heads the political party--or coalition of parties--that holds a majority of elected seats in the parliament. Upon taking office, the prime minister names a cabinet of individuals who serve as advisors - executive branch hold power as long as parliament has confident how it is being led if voted out new election to be led

Plaintiff

The injured party- who has to file papers setting out action against the defendant which is known as instituting a lawsuit

The Pleading Stage

The pleadings are the formal, written statements that set out the claims and defenses of each of the parties to a lawsuit pleadings serve to: -define the issues that are in dispute - set out the material facts that are involved in the dispute - set out the material facts that are involved in the dispute - set forth the legal theory or theories that the plaintiff is relying on - define the judicial relief that the parties seek from the court

legal remedies

These remedies primarily involved the payment of money damages to injured parties. Over time, legal remedies were inadequate to remedy some wrongs - monetary compensation

International convention for the suppression of the financing of terrorism

This United Nations convention prohibits any person from providing funds that are intended to be used to carry out acts of terrorism

True/False: Regulations make up the body of law known as administrative law

This statement is true. Regulations make up the body of law known as administrative law, and the regulations of each governmental unit are compiled into that jurisdiction's administrative code the life Insurance industry is of such importance to so many people that it occupies a special position of public trust. Millions of families rely on life insurance and annuity products for savings and financial protection against the risks of dying too soon or outliving assets. Also, the reserves held by life insurers are one of the largest sources of private funds in the world's financial markets

T/F many countries have enacted criminal laws that apply to businesses as well as individuals. Businesses can be found guilty of crimes such as Fraud and tax evasion

True- many countries have enacted criminal laws that apply to businesses as well as individuals. Businesses, for example, can be found guilty of crimes such as fraud, tax evasion, and antitrust violations

Case law

Written decisions of the courts form a body of law all legal systems have some type of judicial system or court system that is responsible for applying the laws to specific cases. Courts may apply both substantive and procedural laws

Interrogatories

Written questions that one party prepares and that the other party must answer in writing within a specified time.

sole proprietorship

a business that is owned and operated by one individual, who is known as the sole proprietor. A sole proprietorship and the individual who owns the business are one and the same legal person

holding company system

a corporate ownership structure in which one company the holding company owns and controls another company known as a subsidiary of the holding company n

Officers

a corporation are the people responsible for carrying out important management functions for the operation of the corporation. Officers may include the CEO, President, and treasurer.

Mutinational Corporation (MNC)

a corporation that operates in more than one country and makes major decision within a global context. Multinationals operate across jurisdictions and face unique legal and regulatory issues because they must comply with the laws and reg of their home country

publicly traded corporation

a corporation whose stock is available for sale to the general public

Certificate Authority

a document issued by the state insurance department that grants the insurer the right to conduct insurance business in the state. this licensing requirement enables insurance depart to examine the insurer's finances and ability to pay policy benefits.

articles of incorporation

a document that describes some of the essential features of the corporation following info must be included: - names and addresses of the incorporators - the team of the proposed corporation: Each corp must have a unique name. This cannot be the same as or deceptively similar to the name of any other - the street address of the corp registered office and the name of the corp registered agent at that address - for a stock company number of shares of stock that the corp is authorized to issue might be required to file docs with incorporators

Corporate Governace

a framework of rules and processes for directing and controlling a corporation that emphasizes integrity, transparency, and balancing the interests of stakeholders while fulfilling strategic goals.

common law jurisdiction

a geographic area of legal authority that bases its legal system on the common law of England

Financial holding company (FHC)

a holding company that conducts acitivtes that are financial in nature or incidental to financial activities such as insurance, securitys, banking, and investment and advisory services - must include depository institution

Civil Litigation

a judicial process by which private parties go to court to enforce a legal right or to obtain a remedy for a civil wrong

corporation

a legal entity that is created by the authority of a governmental unit, such as a state or nation. is separate and distinct from the people who own it continues beyond the death of any or all of its owners

Restitution

a legal remedy and at other times an equitable remedy in which a party is ordered to return property to its owner or to the person entitled to it. The basic purpose of restitution is to prevent unjust enrichment: A person should not be allowed to profit or be enriched as a result of a wrong committed at the expense of another person. Restitution is available in civil actions in which it is more appropriate to restore to the plaintiff what the defendant received than to award damages in the amount of the plaintiff's losses

Treaty

a legally binding agreement entered into by two or more nations that agree to abide by the terms of the agreement. Treaties maybe referred to by various terms, including conventions and pacts. When a nation signs a treaty, it generally agrees to enforce the terms of the treaty within its borders. It also agrees to cooperate with other nations enforcing the treaty there are many types of treaties. Political treaties establish military alliances, end wars, and settle boundary disputes, Among other things. Commercial treaties deal with trade and tariff issues. Countries enter into legal treaties under which they agree to abide by common patent and copyright protections

free and open market

a market in which prices are established by market forces with little or no intervention from the gov or other powerful economic entities, such as monopolies

person

a natural person or entity such as a corporation, that the law recognizes as having legal rights and duties a cause of action arises when: - one person has a legal right - another person has a legal duty to observe that right - the second person breaches her legal duty - the first person suffers a loss or injury as a result of that breach

Fraternal Insurer

a nonprofit organization known as a fraternal benefit society, that is operated solely for the benefit of its members. It provides its members with social and insurance benefits. A Fraternal insurer may not be required to become a corporation

employee

a person in the service of another, the employer, who has the power or right to control and direct how the employee performs the work. supplied tools by employerr - paid in regular salaries

independent contractor

a person who contracts to do a specific task according to his own methods and who generally is not subject to the employer's control except as to end product or final result of the work. - supplies own tools for work - paid commission or lump sum

to be granted equitable relief

a plaintiff must have - no adequate remedy at law: equity only intervenes when damages do not adequately compensate a plaintiff - must come into court with clean hands: will not aid a party who acts unfairly or dishonestly equity will deny relief in these cases - must not be guilty of laches: unreasonably delayed in pursuing a claim for relief and the defendant was harmed in some way

State Insurance Code

a portion of each state code regulates the insurance industry within the state and is often known as the state insurance code

Tort

a private wrong -- other than breach of contract-- for which the law provides a remedy to wronged party.

Negligence

a private wrong committe dby a person who failed to exercise the legally required degree of care in 1 something that is otherwise legally permissible 2 omitting to do something that is otherwise legally requried

Intentional Tort

a private wrong committed by a person who intended to do something that the law declares a wrong. The common law imposes liability fo r a variety of specific intentional torts, which are either wrongs against another person or wrongs against another person's property. Intentional torts consist of - assault- Battery- Defamation- Fraudulent misrepresentation- Breach of contract intentional tort against property include- trespass to land and conversion most common for insurance include defamation and fraudulent misrepresentation

States are responsible for

a range of functions, including regulating business and professions within their borders, providing for public schools, and protecting the health and safety of people. States delegate some of their governmental authority to local governmental units such as countries and municipalities

presumptions

a rule of law under which a fact is assumed to be true because another fact or set of facts was proven ex- death facts lead to suicide or accident it is assumed to be accident

Model Law (uniform law)

a sample law created ad adopted by a national or international organization regulators, lawmakers, lawyers, and/or academics. The organization encourages legislatures to enact laws based on the model To become effective, the law must be enacted by a legislature

reasonable person standard

a standard applied in objective test in which a party's actions or understanding is compared to the actions or understanding of a hypothetical reasonable person in the party's position

Federal reserve system (the fed)

a system consisting of 12 regional banks, all national banks, and most state banks. These banks are known as fed members. The fed has number of primary functions that it conducts - national monetary policy - maintains stability of nations financial sysem - provides financial services to us gov, public and financial institutions - also supervises and regulates banking

merger

a transaction in which one corp is absorbed into another combining its assets and liabilities

acquisition

a transaction in which one corp purchases a controlling interest in another copr resulting an a linkage between formerly independent corp

RegTech

a type of technology that helps regulators, as well as insurance companies, manage regulatory and compliance activities more effectively and at a reduced cost. With regtech, for instance , a company might use big data to better manage its compliance records. similarly, a company might use predictive analytics to identify compliance risk

compensatory damages

actual damages, are intended to compensate an injured party for the amount of the monetary losses that resulted from the defendant's wrongful conduct generally include losses - physical - mental - emotional injures price paid- typically consist of the amount of the plaintiff's medical expenses and loss of earnings, including loss of future earnings

Bilateral agreement between the eu and us on prudential measures regarding insurance and reinsurance

addresses insurance and reinsurance issues

assumption of the risk

affirmative defense that totally bars a plaintiff's claim when the plaintiff understood the risk presented by the defendant's conduct and voluntarily incurred that risk.

sub regulatory guidance

agency clarifiying a regulation by issuing a bulletin or other document

affirmative defense

allegation of facts that constitute a defense to the plaintiff's claim. ex- applicant concealed vital fact about health misrepresentation

General partnership

an association between two or more individuals, known as the partners, who enter into an agreement to own and operate a business for profit. A partnership agreement, which may be oral or written governs the operation of the partnership. State laws also govern most aspects of the operation of partnerships

Fiduciary

an entity or individual who holds special position of trust or confidence when handling the affairs of another and who must put the others interest above the fiduciary own

Defendant

an individual or group being sued or charged with a crime

Mutual insurance company

an insurance company owned by its policy owners, the parties who own insurance policies issued by the company. Mutual insurers do not issue stock to raise capital

Stock insurance company

an insurance company owned by its stockholders. A stock company also may be classified according to how its stock is sold. Large corporations including many insurers, are publicly traded corporations.

issue of fact

an issue in which the parties disagree as to the facts involved in the action. In all cases, the judge is responsible for deciding issues of law

issue of law

an issue that in which the parties disagree on how the law should be applied to a given set of facts

in the us the Sherman act, Clayton act, and Federal trade commission act are examples of what types of federal law?

antitrust law-

Contempt of court

any act that hinders the court in administering justice or that lessens the authority and dignity of the court. a person found in contempt is subject to a variety of penalties including seizure of property, imprisonment, or monetary fine

consumer credit report

any communication of info by a consumer reporting agency that 1 beans on consumer creditworthiness credit standing capacity character and general rep personal characteristics mode of living 2 is use or collected as a factor in seablishing a consumers eligibility for insurance credit

Alternative Dispute Resolution (ADR) Methods

any nonjudicial method of resolving dispute themselves by means of formal or informal negotiations. - mediation - arbitration

comparative negligence

apportions losses between plaintiffs and defendants when both parties' negligence contributed to a plaintiffs losses. 20% - plaintiff at fault and 80% defendant at fault

exempt employees

are not entitled to overtime pay ex- officers, managers, attorneys

Federal sentencing guidelines

are us federal rules that set out uniform polices for sentencing individuals organizations convicted of serious federal crimes federal judges must consider these guidelines when setting a punishment, but they may consider other factors the guidelines provide incentives--in the form of substantially reduced penalties --for an organization that can demonstrate an effective compliance and ethics program

Conflict of laws

area of law that determines which substantive laws apply to each issue in a case when the laws of more than one jurisdiction are involved in the action. Procedural rules in each jurisdiction around the world guide the courts in making conflict of laws determinations

Lisa keynes trespassed onto a construction site despite seeing several "no trespassing" and "danger zone" signs before entering the property. She suffered an injury while on the premises. Ms. Keynes sued the company that owned the property for damages. The property owner's insurance company, Morningstar life insurance, argued that its insured had posted clear warning signs about the dangers inherent to the ongoing construction, and Ms. Keynes was aware of those dangers when she chose to trespass. Morningstar is using the affirmative defense known as assumption ofa. comparative negligenceb. assumption of the risk

assumption of the risk

Appellate courts

authorized to review the decisions of lower courts. Thus, a party that loses a case heard by a trial Court may have the right to appeal--or contest--that decision by asking an appellate court to review the trial court's decision. state and federal appellate Cours issue a written option for most non criminal cases they decide. These appellate court decisions are publish in a series of volumes known as reports or reporters. Courts may also issue unpublished opinions.

Bylaws

basic rules under which a corporation operates

right to sue notice

charging party to file individual action int he court without the EEOC involvement before a person is permitted to file a civil lawsuit he must pursue his claim with the eeoc

counterclaim

claim by defendant against plaintiff that arises out of the same facts on which the plaintiffs claim is based. ex- contract disputes both parties oftenn have claims against each other. Counter claims alsow parties to resolve multiple disputes in one proceeding

antitrust laws

competition laws in many countries protect commerce against monopolization of market power and unlawful restraints of trade such as price discrimination and price fixing

legislative branch

consist of one or more legislative bodies,- often referred to as the legislature or parliament-- responsible for enacting laws to govern the applicable jurisdiction - create laws

Federal court system

consist of three levels of courts: - district courts - thirteen circuit courts of appeal - the supreme court also has a variety of special court that have limited jurisdiction - tax court

The executive branch

consists of a system of administrative agencies--often referred to as departments or ministries-- that are responsible for administering, enforcing or carrying out the jurisdiction's laws - enforce the laws

The Judicial branch

consists of a system of courts that are responsible for applying and interpreting the jurisdiction's laws and for resolving disputes; in addition, many countries promote alternative dispute resolution methods - interpret the laws

Mixed Legal Systems

contain elements of more than one basic type of legal system

close corporation (closely held corporation)

corporation that has issued stock that is owned by a relatively small group of people, often members of the same family. The stock of a close corp is not available to the general public

Dismissal

court order or judgement that concludes a civil lawsuit without a trial of the issues involved in the lawsuit. Typically, the court dismisses a lawsuit because the plaintiff either failed to prosecute her case ex- by intentionally delaying the action or failed to state a valid flame and therefor is not entitled to judicial relief

injunction

court order that prohibits a party from committing a specific act. Typically, courts issue injunctions in cases in which a defendant is committing or threatening to commit an act that would harm a plaintiff

trial courts

courts of original jurisdiction because they are the courts that hear disputes first.

Substantive laws

create, define, and regulate legal rights and duties. Examples of substantive laws are how a statute defines fraudulent misrepresentation or the punishment that a person convicted of insurance fraud may receive

Punitive damages (exemplary damages)

damages awarded in addition to compensatory damages when a defendant's wrongful conduct was malicious or willful. this is meant to punish the defendant and deter others from similar conduct - wanton - willful - deliberate

Unpublished opinions

decision of a court that is not available for citation in subsequent court cases

preponderance of the evidence

degree of proof generally required in a civil cation, which means that the decision as to an issue of fact must be supported by the greater weight of the evidence. The trier of fact considers with party's evidence was more convincing.

adverse action

denial or revocation of credit or insurance coverage change in terms of an existing credit arrangement or insurance coverage a refusal to grant credit or insurance in substantially the amount or on substantially the terms requested.

Enforces federal antitrust laws

department of justice and FTC

The business judgement rule

directors will not be held personally liable for making business decision if there is a reasonable basis to believe the director acted in good faith and with due care directors are liable if: - acted in bad faith - abuse their desecration - are guilty of gross negligence - commit fraud

conciliation

dispute resolution method that is similar to mediation in that the parties are encouraged to come to a mutually acceptable agreement; third party facilitates the parties negotiations and helps resolve disputes

Certificate of Incorporation (corporate charter)

document issued by a state agency that grants a corp its legal existence and its right to operate as a corp

burden of proof

duty to present evidence to prove a given fact or set of facts duty to persuade trier that the fact is true

State Court System Structure

each state court has a variety of trial courts each trial court is presided over by a judicial officer who is a judge. most states have two levels of appellate courts. The higher level court is the state Supreme Court and the lower is the state court of appeal

employees at will

either the employer or the empire can terminate employment at any time or any lawful reason. nature of employment can be changed by entering into a contract statues may prohibit more than 40 hour work weeks

hong kong

employers may not discriminate on sex race etc

nonexempt employees

entitled to overtime pay

rescission

equitable remedy in which a contract is cancelled or rescinded an the parties are returned to the position they would have been in had no contract ever been created.

reformation

equitable remedy in which a written contract is rewritten to express the original agreement of the contracting parties. Reformation is available when the parties entered into the written contract but the document does not accurately reflect their agreement

specific performance

equitable remedy that requires a party who has breached a contract to carryout the contact according to its terms ex- land sales

Federal trade commission act

establsihed federal trade commission and gave it the power to enforce federal antitrust laws; the FTC is an independent administrative agency of federal gov responsible for enforcing federal antitrust laws as well as federal consumer protection laws

rule of reason analysis

evaluates the overall competitive effect of the parties' conduct. it weighs the competitive harm against the competitive benefits. The specific analysis used varies depending on the facts of each case

prima facie case

evidence that is sufficient to prove the elements of a party's case and the entitles the party to judicial relief unless the opposing party presents evidence to the contrary.

illegal monopoly

exist when a business engages in anticompetitive conduct to control the market for a product or service. In other words biz obtained its power through unfair competition or dishonest practices

Insurers must be careful to avoid

fines, lawsuits, and negative publicity, which can harm the company reputation and profits

legal monopolies

gained power through fair comp and legitimate tactics has not violated anti trust laws ex- being only company willing and able to provide a product

Stockholders

have control over a stock corp management because have right to elect board of directors and also have right to: - inspect corp financial records, books, and papaers - attend annual stockholder meetings and vote on certain important corporate matters - share in the corp profits when dividend are declared

Circuit courts of appeal

hear cases in which the decision of a district court within that circuit is appealed by one of the parties involved in a trial

Federal System

in which a federal government and a number of lower-level governments share governmental powers in other words, a group of sovereign states are unified as a nation - us is federation of 50 states - federal constitution is supreme law all other laws must be consistent - each state has a. constitution that must be consistent with federal constitution

Legal system enables

individuals and organizations to anticipate the outcomes of their actions with some certainty, manage affairs with a minimum of conflict, and resolve disputes fairly

Directors

individuals whoa re appointed or elected by the stockholders or policyholders to manage and direct the affairs of a corp. State law may also provide for board seats appointed by members of the executive, legislative, or judicial branch - inside directors - outside directors duties: managing and overseeing the corporations affairs

The judicial branch of government in any given jurisdiction performs the function of

interpreting the jurisdictions laws the judicial branch o gov consists of a system of courts that are responsible for applying and interpreting the jurisdictions laws and for resolving disputes

Civil law system

is a legal system based o the roman legal system in which the laws are codified into written codes enacted by the legislature. code is a comprehensive written statement of rules that embody the general principles of law in a given civil law jurisdiction. Each jurisdiction has enacted civil code comprising general principles of law that apply to relationships between people that arise through brith, adoption, marriage, death, contracts, and personal liability. The civil code usually regulates property rights as well

contract

is a legally enforceable agreement between two or more parties the agreement consist of a promise or set of promises

states insurance department

is responsible for enforcing the state insurance code and making certain that insurers conducting business within the state comply with all state insurance laws

trier of fact

judge in both trial types is responsible for deciding issues of fact in jury trial judge instructs the jury as to the laws that apply to the case, then the jury decides which facts to believe and applies the laws to those fact to reach a verdict

default judgement

judgement entered against a defendant who fails to plead-- that is, to file an answer within required time

declaratory judgement

judicial statement that declares or denies the parties' legal rights but does not include specific relief or any means to enforce those rights.

Civil laws

laws concerned with private non governmental rights and remedies. A dispute about who has the right to receive life insurance policy proceeds is an example of a civil dispute

Criminal laws

laws that define certain acts as crimes and provide specific punishments for each crime. in criminal case the gov prosecutes its case against the individual charged with the crime

Common law system

legal system based on the common law of England. The system was created in feudal England. At that time, courts were created to resolve disputes in accordance with the customs of the local area. These local customs often were referred to as common laws. Over the years. The courts developed an unwritten body of general principles of law based both on local customs and on public policy

Statutes

legislative branch of gov composed of one or more legislative bodies that are authorized to enact laws to govern the applicable jurisdiction Laws enacted by a legislature are referred to as statutes statutes are- which typically declare, command, or prohibit something. These legislative enactments create the body of law known as statutory law

Strict Liability

liability imposed by tort law without regard for whether the defendant was at fault-- applies only in very restricted situations, such as when a defendant engages in extremely hazardous activities. ex- using dynamite defendant at fault for losses caused even if not negligent

civil law jurisdiction courts

loos first to the jurisdictions codes for the applicable rules of law if the codes do not specifically cover the subject at issue, the court decides in accordance with the general principles of law that are set out in the applicable code. courts in civil law jurisdiction are influenced by their own prior decisions and the decisions fo the jurisdictions higher courts on similar issues

Equal Pay Act

made it illegal for employers to pay female workers less than men for the same job

res judicata

meaning the matter has been decided meaning case result is final and binding on both parties

corporate culture

means the values, beleifs, goals, and patterns of behavior that employees of an organization share. Business that value ethical conduct typically try to create a corporate culture that emphasize ethics. Many business especially large corporations have adopted written standards of ethical conduct companies that operate ethically enhance their reputation, gain the trust of stakeholders, and acquire and conserve more business

Pure competition

means there are many producers and consumers of the product, and prices are established by market forces with no interference from outside economic forces. In theory, pure comp results in the production of the greater output of a product at the lowest price.

customary law system

members of a community have accepted local customs as binding on the community's members. they would establish rules for marriage, separation, divorce, and adoption. establishes rules and guidelines for how houses must be constructed and how the community provides food. Customary laws often set out punishments that the community imposes on those who violate the laws

to operate in foreign countries must meat certain requirements

might be required to - incorporate a business in the host country that operates as a subsidiary - open a branch in host country - enter as a join venture: arrangement between two or more otherwise independent businesses that agree to undertake a specific project together for a specified time period

demutualization

mutual insurer becomes a stock insurer

National Association of Insurance Commissioners (NIAC)

nonprofit association of the insurance commissioners of all US states and territories. Primary function of the NAIC is to promote uniformity of state regulation by developing model insurance laws and regulations.

equitable remedies

not bound by the existing rigid procedures and were given discretionary power to base their decisions on moral rights and concepts of justice. - chancery divisions

defamation

occurs when a person makes false statements that injure the good name or rep of a nother person. Could be through :- slander- when defamatory statements are made orallyLibel- when defamatory statements are made in writing to succced in a civil action for defamation, a plaintiff typically must prove that the defendant made a false statement about the plantiff, 2 the defendant communicated the statement to a third party 3 statement must injured the plaintiff's rep

Judgement

official decision of a court that resolves a litigated dispute and determines the rights and obligations of the parties actions

monopoly

one firm or group of firms acting together, controls the production and distribution of a product. Under a monopoly there is no competition. With no comp prices tend to increase and producers are less responsive to consumer demand

Civil Rights Act of 1964

outlawed discrimination based on race, color, religion, sex, or national origin

Age Discrimination in Employment Act

outlaws discrimination against people older than 40 years

rebuttable presumptions

presumption that can be disproven but, that stands until adequate evidence is presented to the contrary

conclusive presumption

presumption that cannot be refuted

consumer reporting agencies

private business that assemble or evaluate info on consumers and furnish consumer credit reports to their parties in exchange for a fee

the rules of evidence

procedural rules that govern the admissibility of evidence at trials and determine whether the evidence presented is sufficient to prove the issues involved in an action

Mediation

process in which an impartial third party known as a mediator, facilitates negotiations between the parties in an effort to create a mutually agreeable resolution of the dispute.

arbitration

process in which impartial third parties known as. arbitrators evaluate the facts in dispute and render a decision that is usually binding on the parties

Discovery

process in which the parties to a civil lawsuit gather info that is relevant to the lawsuit so that they can prepare to present their respective cases at trial. discovery serves the following functions; - permits parties and witnesses to be questioned early on in litigation process while memories are fresher and in some cases to preserve their testimony - allows parties to narrow the issue by identifying those facts that are not in dispute, thus, reducing the time needed to try the action - facilitates settlements because the parties are able to determine the relative strengths of their own case and the other party's case - seeks to prevent a party from hiding info in order to surprise the other party at trial and gain unfair advantage

Clayton act

prohibits certain actions that lessen competition and lead to monopolies

Americans with Disabilities Act

prohibits discrimination against the disabled

Sherman Act

prohibits individuals and companies from 1. monopolizing or attempting to monopolize any part of interstate or foreign trade 2. engaging in contracts, combinations, or conspiracies in restraint of trade

Business Law for insurance professionals

provides a basic knowledge of the legal system as well as legal and regulatory issues unique to the life insurance industry

legal function

refers to actions a company takes to handle legal matters such as contracts and lawsuits - companies have a legal department known as the law department - person in charge of insurers legal department is known as the general counsel or chief counsel reports to the CEO - attorneys report to the general counsel

compliance function

refers to actions a company takes to make sure it follows the laws and regulations of the jurisdictions where it operates - chief compliance officer (CCO) might report to general counsel or to CEO - compliance staff reports to the CCO - compliance employees can be housed in agency operations or underwriting rather than just compliance department

Jurisdiction

refers to the authority of a court to hear specific cases or, in the event of overlapping authorities, the most appropriate forum to hear the case

Private law

refers to those areas of the law that primarily involve disputes between non governmental parties most private disputes are solved with a mutual agreement

consumer credit protection act

regulates many aspects of how business provide credit to consumers in the US - provides consumers with certain written disclosures concerning all finance charges - adhere to restrictions of garnishment of a debtors wages-- garnishment legal process by which creditor can obtain a debtor's property that is in the possession of a third party - refrain from discriminating

Fair credit reporting act

regulates the reporting and use of consumer credit info and seeks to ensure the consumer credit reports contain only accurate relevant and recent info

Administrative law

regulations make up this body of law. The regulations of each governmental unit are complied into that jurisdictions administrative code. For example the regulations of a state are compiled into that states administrative code

request to produce documents and things

request by one party that the other party produce defined documents and times related to the lawsuit

NAIC Corporate Governance Annual Disclosure Act (also called the Corporate Governance ModelAct)

requires an insurer to provide information regarding corporate governance practices to its state of domicile annually by June 1. The information provided by an insurer is called the corporate governance annual disclosure these groups are: 1. the board of directors 2 the officers of the corp 3 the stockholders

Regulations

rules or orders that are issued by administrative agencies and that also have the force and effect of law, as long as they do not conflict with the underlying statue.

antitrust laws

seek to enable the markets to operate as closely to a state of pure comp as possible

Fair labor standards act (FLSA)

sets a minimum requirements on the wages employers must pay workers. In addition to FLSA most states have min wage requirements overtime for more than 40 hours a week 1 1/2 pay

distric courts

sit in every state and territory and act as trial courts with jurisdiction to hear only specific types of cases as set out in the Constitution and various federal laws. ex- matter exceeds a specific value or dollar amount to be heard by district courts

Procedural laws

specify the rules and methods that courts use to enforce substantive laws example a court's procedural law may require that a defendant answer a complaint within 30 days of being served with the complaint. Procedural laws provide a guideline of how cases proceed through a court system

legislative enactments create the body of law known as

statutory law

The laws enacted by a legislature create the body of law known as

statutory law- the laws enacted by the legislature are referred to as statutes, which typically are laws that declare, command, or prohibit something. These legislative enactments create the body of law known as statutory law

mutualization

stock insurer becomes a mutual insurer

Ethics

system of accepted standards of conduct and moral judgement that combines honesty, integrity, and fair treatment. ethical business decisions are in accordance with accepted legal and moral principles of right and wrong acting ethically means upholding promises to customers, operating in a. responsible manner, etc.

duty to mitigate damages

that is to minimize the amount of damages that result from the defendant's wrong. The plaintiff cannot recover damages for a loss that she could have avoided or lessened by reasonable efforts. Thus, the plaintiff's failure to mitigate damages is an affirmative defense to a civil action. - will reduce amount defendant pays

Public Law

the areas of the law that affect the public interest and govern relationships between the government and nongovernmental parties

Supreme Court

the country's highest court. It hears only certain appeals from lower courts and cases involving any of the states or a foreign official, such as an ambassador. The court primarily reviews cases that involve a matter of national importance that involve the us constitution or cases in which two or more lower courts have reached different results

courts also engage in

the function of interpreting statutes and regulations. For example. statutes usually are expressed in relatively general terms that are designed to cover a wide range of situations. Law intent may be clear but its application to a specific situation may be unclear. In such cases courts general have authority to interpret the meaning of statues. These decision are considered by subsequent courts that may be called upon to decide similar issues in this way the courts serve as a source of law

Parliamentary democracies

the legislative branch of government, usually known as parliament, has ultimate authority for making all laws. ex- Britain, India , singapore executive branch led by prime minister.

Congress

the legislative branch of the federal government is congress the two houses are the senate and the House of Representatives. often referred to as the legislature or general assembly - all the laws enacted are called code (U.S. code) - by state is state code - federal tax laws are referred to as the Internal Revenue Code (IRC)

stakeholders

the parties who have an interest in how the company conducts its business. a life insurance company's stakeholders include stockholders (for stock companies), the board of directors, executives, managers, employees, agents, potential customers, policy owners, beneficiaries, annuity participants, and regulators, among others governments rely on the legal system to put in place specific insurance laws and regulations that safeguard this public trust. Also, in a business as complex and important as the life insurance industry mistakes and disagreements happen and the parties often turn to the legal system to solve disputes

Equal employment opportunity commission (EEOC)

the us federal agency responsible for administering the federal anti discrimination laws described in this section - file a right to sue notice

insurance holding company system

two or more affiliated corporations, one or more of which is an. insurer. The laws are designed to protect an insurer policy owners form the possibility that a holding company might make business decisions that could put insurance coverage at risk

common law

unmodified body of general principles and rules of law developed and followed by the courts. today these common law principles are found in the courts written decisions. These general common law principles supplement the laws enacted by the legislature and thus form a large component of the law of a common law jurisdicition

doctrine of stare decisis

when a court finds that a specific principle of law applies to a certain set of facts, the court will apply that principle to all future cases in which the facts are substantially the same. The decision in such a prior case is known as a precedent. to stray away from precedent the court needs to find how the cases differ. also can differ if precedent would cause an unjust result

nominal damages

when she was wronged but she did not suffer a loss as a result of the wrong, she cannot prove the amount of the loss with reasonable certainty, or the loss was trivial - plaintiff wouldn't receive compensatory because she failed to prove amount of damages with reasonable certainty

Contributory Negligence

when the plaintiff's own negligence contributed to her loss. According to the original common law rule-- a plaintiff who was responsible to any extent for her loss was denied any recovery from the defendant.

European Union

workers are protected against employment discrimination

in Japan

works are protected against discrimination of race etc

Answer

written document filed to respond to plaintiff complaint. in answer defendant can 1. admit or deny each of the facts the plaintiff alleged in her complaint 2. answer that he has no knowledge of a fact that the plaintiff alleged. The defendant may also include affirmative defenses and counter claims

complaint

written document that sets out the cause of action on which the plaintiff bases her claim against the defendant procedural rules specify the proper form of the complaint which is usually personally presented to the defendant

Affidavit

written statement made under oath