Insurance Regulations

Who administers the Terrorism Risk Act?

Treasury Department.

What is the distinction between a Customer and a Consumer in the Gramm-Leach-Bliley Act?

A consumer is any individual who obtains, or has obtained, a financial service from a financial institution. A customer is a consumer who currently maintains a financial relationship with the business.

How must telemarketers act when making telemarking calls?

Telemarketers include anyone who is making unsolicited phone calls in order to convince an individual to engage in a financial transaction. It does not include calls to businesses but it would include cold calls to prospective clients. Telemarketers have to abide by the following restrictions: ● Telemarketers cannot block their caller ID number ● If they use a predictive dialer it cannot abandon more than 3% of all calls ● Calls cannot be made before 8 am or after 9 pm (customer's time) ● When making a telemarketing call you must provide your name, the name of the entity on whose behalf the call is being made, and contact information for that entity.

Who bears the responsibility to ensure accuracy in a credit report?

The FCRA does not specify or limit the types of information that can be contained in a credit report. Nor are the credit reporting agencies obligated to ensure the accuracy of any information contained therein. Accuracy of an individual's personal information contained in the report is the responsibility of the consumer.

What does the Fair Credit Reporting Act govern?

The FCRA governs the collection, evaluation, maintenance, and dissemination of reports on consumers collected for the purpose of evaluating their qualifications for credit, insurance, employment and certain other transactions, and requires credit bureaus and other similar entities to adopt reasonable procedures for meeting the commercial need for information about individuals in a manner that is fair and equitable to the consumer. The Fair Credit Reporting Act also requires that individuals have the opportunity to review and correct information included in any credit report made about them and sets limits on how personal information may be released, restricting such release to "permissible purposes."

Under what conditions may a consumer reporting agency disclose an individual's personal information?

The FCRA is quite specific in terms of the conditions under which it is permissible to share an individual's personal information. By and large, the individual must either give consent for the release of information or, in the least, be informed that the information will be solicited if a consent is not required. Even when solicitation of an individual's personal information is allowable under the Law, it is not uncommon, and always a wise practice, to obtain consent from the consumer first. Whether consent is required or not, the individual must be informed when a third party plans to solicit their personal information from a credit reporting agency.

What information is covered by the Gramm-Leach-Bliley Act?

The GLB act covers non-public personal information, which covers nearly all information about a customer which is not public knowledge.

What is the Gramm-Leach-Bliley Act?

The Gramm-Leach-Bliley Act (GLB) removed many of the restrictions created by the Glass-Steagall act of 1933. The GLB act allowed the merger of Investment banks, commercial banks, and insurance companies.

How may an individual who is convicted fo a felony involving dishonesty or breach of trust practice the business of insurance?

an individual who might otherwise be prohibited may petition for a waiver under Section 1033 (known as a 1033 waiver) that will allow him/her to practice the business of insurance. The person applying cannot practice insurance while the waiver is being considered, and the individual must still comply with all state laws (such as those barring any persons who have been convicted of a felony from practicing insurance). To determine the regulations concerning waivers for a specific state one must contact the Insurance Regulation Agency of that state.

What is a nationwide specialty consumer reporting agency?

Nationwide specialty CRA's are consumer reporting agencies that compile and maintain information on a nationwide basis within specific "specialty" categories. These include: ● Medical records or payments ● Residential or tenant history ● Check writing history ● Employment history ● Insurance claims

After how many years must a consumer report agency remove information re: an adverse action from a consumer report?

Reporting agencies have a duty to remove any information after a certain period of time. Typically, this is seven years (7) from the date of the adverse action. The exceptions to this rule are for bankruptcies which will remain on a credit report for ten (10) years and for tax liens which are removed seven (7) years after the lien has been paid, not seven years after the lien is issued.

What is the insurer deductible under the Terrorism Risk Act?

. TRIA sets the Insurer Deductible at 20% of an insurer's direct earned premium of the preceding calendar year and sets the federal share of compensation at 85% of insured losses for 2015, 84% for 2016, and so on until it becomes 80% by 2020. The government is obliged to recover these expenditures by placing a surcharge on policies in succeeding years.

How does the Gramm-Leach-Bliley Act affect insurance producers?

Insurance producers who receive information from their customers are required to safeguard that information, and not share it with non-insurance company individuals.

What is the Do Not Call Registry?

The creation of the do not call registry, and related rules, was designed to reduce the public's frustration with telemarketing calls. The first part of this law is the actual registry. Individuals can put their name and phone number on this registry and companies are prohibited from calling these numbers for marketing purposes. The second part of the law is that it regulates how telemarketers can operate.

What is the Terrorism Risk Insurance Act?

This law provided federal reinsurance (Terrorism Risk Insurance Program) for defined acts of terrorism (must be certified as such, not be an act of war, and cause at least $5 million in insured losses, etc.) and imposed certain obligations on insurers.

What are the responsible of the users of consumer report information?

Users of the information for credit,insurance, or employment purposes (including background checks) have the following responsibilities under the FCRA: ● They must notify the consumer when an adverse action is taken on the basis of such reports. ● Users must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the consumer.

When must an entity inform the inform the consumer it used information from a credit reporting agency?

Any entity, individual or business, which uses information from a credit reporting agency and which reaches an adverse or negative decision with respect to a consumer based on that information, must inform the consumer of this fact. The consumer then has the right to receive a fully copy of the report upon which the decision was made and to contest any information contained in that report if the report is found to be inaccurate.

What are consumer reporting agencies?

CRA's are entities that collect and disseminate information about consumers to be used for credit evaluation and certain other purposes, such as employment. Credit bureaus are a specific type of CRA that specifically hold only a consumer's credit report in their databases.

May a producer or insurer employ an individual convicted fo a felony involving dishonesty or breach of trust to engage in the business of insurance?

No.

What must a consumer do to have incorrect information removed from their consumer report?

If the report contains inaccurate information, and this has been demonstrated by the consumer to the reporting agency's satisfaction, then the inaccurate information shall be removed. Once contested information has been removed from an individual's report that same information may not be ​reinserted​ into the individual's credit report without prior notification to the consumer.

Do credit agencies review the information reported to them for accuracy?

Inaccurate information, as noted above, must be removed at the request of the consumer to whom the information relates. The consumer must notify the reporting agency that the information is inaccurate and request its removal for this to occur. Except in instances of investigative credit reports​, which require verification of specific items if they appear on a credit report, reporting agencies do not verify or correct the information reported to them.

May any individual convicted of a felony engage in the business of insurance?

Section 1033 of Title 18 of the US Code makes it a criminal offense for an individual who has been convicted of any felony involving dishonesty or breach of trust to willfully engage in the business of insurance if those activities affect interstate commerce.

What is the fine for either being a felon (felony for dishonesty or breach of trust) or employing such a felon if they engage in the business of insurance?

Section 1034 of the Code sets the allowable penalties for violation of this law. These include a fine not to exceed $50,000 and/or a court order that stops the violator from engaging in the prohibited conduct.

What are the two types of information collection agencies the FCRA classifies?

The FCRA classifies two types of information collection agencies; these are consumer reporting agencies (CRA's) and nationwide specialty consumer reporting agencies.

What calls are prohibited by the do not call registry?

The do not call registry prevents marketing solicitation, but it does not prevent all business calls. The following types of calls are allowed regardless of whether the person is on the do not call registry. ● If you have a business relationship with the customer ● If the customer has given written permissions for calls ● If the calls are not commercial and don't include unsolicited advertisements ● If the calls are on behalf of a tax-exempt non-profit organization

How do commercial policies typically address terrorism insurance?

Typically, commercial policies offer coverage for terrorism an an endorsement with an additional premium.