Chapter 1 Us Law And Insurance Regulation

Front 1

Knowing insurance specific and general legal principles provides the foundation for understanding:

Back 1

1-Legal basis of liability
2-Reasons that insurance policies contain provisions
3-Contractual obligations of insureds and insurers

Front 2

Paul vs Virgina

Back 2

1869, established that insurance is a contract delivered locally and governed by state law rather than federal

Front 3

South Eastern Underwriters Case

Back 3

1944, Supreme Court case which ruled that federal law applies in insurance in some cases

Front 4

Three most common ways to classify US law

Back 4

1-Criminal or Civil Law
2-by Subject Matter
3-as either Substantive or Procedural Law

Front 5

Five sources of law for the each of the fifty-one legal systems of the US

Back 5

1-A Constitution
2-The Legislative Branch
3-The Judicial Branch
4-The Executive Branch
5-Administrative Agencies

Front 6

List 4 provisions (other than checks and balances) to the US Constitution relevant to the insurance business

Back 6

1- Delegation of powers to Congress
2-Commerce Clause
3-Due Process Clause
4-Equal Protection Clause

Front 7

Original or Federal jurisdiction rests with the Federal courts in the following three cases

Back 7

1-Cases involving maritime law
2-Lawsuits in which citizens of different states claim land under grants by different states
3-Cases involving a legal minimum amount in damages between citizens of different states or between citizens of one state and a foreign state

Front 8

Courts in contract cases apply the law of the state with the most significant relationship to the case. In determining the state, the courts consider the following:

Back 8

1-Where the parties to the contract live
2-Where the parties entered into the contract
3-Where the parties are to perform the contract

Front 9

The legislative delegation of rulemaking power to an administrative agency is constitutional as long as it meets the following three conditions:

Back 9

1-The legislation carefully defines the scope of the delegated power
2-The agency exercises its rulemaking power within the defined scope
3-The rules are subject to judicial review

Front 10

Parties to lawsuits use three discovery tools:

Back 10

1-Depositions (oral exam)
2-Interrogatories (written)
3-Motions to produce (physical evidence)

Front 11

Jurisdictions may allow one or both of the following two kinds of verdicts

Back 11

1-General Verdict
2-Special Verdict

Front 12

Any time during trial, the judge may take the case from the jury by any one of these actions

Back 12

1-Issuing a direct verdict
2-Declaring a mistrial
3-Declaring a nonsuit

Front 13

Agencies rulemaking function: Agencies promulgate the following 3 rules:

Back 13

1-Legislative rules
2-Interpretative rules
3-Procedural rules

Front 14

Model State Adminstrative Procedure Act (MSAPA) requires agencies to adhere to 3 basic steps

Back 14

1-Publish a notice of intent to adopt a regulation
2-Provide opportunity for public comment
3-Publish the final regulation

Front 15

After agency has reviewed all comments about proposed rule, it can do one of the following:

Back 15

1-Adopt the originally proposed rule
2-Make minimal or extensive changes
3-Nullify the proposed rule

Front 16

Agencies Adjudicatory function, Appropriate notice (due process) requires the following 4 points:

Back 16

1-Statement of hearing time, place and nature
2-Statement of the hearing's legal authority and jurisdiction
3-Reference to the particular statute or rule involved
4-A short, clear statement of the matters at issue

Front 17

The US Constitution places the following limitations on agency investigations

Back 17

1-Fourth Amendment protection against unreasonable searches and seizures
2-Fifth Amendment protection against self-incrimination

Front 18

Judicial review of a case can occur only after the following two requirements have been met

Back 18

1-The agency has issued a final order in the case
2-The doctrine called exhaustion of administrative remedies must apply

Front 19

A court can set aside agency action on the following 5 grounds

Back 19

1-The action was arbitrary and capricious
2-The action was unconstitutional
3-The action violated statutory authority
4-The action violated agency procedural rules or was illegal
5-The action is unsupportable by substantial evidence in the record

Front 20

The three goals of The Freedom of Information Act of 1966

Back 20

1-To ensure an informed citizenry
2-To prevent criminal misuse of information
3-To hold government accountable for the governed

Front 21

McCarran-Ferguson

Back 21

permits each state to regulate the business of insurance conducted within its borders

Front 22

Federal laws have governed insurance only when one of the following 3 scenerios applies

Back 22

1-A federal law applies only to the business of insurance
2-A federal law affects insurers activity that falls outside insurance
3-The state has no law the regulates an aspect of the business of insurance covered by a federal law

Front 23

Three arguments of federal regulation

Back 23

1-Fed reg would provide regulatory uniformity across states
2-Fed regulation is more efficient
3-Fed regulation would attract higher-quality personnel

Front 24

Three arguments opposing federal regulation

Back 24

1-State regulation more responsive to local needs
2-Unifomity of state laws can be attained through the NAIC
3-Greater opportunities for innovation are possible with state regulation

Front 25

DOI commissioner's responsibilities include (5)

Back 25

1-Licensing insurers
2-Monitoring insurer solvency
3-Renewing insurer investments
4-Approving policy forms
5-Setting or approving rates

Front 26

Name (5) of the NAIC's many developed and adopted uniform laws

Back 26

1-Competetive rating
2-Reinsurance credit
3-Unfair trade practices
4-Unfair claim settlement
5-Producer licensing

Front 27

The licensing process package must include the following 4 things

Back 27

1-Description of insurer management
2-Insurer history
3-List of states in which the insurer is licensed
4-Types of insurance the insurer has written