1. Evolution of US insurance regulation
    1. Paul v. Virginia:
      • not commerce (local contracts / not tradeable goods) -> state regulation preserved
    2. NAIC formed as a result to unify regulations and adopt common practices
    3. US v. South-Eastern UW Association:
      • is commerce -> within fed power
      • fed anti-trust legislation (Sherman Act under Commerce) applied to insurance industry -> overturned Paul v. Virginia -> passed McCarran-Ferguson to preserve state regulation
    4. McCarran-Ferguson Act:
      • state regulation is in public interest and primary except when pre-empted by fed laws relating to insurance business, i.e. Sherman Act, Clayton Act, fed Trade Commission Act (prevent and restrict anticompetitive practices)
  2. NAIC reforms after 1980's insolvencies
    • RBC requirements
    • financial regulation accreditation standards
    • initiative to codify accounting principles.
  3. Examples of state law encroachment (3)
    • Gramm-Leach-Bliley Financial Modernization Act
    • Patient Protection and Affordable Care Act
    • Dodd-Frank Wall Street Reform and Consumer Protection Act
  4. Gramm-Leach-Bliley Financial Modernization Act implications
    • states should regulate insurance
    • min standards state laws need to follow or face preemption by fed law.
    • enabled banks to sell insurance, broke down restrictions against bank with insurers
  5. Patient Protection and Affordable Care Act (PPACA) implications
    Health insurance market reform creating specific req'ts for health benefit plans:
    • plans to be marketed thru fedly-mandated insurance exchanges
    • mandated coverage req'ts
    • insurers must maintain specific med LRs set by fed law.
  6. Dodd-Frank Wall Street Reform and Consumer Protection Act Implications
    Authorize fed to collect data, monitor market, require state regulator to raise standards on insurers
    • Establishes FIO (Federal Insurance Office) to collect info about insurance industry and develop fed regulatory framework
    • Established FSOC (Federal Stability Oversight Committee) to oversee, id threats to financial stability of US economy
    • Requires all states to apply uniform eligibility for surplus lines insurers
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