In 1868, the U.S. Supreme Court ruled that states could regulate insurance sales and issuance. The deciding factor, according to the Court was that insurance sales were not interstate commerce. This case was brought by the National Board of Fire Underwriters. The purpose of the case was to challenge the states’ ability to regulate insurance sales.
In the 19th century, life and fire insurance companies began marketing products nationally. In an effort to encourage local enterprise, states began levying license fees and taxes on insurance companies that were not based in the state. This type of legislation was mostly focused on the large insurance companies headquartered in the Northeast United States.
Paul v. Virginia became a landmark case for states’ rights. Paul was an insurance agent for several New York state fire insurance companies. He was selling insurance in Virginia and was convicted for selling insurance without a license under Virginia law.
Paul lived in Virginia and was a resident of the Commonwealth. He was appointed to sell insurance against fire by several New York insurance companies. He applied for a license with the state, but did not deposit bonds with the state treasurer and was refused the license.
The insurance company lawyers argued that their corporations should be considered citizens and be covered under Article IV and the Privileges and Immunities Clause. The ruling by the Supreme Court denied this argument and found that corporations were not citizens as defined by this clause.
In a later 1944 ruling in United States v. Southeastern Underwriters Association, the court found that insurance was interstate commerce, however by this time state regulatory systems were well-defined. Congress strengthened the states’ positions in 1945 when they authorized the McCarran-Ferguson Act and recognized state insurance regulation.
This ruling also held that the federal government could regulate insurance transactions under the Commerce Clause. To date, this ruling has not been reversed.
Insurance as we know it is a regulated industry, what most people do not know is that each state has an insurance commissioner that oversees the conduct of insurance companies in each state. The NAIC provides support for the state insurance commissioners.
The NAIC itself provides guidelines on the best practices in the industry as well as regulations. Each state, however, is free to modify the implementation of the regulations and guidelines. For the most part, though, the laws governing the industry are pretty standard no matter what the state, although it’s fair to assume there might be differences in the regulations with regard to different insurance products. The main idea behind the NAIC, though, is to provide uniformity in all 50 states so it would be easy for the different insurance companies including family insurance to comply with the law.
What this means is that if you are someone who is looking for an insurance product, any type of insurance product, it is important to take note of the different insurance regulations that are in effect in your state. You might just find that there are slight nuances between the regulations in your state and the rest of the country.
The NAIC is an old organization that was formed in 1871. It was first called the National Convention of Insurance Commissioners, after which it was known as the NAIC. The organization has continued to provide support for the national insurance industry.
If you want to know more about what the national gathering of insurance commissioners do, you can find more information on its official website, or watch the video below:
If you ever study or deal with matters of a monetary or financial nature, then you hear certain terms. Sometimes, you might come across particular phrases or terms and not understand what they mean. If that’s the case, it’s understandable if you find yourself wondering just what is financial solvency?
In the realm of finance and business, financial solvency is described or defined as the degree to which a company’s or organization’s current assets exceed the liabilities of that same company or organization. Financial solvency is also alternatively defined or described as the power of a business to responsibly meet its longer-term fixed expenses necessary to engender future growth
A simple example to understand all this can actually be done on an individual basis, as a working adult is basically a business of one. If his or her income, savings, investments, property, and other assets are enough to keep paying monthly bills and reducing the person’s debts over time, then his or her net worth is going up over time. That is considered financial solvency.
On the other hand, if a person is seeing their amount of debt rise over time, even if they’re paying monthly bills and minimum debt payments, then they are financially insolvent on an increasing basis. This is often measured using credit scores.
Judging the financial solvency of a company is something many investors do in determining whether or not to buy their stock. It can also impact stock value.
Lenders often look at the financial solvency of an individual in determining the size and interest rates of loans they offer, much less whether or not to offer one at all. This measurement of the financial health and wellness of any individual, company, or organization should be used to map out a better future.
Insurance companies should operate on incredibly tight margins. If every client they represented used their insurance policies at the maximum values, the insurance industry would simply collapse. With that in mind, insurance companies try to save money at every turn, utilizing intense mathematical gymnastics to figure out how they can pay you as little as possible when something happens to you. While insurance companies will try to scare you into accepting their low-ball offers, you have to stand strong and understand what your true worth is. At the end of the day, your insurance agent is not your friend. Do not let them try to play around with you and your family’s livelihood.
Settlement Agreement Deadlines
One tactic many insurance companies employ is trying to force you to sign a settlement agreement while you are still undergoing medical treatment. While it might sound like a good idea to get some money right away, you have to remember that insurance companies have years of experience with dealing with clients suffering the same injuries or damages as you. They know how much money you are going to need. By setting up an arbitrary deadline, they are trying to make you agree to a settlement that is beneficial to them.
Blaming Injuries On Pre-Existing Conditions
As we have established, the entire goal of insurance companies, like any other company, is to make money. If you allow insurance companies to access your medical records (do not sign anything that authorizes this unless you are signing up for insurance that requires it), they will use that information against you. For example, if you were in a car crash that left you with a concussion, the insurance company might use a previous injury or pre-existing condition to get out of paying you what you deserve. They will say that you were aware of the risk, and they will charge you more in premiums. Do NOT let them control you like this.
Disputing the Severity of Your Injuries
This is pretty cookie-cutter stuff. Do give the insurance companies any reason to think you are in better shape than you actually are. Do not lie about your injuries, but be realistic about them throughout the entire process. If you tell the truth, and have your doctor to vouch for you, you will be fine.
If you have insurance for injuries and sustain a serious injury, do not let insurance companies bully you. Understand your worth, and keep records of everything. There is no reason why you should receive less compensation than you deserve.
When it comes to insurance, people will try to sell you a million different kinds. Remember in Family Guy when the salesman tries to sell Volcano Insurance? It’s hard to say why insurance salesmen get a bad reputation. Perhaps it was from when they had to sell insurance by ringing on people’s doors. But today in the world of online where people can get a quote at their fingertips, what insurance is actually worth purchasing?
Without your health, you have nothing. You can’t work and earn money for your family if you sick or injured. With hospital bills in the thousands of dollars range, having health insurance can help mitigate those costs. Even if you are “never sick” what if you and your beloved decide to have a baby? Having health insurance can make sure that you don’t go into debt before the baby even arrives.
In the event of an unexpected death, don’t put the financial burden on your loved ones. Having life insurance can help your family and friends pay for the cost of a funeral, coffin, wake/shiva and a gravestone, as well as provide them with a bit of a temporary cash flow as your income will now be gone.
Homeowner’s insurance is required if you are to get a mortgage from the bank. They want to make sure in the event that something happens the house is insured. In the event of a natural event such as a hurricane or tornado or fire, or from a crime like a burglary, replacing everything you own is a LOT of money. Insurance can help you rebuild. If you rent, then having renter’s insurance is advised.
Considering most states by law mandate that you have it, it’s something you definitely need. If your car gets damaged and parts need to be replaced, insurance will help pay for the cost, so you can spend time on recovering if you are injured.
As you can see, insurance can help you if you are ever in trouble with either your home, your car or even yourself!
On January 13, the United States and the European Union came to terms regarding the Insurance Regulation Pact. This pact effectively increases the market for both U.S.-based and EU-based insurance and reinsurance companies while eliminating the complications of collateral or local presence requirements when dealing within the international market. It also maintains the United States’ state-based insurance industry model and protects it by a measure within the pact that assures primacy dependent upon the company’s home policy. That is to say, US-based companies, even if operating within the EU, will still follow United States (and more specifically, the individual state’s) policies. Whereas insurers and reinsurers will adhere to EU policies even if operating within the United States.
With the opportunity for insurance and reinsurance companies to operate on an international stage, it also extends the opportunity to supervisory authorities to an exchange of information regarding those insurance and reinsurance companies. This allows respective supervisory authorities to protect the interests of the policyholders within their sovereign borders by requesting at will any and all information “which could harm policyholders’ interests or financial stability in their territory.”
Many companies, both American and European, appeared wholly supportive of the covered agreement, noting the relative simplicity of the regulatory process for those who operate in both the United States and European Union jurisdictions. The International Underwriting Association, a major representative of London-based reinsurance companies (many of whom are reinsurers of United States risks) affirmed their belief that the bilateral agreement would be a universal benefit and promote “global access to reinsurance services.”
While there are many who believe that this pact with the European Union will benefit insurance companies by expanding opportunities for becoming competitive on the international stage, there are those in the United States who believe this agreement could be a hindrance to businesses within US primacy. Representatives of the National Association of Insurance Commissioners based in the United States are skeptical after holding a minimal part in the finalization of the covered agreement between the United States and the European Union. Ted Nickel, the president of NAIC, also commented about the fear that such an agreement would inadvertently provided “…a backdoor to force foreign regulations on US companies.” Representatives of the National Association of Mutual Insurance Companies appeared to find the covered agreement convoluted with much that still required clarification lest they be forced to convene with European authorities regarding insurance regulation at a later date. Still, they instilled good faith in working with the Trump administration in determining the efficacy of this agreement on behalf of United States-based companies and citizens. Tom Considine, CEO and representative for the National Conference of Insurance Legislators, also criticized the covered agreement and suspected that it would infringe upon operating capabilities of state regulatory systems. Considine commented further, suspecting that the policy statement would attempt to reconcile the agreement with state-based regulation, but he believed more firmly that the agreement was “great for Wall Street and horrible for Main Street.”
One of the main themes of this blog will not just be to make you hate insurance companies but to suspend your belief of them when you talk with them. Insurance companies could not possibly give out great deals to everyone, because then they would never make any money. Sure, you need insurance, but there are types of insurance that are a huge waste of money (we will get into those later). What you need to do is identify what you need for your insurance, and let your agents know your expectations heading in. If you find yourself believing everything your agent tells you, please remember this video. Just like with any other product, it is in your best interest to be an informed consumer when you make the decision to purchase insurance. If you don’t do so, you will either wind up woefully underinsured or grossly over-paying. Neither of those sound very good to us.
The United States was subjected to a financial crisis in 2007 through to 2010 under the Obama administration. As a result, the government was required to bail out financial institutions to the amount of several trillion dollars throughout the nation. It was regarded as the worst financial crisis the country had endured since the Great Depression nearly 80 years prior. Amid this crisis, President Obama proposed a bill that would dramatically alter the regulatory systems of the financial industry. It would later come to be known formally as the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The main purpose of this legislation was simply to protect American taxpayers in the event of another financial crisis, that they would not suffer the brunt of the repercussions if Federal banks required another bailout such as that required in the preceding financial crisis. It consolidated and employed new agencies to oversee specific institutions that were seen as a “systemic risk.” It increased transparency and put in safeguards and warning systems regarding the stability of the economy. It also closed legislative loopholes that were said to be at fault for the financial crisis of 2007.
However, there are those in the Trump administration, including President Trump himself, who are strongly opposed to this legislation. The administration claims that it impacts banks negatively by discouraging loan approvals, and thus it impacts the consumer at the base level negatively as well. Those who might seek personal loans for expenses or to start businesses and create jobs, those who have established businesses that may wish to expand and create more jobs, are impacted negatively as a result of the Dodd-Frank Act.
While many are focused on the protections afforded the United States citizens and whether or not they conflict with the forward interests of American financial institutions, there are some who wonder at the implications of the insurance sector rather than strictly the financial sector. Would the Dodd-Frank Act alter the methods of operation for a state-based insurance industry? Would President Trump consider these implications in his effort to repeal or modify the Act? Many believe the President agrees with and supports entirely the notion of the state-based industry considering he has not yet spoken out against it.
The Financial CHOICE Act would effectively negate many of the items put forth in the Dodd-Frank Act. Its goal would be to give more freedom to the financial institutions by simplifying the processes of regulation and encouraging competition while maintaining consumer protections and restricting government bailouts to the financial institutions. Though, some believe that there is still not enough reform to the insurance industry. Or at least, not enough assurance for the current maintenance of the state-based insurance industry. The only significant change proposed in the Financial CHOICE Act bill was the merger of two positions within the hierarchy. There is also speculation of insurance companies which maintain the classification of SIFI (Systemically Important Financial Institutions) – and are therefore affected by articles in the Dodd-Frank Act – to have this label rescinded based on a court case brought forth by MetLife.
While the Trump administration has focused more intently on health care reform in the past months, there is still a focus on dismantling Dodd-Frank, and only time will tell if the the Financial CHOICE Act that hopes to repeal and replace it will include significant insurance reform as well.