INSURANCEREGULATION

Occasionally insurance litigation lands in federal court due to issues of civil rights, jurisdiction, claims involved Native Americans, or other matters. For the most part, however, states adjudicate the majority of insurance proceedings.

Here is a not-inclusive list of actions states regulate.

Licensing insurers

Licensing brokers, agents and adjusters

Examination of insurance carriers

Carrier insolvency

Rates Reserve Investments

Forms

Unfair trade practices

Continued from page 24

National Association of Insurance Commissioners (NAIC)

This advisory body assists most states' regulatory agencies develop forms, model laws and model financial regulations. The NAIC is an advisory body, not a regulatory body, so states can use their information or choose to develop their own. While laws are common across many states, each state is different. We cannot always answer a question in one state and assume it applies to another. This is why your state Big “I" is so invaluable to you, even if your agency has branches in more than one state.

This article is a brief overview of insurance regulations as they stand today in the United States. For more information, you can sign up for Understand the Insurance Industry: From Regulations to Operations, a three-hour training available on ABEN.

ChrisBoggs

19June2023

Face it, most personal lines clients are functionally illiterate regarding insurance.

Don't misunderstand, it is not that your insureds lack intelligence, the issue is most have never been taught insurance fundamentals. Even clients who bought their first insurance policy 40 years ago only know what they hear on commercials, read on the Internet, or are told by their friends and neighbors - who are just as illiterate. In fact, most of what your personal lines clients think they know is actually lies and misinformation.

Insurance practitioners who wallow around in the insurance muck every day forget that insurance" is a unique and foreign language to our clients. We fail to realize our insureds don't know the basis of the insurance contract they purchased; they just know they bought the policy because someone or something made them buy it (contract, statute, or mortgagee).

Without correct information, only price matters. Remember, somewhere between $6 and $7 BILLION is spent on television advertising telling consumers insurance is all about the best price. That's a lot of dollars to support a lie.

When misinformation and lies are replaced with knowledge and truth, the insurance purchase becomes more about protection than price. Give buyers the correct information needed to feel empowered and they feel better about their decisions; and they also feel better about the person who gave them the information. What better reason to teach your client's kids about insurance?