Question 1

Which government entity has primary authority to regulate insurance in the United States?

Accepted Answer

Individual state governments regulate insurance, not the federal government, as established by the McCarran-Ferguson Act of 1945.

Question 2

What is the primary purpose of the McCarran-Ferguson Act of 1945?

Accepted Answer

It affirmed that states have the authority to regulate insurance and that federal antitrust laws apply to insurance only to the extent that it is not regulated by state law.

Question 3

What is the role of the State Insurance Commissioner (or Director)?

Accepted Answer

The State Insurance Commissioner enforces state insurance laws, licenses agents and insurers, approves policy forms and rates, and protects consumers from unfair practices.

Question 4

What is a Certificate of Authority in the context of insurance regulation?

Accepted Answer

A Certificate of Authority is a license issued by a state insurance department that authorizes an insurance company to transact insurance business in that state.

Question 5

What is the difference between an admitted (authorized) insurer and a non-admitted (unauthorized) insurer?

Accepted Answer

An admitted insurer is licensed by the state and subject to state regulations, including guaranty fund protection. A non-admitted insurer is not licensed in the state but may write surplus lines coverage for risks that admitted insurers won't cover.

Insurance Regulations – P&C License Exam Flashcards

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