Regulatory Resources
Historical Perspective
The following are collections of documents on how we got here.
Selected and fascinating read on the evolution of our current regulatory state
Current Regulatory Frameworks
The current regulatory model comprises the following acts
1945 - McCarran-Ferguson Act,
1999 - Gramm-Leach-Bliley Act,
2010 - Dodd-Frank Wall Street Reform and Consumer Protection Act
Upcoming Regulatory Changes (coming to Insurance as guidance)
SOC 2
General Data Protection Regulation
California Consumer Protection Act
New York Privacy Act
NY Reg 187
NYDFS Cybersecurity Regulation
Education Resources
We explore the resources available for those setting the regulation and how web3 technology can be used to address specific regulatory frameworks, and most importantly, how the technology satisfies the concerns addressed by these regulatory frameworks.
Regulatory Bodies
List of some of the organizations involved with regulations in the US [1]
International Association of Insurance Supervisors. A voluntary organization, the International Association of Insurance Supervisors, or IAIS, works to set standards for all insurance-related activities. Its goal is to develop and maintain fair, safe, and stable insurance markets to protect consumers.
Insurance Capital Standard. Though not an actual governing body, the Insurance Capital Standard, or ICS, serves as a set of groupwide principles for internationally active insurance groups. Similar to the IAIS, ICS promotes consumer protection and supports the financial stability of the insurance market through prudentially sound behavior and risk management.
National Association of Insurance Commissioners. The National Association of Insurance Commissioners, or NAIC, is a U.S. insurance standard-setting organization. Instead of voluntary participation, its members consist of the chief insurance regulators from all 50 states, the District of Columbia, and the five U.S. territories. Its primary role is establishing standards and best practices for the insurance industry, but the NAIC also coordinates regulatory oversight and conducts peer reviews.
Regulatory Construct
List of some of the organizations involved with regulations in the US [1]
Structure of Insurance Regulation
By and large, insurance regulation is structured around several key functions, including the following:
Company Licensing
All insurers and insurance-related businesses must be licensed in their states of business prior to selling products or services. Once licensed, insurers are then subject to regulatory standards. Failing to comply with any one of these standards could result in licensure suspension or revocation — as well as potential fines, which vary from state to state.
Producer Licensing
Like insurers, agents and brokers must be licensed in their residing states prior to selling insurance-related products or services. Many states also require that producers be appointed with the insurance companies with which they do business. Unsurprisingly, they also are subject to regulatory requirements. Any agent or broker who fails to comply could face license suspension or revocation as well as state-based fines. To maintain high professional standards, all licensed agents and brokers must participate in continuing education programs.
Product Regulation
To ensure that insurance policy provisions comply with state laws, all insurance-related products are subject to regulation. Although rules and standards vary by state, most regulations ensure that policies are reasonable and fair to consumers — leaving no gaps in coverage unknown to policyholders.
Financial Regulation
Financial regulation is yet another safeguard for policyholders that verifies and validates an insurer’s accounting methods, procedures, and more. The goal is to ensure the financial standing of insurers. Should an insurance company become financially impaired, the state insurance department would step in and use guaranty funds to cover policyholder losses.
Market Regulation
Market regulation is just as it sounds: It’s a process to maintain fair and reasonable prices, products, and trade practices in the industry. To ensure consumer protection, states conduct routine examinations of an insurance company’s business, such as sales practices, claims handling, and the types of products sold by the company. Should state regulators find violations, the insurance department may recommend operational improvements and/or issue a civil penalty, license suspension, or revocation.
Consumer Services
With the many changes taking place in the insurance and financial services marketplace, states are establishing consumer services to handle questions and complaints. These services often include toll-free numbers, informational websites, educational seminars, and special consumer services units.
References
1- https://www.pimainsights.org/blogs/michael-baccelli1/2020/06/25/overview-of-the-regulatory-framework-of-insurance