1. Regulation

2. Insurance regulation State regulation Legislative Judicial Executive (Insurance Commissioners) NAIC

3. History Is insurance interstate commerce? Federal Anti-trust law McCarran Ferguson Act Rationale for exemption

4. Areas regulated Formation and Licensing Financial regulation Investments, Reserves, Surplus Disclosure (Annual and quarterly reports) Insolvency funds, Liquidation, Reorganization Risk based capital and early detection

5. Areas (Continued) Rate regulation Policy forms Sales practices

6. Risk Based Capital Asset Risk Insurance Risk Interest Rate Risk Business Risk

7. Life Insurance Rate Regulation Rate regulation is indirect Laws may specify mortality tables and interest rate assumptions for reserving Disclosure requirement regarding standardized cost indexes and dividends

8. Property-Liability Rate Regulation Prior approval File and use Use and file Flex rating (price range established) Open competition

9. Sales Practices Regulation Licensing of agents Rebating Twisting Unfair trade practices