The regulation of the insurance industry is done principally by the state insurance departments. These departments license agents and insurers, and they supervise agent and company sales practices. As a result of this pervasive state presence, few people give much thought to the role the federal government plays in the regulation of the insurance industry.
Despite this predominance of state regulators, the federal government exerts regulating control over the insurance industry in four principal ways. Federal government influence in the insurance industry is wielded through:
SEC regulation of insurance products considered securities.
The federal government retains the power to control the insurance industry under the McCarran-Ferguson Act to the extent that the issues involved are deemed to be national in character. Overseeing state regulation of the insurance industry is a power reserved to the federal government. Although the states are specifically charged with the responsibility of regulating matters relating to ethical conduct of insurance agents, the federal government could consider it to be of sufficient national concern to step in. There has been little federal interest up to this point, however, in taking over the job of supervising agent conduct.
The role of the federal taxing authority is very familiar to those practitioners whose career is principally on the life insurance side of the industry. The tax treatment given to products sold by life insurers, particularly the tax-favored cash value growth and income tax-free death benefits, often play an important role in the sale of substantial amounts of life insurance. Furthermore, the Internal Revenue Code also contains specific provisions concerning the taxation of mutual and stock insurance companies. Since taxation can significantly affect any product or industry, it becomes clearer just how important this area of regulatory influence is.
The third area of federal influence concerns its ability to legislate in the areas of health insurance and pensions. In the area of health insurance, the federal government created standards for Medicare supplement policies first and then established criteria for qualified long term care policies. Subsequently, the passage of the Health Insurance Portability and Accountability Act (HIPAA), further defined the health insurance playing field. Recently, the Economic Growth and Tax Relief Reconciliation Act of 2001 made significant changes to pension regulation and contribution limits to qualified plans. Some observers expect that the federal government's move towards standardization will eventually apply to basic health care plans.
The federal government, through the SEC, exerts considerable influence in both licensing and product registration of securities products, and that influence is increasing in the insurance industry due to the many new insurance products that have a dual character as insurance products and investment products. Although the federal government has considerable power to affect the insurance industry through regulation, the major burden of insurance regulation falls to the states.
The enumerated powers (also called expressed powers, explicit powers or delegated powers) of the United States Congress are the powers granted to the federal government of the United States by the United States Constitution. Most of these powers are listed in Article I, Section 8.
include, among other things, the power to levy taxes, regulate commerce, establish a uniform law of naturalization, establish federal courts (subordinate to the Supreme Court), establish and maintain a military, and declare war.
In their attempt to balance order with liberty, the Founders identified several reasons for creating a federalist government: to avoid tyranny. to allow more participation in politics. to use the states as "laboratories" for new ideas and programs.
Examples: The United States, Australia, the Federal Republic of Germany. One central government controls weaker states. Power is not shared between states, counties, or provinces.
The most obvious way the government is involved in the U.S. economy is providing public goods and services like education, military protection, national parks and federal highways. These goods and services are paid for with tax revenue, which introduces a second role of government – redistribution of income.
Though the rules and responsibilities vary greatly through time and place, governments must create them. Governments provide the parameters for everyday behavior for citizens, protect them from outside interference, and often provide for their well-being and happiness.
1. a. : of or constituting a form of government in which power is distributed between a central authority and a number of constituent territorial units. b. : of or relating to the central government of a federation as distinguished from the governments of the constituent units.
The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, five major self-governing territories, several island possessions, and the federal district and national ...
The purpose of a government is to protect its people and keep society safe. The government's role also includes keeping society organized. A government must be able to maintain order and stability.
The national (also known as federal) government makes laws for the entire country. It is responsible for areas of national interest such as immigration, defence and trade with other countries. Federal elections are held every four to five years.
Federalism promotes political participation. Federalism encourages economic equality across the country. Federalism provides for multiple levels of government action. Federalism accommodates a diversity of opinion.
The Federal Government impacts our daily lives, from ensuring the safety of our meals to maintaining the safety of our roads, and driving innovation through research.
Congress is the lawmaking branch of the federal government. Learn how a bill becomes a law and how the process is different in the House of Representatives and in the Senate.
Keep Order 2. Make Laws 3. Help Citizens 4. Protect the Country Match each of the examples in this set to the government role that it best represents..
Namely the power “to lay and collect taxes”, duties, impost and excises, to pay debts, to provide for the common defense and general welfare of the United States, to regulate commerce with foreign Nations, to constitute tribunals inferior to the Supreme Court, to raise and maintain armed forces, to declare war, to ...
The Articles of Confederation (1781-1789) were America's first attempt to govern itself as an independent nation. They united the states as a confederation - a loose league of states represented in a Congress.
Federal Hall in New York was the site of the meeting of the first federal Congress in 1789. Built in 1700 as New York's City Hall and demolished in 1812, it also was the site of key events on America's road to freedom.
Governments were created to set rules. They originated with the need to protect people from conflict and to provide law and order. Governments first evolved as people discovered protection was easier if they stayed together in a group, and if one (or some) members of the group had more power than others.
Introduction: My name is Wyatt Volkman LLD, I am a handsome, rich, comfortable, lively, zealous, graceful, gifted person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
Despite this predominance of state regulators, the federal government exerts regulating control over the insurance industry in four principal ways. Federal government influence in the insurance industry is wielded through:
the powers reserved to it under the McCarran-Ferguson Act,