While states play the primary role in regulating the insurance industry, the federal government exerts control over the insurance market -- directly and indirectly -- in four areas:
the Internal Revenue Code and its special tax treatment of insurance products,
health insurance and pension legislation (most notably HIPAA and ERISA),
regulation of insurance products considered securities by the Securities Exchange Commission, and
the powers reserved to it under the McCarran-Ferguson Act,.
The tax code provides insurance products special tax treatment: such as tax-deferred growth of cash values within life insurance and annuities, income tax-free death benefits, and deductions for employers who provide group health insurance. These often play an important role in the sale of insurance. Furthermore, the Internal Revenue Code also exerts control over taxation of mutual and stock insurance companies. Taxes provide incentives and disincentives, and changes in tax policy can significantly affect how the insurance market evolves.
A second area of federal influence relates to the areas of health insurance and pensions. The federal government enacted Medicare and Medicaid -- a basic health care framework for the elderly and poor. The insurance industry responded with products that work in concert with that federally-created and administered framework, such as Medicare supplement policies and qualified long term care policies. Subsequently, the passage of the Health Insurance Portability and Accountability Act (HIPAA), further defined the health insurance playing field. ERISA (The Employee Retirement Income Security Act) applies to employer provided benefit programs such as pensions and health care plans offered by HMOs. 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.
Lastly, the federal government retains the power to control the insurance industry under the McCarran-Ferguson Act. This law was passed in response to a Supreme Court decision in 1945 that declared insurance to be "interstate commerce" subject to federal jurisdiction. The McCarran-Ferguson Act effectively overturned that decision, leaving most insurance regulation to the states, but retaining federal jurisdiction to the extent that the issues involved are deemed to be national in character. So, ultimately, oversight of state insurance regulations 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 -- as is the case of the Gramm-Leach-Blily Act (or Financial Services Modernization Act), which provides for standardized nationwide licensing requirements of insurance agents and
If these federal and state regulations were the only rules that applied to agent and insurer marketing practices and conduct, they would be sufficient to hold both agents and their companies liable for errors and omissions. Insurers, however, have liability for agent conduct that predates these laws. That liability derives from the common law and its concept of agency.
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.
There are hundreds of Federal agencies and commissions charged with handling responsibilities as varied as managing America's space program, protecting its forests, gathering intelligence, and advancing the general welfare of the American people.
The federal government's power is shared with the states. States are given the powers needed to protect public safety and health. Such powers are called "police powers." Certain powers are called "concurrent powers." These are powers that states and the federal government both have.
Social Security: The federal government administers Social Security benefits, impacting retirees and disabled citizens. Taxation: Federal taxes fund government programs, influence the economy, and affect citizens' financial well- being.
Defense, diplomacy, promote commerce and the general well-being of the country. State governments have all the other authorities. The only real necessity the Federal Government is supposed to do is protect citizens from all enemies, foreign and domestic that would try to deprive you of your Life, Liberty and Happiness.
These enumerated powers 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.
Economists, however, identify six major functions of governments in market economies. Governments provide the legal and social framework, maintain competition, provide public goods and services, redistribute income, correct for externalities, and stabilize the economy.
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 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. If a government fails to do this, a society will fall into chaos and its people will suffer.
The main function of the federal government is creating laws and regulation and making sure they are being followed among all states. The main function of state governments is to take care of state matters such as education, healthcare, etc. and enforce policies for the good of citizens.
It is responsible for managing monetary policy and regulating the financial system. It does this by setting interest rates, influencing the supply of money in the economy, and, in recent years, making trillions of dollars in asset purchases to boost financial markets.
One of the primary responsibilities of any government is to protect the well-being and security of its citizens. Traditionally, this has meant securing borders, maintaining law and order, and defending against external threats. However, as the nature of threats evolves, the nature of protection must evolve with it.
Share: 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.
Legislative—Makes laws (Congress, comprised of the House of Representatives and Senate) Executive—Carries out laws (president, vice president, Cabinet, most federal agencies) Judicial—Evaluates laws (Supreme Court and other courts).
So, our federalist form of government has several advantages, such as protecting us from tyranny, dispersing power, increasing citizen participation, and increasing effectiveness, and disadvantages, such as supposedly protecting slavery and segregation, increasing inequalities between states, states blocking national ...
These included: to lay and collect taxes; pay debts and borrow money; regulate commerce; coin money; establish post offices; protect patents and copyrights; establish lower courts; declare war; and raise and support an Army and Navy.
The federal government collects revenue from a variety of sources, including individual income taxes, payroll taxes, corporate income taxes, and excise taxes. It also collects revenue from services like admission to national parks and customs duties.
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While states play the primary role in regulating the insurance industry, the federal government exerts control over the insurance market -- directly and indirectly -- in four areas: 
the Internal Revenue Code and its special tax treatment of insurance products,