The Insurance Regulators undertake the following activities to protect insurance consumers: -
· Licensing Insurers
· Licensing Insurance Company Representatives
· Approving Policy Forms
· Examining Market Conduct
· Investigating Consumer Complaints
Licensing Insuring
Most insurance companies must be licensed by the state insurance department before they are authorized to write insurance policies in that State.
· Licensed Insurer (admitted insurer) is one who is authorized by the state insurance department to sell insurance in that state.
· Domestic Insurer is an insurance company that is incorporated in the same state in which it is writing insurance.
· Foreign Insurer is an insurance company licensed to operate in that state but is incorporated under the laws of another state.
· Alien Insurer is an insurance company licensed to undertake business in a State but incorporated in another country.
Licensing Insurance Company Representatives
All the states have licensing requirement for certain representatives of the insurance companies like agents, brokers and claim representatives to transact insurance business in the State. A license is usually granted only after the applicant passes an examination on insurance laws and practices.
Approving Policy Forms
Most state requires insurance companies to file their policy forms with the state insurance departments in a manner similar to method used for rate filing.
For example, when an insurer wants to change language of a particular policy, it must submit the new form for approval.
It consists of state laws that regulate the practices of insurers in regard to the four areas of operations, i.e., Sales and Advertising, Underwriting, Rate Making and Claim Handling.
If there be any unfair trade practices, the license of the particular insurance company involved will be revoked or suspended by the authorities.
Investigating Consumer Complaints
Every State Insurance Department has a consumer complaints division to enforce the consumer protection objectives of the state insurance department and to help insureds deal with problems that they have encountered with insurance companies and their representatives.
Who Provides Insurance
