The federal government is extensively involved with insurance company regulation in the following areas go to the website:
a. SEC regulations apply to some facets of insurance accounting and also to companies with publicly traded stock.
b. Annuity contracts are regulated under the investment Companies Act of 1940.
c. Federal Trade Commission regulates insurance company mergers, advertising of mail order insurance, etc.
d. HUD, with the Federal Insurance Administrator, regulates the flood, crime, FAIR Plan and riot reinsurance programs.
e. The Interstate Commerce Commission specifies coverages required of interstate carriers.
f. An international agreement negotiated by the authorities establishes civil liability for airline passengers in international travel.
g. The Price-Anderson Act determines limits of liability and establishes absolute liability on operators of nuclear reactors.
h. The Sba administers the Surety Bond Guarantee Program
State vs. Federal Regulation
The question of whether the public interest rates are best served by state or federal regulation is an open- ended question. A partial review of the advantages and disadvantages regarding each level of authority is placed forth below:’4
Arguments for Federal Regulation
Advocates of federal regulation contend that: state regulation is parochial; state regulation does 59
not have uniformity; and state regulation is costly. Since insurance companies must deal with numerous insurance departments, each having different requirements , costly duplication is inevitable. It’s further contended that states cannot effectively regulate interstate companies and that state insurance commissioners are unqualified here are the findings.
Arguments Against Federal Regulation
Proponents of state regulation contend that state regulation is responsive to local conditions and requires; state regulation is definitely an established and known entity; assuring regulation encourages innovation and experimentation. It is also claimed that decentralization and dispersion of political power is, by itself, an important value inside a democratic society.