Insurance Licensing, Regulation, and General Concepts

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What does Licensing and Regulation cover in insurance exams?

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Understanding the licensing process, regulatory framework, and compliance obligations.

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What is the Fair Credit Reporting Act (FCRA)?

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A federal law governing how consumer credit information is collected, used, and shared. Insurers must obtain consent before accessing credit reports and notify consumers of adverse actions.

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What happens if an insurer denies coverage based on a credit report?

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They must provide an adverse action notice with the reporting agency’s contact info.

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What are Fraud and False Statements under 18 USC §§ 1033–1034?

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Federal statutes criminalizing fraudulent conduct in the insurance industry, including embezzlement, false statements, and dishonesty affecting interstate commerce.

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What is required under the Gramm-Leach-Bliley Act (GLBA)?

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Financial institutions, including insurers, must protect consumers’ nonpublic personal information, provide privacy notices, opt-out rights, and safeguards for data security.

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What is the National Flood Insurance Program (NFIP)?

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A FEMA-managed program providing flood insurance to property owners in participating communities to reduce flood damage through insurance and floodplain management.

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What is the Terrorism Risk Insurance Act (TRIA)?

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A federal law providing a backstop for insurance claims related to certified acts of terrorism, requiring insurers to offer terrorism coverage for commercial property and casualty policies.

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What is the Motor Carrier Act of 1980?

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A federal law deregulating the trucking industry and imposing financial responsibility requirements on for-hire motor carriers operating in interstate commerce.

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What is the MCS-90 Endorsement?

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A federally required endorsement guaranteeing insurers will pay certain public liability claims even if excluded under the policy, protecting the public.

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What is risk in insurance?

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The uncertainty of loss. Only pure risk (loss or no loss) is insurable—not speculative risk (loss or gain).