prin of Insurance chapter 8

When did local stock companies and mutual protection associations begin to form?

• Early 1700s

• Early 1800s

• Late 1800s

• Early 1900s

What was a result of large conflagrations in property insurance?

• Low concentration of risk

• Stable pricing

• High concentration of risk

• Decreased company failures

What were life insurers notorious for?

• Low expenses

• Strong finances

• Abusive sales practices

• High reputation

What was the significance of the Paul versus Virginia case in 1868?

• Insurance was ruled as interstate commerce

• Federal government had the right to regulate insurance

• Insurance was not interstate commerce

• Insurance was exempt from state regulation

When was the National Association of Insurance Commissioners (NAIC) formed?

• 1868

• 1871

• 1944

• 1900

What does the McCarran-Ferguson Act (1945) establish regarding the insurance industry?

• Federal regulation of all insurance practices

• State regulation and taxation of the insurance industry

• Complete deregulation of the insurance industry

• International regulation of insurance companies

Which act changed federal law to allow banks, insurers, and investment firms to compete outside their core area?

• The McCarran-Ferguson Act

• The Financial Modernization Act

• The Dodd-Frank Act

• The Securities Act

Who regulates the sale of securities?

• The Federal Reserve

• State insurance departments

• The Securities and Exchange Commission (SEC)

• State and federal bank agencies

What is one of the criticisms of state regulation of the insurance industry?

• It is too competitive

• It is too lenient on small insurers

• It no longer needs broad antitrust exemption

• It prevents federal regulation

What was the purpose of the Dodd-Frank Wall Street Reform and Consumer Act (2010)?

• To deregulate the financial services industry

• To address abuses in the financial services industry

• To eliminate state insurance departments

• To increase competition among small insurers