Chapter 2 - Chart A
Insurance Regulations

A: The State Insurance Department

Regulation of Insurance – The responsibility to regulate the insurance industry is shared jointly by the federal government and state government.

The McCarren-Ferguson Act:

• Also, known as Public Law 15, granted the states the authority to regulate insurance in conjunction with the federal government.

• This law was passed in 1945 and declared that the regulation of insurance companies should remain with the individual states.

• This law also reserved for the federal government the authority to regulate insurance in areas such as fair labor standards and anti-trust matters.

The Insurance Commissioner/Director:

The role of the insurance commissioner/director is to:

• Monitor the financial solvency of insurance companies;

• Monitor the conduct of individual insurance agents;

• Review and approve rates, policies, and forms;

• Assure the public of insurance availability.

Cease and Desist Orders - All states have enacted laws that provide the Insurance Commissioner/Director with powers to conduct hearings in regard to possible unlawful acts in the performance of agents, adjusters, and companies. Following a hearing, the Commissioner/Director may issue a cease and desist order demanding that the offender refrain from committing the offenses immediately. The Commissioner/Director may suspend, revoke or fine the offender depending on the nature of the offenses and/or if the act was intentional.

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