The federal government is extensively involved with insurance company regulation in the following areas sources tell me:
a. SEC regulations affect some facets of insurance accounting and to companies with publicly owned stock.
b. Annuity contracts are regulated under the investment Companies Act of 1940.
c. Federal Trade Commission regulates insurance provider mergers, advertising of catalog shopping 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 through 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 if the public interest is best served by state or federal regulation is definitely an open- ended question. An incomplete summary of the advantages and disadvantages regarding each degree of authority is placed forth below:’4
Arguments for Federal Regulation
Proponents of federal regulation contend that: state regulation is parochial; state regulation does 59
not have uniformity; and state regulation is dear. Since insurance providers must cope 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 lowest price.
Arguments Against Federal Regulation
Advocates of state regulation contend that state regulation is responsive to local conditions and requires; state regulation is definitely an established and known entity; and state regulation encourages innovation and experimentation. It is also claimed that decentralization and dispersion of political power is, in itself, an essential value inside a democratic society.