Regulatory Compliance & Law Flashcards
7 cards from real ACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance & Law flashcards as text
Under the ACA (Affordable Care Act), what is the 'medical loss ratio' (MLR) requirement for large group health insurers?
Answer: At least 85% of premiums must be spent on medical claims and quality improvement
The ACA requires large group health insurers to spend at least 85% of premium revenue on medical care and quality improvement, or issue rebates.
In regulatory compliance, 'admitted' vs. 'non-admitted' carrier status affects:
Answer: Whether the carrier's policies are backed by state guaranty funds
Admitted carriers are licensed by the state and covered by state guaranty funds; non-admitted (surplus lines) carriers are not subject to guaranty fund protection.
What does 'prior approval' mean in the context of insurance rate regulation?
Answer: Insurers must receive state regulatory approval before implementing new rates
In prior approval states, insurers must file new rates with the state insurance department and receive approval before those rates can be used.
Which federal act prohibits insurers from discriminating in coverage based solely on genetic information?
Answer: GINA (Genetic Information Nondiscrimination Act)
GINA prohibits health insurers and employers from using genetic information to make coverage, underwriting, or premium decisions.
An insurer's 'surplus lines' placement is most appropriate when:
Answer: The risk cannot be placed in the admitted market after a diligent search
Surplus lines insurance is used for risks that cannot be placed with licensed (admitted) carriers after a diligent search of the admitted market.
Under ERISA, self-funded employer health plans are primarily regulated by:
Answer: Federal government (Department of Labor)
ERISA preempts state regulation of self-funded employer benefit plans, placing oversight authority with the U.S. Department of Labor.
What is the primary function of ACORD's AL3 (Agency/Company Interface) standard in regulatory compliance?
Answer: Standardizing data exchange between agencies and insurance companies to reduce errors
ACORD AL3 is a data exchange standard that enables consistent, accurate transfer of policy and claims information between agencies and carriers.