ACE Regulatory Compliance & Law 2

Question 1

Under the McCarran-Ferguson Act, who has primary authority to regulate the insurance industry?

Accepted Answer

State governments

Answer

McCarran-Ferguson Act of 1945 affirmed that states, not the federal government, have primary authority to regulate insurance.

Question 2

Which ACORD standard data element is used to uniquely identify an insurance company in electronic transactions?

Accepted Answer

NAIC company code

Answer

The NAIC company code is the standard identifier used to uniquely identify insurers in ACORD electronic data transactions.

Question 3

What is 'rebating' in the context of insurance regulatory compliance?

Accepted Answer

Refunding a portion of the premium as an inducement to purchase

Answer

Rebating is the illegal practice of offering a portion of the commission or premium as an inducement to purchase insurance.

Question 4

A certificate of insurance issued via ACORD 25 is best described as:

Accepted Answer

Evidence of insurance coverage at a point in time

Answer

ACORD 25 is evidence of insurance only and does not confer rights, amend coverage, or guarantee future coverage.

Question 5

Which federal law requires financial institutions, including insurers, to implement customer information security programs?

Accepted Answer

Gramm-Leach-Bliley Act

Answer

The Gramm-Leach-Bliley Act (GLBA) mandates that financial institutions protect the security and confidentiality of customer nonpublic personal information.

(ACE) ACORD Certified Expert Practice Test

(ACE) ACORD Certified Expert Practice Test

ACE Regulatory Compliance & Law 2