Regulatory Frameworks & Compliance Flashcards
7 cards from real Insurance 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 Frameworks & Compliance flashcards as text
Which federal act established minimum standards for health insurance portability and accountability, including protections for pre-existing conditions in group health plans?
Answer: HIPAA
HIPAA (Health Insurance Portability and Accountability Act of 1996) established portability protections and limits on pre-existing condition exclusions in group health plans.
Under the NAIC model law, what is the maximum number of days an insurer typically has to acknowledge receipt of a claim?
Answer: 10 days
The NAIC Unfair Claims Settlement Practices Model Act requires insurers to acknowledge receipt of a claim within 10 working days.
Which regulatory concept requires insurers to maintain sufficient assets to cover their liabilities and provide a cushion against unexpected losses?
Answer: Solvency margin
A solvency margin (or surplus) is the excess of assets over liabilities that regulators require to ensure insurers can pay all future claims.
A state law that requires all admitted insurers to participate in a shared market for high-risk drivers unable to obtain standard coverage is called a(n):
Answer: Assigned risk plan
An assigned risk plan (or automobile insurance plan) distributes high-risk drivers among all licensed auto insurers in proportion to their market share.
The principle that insurance rates must not be unfairly discriminatory means that:
Answer: Rates must reflect actual cost differences among risk classes
Non-discriminatory rates allow different premiums only when they reflect actuarially justified differences in expected losses or expenses among risk groups.
Which document must an insurer file with the state insurance department before using a new policy form in most states?
Answer: Policy form filing
Most states require insurers to file policy forms with the insurance department for review or approval before they can be issued to consumers.
Under state guaranty fund laws, when an admitted insurer becomes insolvent, covered policyholders are protected up to a maximum claim limit, which is typically:
Answer: $300,000
Most state property and casualty guaranty funds cover claims up to $300,000, though the exact limit varies by state and line of insurance.