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 type of market conduct examination focuses specifically on how an insurer handles policyholder claims, complaints, and cancellations?
Answer: Targeted market conduct exam
A targeted market conduct examination reviews specific business practices such as claims handling, underwriting, and policyholder treatment rather than overall financial condition.
Under COBRA, for how long may a qualified beneficiary typically continue group health coverage after losing eligibility due to termination of employment?
Answer: 18 months
COBRA generally provides 18 months of continuation coverage for qualified beneficiaries who lose coverage due to reduced hours or termination of employment (not for gross misconduct).
A free-trade zone regulatory approach in which insurers from states with 'substantially similar' laws may do business in other states without additional licensing is provided by the:
Answer: Interstate Insurance Product Regulation Compact
The Interstate Insurance Product Regulation Compact (IIPRC) allows insurers to file certain life, annuity, disability, and long-term care products for approval by a single interstate authority.
An insurer's 'risk-based capital' (RBC) ratio compares its actual capital to its required capital. A ratio below 200% typically triggers which level of regulatory action?
Answer: Company action level
An RBC ratio below 200% (the Company Action Level) requires the insurer to submit a plan to regulators explaining how it will improve its capital position.
Which regulation requires insurers to provide written notice to policyholders before canceling a policy mid-term, with most states requiring at least:
Answer: 30 days
Most states require at least 30 days' advance written notice before mid-term cancellation, though some states require fewer days for nonpayment of premium.
The Gramm-Leach-Bliley Act (GLBA) requires insurance companies to:
Answer: Notify customers about information-sharing practices and protect financial data privacy
GLBA requires financial institutions, including insurers, to provide privacy notices and safeguard customers' nonpublic personal financial information.
When an insurer's domicile state is different from the state where it writes most of its business, it is classified as a(n) _____ insurer in those other states:
Answer: Foreign
An insurer is 'domestic' in its state of incorporation, 'foreign' in other U.S. states where it is licensed, and 'alien' if incorporated outside the United States.