RMI 3502 Lecture 3: Topic 3 book and class notes
Document Summary
Regulators help to protect consumers by reviewing insurance policy forms to determine whether they benefit consumers and comply with state consumer protection laws. Regulators can review policy language and disapprove policy forms and endorsements that are inconsistent with state consumer protection laws. Regulators protect consumers against fraud and unethical market behaviors. Regulators try to ensure that insurance is readily available. Cancellation restrictions aimed at promoting availability can lead insurers to reject more new-business applications, which reduces insurance availability. Regulators also provide information about insurance matters so the consumer can make more informed decisions: to maintain insurer solvency: solvency regulation protects insureds against the risk that insurers will be unable to meet their financial obligations. Some insurers underprice their products to increase market share and customer, this drives down price levels in the whole market. Investigating policyholder complaints: rehabilitating or liquidating insolvent insurers.