The Framework of Insurance
Regulation
Rex Bagwell
Business Development Manager
Insurance Productivity Services
Kurt Jackson
EVP of Sales
GhostDraft v

Rex Bagwell
• Business Development Lead with
Salient Commercial Solutions
• Worked directly in the insurance industry for 9 years as an agent, a district manager and now with Salient years
• Former Director IASA Board and on several other national committees

Kurt Jackson
• Proven and accomplished sales leader with over 20 years of experience in the technology sector
• EVP of Sales and Marketing at
• IASA volunteer and committee member

Key takeaways
Insurance Regulation
101
• Protecting the policyholder
The impact of regulations on carriers v and rate of change
How do regulations affect your ability to sell
• Do your homework
• Based on what you are selling

Agenda
• The Purpose of Insurance Regulation
• Key Regulators
• The Structure of Insurance Regulation
• Key Legislation
• Regulations and Carrier Concerns v
• Vendor Opportunities
• Case Studies

The Purpose of Insurance Regulation
Protect the insured (policyholder):
• State departments of insurance are accessible and interests of the policyholder.
• State regulation works to protect insured and ensure promises made by insurers are kept.

Other Insurance Regulation Assurances
• Availability and Equal Treatment to All Entitled Persons
• Fair Competition
• Insurer’s Solvency through Monitoring of Assets
• Availability of Insurance v

Key Regulators
State Department of Insurance
• Establish and oversee state insurance departments
• Regularly review and revise state insurance laws
• Approve regulatory budgets
• Have impact on market entry of new carriers v
• Audit insurance companies
National Association of Insurance Commissioners (NAIC)
• Advisory body and service provider for state insurance departments to:
• Pool scarce resources
• Discuss issues of common concern
• Align their oversight of the industry

The Structure of Insurance Regulation
Company
Licensing
Consumer
Services
Producer
Licensing v
Market
Regulation
Product
Regulation
Financial
Regulation

Regulatory Measures
• Guaranty Funds
• Yellow Book
• Oversight
• Statistical Reporting v

State Revenue from Regulation
• In 2000 states collected more than $10.4 billion in revenues from insurance sources:
 $880 million (8.4%) went to regulate the business of insurance
 Remaining $9.6 billion went to state general funds for other purposes
 Effectively paying a premium tax v

Insurance for Those Who Can’t Get
Insurance
• Assigned Risk Pool
• FAIR Plans
• Workers Compensation Funds
• Windstorm / Hail Pools & Beach Plans
• Healthcare v
*Associations for each

Key Legislation
1945 ‐ McCarren‐Ferguson Act
1996 – Health Insurance Portability and Accountability Act (HIPAA)
2002 – Sarbanes‐Oxley Act (affects publicly held carriers)
2010 - Affordable Healthcare Act

Regulations and Carrier Concerns
• Licensing
• Product Ratings
• Financial Stability
• Market Conduct Exams
• Insurer Complaints v
• Relationships with Commissioners
Liberty Mutual Insurance TV Commercial –
New Car Replacement and Accident Forgiveness

Implications of Regulations on Carriers
 Why do companies pull out of states?
• Florida Insurance Market
 Understanding of prospects markets they serve and the regulatory climate
 PA Commissioner interested in holding board accountable v
 Often new regulations are delayed six months before rollout

Vendor Opportunities
• Understand carrier ability to use your product or service
• Forms regulation management
• Address carrier concerns with regulations
• Keep up with changing regulations
• Reduce risk and increase regulatory accuracy
• Understand regulations to get credibility with executives

Case Studies
• Producer Lifecycle Management
 Licensing and compliance, ensure authorization to sell
• Customer Communication Management
 Less customer complaints through effective communications
 Forms Compliance v
• Statistical Reporting
• Product Development / Compliance

Future of Regulations
v
• Insurance Journal: http://www.insurancejournal.com/news/national/2015/01/08/353430.htm
• NAIC: http://www.naic.org/documents/consumer_state_reg_brief.pdf

Key Takeaways
Insurance Regulation
101
• Protecting the policyholder
The impact of regulations on carriers and rate of change
How do regulations affect your ability to sell
• Do your homework
• Based on what you are selling