Chap006 - Chapter 6 Insurance Regulation I. Multiple Choice...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 6 Insurance Regulation I. Multiple Choice 1. In most states, insurance regulation covers all of the following areas except : a. licensing of agents and brokers b. rates c. expenses d. solvency Answer: c Type: K 2. Which area of insurance regulation includes risk-based capital requirements, guaranty funds, and financial reporting requirements? a. licensing regulation b. solvency regulation c. rate regulation d. regulation of sales practices Answer: b Type: K 3. Insurance pricing and sales practices are: a. regulated by federal law. b. regulated by state law. c. regulated by both federal and state law. d. not regulated. Answer: b Type: K 4. The McCarran-Ferguson Act: a. is now repealed. b. gives the federal government primary authority for insurance regulation but allows for state regulation when federal regulation is deficient. c. exempts insurance companies from federal antitrust law subject to some restrictions. d. suggests that federal regulation of insurance is in the public interest. 34
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Answer: c Type: K 5. The main criticism of the McCarran-Ferguson Act is that: a. it causes heterogeneity in prices. b. it makes it more difficult for insurers to adequately price policies. c. it increases the cost of entry into a particular market or line of business. d. it facilitates collusion among insurers to increase prices. Answer: d Type: K 6. Which of the following areas of insurance regulation is/are aimed at reducing the cost of information to consumers? a. regulation of contract language b. regulation of deceptive sales and unfair claims practices c. licensing of agents d. all of the above Answer: d Type: K 7. The theory that suggests that regulators will tend to pass legislation that benefits the regulated industry at the expense of consumers is called the: a. capture hypothesis b. public interest theory of regulation c. economic theory of regulation d. political support hypothesis Answer: a Type: K 8. In an insurance market characterized by imperfect and costly information, which of the following is a likely result in the absence of regulation? a.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/24/2011 for the course IDS 472 taught by Professor Wang during the Spring '10 term at UChicago.

Page1 / 6

Chap006 - Chapter 6 Insurance Regulation I. Multiple Choice...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online