Difference between revisions of "Baribeau.Regs"
(→BattleTable) |
|||
Line 1: | Line 1: | ||
+ | The Baribeau reading, ''Demystifying the Regulatory Web'' discuss the impact of the ''Dodd–Frank Wall Street Reform and Consumer Protection Act'' on insurance companies. This Act, passed in 2010, primarily targeted non-insurance financial institutions although it also has significant implications for insurance companies. | ||
+ | |||
[https://www.battleacts6us.ca/vanillaforum6us/categories/baribeau-regs<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>] | [https://www.battleacts6us.ca/vanillaforum6us/categories/baribeau-regs<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>] | ||
− | == | + | ==Study Tips== |
+ | This reading is only 8 pages but the exam questions are detailed. Use the wiki article to orient yourself, scan the quizzes, read the source, then come back and memorize the quiz answers. | ||
==BattleTable== | ==BattleTable== | ||
Line 8: | Line 11: | ||
Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are: | Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are: | ||
− | * | + | * fact 1... |
− | * | + | * fact 2... |
+ | |||
+ | '''Note''': Exam problems <u>below the solid line</u> in the table below appear to be from Dodd-Frank readings no longer on the syllabus. They have been mostly excluded from the quizzes but <u>are</u> included as BattleCards of lower probability. ''(You can access these through the <u>Custom Battles</u> feature either from the sidebar or the main part of the BattleActs site.)'' | ||
: {| class="wikitable" style="width: ;" | : {| class="wikitable" style="width: ;" | ||
Line 18: | Line 23: | ||
|- | |- | ||
| [https://www.battleacts6us.ca/pdf/Exam_(2017_2-Fall)/(2017_2-Fall)_(04).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2017.Fall #4)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2017_2-Fall)/(2017_2-Fall)_(04).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2017.Fall #4)'''</span> | ||
− | || [[Porter.3-Roles-Fed]] | + | || ''[[Porter.3-Roles-Fed]]'' |
− | || [[Porter.3-Roles-Fed]] | + | || ''[[Porter.3-Roles-Fed]]'' |
− | || [[Porter.3-Roles-Fed]] | + | || ''[[Porter.3-Roles-Fed]]'' |
− | || [[Porter.3-Roles-Fed]] | + | || ''[[Porter.3-Roles-Fed]]'' |
|| '''types of companies''': <br> - reg'd by Dodd-Frank | || '''types of companies''': <br> - reg'd by Dodd-Frank | ||
|| '''required actions''': <br> - under Dodd-Frank | || '''required actions''': <br> - under Dodd-Frank | ||
Line 34: | Line 39: | ||
| style="background-color: lightgrey;" | | | style="background-color: lightgrey;" | | ||
− | |- | + | |- style="border-top: 2px solid;" |
| [https://www.battleacts6us.ca/pdf/Exam_(2016_2-Fall)/(2016_2-Fall)_(04).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2016.Fall #4)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2016_2-Fall)/(2016_2-Fall)_(04).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2016.Fall #4)'''</span> | ||
|| '''Federal Ins. Office''': <br> - functions | || '''Federal Ins. Office''': <br> - functions | ||
Line 45: | Line 50: | ||
|- | |- | ||
| [https://www.battleacts6us.ca/pdf/Exam_(2015_1-Spring)/(2015_1-Spring)_(03).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2015.Spring #3)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2015_1-Spring)/(2015_1-Spring)_(03).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2015.Spring #3)'''</span> | ||
− | || [[Porter.2-Devlpt]] | + | || ''[[Porter.2-Devlpt]]'' |
− | || [[Porter.2-Devlpt]] | + | || ''[[Porter.2-Devlpt]]'' |
| '''fed role in insurance''': <br> - of Dodd-Frank | | '''fed role in insurance''': <br> - of Dodd-Frank | ||
|| [[Porter.2-Devlpt]] | || [[Porter.2-Devlpt]] | ||
Line 53: | Line 58: | ||
|- | |- | ||
− | | [https://www.battleacts6us.ca/pdf/Exam_(2014_2-Fall)/(2014_2-Fall)_(03).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''( | + | | [https://www.battleacts6us.ca/pdf/Exam_(2014_2-Fall)/(2014_2-Fall)_(03).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2014.Fall #3)'''</span> |
− | || [[Porter.2-Devlpt]] | + | || ''[[Porter.2-Devlpt]]'' |
|| '''general description''': <br> - of Dodd-Frank | || '''general description''': <br> - of Dodd-Frank | ||
− | || [[NAIC.Solvency]] | + | || ''[[NAIC.Solvency]]'' |
− | || [[NAIC.Solvency]] | + | || ''[[NAIC.Solvency]]'' |
| style="background-color: lightgrey;" | | | style="background-color: lightgrey;" | | ||
| style="background-color: lightgrey;" | | | style="background-color: lightgrey;" | | ||
Line 63: | Line 68: | ||
|- | |- | ||
| [https://www.battleacts6us.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(04).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2014.Spring #4)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(04).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2014.Spring #4)'''</span> | ||
− | || [[Porter.2-Devlpt]] | + | || ''[[Porter.2-Devlpt]]'' |
− | || [[Porter.2-Devlpt]] | + | || ''[[Porter.2-Devlpt]]'' |
− | || [[Porter.2-Devlpt]] | + | || ''[[Porter.2-Devlpt]]'' |
− | || [[Porter.2-Devlpt]] | + | || ''[[Porter.2-Devlpt]]'' |
|| '''surplus lines''': <br> - impact of Dodd-Frank | || '''surplus lines''': <br> - impact of Dodd-Frank | ||
|| '''cedant benefits''': <br> - under Dodd-Frank | || '''cedant benefits''': <br> - under Dodd-Frank | ||
Line 75: | Line 80: | ||
[https://www.battleacts6us.ca/vanillaforum6us/categories/baribeau-regs<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>] | [https://www.battleacts6us.ca/vanillaforum6us/categories/baribeau-regs<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>] | ||
+ | |||
+ | ==In Plain English!== | ||
+ | |||
+ | ===Intro=== | ||
+ | |||
+ | Regarding insurance regulation, Dodd-Frank created <u>2 entities</u>: | ||
+ | |||
+ | * '''Federal Insurance Office (FIO)''': | ||
+ | : - monitors insurance industry | ||
+ | : - identifies <u>gaps</u> in the state-based regulatory system | ||
+ | * '''Financial Stability Oversight Council (FSOC)''': | ||
+ | : - monitors all financial services markets ''(including insurance)'' | ||
+ | : - identifies <u>risks</u> to financial stability | ||
+ | |||
+ | Dodd-Frank has the authority to regulate <u>2 types</u> of insurers: | ||
+ | * SIFIs ''(Systematically Important Financial Insititutions)'' | ||
+ | * insurance holding companies that own banks | ||
+ | |||
+ | Dodd-Frank imposes several <u>requirements</u> on these insurers: | ||
+ | * liquidity requirements ''(for short-term obligations)'' | ||
+ | * capital requirements ''(for all obligations)'' | ||
+ | * stress-testing ''(to assess whether an insurer can absorb the financial impact of adverse events)'' | ||
+ | * living will ''(a resolution plan in the event of insolvency)'' | ||
+ | |||
+ | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Baribeau&suffix=Regs§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=1<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 1]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> | ||
+ | |||
+ | ===FIO Details=== | ||
+ | |||
+ | Let's dig a little deeper into how the FIO operates. There are several specific things it does as part of its goal to monitor the industry and identify gaps in state regulation: | ||
+ | |||
+ | :{| class='wikitable' | ||
+ | |- | ||
+ | | '''Question''': describe specific areas of responsibility of the FIO [Hint: <span style="color: red;">'''CRITI'''</span>] | ||
+ | |} | ||
+ | |||
+ | :: <span style="color: red;">'''C</span>ollect''' data on the insurance industry | ||
+ | :: <span style="color: red;">'''R</span>eport''' annually to Congress on the state of the insurance industry | ||
+ | :: <span style="color: red;">'''I</span>mprovements''' ''(suggest improvements to insurance regulation in conjunction with state insurance departments)'' | ||
+ | :: <span style="color: red;">'''T</span>RIA''' ''(help administer TRIA - Terrorism Risk Insurance Act)'' | ||
+ | :: <span style="color: red;">'''I</span>nternational''' ''(help with negotiation of international agreements)'' | ||
+ | |||
+ | Of course, with any significant piece of legislation affecting large industries, there are concerns. In the source reading, there's a table on page 7 ''(labelled as page 24)'' that highlights these: | ||
+ | |||
+ | :{| class='wikitable' | ||
+ | |- | ||
+ | | '''Question''': describe <u>actuarial concerns</u> regarding the FIO | ||
+ | |} | ||
+ | |||
+ | :* dual regulation: | ||
+ | :: - <u>inconsistent</u> regulation between state & federal ''(accounting/solvency standards)'' | ||
+ | :: - <u>excessive</u> regulation ''(federal regulation on top of state regulation may be expensive and restrictive)'' | ||
+ | :* capital requirements: | ||
+ | :: - <u>inappropriate</u> increases in capital requirements ''(stricter capital requirements should apply more to banks that insurers)'' | ||
+ | :* standardization: | ||
+ | :: - <u>forced</u> standardization of forms rates decreases innovation and competition | ||
+ | :* banking regulation spillover: | ||
+ | :: - increases <u>compliance costs</u> for insurers that have banks within their structure | ||
+ | |||
+ | All industries, including insurance, are more globalized than before. This presents opportunities but also concerns. | ||
+ | |||
+ | :{| class='wikitable' | ||
+ | |- | ||
+ | | '''Question''': describe <u>international concerns</u> regarding the FIO | ||
+ | |} | ||
+ | |||
+ | :* conflict between NAIC & FIO: | ||
+ | :: - NAIC and states have traditionally been at the forefront of international insurance issues | ||
+ | :: - FIO is now participating at the federal level and may have different approaches | ||
+ | :* federal approach: | ||
+ | :: - <u>better</u> for international coordination of standards ''(versus many different state-based approaches)'' | ||
+ | :: - <u>worse</u> for transparency ''(FIO is not as transparent as NAIC)'' | ||
+ | :* standardization of insurance: | ||
+ | :: - this was listed as an actuarial concern but also applies internationally | ||
+ | :: - may decrease innovation, reduce consumer options, increase costs | ||
+ | |||
+ | To finish this section, observe the the power of the FIO is not absolute. There are limits as to what it can do and how it is permitted to change existing state regulations. | ||
+ | |||
+ | :{| class='wikitable' | ||
+ | |- | ||
+ | | '''Question''': describe <u>restrictions</u> on the authority of the FIO | ||
+ | |} | ||
+ | |||
+ | :: ==> '''cannot''' preepmpt state regulation of: | ||
+ | ::: - rates | ||
+ | ::: - UW | ||
+ | ::: - coverage requirements | ||
+ | ::: - sales practices | ||
+ | ::: - capital requirements | ||
+ | :: ==> '''EXCEPT''' if such requirements result in less favorable treatment of a non-U.S. insurer versus a U.S. insurer | ||
+ | ::: ''(preemption of state law requires a rigorous process)'' | ||
+ | |||
+ | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Baribeau&suffix=Regs§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=2<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 2]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> | ||
+ | |||
+ | ==Other Exam Problems== | ||
+ | |||
+ | Nothing new here. Just more practice. | ||
+ | |||
+ | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Baribeau&suffix=Regs§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=3<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 3]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> | ||
+ | |||
+ | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Baribeau&suffix=Regs§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=all<span style="font-size: 20px; background-color: lightgreen; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Full BattleQuiz]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> |
Revision as of 21:16, 23 March 2019
The Baribeau reading, Demystifying the Regulatory Web discuss the impact of the Dodd–Frank Wall Street Reform and Consumer Protection Act on insurance companies. This Act, passed in 2010, primarily targeted non-insurance financial institutions although it also has significant implications for insurance companies.
Contents
Study Tips
This reading is only 8 pages but the exam questions are detailed. Use the wiki article to orient yourself, scan the quizzes, read the source, then come back and memorize the quiz answers.
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
- fact 1...
- fact 2...
Note: Exam problems below the solid line in the table below appear to be from Dodd-Frank readings no longer on the syllabus. They have been mostly excluded from the quizzes but are included as BattleCards of lower probability. (You can access these through the Custom Battles feature either from the sidebar or the main part of the BattleActs site.)
reference part (a) part (b) part (c) part (d) part (e) part (f) E (2017.Fall #4) Porter.3-Roles-Fed Porter.3-Roles-Fed Porter.3-Roles-Fed Porter.3-Roles-Fed types of companies:
- reg'd by Dodd-Frankrequired actions:
- under Dodd-FrankE (2017.Spring #4) impact on compacts:
- of SEUAimpact on compacts:
- of McCarran-Fergusonimpact on compacts:
- of Dodd-FrankE (2016.Fall #4) Federal Ins. Office:
- functionsFederal Ins. Office:
- restrictions onreinsurer impact:
- of Dodd-FrankE (2015.Spring #3) Porter.2-Devlpt Porter.2-Devlpt fed role in insurance:
- of Dodd-FrankPorter.2-Devlpt E (2014.Fall #3) Porter.2-Devlpt general description:
- of Dodd-FrankNAIC.Solvency NAIC.Solvency E (2014.Spring #4) Porter.2-Devlpt Porter.2-Devlpt Porter.2-Devlpt Porter.2-Devlpt surplus lines:
- impact of Dodd-Frankcedant benefits:
- under Dodd-Frank
Full BattleQuiz You must be logged in or this will not work.
In Plain English!
Intro
Regarding insurance regulation, Dodd-Frank created 2 entities:
- Federal Insurance Office (FIO):
- - monitors insurance industry
- - identifies gaps in the state-based regulatory system
- Financial Stability Oversight Council (FSOC):
- - monitors all financial services markets (including insurance)
- - identifies risks to financial stability
Dodd-Frank has the authority to regulate 2 types of insurers:
- SIFIs (Systematically Important Financial Insititutions)
- insurance holding companies that own banks
Dodd-Frank imposes several requirements on these insurers:
- liquidity requirements (for short-term obligations)
- capital requirements (for all obligations)
- stress-testing (to assess whether an insurer can absorb the financial impact of adverse events)
- living will (a resolution plan in the event of insolvency)
mini BattleQuiz 1 You must be logged in or this will not work.
FIO Details
Let's dig a little deeper into how the FIO operates. There are several specific things it does as part of its goal to monitor the industry and identify gaps in state regulation:
Question: describe specific areas of responsibility of the FIO [Hint: CRITI]
- Collect data on the insurance industry
- Report annually to Congress on the state of the insurance industry
- Improvements (suggest improvements to insurance regulation in conjunction with state insurance departments)
- TRIA (help administer TRIA - Terrorism Risk Insurance Act)
- International (help with negotiation of international agreements)
Of course, with any significant piece of legislation affecting large industries, there are concerns. In the source reading, there's a table on page 7 (labelled as page 24) that highlights these:
Question: describe actuarial concerns regarding the FIO
- dual regulation:
- - inconsistent regulation between state & federal (accounting/solvency standards)
- - excessive regulation (federal regulation on top of state regulation may be expensive and restrictive)
- capital requirements:
- - inappropriate increases in capital requirements (stricter capital requirements should apply more to banks that insurers)
- standardization:
- - forced standardization of forms rates decreases innovation and competition
- banking regulation spillover:
- - increases compliance costs for insurers that have banks within their structure
All industries, including insurance, are more globalized than before. This presents opportunities but also concerns.
Question: describe international concerns regarding the FIO
- conflict between NAIC & FIO:
- - NAIC and states have traditionally been at the forefront of international insurance issues
- - FIO is now participating at the federal level and may have different approaches
- federal approach:
- - better for international coordination of standards (versus many different state-based approaches)
- - worse for transparency (FIO is not as transparent as NAIC)
- standardization of insurance:
- - this was listed as an actuarial concern but also applies internationally
- - may decrease innovation, reduce consumer options, increase costs
To finish this section, observe the the power of the FIO is not absolute. There are limits as to what it can do and how it is permitted to change existing state regulations.
Question: describe restrictions on the authority of the FIO
- ==> cannot preepmpt state regulation of:
- - rates
- - UW
- - coverage requirements
- - sales practices
- - capital requirements
- ==> EXCEPT if such requirements result in less favorable treatment of a non-U.S. insurer versus a U.S. insurer
- (preemption of state law requires a rigorous process)
- ==> cannot preepmpt state regulation of:
mini BattleQuiz 2 You must be logged in or this will not work.
Other Exam Problems
Nothing new here. Just more practice.
mini BattleQuiz 3 You must be logged in or this will not work.
Full BattleQuiz You must be logged in or this will not work.