《风险管理与保险 齐瑞宗》Treisch12e_Ch24.pptVIP

Government Regulation of Risk Management and InsuranceChapter 24 Chapter Objectives Explain why insurance needs to be regulated Identify what aspects of insurance are regulated State the pros and cons of state versus federal regulation Indicate how regulation affects insurance rates Indicate the direction in which insurance regulation is headed Why Insurance is Regulated Certain characteristics of insurance set it apart from tangible goods industries and account for the special interest in government regulation Insurance is a service that is paid for in advance But its benefits are reaped in the future Often the beneficiary is entirely different from the insured and is not present to protect his or her self-interest when the contract is made Insurance is affected by a complex agreement that few lay people understand The insurer could achieve a great and unfair advantage if disposed to do so Insurance costs are unknown at the time the premium is established There exists a temptation for unregulated insurers to charge too little or too much Insurance is also regulated to control violations of the public trust Future Performance The management of other people’s money immediately becomes a candidate for regulation Because of the temptations for the unscrupulous to use these funds for their own ends Instead of for those to whom the funds belong Particularly when it has grown to be one of the largest industries in the nation Complexity Even if the lay person understands the implications of every legal clause in a contract The rights of that person are vitally affected by the operation of certain legal principles and industry customs to which no reference exists in the written contract The legal battles that have been fought over the interpretation of the contractual wording of a policy Offer testimony to the fact that misunderstandings arise over the meaning of provisions even after the best legal minds have attempted to make the intent of the i