LOMA 311 Module 1

True/False: Regulations make up the body of law known as administrative law - Answer-This statement is true. Regulations make up the body of law known as administrative law, and the regulations of each governmental unit are compiled into that jurisdiction's administrative code the life Insurance industry is of such importance to so many people that it occupies a special position of public trust. Millions of families rely on life insurance and annuity products for savings and financial protection against the risks of dying too soon or outliving assets. Also, the reserves held by life insurers are one of the largest sources of private funds in the world's financial markets stakeholders - Answer-the parties who have an interest in how the company conducts its business. a life insurance company's stakeholders include stockholders (for stock companies), the board of directors, executives, managers, employees, agents, potential customers, policy owners, beneficiaries, annuity participants, and regulators, among others governments rely on the legal system to put in place specific insurance laws and regulations that safeguard this public trust. Also, in a business as complex and important as the life insurance industry mistakes and disagreements happen and the parties often turn to the legal system to solve disputes a legal system includes two major components: - Answer-1. laws and regulations that regulate conduct 2. legal processes to enforce those laws and regulations. The laws and regulations provide guidelines and rules to help peoples, combines, and governments interact in an orderly way. legal process are used to resolve disputes, provide remedies for victims, and punish those who break laws Legal system enables - Answer-individuals and organizations to anticipate the outcomes of their actions with some certainty, manage affairs with a minimum of conflict, and resolve disputes fairly laws that affect how life insurers conduct business - Answer-- contract law - agency law - property law Insurers must be careful to avoid - Answer-fines, lawsuits, and negative publicity, which can harm the company reputation and profits Business Law for insurance professionals - Answer-provides a basic knowledge of the legal system as well as legal and regulatory issues unique to the life insurance industry