ALU 202 UPDATED TEST PAPER QUESTIONS AND
ANSWERS SET A+
✔✔In the federal system in the US, there are two sources of legislation impacting life
insurance. - ✔✔Federal Level
State Level
✔✔At the state level, state legislatures - ✔✔are the primary source of insurance
legislation, enacting a significant body of legislation that regulates the life insurance
industry, including licensing, solvency, and market conduct review.
✔✔At the federal level - ✔✔the US congress routinely passes laws impacting many
aspects of financial services, including life insurance.
✔✔Canada follows a similar approach whereby laws impacting life insurance are
passed - ✔✔by the Canadian Parliament as well as by the legislatures at the provincial
level.
✔✔McCarran-Ferguson Act - ✔✔was adopted in 1945 after extended debate over the
jurisdiction of state and federal governments in regulating the life insurance industry.
✔✔Financial Stability Oversight Council (FSOC) - ✔✔was established and given broad
authority to identify and monitor systemic risks.
✔✔FSOC identifies - ✔✔both bank and non-bank financial institutions whose financial
failure can have a widespread negative impact on the US economy.
✔✔Insurance companies can be included under the category of non-bank financial
institutions if they have - ✔✔over 50 billion in assets.
✔✔International Association of Insurance Supervisors (IAIS) - ✔✔is a significant
regulator for many US insurers as a consequence of the 2008 financial crisis.
, ✔✔IAIS - ✔✔Collaborates with the NAIC collecting and sharing information about global
insurance holding companies with the international regulators.
✔✔Health Insurance Portability and Accountability Act of 1996 (HIPAA) - ✔✔was
designed to improve efficiency in health care through the standardization of electronic
data interchange, as well as to provide security measures to protect health info and its
disclosure.
✔✔A major goal of the Privacy Rules - ✔✔is to assure that individual's health
information is properly protected while allowing the flow of health information needed to
provide and promote high quality health care and to protect the public's health and well-
being.
✔✔The privacy rule protects - ✔✔all individually identifiable health information held or
transmitted by a covered entity or its business associate, in any form or media, whether
electronic, paper or oral.
✔✔Individually identifiable health information is information, including demographic data
that: - ✔✔-Relates to the individual's past, present or future physical or mental health
condition
-Relates to the provision of health care to the individual
-Relates to the past, present, or future payment for the provision of health care to the
individual.
-Identifies the individual or for which there is a reasonable basis to believe it can be
used to identify the individual.
-Includes any common identifier (name, address, DOB, SSN).
✔✔The Canadian Life and Health Insurance Association, Inc. (CLHIA) - ✔✔developed a
comprehensive set of privacy guidelines, and in 1980 the Ontario legislature decreed
that all life, accident, and sickness carriers must follow the guidelines if they want to do
business in Ontario.
✔✔The Personal Information Protection and Electronic Documents Acts (PIPEDA) -
✔✔establishes ground rules for how private sector organizations can collect, use or
disclose personal information in the course of commercial activities.
✔✔The Consumer Reporting Act (CRA) - ✔✔also plays a significant role in regulating
the collection of information in the underwriting process at the provincial level.
✔✔Quebec Bill 68 - ✔✔is another example of legislation to protect personal information.
The bill establishes specific rules regarding notification, disclosure, and accuracy in the
collection of personal information in the underwriting process.
ANSWERS SET A+
✔✔In the federal system in the US, there are two sources of legislation impacting life
insurance. - ✔✔Federal Level
State Level
✔✔At the state level, state legislatures - ✔✔are the primary source of insurance
legislation, enacting a significant body of legislation that regulates the life insurance
industry, including licensing, solvency, and market conduct review.
✔✔At the federal level - ✔✔the US congress routinely passes laws impacting many
aspects of financial services, including life insurance.
✔✔Canada follows a similar approach whereby laws impacting life insurance are
passed - ✔✔by the Canadian Parliament as well as by the legislatures at the provincial
level.
✔✔McCarran-Ferguson Act - ✔✔was adopted in 1945 after extended debate over the
jurisdiction of state and federal governments in regulating the life insurance industry.
✔✔Financial Stability Oversight Council (FSOC) - ✔✔was established and given broad
authority to identify and monitor systemic risks.
✔✔FSOC identifies - ✔✔both bank and non-bank financial institutions whose financial
failure can have a widespread negative impact on the US economy.
✔✔Insurance companies can be included under the category of non-bank financial
institutions if they have - ✔✔over 50 billion in assets.
✔✔International Association of Insurance Supervisors (IAIS) - ✔✔is a significant
regulator for many US insurers as a consequence of the 2008 financial crisis.
, ✔✔IAIS - ✔✔Collaborates with the NAIC collecting and sharing information about global
insurance holding companies with the international regulators.
✔✔Health Insurance Portability and Accountability Act of 1996 (HIPAA) - ✔✔was
designed to improve efficiency in health care through the standardization of electronic
data interchange, as well as to provide security measures to protect health info and its
disclosure.
✔✔A major goal of the Privacy Rules - ✔✔is to assure that individual's health
information is properly protected while allowing the flow of health information needed to
provide and promote high quality health care and to protect the public's health and well-
being.
✔✔The privacy rule protects - ✔✔all individually identifiable health information held or
transmitted by a covered entity or its business associate, in any form or media, whether
electronic, paper or oral.
✔✔Individually identifiable health information is information, including demographic data
that: - ✔✔-Relates to the individual's past, present or future physical or mental health
condition
-Relates to the provision of health care to the individual
-Relates to the past, present, or future payment for the provision of health care to the
individual.
-Identifies the individual or for which there is a reasonable basis to believe it can be
used to identify the individual.
-Includes any common identifier (name, address, DOB, SSN).
✔✔The Canadian Life and Health Insurance Association, Inc. (CLHIA) - ✔✔developed a
comprehensive set of privacy guidelines, and in 1980 the Ontario legislature decreed
that all life, accident, and sickness carriers must follow the guidelines if they want to do
business in Ontario.
✔✔The Personal Information Protection and Electronic Documents Acts (PIPEDA) -
✔✔establishes ground rules for how private sector organizations can collect, use or
disclose personal information in the course of commercial activities.
✔✔The Consumer Reporting Act (CRA) - ✔✔also plays a significant role in regulating
the collection of information in the underwriting process at the provincial level.
✔✔Quebec Bill 68 - ✔✔is another example of legislation to protect personal information.
The bill establishes specific rules regarding notification, disclosure, and accuracy in the
collection of personal information in the underwriting process.
