State Regulation Of Insurance Part 2 Exam Questions with complete solutions

Director's Powers and Duties - ANSWER-The head of the state's Insurance Department is the Director (sometimes also referred to as the Commissioner). The Director enforces the laws governing the insurance business in South Carolina. In carrying out his or her duties, the Director has the power to: *regulate the rates and services of every insurer as well as set reasonable standards and practices for insurers to follow when doing business in the state *enforce the insurance laws *issue regulations to administer the insurance laws *report criminal violations concerning the insurance business to the state Attorney General or other law enforcement officials *institute lawsuits necessary to carry out the Director's duties. Company Regulation: Certificate of Authority - ANSWER-The Director issues certificates of authority to qualified insurers, which permits them to transact insurance business in the state. The certificate specifies the kinds of insurance that the insurer is authorized to transact in the state. * To qualify for a certificate of authority, an insurer must show the Director that it is financially able to fulfill its obligations to the state and its policyholders, Company Regulation: Solvency - ANSWER-The Director can suspend or revoke an insurer's certificate of authority if the insurer *is not financially solvent *has violated the law *poses a hazard to the public or its policyholders refuses to submit to examination by the Director