Ethics Part III(1.5 Credit Hour) TDI Course No.

Chapter 6:

6.1     History of Regulation of the Insurance Industry

• 1866 Paul v. Virginia – determined states shall regulate
• 1944 US v. Southeastern Underwriters Assoc. reversed Paul v. Virginia
• 1945 Congress Passed McCarren-Ferguson Act Public Law 15
• 2010 Dodd-Frank

6.2     Explanation of the McCarren-Ferguson Act

• Federal regulates fair labor and anti-trust
• State regulates all else, including ethical conduct
• The McCarren-Ferguson Act does not the key phrase "business of insurance"
• An act of congress can invalidate any state law

6.3    Policy Replacement Guideline

• Full and fair disclosure including replacement cost and replacement value
• Prevents over-insurance which can contribute to arson & insurance fraud
• Complete appropriate forms
• Educate and inform

6.4     National Association of Insurance Commissions (NAIC) Model Disclosure Documents

• Product disclosure document
• Disclosure & buyer"s guide provided at time of application
• Policy summary
• QC manual