cgott42
03-29-2009, 11:26 AM
Can someone explain what the federal chartering issue is. I've read it 2x and it seems to presuppose a certain level of background.
i.e. simply put -
(1) what difference does it make who charters an insurer?
(2) Why would the federally chartered insurers be free of filing requirements? Wouldn't the fed want rates filed for the same reason that the state does (to protect vs. insolvency)?
(3) What is "social engineering" - Can't help but to get images of late night sci fi movies out of my head when I read this.
(4) It seems that if free from rate control, they can undercharge and take the business away from state chartered companies (that makes sense) -However the paper offers 2 reasons why state chartered companies will still play a major role: (a) b/c must permit ins. co's to have both federal and state chartered subsidiaries - How does this help- ie the state chartered subsidiary won't have market share for the same reason? (b) It would afford consumers ready access to traditional surplus lines product that are free of filing requirements, while at the same time granting access to the products that federally chartered insurers would bring to the marketplace
(5) Lastly, aren't surplus lines insurers not subject to state form requirement (ie that's why they're excess lines in the first place) - as they're not state admitted (is there a difference between being state chartered vs. state admitted)?
i.e. simply put -
(1) what difference does it make who charters an insurer?
(2) Why would the federally chartered insurers be free of filing requirements? Wouldn't the fed want rates filed for the same reason that the state does (to protect vs. insolvency)?
(3) What is "social engineering" - Can't help but to get images of late night sci fi movies out of my head when I read this.
(4) It seems that if free from rate control, they can undercharge and take the business away from state chartered companies (that makes sense) -However the paper offers 2 reasons why state chartered companies will still play a major role: (a) b/c must permit ins. co's to have both federal and state chartered subsidiaries - How does this help- ie the state chartered subsidiary won't have market share for the same reason? (b) It would afford consumers ready access to traditional surplus lines product that are free of filing requirements, while at the same time granting access to the products that federally chartered insurers would bring to the marketplace
(5) Lastly, aren't surplus lines insurers not subject to state form requirement (ie that's why they're excess lines in the first place) - as they're not state admitted (is there a difference between being state chartered vs. state admitted)?