NJ Laws, Rules and
Regulations - Pertinent to
Property & Casualty Insurance
Exam Questions and Answers
100% PASS
State Regulatory Jurisdiction—ANSWER-The purpose of state insurance
regulation is to protect the public against the insolvency of insurers as well.
The area of insurance is subject to state and federal regulation because it is
a business that is affected with a public interest.
Legislation—ANSWER-One of the primary methods the government uses to
regulate the insurance business. Legislation creates insurance law.
Insurance Commissioner—ANSWER-- usually appointed by the governor
- possesses broad powers to enforce the insurance laws (code) of his
particular state
- has the authority to license insurers & producers, regulate rates and
conduct investigations
,State Regulation—ANSWER-The state insurance department is generally
responsible for:
- issuing rules and regulations (the commissioner enforces laws and issues
rules based on law - only the legislature enacts or passes laws)
- licensing and supervising insurance producers and brokers
- controlling the types of insurance contracts that may be sold
- determining the amount of reserves an insurer must maintain ( reserves
are the monies the company must set aside to pay future claims and
guarantee financial solvency)
- overseeing insurance marketing practices
- investigating customer complaints
Federal Laws and Court Cases—ANSWER-Over time federal statues and
court cases have resolved that individual states have primary regulatory
responsibility of the insurance industry. However, other federal statues
impact the insurance industry and may be on the insurance licensing exam.
Paul V. Virginia—ANSWER-This court case heard in 1869 declared that an
insurance policy was not an article of commerce and that it was actually a
contract of indemnity. Therefore, because insurance was not commerce, it
was also not interstate commerce and the federal government (i.e. congress)
had no authority to regulate it.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Katelyn Whitman
, US v. South-Eastern Underwriters Association (1944)—ANSWER-This court
case found that although Paul V. Virginia affirmed the authority of each
state to regulate insurance, Congress still had the authority to regulate the
insurance industry as a whole. After an appeal, a further ruling held that
the insurance business was, in fact, interstate commerce and thus subject
to federal anti-trust laws.
McCarran-Ferguson Act (Public Law 15)—ANSWER-In 1945, over ruling the
court by stating affirmatively that regulation of insurance was the job of the
states, not the federal government. The law exempted insurance from federal
antitrust rules if it was covered by state regulation. If there are any "holes"
in state regulations, the Fed address it. This is what is in place today.
ORDER OF REGULATION IS: STATE, THEN FEDERAL GOVERNMENT
Fair Credit Reporting Act (1970)—ANSWER-This consumer protection bill
requires fair and accurate reporting of information about consumers,
including applicants for insurance. Insurers must inform applicants about
any investigations being made.
National Do-Not-Call Registry—ANSWER-Managed by the federal trade
commission (FTC) and allows consumers to place their personal telephone
and cellphone numbers on a list telling telemarketers which numbers they
are prohibited from calling.
*political, charitable, debt collection and informational calls still allowed
Regulations - Pertinent to
Property & Casualty Insurance
Exam Questions and Answers
100% PASS
State Regulatory Jurisdiction—ANSWER-The purpose of state insurance
regulation is to protect the public against the insolvency of insurers as well.
The area of insurance is subject to state and federal regulation because it is
a business that is affected with a public interest.
Legislation—ANSWER-One of the primary methods the government uses to
regulate the insurance business. Legislation creates insurance law.
Insurance Commissioner—ANSWER-- usually appointed by the governor
- possesses broad powers to enforce the insurance laws (code) of his
particular state
- has the authority to license insurers & producers, regulate rates and
conduct investigations
,State Regulation—ANSWER-The state insurance department is generally
responsible for:
- issuing rules and regulations (the commissioner enforces laws and issues
rules based on law - only the legislature enacts or passes laws)
- licensing and supervising insurance producers and brokers
- controlling the types of insurance contracts that may be sold
- determining the amount of reserves an insurer must maintain ( reserves
are the monies the company must set aside to pay future claims and
guarantee financial solvency)
- overseeing insurance marketing practices
- investigating customer complaints
Federal Laws and Court Cases—ANSWER-Over time federal statues and
court cases have resolved that individual states have primary regulatory
responsibility of the insurance industry. However, other federal statues
impact the insurance industry and may be on the insurance licensing exam.
Paul V. Virginia—ANSWER-This court case heard in 1869 declared that an
insurance policy was not an article of commerce and that it was actually a
contract of indemnity. Therefore, because insurance was not commerce, it
was also not interstate commerce and the federal government (i.e. congress)
had no authority to regulate it.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Katelyn Whitman
, US v. South-Eastern Underwriters Association (1944)—ANSWER-This court
case found that although Paul V. Virginia affirmed the authority of each
state to regulate insurance, Congress still had the authority to regulate the
insurance industry as a whole. After an appeal, a further ruling held that
the insurance business was, in fact, interstate commerce and thus subject
to federal anti-trust laws.
McCarran-Ferguson Act (Public Law 15)—ANSWER-In 1945, over ruling the
court by stating affirmatively that regulation of insurance was the job of the
states, not the federal government. The law exempted insurance from federal
antitrust rules if it was covered by state regulation. If there are any "holes"
in state regulations, the Fed address it. This is what is in place today.
ORDER OF REGULATION IS: STATE, THEN FEDERAL GOVERNMENT
Fair Credit Reporting Act (1970)—ANSWER-This consumer protection bill
requires fair and accurate reporting of information about consumers,
including applicants for insurance. Insurers must inform applicants about
any investigations being made.
National Do-Not-Call Registry—ANSWER-Managed by the federal trade
commission (FTC) and allows consumers to place their personal telephone
and cellphone numbers on a list telling telemarketers which numbers they
are prohibited from calling.
*political, charitable, debt collection and informational calls still allowed
