Insurance regulation in a nutshell

(d)Amount of Coverage

The amount of coverage available under the Model Act is as follows: (i) the full amount of a covered claim for benefits under a workers’ compensation insurance coverage, (ii) an amount not exceeding $10,000 per policy for a covered claim for the return of unearned premium, and (iii) an amount not exceeding $300,000 per claimant for all other covered claims.¹⁴¹

(e)Assessments

The guaranty association is authorized to assess insurers’ amounts necessary to pay the obligations of the fund subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, and other expenses authorized by the Model Act. The assessment of each member insurer is in the proportion that the net direct written premiums of the member insurer for the calendar year preceding the assessment bears to the net direct written premiums of all member insurers for the calendar year preceding the assessment. A member insurer may not be assessed in any year by an amount greater than 2% of that member insurer’s net direct written premiums for the calendar year preceding the assessment.¹⁴²

(f)Trigger of Guaranty Association Coverage

The guaranty association covers claims of an “insolvent insurer,” which is defined to mean an insurer licensed to transact insurance in the state, either at the time the policy was issued or when the insured event occurred, and against whom a final order of liquidation has been entered with a finding of insolvency by a court of competent jurisdiction in the insurer’s state of domicile.¹⁴³

ARTICLE X

Proposed Federal Regulation of Insurance

Section X.1.Early Proposals for Federal Regulation of Insurance

While insurance has been regulated by the states since the beginning of insurance regulation in the mid-19th century, proposals for federal regulation of insurance are not new. Among the prior proposals for federal regulation of insurance are the Dryden Bill S. 7277 (1905), the Dodd Bill S. 3919 (1966) and S. 688 (1967), the Magnuson Bill S. 2236 (1969), the Brooke Bill S. 3884 (1977), the Metzenbaum Bill S. 2474 (1980), the Dingell Bill H.R. 4900 (1992) and the H.R. 1290 (1993). The genesis of each of these bills and the areas in which they proposed federal regulation of insurance are summarized in the following table: