Insurance Regulation

These flashcards cover essential vocabulary and concepts related to insurance regulation, focusing on definitions and important terms identified in the lecture notes.

Capital Adequacy

The requirement for an insurer to maintain sufficient capital to meet its obligations to policyholders.

International Association of Insurance Supervisors (IAIS)

A voluntary organization of insurance supervisors from various jurisdictions aiming to promote effective supervision of insurance.

Claims Fraud

Fraud committed by a policyholder or third party during the insurance claim process.

Customer Due Diligence (CDD)

The measures taken by insurers to assess risks associated with customers and ensure compliance with regulations.

Prudential Regulation

Regulation focused on the safety and financial soundness of insurance companies.

Market Conduct Regulation

Regulation that ensures fair dealing and appropriate business practices within the insurance market.

Financial Action Task Force (FATF)

An intergovernmental organization that sets global standards for combating money laundering and terrorist financing.

Internal Fraud

Fraud committed by directors, employees, or associates within an organization.

Types of Regulatory Approaches

Regulatory strategies include prescriptive, principles-based, and risk-based regulation.

Surveillance

The ongoing monitoring by regulators to identify trends and potential vulnerabilities in the insurance market.

Solvency Margin

The excess of assets over liabilities that an insurer must maintain to ensure financial stability.

Insurance Regulator

A government authority responsible for overseeing and regulating the insurance industry.

Market Discipline

The efforts by regulators to ensure timely and accurate disclosures from insurers to promote informed decision-making by consumers.

Enforcement

Actions taken by the regulator against companies or individuals who violate regulatory requirements.

Consumer Education

The role of the regulator in enhancing consumer understanding of financial products and services.

Vulnerabilities in Insurance

Risks of money laundering and terrorist financing specific to life and general insurance.

Types of Regulatory Oversight Functions

Functions performed by insurance regulators include regulation, authorization, supervision, surveillance, and enforcement.

Anti-Money Laundering Regulations

Regulatory frameworks established to prevent and detect money laundering activities.