Understanding American Insurance Policies
Written by Alex Barry
Published on 11/24/2019 11:15:58 AM
Insurance is is a risk market where buyers and sellers trade risks. The Insurer (the insurance company or insurance group) signs risk trade agreement with the Insured (Person or Property), the Insured pays an agreed fixed amount of money, monthly, called Premium to the Insurer which qualifies the Insured to enjoy a specified benefit from the insurer in case of accident to life or property but, legally as contained in the risk agreement. American Insurance Companies operate under two policies.
Insurance Policies were setup, mainly, to assist in preventing business excessiveness either by the insurer or the insured. It ensures sincere respect to the binding agreements in such a way that neither the Insurer nor the Insured would have an audacity to go off the concerned responsibilities as clearly stated in the risk binding agreement.
For instance, it is the legal responsibility of the Insurance company or insurance group to take up the medical bill for restoring heal health of her ill partner who is on Life/Health Insurance with her. If the partner is in need of heart transplant, and no medical option seems alternative, the Insurer may want to save cost and persistently put the ill partner on drug because the Insurer would not want to spend the huge amount of money required for a successful transplant. This is where American Insurance Policy come to play.
Also, an Insured partner who has been perpetually inconsistent in settling her premium would not be expecting an Insurance Company or Insurance group to bear any loss with her. Another side been handled by the American Insurance Policy.
American Insurance Policies operate on two level policies to moderate the activities in the Insurance market. There are State-Base Insurance Regulatory System and Federal Regulations of Insurance.
State-Base Insurance Regulatory System
The State-Base Insurance Regulatory System is fully state dependent and eminently manages and monitors the activities taking place in the Insurance market of a particular state. This is fully state dependent.
The Insurance Regulatory System being implemented in Texas is not applicable to an Insurance Company or Insurance Group operating in California. California State has its independent Insurance Regulatory System which is not applicable to any other state than California. The same happens to Texas State and every other State in the United States of America.
The deficiency in State-Base Insurance Regulatory System is that it has boundary and may not checkmate regulatory failure in another state, hence the need for the Federal Regulation of Insurance.
Federal Regulation of Insurance
Federal Insurance Office (FIO) was purposely established by the government of United States of America to provide an effective monitoring of state-base Insurance Policy, identifies gaps within the respective state-base Insurance Regulatory System.
Federal Insurance Office works in corporation with other agencies to prevent insurance excessive that may result into negative effects on the United State's economy as a country.
FIO checkmates the efficiencies of each state's Insurance Regulatory System and ensure it complies with United States Trade Regulatory Policy.
Both the Insurer and insured are being safe by the American Insurance policy, hence, the population of the in America is on increase in a daily basis.
American Insurance Policy ensures smooth insurance operations, prevention of industrial excessiveness and checking and balancing gaps among the Insurance group.