The State Run Regulatory System

The insurance industry’s performance is highly correlated with the state of the economy and specifically GDP growth. From the data outlined in this report, it is evident that the insurance industry flourishes alongside the economy where factors such as output, unemployment, and other variables are growing as well. Since the 2008 crisis, the Canadian economy has recovered quite well. One of the key concerns going forward is the current exchange rate of the Canadian dollar. Going forward, as the economy goes into a boom it will be crucial for the insurance industry to reach its potential.

High concentration in the market, as we all know, leads to market inefficiency, where insurers are able to set inadequate or unfairly discriminatory premium rates. Few oligopoly firms operating in the statewide markets are definitely to use market power for their advantages. These can be tightening barriers to entry what some of the US health insurers have been doing. For instance, large insurance companies like UnitedHealth Group, WellPoint and Aetna have been acquiring existing smaller health insurers without developing their own networks and products. These acquisitions tend to decrease competition and thus making insurance market more concentrated. On the other hand, there are more of the few ways of getting rid of competitors, one of them being through cost-efficiency. As far as Choi and Weiss (2005) concerned, cost-efficient firms are able to minimize cost and thus charge lower prices than competitors, which

Prior to the financial crisis, the overall responsibility for financial oversight was divided among several different agencies. These agencies and their “varying rules and standards led to certain entities not being regulated at all, with others subject to less oversight than their peer

Insurance companies are a business with the ultimate to goal to make more than they spend.

We live in a nation of freedom and free markets. However, there are some markets that are not as free. One market is the insurance industry. Insurance started in the roots of the early Republic with marine and fire insurance. Then the liability and property insurance expanded to other areas. Later life and health insurance evolved in the 1840s. Originally it was to protect the farmers. Mutual Life Insurance Company of New York took insurance to the public through accident insurance in the 1850s. As time evolved, many new companies wrote coverage for different things such as fire insurance, aviation insurance, automobile insurance, health insurance, and so on. In 1906 it was determined life insurance business was a fundamentally sound

Before the advent of the Federal Deposit Insurance Corporation (FDIC) in 1933 and the general conception of government safety nets, the United States banking industry was quite different than it is today. Depositors assumed substantial default risk and even the slightest changes in consumer confidence could result in complete turmoil within the banking world. In addition, bank managers had almost complete discretion over operations. However, today the financial system is among the most heavily government- regulated sectors of the U.S. economy. This drastic change in public policy resulted directly from the industry’s numerous pre-regulatory failures and major disruptions that produced severe economic and social

The banking industry as a whole after the stock market crashed was going bankrupt due to not being able to carry the “bad debt” that was created from using customer money to buy stock. Because the banks were out of money, they were unable to cover customer withdrawals from their bank, causing many bank customers to lose all of their savings. With the uncertainty of the future of the banking industry, many people withdrew all of their savings, which caused more than 9,000 banks to close their doors and go out of business (Kelly). Due to the effects of the Great Depression, and the collapse of the banking industry, the government created regulations to prevent similar failure in the future. For Example, the SEC, (or Securities Exchange Commission), which regulates the sell and trade of stocks, bonds and other investments was created as a result of The Great Depression. The FDIC (or Federal Deposit Insurance Corporation), was created to insure bank accounts so that that the consumer would be protected if the bank were to go out of business (Kelly). The Great Depression's effect on the banking industry led to many useful changes to the banking industry and helped restore confidence in banks in the American people.

Regulatory agencies are mandated by Congress to help in limiting some power of agencies. Regulations help organizations and leaders who are also susceptible to the abuse of power. Regulations refrain managers and leaders from abusing laws. Congress allow administrators of agencies a broad flexible power to write regulations for organizations in which they are liable (Starling, 2010). Employees can present some challenges to enforcing laws of an organization. Some time salaried government officials or agency officials are dishonest. Dishonest administrators or officials usually do not have the well-being of people at heart or serving the position as priority. Most dishonest official’s purpose is maintaining their job and progressing their careers. When managers enforce laws on the job they must be very careful since some managers authority is limited and can create trouble for the organization. Managers must also record and document employee work habits. Often time managers are accused of discrimination.

The health sector is among the most important sectors in the United States economy. The government has enacted certain laws that affect the corporation’s activities and the insurance industry in general. The regulation affects competition among the health insurance companies, and the insurance industry in general.

A board of directors in corporate office oversees policies and guidelines for all the communities. The board ensures that optimum service is provided at the center and also bridges the relation of LNC with Ohio Department of Health. The administrator is a focal person of the LNC, who oversees the overall operation and supervises the directors of all departments as discussed in bureaucratic structure. Local offices autonomously take decisions in running day to day operation.

Government regulations for insurance was implemented in the 18th century. Where as to the reason we have insurance regulation is to protect American Consumers. This means that the public can be protected by insurance in many ways.

Markets, regulation and tort law are elective techniques for accomplishing security. Of these the business sector is the most capable yet it is frequently disregarded in approach exchanges. I demonstrate that both for the United States after some time and for the world in general higher earnings are connected with lower coincidental demise rates and I talk about a few illustrations of business sectors making wellbeing. Markets may fall flat if there are outsider impacts or if there are data issues. Excellent tort law is a sensible approach to handle outsider impacts for outsiders as on account of car crashes. In principle regulation could take care of data issues yet by and by numerous regulations

Also, another political factor that applies to State Farm is McGarran-Furguson act. This act falls under the antitrust law category. State Farm is well aware of this act by stating that “the McCarran-Ferguson Act provides that the federal antitrust laws are applicable to the business of insurance in instances where the "business of insurance" is not otherwise regulated by state law” (State Farm, 2015) This act provides every driver the protection of being taken

Laws, laws, laws, are something that America has strived to uphold over the years in order to be successful. That will be the first subject of our questions today. I will give insight to whether NPM can coincide in a regulatory environment where legal and political approaches are often controlling. In order to answer this question, we must first look at what actually foster’s the regulatory environment.

Financial regulation is necessary and without an efficient set of regulations a country could see rises in unemployment, interest rates, and the deterioration of financial intermediaries. With the globalization of the financial industry, it becomes more and more common for businesses to seek financing outside of their county 's boarders. These innovations in the financial industry stress why it is so important for regulations to be created and changed to reduce risk and asymmetric information in financial systems.