Insurance law is the name given to practices of law surrounding insurance, including insurance policies and claims. In the absence of insurance, three possible individuals bear the burden of an economic loss; the individual suffering the loss; the individual causing the loss via negligence or unlawful conduct; or lastly, a particular party who has been allocated the burden by the legislature, such as employers under Workmen's Compensation statutes.
The McCarran-Ferguson Act, broadly speaking, gives states the power to regulate the insurance industry. While state insurance statutes override most federal laws, some portions of federal law are always commanding. Therefore, when researching whether a particular law governs, a good rule of thumb is to ask whether the inquiry is related to the "business of insurance”, or whether it is related to peripherals of the industry.
Regulation of insurance agencies
The origins of insurance policies in general differs through various countries, limited policies can be traced to the 17th and 18th centuries, though establishment of newer policies did not come until the 20th century.
The first ruling on insurance had taken place in 1868, with the Supreme Court ruling that insurance policy contracts were not in themselves commercial contracts. This stance did not change until 1944, when the Supreme court upheld a ruling stating that policies were commercial, and thus were regulatable as other similar contracts were.
Regulation of the insurance industry began in the 1940s in the United States, through several Supreme Court rulings. The first ruling on insurance had taken place in 1868, with the Supreme Court ruling that insurance policy contracts were not in themselves commercial contracts. These laws and statutes ensure that the policy holder is protected against bad faith claims on the insurer's part that premiums are not unduly high, and that contracts and policies issued meet a minimum standard.
