Download LOMA 311 Module 1 Exam: Understanding the Legal Framework of Life Insurance and more Exams Business and Labour Law in PDF only on Docsity!
LOMA 311 MODULE 1 EXAM WITH
QUESTIONS AND CORRECT ANSWERS
correct/False: Administrative law is made up of regulations - ANSWER This statement is correct. Administrative law is a body of legislation composed of regulations, and each governmental unit's regulations are put into its administrative code.
The life insurance sector is so important to so many individuals that it enjoys a unique level of public trust. Millions of families rely on life insurance and annuity products to save money and protect themselves from the hazards of dying prematurely or outliving their assets. Furthermore, the reserves kept by life insurers are one of the major sources of private funds in the global financial markets.
Stakeholders are the parties who have an interest in how the company does business.
The stakeholders of a life insurance firm include stockholders (for stock companies), the board of directors, executives, managers, workers, agents, potential customers, policy owners, beneficiaries, annuity participants, and regulators, among others.
Governments rely on the legal system to enact specialized insurance laws and regulations that protect the public trust. Furthermore, in a business as sophisticated and essential as the life insurance sector, mistakes and disagreements occur, and the parties frequently turn to the legal system to resolve issues.
A legal system has two key components: - ANSWER 1. Laws and rules that govern conduct
- Legal processes are used to enforce laws and regulations. Laws and regulations establish principles and standards to enable individuals, groups, and governments to interact in an orderly manner. The legal process is used to resolve disputes, provide remedies for victims, and punish those who violate laws.
The legal system allows individuals and organizations to predict the effects of their actions with some confidence, manage affairs with a minimum of friction, and resolve conflicts equitably.
ANSWER: Contract law affects how life insurance conducts business.
Insurers must take care to avoid fines, lawsuits, and unwanted publicity, which can hurt the company's brand and earnings.
Business Law for Insurance Professionals - ANSWER gives a basic knowledge of the legal system as well as legal and regulatory concerns specific to the life insurance sector.
Sources of law: ANSWER 1. Constitutions
- Statutes
- Administrative Regulations
- Treaties and international accords. In many countries, including the United States, another main source of law is case law generated by the courts.
Constitution - ANSWER A document or series of documents that establishes the fundamental principles that regulate the powers and obligations of governments as well as the rights of citizens. It is a fundamental component of a country's legal system, designed to be a relatively permanent and primary source of law. A constitution is often regarded as the supreme law of the land. Any laws deemed to violate a country's constitution are generally considered invalid.
- The constitution establishes the organizational structure of the government.
Parliamentary democracies - ANSWER The legislative part of government, sometimes referred to as parliament, has ultimate authority to make all laws.
ex- Britain, India, and Singapore.
The executive branch is led by the prime minister.
The prime minister is the leader of the political party (or coalition of parties) that controls the majority of elected seats in parliament. Upon taking office, the prime minister appoints a cabinet of advisors.
- The executive branch retains power as long as parliament is confident in its leadership; if voted out, a new election will be held.
ANSWER: A federal government and a number of lower-level governments share governmental powers. In other words, a group of sovereign states are unified as a nation.
- The US is a federation of 50 states.
- The federal constitution is the highest law, and all other legislation must be consistent.
- Every state has one. The constitution must be congruent with the federal constitution.
States are responsible for a variety of functions, such as regulating commerce and professions inside their boundaries, providing public education, and preserving people's health and safety. States assign some of their governmental authority to local governmental bodies such as counties and municipalities.
Statutes - ANSWER the legislative branch of government comprised of one or more legislative bodies that are allowed to establish laws to regulate the relevant jurisdiction.
Statutes refer to laws enacted by a legislature.
Statutes are often used to declare, demand, or prohibit something. These legislative enactments establish the body of legislation known as statutory law.
Statutory law - Declare
-- command
ANSWER: The legislative branch of the federal government is Congress.
There are two houses: the Senate and the House of Representatives.
commonly referred to as the legislative or general assembly.
- All laws enacted are referred to as code (US code).
- by state is the state code.
- Federal tax laws are known as the Internal Revenue Code (IRC).
Regulations are rules or orders issued by administrative authorities that have the force and effect of law, provided they do not contradict the underlying statute.
Administrative law is made up of regulations. The regulations of each governmental entity are included into that jurisdiction's administrative code. For example, a state's regulations are compiled into its administrative code.
The state insurance department - ANSWER is charged for enforcing the state insurance code and ensuring that insurers operating business inside the state comply with all state insurance rules.
Official regulatory guidance - ANSWER agency clarifies a regulation by producing a bulletin or another document.
A treaty is a legally binding agreement between two or more nations that agree to abide by its terms.
Treaties are also known as conventions and pacts. When a country signs a treaty, it often commits to enforce the terms of the treaty inside its borders. It also promises to assist with other states to enforce the convention.
There are various types of treaties. Political treaties, among other things, establish military alliances, bring wars to an end, and resolve boundary disputes. Commercial treaties address trade and tariff issues. Countries enter into legal treaties where they agree to comply with common patent and copyright protections.
Case law is a collection of written judicial opinions.
All legal systems have a judicial or court system in place to apply the laws to specific instances. Courts can apply both substantive and procedural laws.
Substantive laws establish, define, and control legal rights and obligations.
Examples of substantive laws are how a statute defines fraudulent misrepresentation or the punishment that a person convicted of insurance fraud can get.
Procedural laws outline the procedures and methods used by courts to enforce substantive laws.
For example, a court's procedural law may compel a defendant to respond to a complaint within 30 days after receiving it. Procedural laws establish guidelines for how matters go via a court system.
Jurisdiction relates to a court's jurisdiction to hear certain matters or, in the event of overlapping authorities, the most appropriate forum to hear the case.
Trial courts are the first courts to hear disputes, hence they have original jurisdiction.
Appellate courts - ANSWER are permitted to examine lower court rulings. Thus, if a party loses a lawsuit heard by a trial court, they may be able to appeal--or
- Civil Law Systems
- mixed legal systems.
ANSWER: A legal system based on English common law. The system originated in feudal England. At the period, courts were established to adjudicate conflicts according to local norms. These local customs were frequently referred to as common laws. Over the years. The courts created an unwritten set of general legal rules based on both local norms and national policy.
common law jurisdiction is a geographical area of legal authority that builds its legal system on the common law of England.
Common law is an unmodified corpus of general legal concepts and norms formed and implemented by courts. Today, these common law ideas can be found in written court rulings. These broad common law principles augment the laws made by the legislature, and hence comprise a significant component of the law of a common law jurisdiction.
The doctrine of stare decisis states that if a court determines that a specific legal principle applies to a particular set of facts, that principle will be applied to all subsequent cases in which the facts are substantially the same. A precedent is a previous case's decision. To break away from precedent, the court must determine how the cases differ. also can differ if precedent would result in an unjust outcome.
The precedent remains in effect until - ANSWER 1. A court overturns the precedent.
2 The legislature passes a statute that alters the legal concept that governs the precinct. Thus, the courts and legislature can amend and change the law to keep up with changing times and situations.
Civil law system - ANSWER is a legal system based on the Roman legal system in which laws are codified into written codes passed by the legislature. A code is a detailed written declaration of regulations that expresses the main principles of law in a certain civil law jurisdiction. Each jurisdiction has created a civil code that contains general legal concepts that relate to interpersonal ties formed by birth, adoption, marriage, death, contracts, and personal liability. The civil code typically regulates property rights as well.
Civil law jurisdiction courts - ANSWER: The court looks first to the jurisdiction's codes for the appropriate rules of law. If the codes do not directly cover the subject at hand, the court determines based on the basic principles of law outlined in the applicable code. Courts in civil law jurisdiction are influenced by their own earlier decisions and the decisions of the jurisdiction's higher courts on related topics.
Mixed Legal Systems - ANSWER have aspects from more than one main form of legal system.
A customary law system is one in which members of a community regard local customs as obligatory on all of them. They would set standards for marriage, separation, divorce, and adoption. develops rules and criteria for how homes must be built and how the community will provide food. Customary rules frequently specify sanctions that the society imposes on people who disobey the laws.
The federal court system consists of three levels of courts.
- District Courts
- 13 Circuit Courts of Appeal
- The Supreme Court
Legal function - ANSWER refers to actions a firm does to deal with legal concerns such as contracts and lawsuits.
- Companies have a legal department called the law department.
- The person in charge of the insurer's legal department is known as the general counsel or chief counsel and reports to the CEO.
- Attorneys report to the General Counsel.
compliance function - ANSWER refers to actions a company takes to ensure it complies the laws and regulations of the jurisdictions in which it operates.
- The chief compliance officer (CCO) may report to general counsel or to the CEO.
Compliance personnel reports to the CCO.
- Compliance personnel might work in agency operations or underwriting rather than only the compliance department.
RegTech - ANSWER A type of technology that assists regulators and insurance companies in managing regulatory and compliance activities more effectively and affordably. In regtech, for example, a corporation may use big data to better manage its compliance records. Similarly, a corporation may employ predictive analytics to determine compliance risk.
Ethics is a system of accepted standards of conduct and moral judgment that includes honesty, integrity, and fair treatment.
Ethical business decisions adhere to established legal and moral standards of right and wrong.
Acting ethically entails fulfilling promises to customers and working in a. Responsible behavior, etc.
Corporate culture - ANSWER refers to the values, beliefs, goals, and patterns of conduct that employees of a firm share. Businesses that promote ethical behavior usually aim to build a corporate culture that emphasizes ethics. Many businesses, particularly major corporations, have developed written criteria for ethical conduct. Companies that perform ethically improve their reputation, earn the trust of stakeholders, and obtain and retain more business.
government sentencing guidelines - ANSWER are US government regulations that establish uniform policies for sentencing persons and organizations guilty of significant federal offenses.
Federal judges must examine these standards when establishing a sentence; however, they may consider other issues.
The recommendations give incentives, in the form of significantly lower penalties, for an organization that can establish a strong compliance and ethics program.
- more likely to escape litigation, regulatory proceedings, and criminal prosecutions.
A life insurance company's stakeholders include the board of directors.
- Potential customers.
- Regulators
The job of the judicial branch of government in any particular jurisdiction is to interpret the jurisdiction's laws.
The judicial branch of government consists of a system of courts that are responsible for applying and interpreting the jurisdiction's laws and resolving disputes.
The laws enacted by a legislature form the body of legislation known as - ANSWER statutory law-. The laws enacted by the legislature are referred to as statutes, and they often declare, command, or prohibit something. These legislative enactments establish the body of legislation known as statutory law.
The executive branch of government consists of a range of departments, commonly known as administrative agencies, that issue rules or directives to fill in the specifics of the legislation.
- Codes
- Regulations
- substantive legislation.
- Answer B: Customary laws. - Regulations
Individuals and organizations are required to follow the federal sentencing standards; however, regulators voluntarily do so.
Criminal laws are rules that identify particular activities as crimes and impose precise punishments for each.
In criminal cases, the government prosecutes its case against the person charged with the offense.
Civil laws are concerned with private, non-governmental rights and remedies.
A civil dispute is one that involves who has the right to receive the proceeds of a life insurance policy.
Civil law has two jurisdictions. ANSWER: public law
Public Law - Respond to the areas of the law that influence the public interest and govern relationships between the government and nongovernmental parties.
contract - ANSWER is a legally binding agreement between two or more parties.
The agreement is comprised of a promise or collection of pledges.
A breach of contract is the failure of a party to perform a contractual commitment.
The former insurance did not pay the claim.
Tort - ANSWER a private harm (other than breach of contract) for which the law gives redress to the offended parties.
Plaintiff - ANSWER The damaged person must file documents setting forth action against the defendant, which is known as starting a lawsuit.
Defendant - A person or group being sued or charged with a crime.
Civil action has three stages: ANSWER - pleading stage
- Discovery stage
- Trial stage
Parties can settle disputes at any stage before the court's verdict.
The Pleading Stage - ANSWER The pleadings are official, written declarations that set out the claims and defenses of each of the parties to a lawsuit. They serve to:
-Define the topics in dispute.
- state the material facts involved in the dispute.
- state the material facts involved in the dispute.
- state the legal theory or theories that the plaintiff is relying on.
- specify the judicial remedies that the parties request from the court.
complaint - ANSWER written document that outlines the cause of action on which the plaintiff bases her claim against the defendant.
Procedural guidelines describe the right form of the complaint, which is typically directly submitted to the defendant.
Service of Process - ANSWER The act of presenting the complaint to the defendant gives the defendant official notice of the proceeding. Thus, the defendant is given the opportunity to appear and be heard. Once the complaint is served, the defendant has so many days to submit an answer with the court.
Answer - A written document filed in ANSWER to the plaintiff's case. In ANSWER, the defendant can 1. confirm or deny each of the facts that the plaintiff claimed in her lawsuit.
