The McCarran-Ferguson Act, passed in 1945, declares that states should regulate the business of insurance and that federal antitrust laws should not apply to the insurance industry unless insurance is not regulated by state law. This act essentially gives states the primary authority to regulate and tax the business of insurance, including property and casualty insurance. The act also provides that federal legislation that does not specifically relate to the business of insurance does not preempt state laws or regulations that pertain to the business of insurance.
The Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999, requires financial institutions, which include insurance companies, to explain their information-sharing practices to their customers and to safeguard sensitive data. The act consists of three main sections: the Financial Privacy Rule, which governs the collection and disclosure of private financial information; the Safeguards Rule, which stipulates that financial institutions must implement security programs to protect such information; and the Pretexting Provisions, which prohibit the practice of pretexting (accessing private information using false pretenses). This act is particularly relevant to property and casualty insurance companies as they handle significant amounts of personal and financial data.
The Fair Credit Reporting Act is a federal law that regulates the collection, dissemination, and use of consumer information, including credit information. Under FCRA, consumers have the right to know what information is in their file, have access to their credit report, and dispute incomplete or inaccurate information. Insurers who use credit information for underwriting or rating must comply with FCRA, which includes providing notices to consumers when adverse actions are taken based on their credit information. This act ensures that personal information is reported accurately and used fairly by insurers offering property and casualty insurance.
The Terrorism Risk Insurance Act was enacted in response to the inability of insurance companies to underwrite risks associated with terrorism following the September 11, 2001 attacks. TRIA created a federal 'backstop' for insurance claims related to acts of terrorism, which is designed to ensure that adequate resources are available for businesses to recover and rebuild if they are the victims of a terrorist attack. The act requires insurers to offer terrorism risk insurance with the understanding that the federal government will share the losses in excess of certain thresholds. This partnership helps to stabilize the market for property and casualty insurance in the face of terrorism risks.