Principles of Risk Management and Insurance, 13th Edition

Historical Development of Insurance Regulation

In this section, the development of insurance regulation by the states is briefly reviewed. You should pay careful attention to certain landmark legal decisions and legislative acts that have had a profound impact on insurance regulation.

Early Regulatory Efforts

Insurance regulation first began when state legislatures granted charters to new insurers, which authorized their formation and operation. The new insurers were initially subject to few regulatory controls. The charters required only that the companies issue periodic reports and provide public information concerning their financial conditions.

The creation of state insurance commissions was the next step in insurance regulation. In 1851, ...