Assignment 1:

Question 1: In the market for most consumer goods and services we assume the law of supply and demand, operating through open competition, determines the price. Competition, however, does not necessarily work to the consumer's advantage in the insurance market. Here are the questions. How does the pricing of an insurance policy for the insurer differ from a bologna manufacture's pricing its product? Why does the difference in pricing problems require that insurance pricing be subject to regulation? Why might be lowest-priced insurance policy be undesirable from the consumer's standpoint?

Question 2: We all know football is enjoyable for spectators and participants because of comprehensive roles. Similarly, insurance transaction also needs regulation. So, what is meant by the term insurance regulation"? Why is the solvency of insurers of such great importance to regulators? How do the regulators try to establish and maintain insurers' solvency?

Assignment 2:

Assume you are the Human Resources Manager for a large insurance company and you are responsible for creating a PowerPoint presentation for new employees of the company. Your boss wants a presentation that will give an overview of the insurance market, how the economy plays a role in the business, and issues surrounding insurance regulations. Your presentation must address the following objectives:

• Describe the main participants in the insurance market.
• Explain how the economic theory of supply and demand applies to the insurance market.
• Describe how the courts, the law, and the insurance commissioner provide consumer protection in the insurance market.
• Define the term regulation and give four reasons why the insurance industry and the insurance transaction are comprehensively regulated.
• Identify the important landmarks in the history of insurance regulation.
• Explain the role the National Association of Insurance Commissioners plays in insurance regulation.
• Describe the regulatory activities of state insurance departments, including solvency regulation, rate regulation, investment regulation, and regulation of agents and company officers.