Principles of Risk Management and Insurance, 13th Edition

Modernizing Insurance Regulation

Critics believe that insurance regulation must be ­modernized and brought up to date. They argue that regulation of the financial services industry is broken; state and federal regulators see only part of a horribly complex system of regulation; regulators are often lax in their oversight of the industries they are supposed to regulate; and critical regulatory gaps and weaknesses in the supervision of insurers exist in the present system. Critics believe that a complete overhaul and restructuring of the financial services regulatory system are necessary, which also includes the ­insurance industry.

As stated earlier, during 2007–2009 the United States experienced the worst business recession in its history since ...