Insurance law refers to the set of regulations controlling insurance. This law monitors how insurance agreements are made and enforced. In simple words, insurance law in the United States regulates the offering, buying, selling, and claims processes regarding insurance.
Different types of insurance cover different things. For instance, you can obtain insurance for your car and get another insurance type for your commercial property or residential property. You may be receiving health insurance as an employee benefit, or you can obtain health insurance independently.
The federal government doesn’t monitor insurance as much, but the states do. Most insurance regulations vary from state to state, but every state has an insurance licensing department. The state insurance department is responsible for issuing an insurance license to professional insurance agents and regulates the state insurance laws. The department formulates insurance laws that insurance companies licensed to operate in that state must meet, investigate law violations and enforce actions.
Insurance law regulates aspects such as:
- Requirements for inclusions in an insurance policy.
- The premiums insurance companies can charge for a policy.
- Penalties for bad faith practices by insurance agents.
- Measures to ensure insurance companies engage in healthy competition without fixing prices.
- Ascertains whether an insurance company has enough capital to run a secure business.
- Some states regulate when clients must buy insurance, such as auto insurance minimums.
Who can practice insurance law?
There are different ways to practice insurance law in the US.
An insurance attorney works on behalf of the insurance company to defend them against the client’s claim. Most of these lawyers work as in-house counsel- they appear in court most of the time, conduct investigations, and defend legal motions. An insurance agent or company can hire insurance defense to protect them in court if a client sues them, for example, in an auto accident.
Present insurance claims on behalf of litigants
Just as insurance companies need lawyers to defend them against suits filed by clients, the insured also require lawyers to present their insurance claim if they feel that the insurance company is acting unfairly. Working on behalf of the insured client is both litigation law and insurance law. Insurance lawyers that represent clients seeking insurance compensation can work in insurance law or personal injury law.
Since states have laws regulating insurance, insurance agents and companies rely on lawyers to help them understand and comply with those laws. The lawyers interpret the insurance law to them and help them comply in the best way possible. Here, the lawyer may work as an in-house counsel under a contract with the insurance company.
Under this, insurance companies and agents usually rely on lobbyists to help them work towards favorable insurance laws. Whenever legislators at the state or federal level are making changes to insurance laws, lobbyists defend the insurance companies. These lawyers present the position of insurance companies to the legislators.
Insurance law is complex, and both insurance agents and insured clients rely on lawyers to understand it and comply. Insurance attorneys facilitate legal processes regarding insurance either as insurance attorneys, litigators, lobbyists, or may work in compliance. For attorneys that work with the insurance companies, they may be under a contract that lasts many years.