New Jersey Life Insurance Exam

Total Questions: 96 (Free preview: first 5 only)

Question 1 of 96

The McCarran-Ferguson Act was passed by Congress to

A. redefine the authority of state and federal governments to regulate the insurance industry.
B. redefine the authority of insurance companies to issue policies.
C. establish that the regulation of insurance company advertising lies solely within the jurisdiction of the Federal Communications Commission (FCC).
D. establish that the process of transacting insurance is not interstate commerce. Correct

Rationale: The McCarran-Ferguson Act clarifies that the regulation of insurance is primarily a state responsibility, affirming that insurance transactions are not considered interstate commerce. This means states retain the authority to regulate insurance practices without interference from federal oversight.

Option A is incorrect as the Act does not redefine the authority of state and federal governments; rather, it emphasizes state control. Option B is misleading since the Act does not focus on the authority of insurance companies to issue policies. Option C is wrong because the Act does not assign advertising regulation to the FCC; it maintains state jurisdiction over insurance advertising.

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