New Jersey Life Insurance Exam Practice Question
Which of the following acts states that federal government laws and regulations apply to the insurance industry when the industry is NOT regulated by state laws?
Correct Answer: B
Rationale: The McCarran-Ferguson Act specifically allows states to regulate the insurance industry, but also affirms that federal laws can apply when states do not. This means that if state regulation is absent, federal oversight takes precedence.
In contrast, the Sherman Act and Clayton Act focus on antitrust issues and do not specifically address insurance regulation. The Gramm-Leach-Bliley Act pertains to financial services and privacy, not directly to insurance regulation. Thus, only the McCarran-Ferguson Act clearly establishes the framework for federal involvement in the insurance sector when state laws are insufficient.
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