West Virginia State Life Insurance Practice Exam

In what year was the McCarran-Ferguson Act enacted?

1. 1940

2. 1945

3. 1950

4. 1965

The correct answer is: 1945

The McCarran-Ferguson Act was enacted in 1945, and it plays a significant role in the regulation of the insurance industry in the United States. This legislation gave states the authority to regulate the business of insurance without interference from federal regulation, unless Congress specifically legislated on the topic. The Act effectively affirmed that the states would have primary oversight over insurance, which was recognized as a matter of local concern. The passage of the McCarran-Ferguson Act aimed to balance the need for insurance regulation to protect policyholders and ensure the solvency of insurance companies with the states' rights to manage their own regulatory framework. It emphasized the importance of state regulation and provided a federal “non-interference” stance as long as the states maintained their regulatory oversight. Understanding the context of the McCarran-Ferguson Act is essential for those studying life insurance practices, as it set the groundwork for how insurance is overseen and the principles that govern the industry today.