Different laws exist to provide rules and regulations in specific areas or industries. In the industry of insurance, some rules and regulations exist to create standards or criteria that must be met by people in order to obtain insurance, to limit the amount of insurance that can be provided, and to provide a general guideline with regards to how insurance companies should work. These laws are collectively referred to as insurance law.
The purpose of insurance law is to protect the rights of the consumer as well as the rights of the insurance companies. Insurance exists in order to provide people options for when the unexpected happens. For example, car insurance provides people financial security with regards to their car in the event of a car accident. Insurance is not just limited to car accidents but includes a variety or areas and industries such as medical, health, business, death, property, and all others. Companies issue insurance based on the financial status of the consumer as well as other circumstances that relate directly with the area or property that is to be insured. Insurance law ensures that issues arising from such events may be addressed in a legal manner.
Insurance law can be generally categorized into the regulation of business insurance and the regulation of claim handling. The former provides for the regulation of capitalization, rates, reserve policies, and all other matters that relate to the business processing of insurance, while the latter provides for regulation of the standards or criteria for claiming insurance as well as the processes involved in dealing with consumer claims.