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When a state insurance commissioner allows a company to deviate from what is required in the Accounting and Practices Procedures manual, or in state law, this is an example of a ______________.

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Final answer:

A regulatory exemption occurs when a state insurance commissioner allows a company to deviate from what is required in the Accounting and Practices Procedures manual or in state law.

Step-by-step explanation:

When a state insurance commissioner allows a company to deviate from what is required in the Accounting and Practices Procedures manual, or in state law, this is an example of a regulatory exemption.

A regulatory exemption occurs when regulators grant permission to a company to not comply with certain requirements. It is typically granted in specific circumstances where strict adherence to the regulations may be impractical or unnecessary.

For example, if a company can demonstrate that following a specific accounting practice would be overly burdensome or not in the best interest of policyholders, the insurance commissioner may allow an exemption.

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