American Insurance Association – Definition

Cite this article as:"American Insurance Association – Definition," in The Business Professor, updated December 16, 2019, last accessed August 9, 2020, https://thebusinessprofessor.com/lesson/american-insurance-association-definition/.

Back To: INSURANCE & RISK MANAGEMENT

American Insurance Association (AIA) Definition

The American Insurance Association (AIA), which was incorporated in 1866, has functioned as a leading property and casualty insurance trade organization. As of April 2016, the American Insurance Association represents over 350 insurers who write over $140 billion in premiums yearly. The property and casualty insurance industry is seen as a part of the stock market’s financial sector and includes various big insurance companies.

A Little More on What is the American Insurance Association (AIA)

The AIA represents companies on the federal, state, and international scope by supervising legislation on each level. Furthermore, it’s a resource for the media, policymakers, and the public on specific insurance challenges. The AIA has local representation in all states, regional offices in major locations all over the country, as well as, headquarters in Washington DC. The AIA has contributed to highway safety, National Building Codes, and the enactment of the 2002 Terrorism Risk Insurance Act. As of the 19th of April, 2019, the AIA president and chief executive officer (CEO) is Leigh Ann Pusey.

AIA’s function is to safeguard and support its members. Its board of directors assembles industry resources in different insurance fields to help with certain issues. The member companies of the AIA jointly develop judicial, legislative and regulatory priorities. The AIA’s members have online access to new laws, bulletins, and regulations. Members also gain access to the latest legal research tools, ad hoc studies, and data sources. The AIA also supports gives support to members in the court system via its legal department. It’s also responsible for facilitating meetings between regulatory officials and member companies in situations whereby company-specific problems arise and require resolution.

The AIA customizes daily reports relating to department bulletins and adopted regulations. Furthermore, it possesses a regulatory database, as well as, a supplemental Enhanced Legislative Search that enables its members to search for every insurance-based legislation by any combination of every 261 insurance problems in the AIA database. Another AIA-produced report pertains to newly enacted legislation by issue; it creates 28 specific reports by topic every 3 weeks. The AIA creates a state-level report for summarizing specific property, as well as casualty insurance issues, communications, and regulations.

American Insurance Association Research

The law department of the AIA produces surveys, charts, and other documents on the basis of jurisdiction. Based on a request from any member, the AIA makes the research available. Their research comprises compilations of laws, analysis of certain regulatory issues, and specialized policies. Additionally, the AIA compiles a research catalog for its members.

Reference for “American Insurance Association Research”

www.aiadc.org/

https://en.wikipedia.org/wiki/American_Insurance_Association

https://www.insurancejournal.com/topics/american-insurance-association-aia/

https://www.investopedia.com/terms/a/american-insurance-association-aia.asp

https://www.irmi.com/term/insurance-definitions/american-insurance-association

Academics research on American Insurance Association Research”

The insurance and risk management industries: new players in the delivery of energy-efficient and renewable energy products and services, Mills, E. (2003). The insurance and risk management industries: new players in the delivery of energy-efficient and renewable energy products and services. Energy policy31(12), 1257-1272. The insurance and risk management industries are typically considered to have little interest in energy issues, other than those associated with large energy supply systems. The historical involvement of these industries in the development and deployment of familiar loss-prevention technologies such as automobile air bags, fire prevention/suppression systems, and anti-theft devices, evidences a tradition of mediating and facilitating the use of technology to improve safety and otherwise reduce the likelihood of losses. Through an examination of the connection between risk management and energy technology, we have identified nearly 80 examples of energy-efficient and renewable energy technologies that offer loss-prevention benefits (such as improved fire safety). This article presents the business case for insurer involvement in the sustainable energy sector and documents early case studies of insurer efforts along these lines. We have mapped these opportunities onto the appropriate market segments (life, health, property, liability, business interruption, etc.). We review steps taken by 53 forward-looking insurers and reinsurers, 5 brokers, 7 insurance organizations, and 13 non-insurance organizations. We group the approaches into the categories of: information, education, and demonstration; financial incentives; specialized policies and insurance products; direct investment; customer services and inspections; codes, standards, and policies; research and development; in-house energy management; and an emerging concept informally known as “carbon insurance”. While most companies have made only a modest effort to position themselves in the “green” marketplace, a few have comprehensive environmental programs that include energy efficiency and renewable energy activities.

Federal Chartering of Insurance Companies: Options and Alternatives for Transforming Insurance Regulation, Harrington, S. E. (2006). Federal Chartering of Insurance Companies: Options and Alternatives for Transforming Insurance Regulation. This paper provides an overview of the rationale and options for federal intervention in insurance regulation. Despite a number of positive and incremental reforms throughout the past decade, several key aspects of state insurance regulation, including regulation of rates, rate classification, and policy forms, remain substantially dysfunctional in many states – with no end in sight and with significant burdens on interstate commerce. A transformation of insurance regulation to reduce those burdens by promoting healthy price and product competition and eliminating regulatory micromanagement of price and product decisions will not be achieved without federal intervention. A well-designed system of optional federal chartering and regulation represents one means for attempting to achieve such a transformation. Two alternatives for transforming insurance regulation without creating a federal regulator and perhaps with less risk than optional federal chartering include: (1) enact minimum federal standards for state insurance regulation that would preempt non-conforming state regulation, and (2) allow life, health, and property/casualty insurers to designate a “primary state,” and to operate nationwide subject primarily to the regulations of that state.

The history of no-fault auto insurance, Nordman, E. (1998). The history of no-fault auto insurance. Journal of Insurance Regulation16(4), 457.

Adverse selection, private information, and lowballing in insurance markets, D’Arcy, S. P., & Doherty, N. A. (1990). Adverse selection, private information, and lowballing in insurance markets. Journal of Business, 145-164. Recent contributions to the adverse selection literature have focused on a multiperiod competitive environment. In this setting a clean distinction arises between the predictions of competing models. Cooper and Hayes extend the model of Rothschild and Stiglitz to multiple periods. The result is a self-selecting equilibrium characterized by price highballing, or systematically overcharging new business. Kunreuther and Pauly suggest that information asymmetries between competing insurance firms render such price-quantity policies infeasible. Their model results in a pooling equilibrium that is characterized by price lowballing, or systematically undercharging new business. Our evidence is consistent with the Kunreuther and Pauly model and reveals the persistence of adverse selection in the automobile insurance market.

An analysis of an alliance: NAFTA trucking and the US insurance industry, Condon, B., & Sinha, T. (2001). An analysis of an alliance: NAFTA trucking and the US insurance industry. Estey Journal of International Law and Trade Policy2(1753-2016-141102), 235. In the NAFTA, the United States agreed to phase out restrictions on the operation of Mexican trucking companies in the United States. When the deadlines came, the Clinton Administration chose to maintain the restrictions. Following a NAFTA panel ruling against the United States, the Bush Administration announced it would remove the restrictions. The decision has met with opposition from both truckers and insurers in the United States, who cite safety concerns. This article examines the economic, political and legal forces at work in this debate, as well as the relationship between the NAFTA and WTO rules on trade in services that apply.

Was this article helpful?