In the United States, insurance is regulated by the states under the McCarran-Ferguson Act, with "periodic proposals for federal intervention", and a nonprofit coalition of state insurance agencies called the National Association of Insurance Commissioners works to harmonize the country's different laws and regulations. The National Conference of Insurance Legislators (NCOIL) also works to harmonize the different state laws. Laws passed include the Insurance Companies Act 1973 and another in 1982, and reforms to warranty and other aspects under discussion as of 2012. As far as insurance in the United Kingdom, the Financial Services Authority took over insurance regulation from the General Insurance Standards Council in 2005.
This only reduces the financial burden and not the actual chances of happening of an event. Insurance is a risk for both the insurance company and the insured. Created a single insurance market in Europe and allowed insurance companies to offer insurance anywhere in the EU (ubject to permission from authority in the head office and allowed insurance consumers to purchase insurance from any insurer in the EU. For example, most insurance policies in the English language today have been carefully drafted in plain English. Typically, courts construe ambiguities in insurance policies against the insurance company and in favor of coverage under the policy. If a person is financially stable and plans for life's unexpected events, they may be able to go without insurance. In the European Union, the Third Non-Life Directive and the Third Life Directive, both passed in 1992 and effective 1994.
The insurance company understands the risk involved and will perform a risk assessment when writing the policy. This 'insulates' many from the true costs of living with risk, negating measures that can mitigate or adapt to risk and leading some to describe insurance schemes as potentially maladaptive. 9/11 was a major insurance loss, but there were disputes over the World Trade Center's insurance policy. As a result, the premiums may go up if they determine that the policyholder will file a claim. Insurance policies can be complex and some policyholders may not understand all the fees and coverages included in a policy. As a result, people may buy policies on unfavorable terms. In response to these issues. To reduce their own financial exposure, insurance companies have contractual clauses that mitigate their obligation to provide coverage if the insured engages in behavior that grossly magnifies their risk of loss or liability.
An insurance company may inadvertently find that its insureds may not be as risk-averse as they might otherwise be a concept known as moral hazard. Many countries have enacted detailed statutory and regulatory regimes governing every aspect of the insurance business, including minimum standards for policies and the ways in which they may be advertised and sold. The industry learned the hard way that many courts will not enforce policies against insureds when the judges themselves cannot understand what the policies are saying. Agents generally cannot offer as broad a range of selection compared to an insurance broker.