Welcome to Assignment 1
This assignment is your foundation for the entire CPCU 530 course. Before diving into contracts, torts, or agency law, you need to understand how the U.S. legal system works, where laws come from, how courts operate, and — critically — how insurance is regulated at both the state and federal level. Everything in later assignments builds on these concepts.
Exam Alert!
Key exam topics from this assignment: the difference between substantive and procedural law in federal courts (Erie doctrine), the McCarran-Ferguson Act, NAIC model laws, and the three requirements for judicial review of agency decisions.
What You Will Learn
1. The difference between civil-law and common-law systems
2. The five sources of U.S. law and key Constitutional provisions
3. How lawsuits work — from filing to appeals
4. Alternative dispute resolution (ADR) methods
5. How administrative agencies function and their limits
6. The federal/state split in insurance regulation
Assignment Parts
The U.S. Legal System & Sources of Law
Civil vs. common law, stare decisis, constitutions, the Commerce Clause, Due Process, Equal Protection, and how courts are organized.
Legal Procedures & ADR
How lawsuits work from complaint to verdict, evidence rules, appeals, arbitration, mediation, and negotiation.
Administrative Agencies & Insurance Regulation
Agency rulemaking, judicial review, McCarran-Ferguson Act, state regulation, NAIC, rate regulation, and producer licensing.
Quick Reference Summary
Common Law
Based on court precedent (stare decisis). Used in 49 states.
Erie Doctrine
Federal courts apply state substantive law + federal procedural law.
McCarran-Ferguson
States regulate insurance. Federal law defers as long as states are active.
NAIC
Voluntary org of state commissioners. Model laws are NOT mandatory.
ADR
Arbitration (decision), Mediation (facilitation), Negotiation (direct).
Judicial Review
Requires: standing + final order + exhaustion of admin remedies.