Carlos is new to the insurance business and is learning about insurance regulation and what he, now working with Grady Insurance, will need to be aware of regarding the subject of compliance. Which one of the following will Carlos find is accurate as he better understands why insurance is regulated?
1) Insurance regulation ensures fair practices and protects consumers from fraud and unfair treatment.
2) Insurance regulation is unnecessary and only adds unnecessary bureaucracy to the industry.
3) Insurance regulation is primarily focused on increasing profits for insurance companies.
4) Insurance regulation is only applicable to certain types of insurance policies.