Final answer:
The right of the states to regulate the business of insurance was first established by the McCarran-Ferguson Act of 1945.
Step-by-step explanation:
The right of the states to regulate the business of insurance was first established by the McCarran-Ferguson Act of 1945.
Before the act was passed, the regulation of insurance was largely left to the individual states. However, the act granted states the authority to regulate insurance within their borders, including setting rates and enforcing solvency requirements.
This act was a response to a Supreme Court decision in 1944 that ruled that insurance was subject to federal regulation.
The McCarran-Ferguson Act reestablished the primacy of state regulation over insurance, allowing states to retain control over the industry.