National Association of Insurance Commissioners (NAIC)

What Is the National Association of Insurance Commissioners (NAIC)?

The National Association of Insurance Commissioners (NAIC) is a nonprofit, neutral organization represented by the chief insurance regulators of the 50 states, the District of Columbia, and the five U.S. domains: American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands. The NAIC sets standards and lays out best practices for the U.S. insurance industry and offers help to insurance regulators. It likewise gives data and resources to consumers. Insurance products sold in the U.S. are generally regulated by the states, as opposed to the federal government.

History of the National Association of Insurance Commissioners

The NAIC was established in 1871 by state insurance regulators to "address the need to arrange regulation of multistate insurers. The principal major step in that cycle was the development of uniform financial reporting by insurance companies."

Since insurers frequently carry on with work in various states, whether or not they ought to be regulated on a state or federal level has long involved banter in the U.S. The 1944 Supreme Court case [United States v. The South-Eastern Underwriters Association](/united-states-v-the-southeastern-guarantor association) established that the insurance industry ought to be subject to regulation by Congress under the Commerce Clause of the Constitution, which affords legislators regulatory power over interstate and international commerce. Nonetheless, Congress successfully abrogated that ruling the next year with the section of the McCarran-Ferguson Act, which excluded the insurance industry from generally federal regulation, including antitrust laws.

Today, with few special cases, that regulatory authority actually lives with the states and their chosen or designated insurance commissioners.

How the National Association of Insurance Commissioners Works

The NAIC is settled in Kansas City, Mo., with executive offices in Washington, D.C. The group says its regulatory objectives are to:

• Safeguard the public interest
• Advance competitive markets
• Work with the fair and equitable treatment of insurance consumers
• Advance the unwavering quality, solvency, and financial strength of insurance establishments
• Support and further develop state regulation of insurance

Through boards of trustees, task powers, and working groups, the NAIC creates model laws and regulations to assist with normalizing insurance across the states. Its standing panels incorporate life insurance and annuities, health care coverage and managed care, property and casualty insurance, market regulation and consumer affairs, the financial condition of insurers, financial regulation standards and license, and international insurance relations.

The NAIC and its boards ordinarily meet three times every year. These gatherings are generally open to the public.

The NAIC additionally offers education and training courses for insurance regulators. In 2006, it sent off the Insurance Regulator Professional Designation Program and granted its most memorable professional assignment the next year.

The NAIC website has various resources consumers can use to find out about insurance products and check out grumbling data on specific companies.

The NAIC and Consumer Complaints

Notwithstanding its work in support of state insurance regulators, the NAIC offers a number of devices for consumers. Its Consumer Insurance Search apparatus assists consumers with researching specific insurance companies, including any grumbling data the NAIC has collected. Companies are scored on a national objection index, which shows whether they've received more or less protests than different insurers, in the wake of adjusting for market share.

As per the NAIC's latest accumulated data from state insurance divisions, the majority of objections in 2019 involved how an insurer took care of policyholders' claims, with unsatisfactory settlements or offers, delayed claims, and denied claims on the whole accounting for just more than half, everything being equal. Different types of grievances, however much lower based on the rundown in conditions of rates, included high-pressure sales tactics, deceiving advertising, and discrimination.

For consumers who might want to register their very own objection, the NAIC website likewise has a File a Complaint instrument, with connections to state insurance offices for additional data on the interaction.

Along with those consumer resources, the NAIC website offers fundamental data on life, wellbeing, homeowners, automobile, and several different types of insurance. It likewise has a Life Insurance Policy Locator device, which consumers can use to request data on whether a deceased relative abandoned an unclaimed policy.

The NAIC ought not be mistaken for groups with comparative abbreviations: the National Association of Investors Corp. or the North American Industry Classification System.

Features

• The National Association of Insurance Commissioners (NAIC) is driven by the insurance commissioners of the 50 states, plus Washington, D.C., and five U.S. domains.
• The NAIC creates model rules and regulations for insurance companies and products.
• Insurance in the United States is regulated fundamentally by the individual states, as opposed to by the federal government.
• The association additionally offers programs, data, and online instruments for insurance consumers.