Outside of federal and state legislature, insurance companies also abide by non-governmental associations that unify the states and help protect consumers. Industry associations such as the National Association of Insurance Commissioners impose major influence on insurance companies to maintain common industry standards.
A major form of self-regulation, the National Association of State Commissioners (NAIC), is widely recognized as a major influence in the insurance industry. NAIC is not a federal or state legislative body, nor does it regulate insurance law, even though its members are the insurance commissioners (i.e., the chief insurance regulators) of each state in the U.S.
Founded in 1871, the National Association of Insurance Commissioners was created as a non-governmental organization that has since created and maintained a uniform set of laws for states to follow in an attempt to standardize multiple-state insurance laws. Though it has created a set of ‘by-laws’ to help centralize the state-run insurance industry, NAIC, itself, does not actually regulate insurance law. The states regulate their respective insurance laws as well as abide by any relevant federal laws.
The NAIC is composed of insurance commissioners from each of the 50 states, the District of Columbia, and surrounding U.S. territories. These members are either elected to their post, or appointed by their states’ governor and are represented by an executive committee comprised of the President, President-Elect, Vice President and Secretary-Treasurer of the NAIC. These governing members are elected on an annual basis by NAIC members.
In addition to the Executive Committee, the NAIC is composed of seven additional committees including:
Life Insurance and Annuities
Health Insurance and Managed Care
Property and Casualty Insurance
Market Regulation and Consumer Affairs
Financial Regulation Standards and Accreditation
Financial Condition Committee
International Insurance Relations Committee.
NAIC’s ‘by-laws’ promote uniformity throughout the insurance industry and enable insurance companies to better comply with the laws and regulations set forth in all states in which they conduct insurance business. The association has influenced the industry by introducing uniform regulation including:
Model Life Insurance Solicitation regulation
Viatical Settlement Model regulation
Model Life Insurance Replacement regulation
Model Group Life Insurance provisions
Model Health Policy provisions
Long-term Care Insurance Model regulation
National Online Insurance School
Latest posts by National Online Insurance School (see all)
- Remote Testing Available for the State Exam - October 2, 2020
- Affordable Care Act – Benefits a Health Insurer Must Cover - September 24, 2015
- Four Takeaways to Tackle the California Insurance Licensing Exam - May 17, 2013