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.

Industry Regulation

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