State Insurance Offices
Every state, and the District of Columbia, has a state insurance office (sometimes referred to as a state insurance department) which is responsible for the regulation of insurance operations in their respective jurisdictions.
The primary functions of state insurance offices are to:
- Regulate the conduct of insurance companies;
- Protect consumers from financially unsound or insolvent insurers;
- Identify and stop criminal and unethical behavior, such as fraud and deception;
- Educate consumers on insurance products and insurance choices;
- Deal with complaints by policyholders and maintain a complaints register;
- Encourage growth in their respective insurance markets.
In order to regulate insurance operations in their respective states, state insurance offices issue licenses to insurance entities and individuals who provide insurance services. These include insurance companies, agents, brokers, claims adjusters, insurance administrators and reinsurers. State insurance offices also routinely carry out examinations and audits of insurance company operations and of other industry participants.
A further important function of state insurance offices is to approve and regulate premium rates for each type of coverage which is offered for sale in the state. Offices also undertake a range of ancillary functions, such as examining and approving proposed company mergers and acquisitions, and supervising the restoration or wind up of insolvent insurance companies.
Each state insurance office is under the control of an insurance commissioner who is either an appointee or an elected official. Insurance commissioners are represented at a national level by the National Association of Insurance Commissioners (NAIC), which undertakes a range of tasks including lobbying for policy change at a federal level.
The following are links to all state insurance office websites:
An important and practical function of state insurance offices for consumers is providing access to information on complaints filed against insurance companies licensed in the state. Each year state insurance offices compile data on complaints upheld against the insurance companies which they license, and they publish that data in a form which enables consumers to directly compare the level of complaints between those companies. That often takes the form of a ‘complaints index’ or a ‘complaints ratio’ in which the number or premium value of complaints is calculated as a proportion of the total number or value of policies on issue by each insurance company in the state. The comparative value of the index or ratio, and its trend over preceding years, can be used by prospective and current policyholders as a factor in deciding whether to change to or from a particular insurer.
