What is a key function of the NAIC?

The NAIC, or National Association of Insurance Commissioners, plays a crucial role in facilitating coordination among state regulators. This organization consists of state insurance department leaders from across the United States, working together to establish standards and model regulations that promote uniformity and efficiency in the insurance industry.

By acting as a forum for state insurance regulators to collaborate, the NAIC helps ensure that regulations are consistent and effective in various states while allowing for the individual states to retain their regulatory authority. This coordination is essential for addressing issues that cross state lines, such as complex insurance products and multi-state insurers, ensuring that all states can maintain a fair and competitive insurance market.

In contrast, setting premium rates for insurance, overseeing claim payments, or managing operations of individual insurers do not fall within the scope of the NAIC’s key functions. The NAIC does not have the authority to dictate premium rates or directly oversee claims; those responsibilities typically remain with individual states and their insurance regulators.