National Association of Insurance Commissioners
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. The NAIC is an Internal Revenue Code Section 501(c)(3) non-profit organization. Its current president is John M. Huff, from the Missouri Department of Insurance, Financial Institutions and Professional Registration.
Officers of the NAIC include a President, President-Elect, Vice President and Secretary- Treasurer, who are elected annually by the membership by secret ballot. To help organize the NAIC’s efforts, the United States has been divided into four geographic zones: Northeastern, Southeastern, Midwestern and Western. Each zone has its own chair, vice chair and secretary who sit on the NAIC’s Executive (EX) Committee. In addition to the Executive Committee, the NAIC maintains additional standing committees to address specific charges as approved by NAIC leadership.
The NAIC acts as a forum for the creation of model laws and regulations. Each state decides whether to pass each NAIC model law or regulation, and each state may make changes in the enactment process, but the models are widely, albeit somewhat irregularly, adopted. The NAIC also acts at the national level to advance laws and policies supported by state insurance regulators. The NAIC also is responsible for creating the statutory accounting principles (SAP) upon which insurance accounting is based. SAP is often contrasted with Generally Accepted Accounting Principles (GAAP) and is notable for its very conservative valuation methods. Additionally the NAIC promulgates the NAIC annual statement which incorporates SAP and must be filed with the department of insurance in every state in which an insurance company writes business.
The NAIC is not a regulator; while its members are the insurance commissioners (i.e., the chief insurance regulators) of each state and territory, the NAIC is a non-governmental organization that concerns itself with insurance regulatory matters but does not actually regulate. The states have not delegated their regulatory authority to the NAIC.
Although the NAIC's mandate is to benefit state regulators and insurance consumers by promoting uniform laws and regulations, by promoting uniformity of regulation among the states, it also makes it easier for insurance companies to comply with the laws and regulations in all states in which they do business.
After Paul v. Virginia, state insurance commissioners formed the National Insurance Convention in 1871 to coordinate; this became the National Convention of Insurance Commissioners and then the National Association of Insurance Commissioners. During the first session, a uniform annual statement was adopted and life insurance companies but not fire insurance companies were required to make reserve deposits to protect their policyholders. In the second session a model law was passed; many states adopted a standard fire insurance policy known as the New York Standard Fire Policy of 1886. It has been argued that the policy was designed to favor the industry, as it contains various conditions which, if not adhered to, render the policy void.
- "About the National Association of Insurance Commissioners". NAIC. Retrieved 2015-07-22.
- "NAIC FAQ" (PDF). NAIC. Retrieved 2012-03-12.
- Brent Martin (2010-10-14). "National association stays on Missouri side of KC". Missourinet.com. Retrieved 2010-10-18.
- Meier, Kenneth J. (1988). The political economy of regulation: the case of insurance. Albany, NY: State University of New York. pp. 52–53. ISBN 0-88706-731-X.