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Insurance part 4 : State Regulation

    • 144 posts
    February 26, 2014 10:41 PM IST

      Each state has established an administrative agency, known as the state insurance

    department that is under the direction of an insurance commissioner or a state superintendent

    of insurance.


      The state insurance department is charged with ensuring that insurers operating within the

    state comply with all state insurance laws and regulations.


      The National Association of Insurance Commissioners (NAIC) is a non-governmental

    organization consisting of the insurance commissioners or superintendents of the various state

    insurance departments.


      NAIC primary function is to promote the uniformity of state regulation and to pass as model



      A model bill is a sample law to regulate state insurance laws.

      Insurance companies operate as corporations.

      Corporation is as entity by the authority of an governmental unit which

    • Can sue and can be sued.
    • Can enter into contracts.
    • Can own property.
    • Provides an element of stability and permanence.



      When the company meet the requirements for incorporation, the state issues a certificate of

    incorporation or corporate charter by which the business gains its legal existence as a



      State insurance department takes care of minimum number of directors, duties of directors and

    the rights of shareholders.


      The state insurance department issues a certificate of authority or license that grants the

    company to conduct business.

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