The NAIC was created to help supply an even communication within all states’ insurance commissioners and their newly enacted laws. This infrastructure helps provide a more substantial way to enable a competitive marketplace, while also protecting the interests of the consumer. As the community infrastructure changed so did the regulations and involvement of different governmental and non-governmental entities. In order for the NAIC to have the influence it has today, many different congressional acts had to transpire.
In 1871, the Federal government ruled that a corporation can act separately from a private citizen when conducting business. The ruling held, in Paul v. Virginia, that when an insurance company issues any insurance to private citizens that it is a transaction between two private entities. In 1944 the overturning of this act appeared in The United States v. South-Eastern Underwriters Association. The United States Federal government would now be able to apply regulation to each state’s commerce by way of the Sherman Act, under the Commerce Clause.
The McCarron-Ferguson Act is a law that has allowed the Federal Government to regulate State insurance programs since 1945 in accordance with the “Commerce Clause” within the U.S Constitution. Each state is provided an insurance commissioner (via The “National Association of Insurance Commissioners” ) to help aid in the insurance making process. This insurance regulation is done within the companies that develop insurance policies; in cooperation with the states insurance commissioner.
The National Association of Insurance Commissioners (NAIC) was created to enable the public’s ethical interaction with insurance companies. The commission has influence over 50 states, The District of Columbia and the 5 U.S. territories. Each state and territory have unique laws in accordance to the public’s insurance needs. The NAIC was created in 1871 to help coordinate the regulation of these laws with multi-state insurers. This cooperation between the regulators and insurance providers creates a uniformity between states and territories that help promote the public’s interest while maintaining a healthy marketplace.
As time progressed we have seen many congressional acts ensuring the success of the insurance market. The NAIC has maintained a consistent communication between each state’s insurance commissioner. This has enabled a fair interaction between the consumer and insurance business alike.
The NAIC‘s mission is to:
- Protect the public interest
- Promote competitive markets
- Facilitate the fair and equitable treatment of insurance consumers
- Promote the reliability, solvency and financial solidity of insurance institutions
- Support and improve state regulation of insurance