State Insurance Department
What Is The State Insurance Department?
Each state has a designated agency for insurance. The state insurance department has duties for insurance regulation that protects you as a consumer. The most common types of insurance are property, life, and health. Valuable information is provided from the state regarding each kind of insurance, including what the regulations are and what companies are available for you.
If you need assistance with selecting an insurance company or have questions, you can contact the agency who can provide a navigator to help you. The department of insurance manages in the following ways: the rates and policies are governed, the practices of the insurance companies are monitored and reviewed, licensing insurance companies and its agents, and handling consumer complaints.
Department Of Insurance History
In the U.S., insurance had its start in the early to mid-1700's and began with fire policies. Insurance companies began to spring up quickly, and regulation was by company charter or by state law. In the mid-1800's regulation of insurance was beginning to formalize with the appointment of a state insurance commissioner in New Hampshire. A few years later New York created a state insurance department for better regulation at the state level. In the 1950's multi-line insurance outgrew the small single-line policy companies that once dominated.
Since those early times, the entire industry has branched out and diversified, and the state insurance department has been regulating since the first commissioner position was implemented. The U.S. did attempt to have federal regulation for insurance, but that did not occur, although there are federal laws in place such as the False Claim Act.
Department Of Insurance Regulations
The department of insurance in each state will regulate many things within the insurance realm. While each state may go about it in different ways (different websites, publications, etc.), the purpose is to make sure that you are protected and that companies or agents are following the guidelines and laws that have been put in place.
Types of regulations would include the rules of practice for insurance companies, what is required to be licensed as an agent, and uniform credentialing. Rules and standards of practice, annual financial filings for each company and insurance rates are other types of regulatory items. You can also find other helpful information regarding restrictions of solicitation, the standards of insurance, and approved healthcare plan offerings for your state. The state insurance department will usually provide advisory messages and bulletins to update you on current issues, and you can reference your state's specific information on the state's website.
State Insurance Commissioners
The main function within the department of insurance has not changed drastically since it was created in the mid-1800's. Within the executive branch of each state, there is an insurance commissioner who is a public official representing the state insurance department. In some states, the insurance commissioner is appointed, and in others, it is an elected seat. The commissioner could operate within another larger department or as an independent state department.
The role of the insurance commissioner can vary between states, and operates as an administrator, providing protection of consumers and regulation of insurance. To better coordinate regulation between states, each state commissioner is a member of the NAIC (National Association of Insurance Commissioners).
What Are The Duties Of Insurance Commissioners?
Your state insurance commissioner has many duties within the state insurance department. The position shall ensure the availability of insurance and fair pricing, monitor the solvency of insurance companies, and to review the practices of the companies. The commissioner accomplishes these goals by examining financial data of insurance companies, regulating the licensing of agents and companies, as well as brokers, and monitoring the way claims are handled. An example of one duty is handling state continuation of health insurance, you lose coverage through your employer.
You can contact your department of insurance to obtain information and for numerous other actions. You could make a complaint, inquire about unfair trade practice, ask about the privacy of information regulations, and verify licensure of an insurance company or agent.