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National Association of Insurance Commissioners (NAIC)

The National Association of Insurance Commissioners (NAIC) is the organization of the chief insurance regulators of the states, the District of Columbia and five U.S. territories. It writes model laws and regulations, runs shared systems and publishes consumer tools, but it regulates no one itself.

Last reviewed by Steven Fox, CFP®, EA on

Quick Summary

  • Founded in 1871, the NAIC is governed by the chief insurance regulators of the 50 states, the District of Columbia and five U.S. territories.
  • It is not a regulator. Insurance in the United States is regulated by each state's insurance department.
  • Its model laws and model regulations bind no one until a state adopts them, by statute or regulation, and a state may change them on the way.
  • Consumers meet it through its glossary, complaint information, Consumer Insurance Search and Life Insurance Policy Locator.
  • A citation to "NAIC Model" followed by a number describes what the association recommends, not necessarily the law where you live.

Definition

The National Association of Insurance Commissioners is the standard-setting and support organization of the United States' state insurance regulators. In its own words, the NAIC "provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers," and "Founded in 1871, the U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories to coordinate regulation of multistate insurers."

The name invites a misunderstanding worth clearing up at once: the NAIC is an association of regulators, not a federal agency and not a regulator in its own right. Insurers and agents are licensed and supervised by each state's insurance commissioner or department, and a consumer's complaint goes there. The NAIC's role is to help those officials agree on common standards and to run the systems they share.

Advanced Explanation

Model laws are recommendations. The NAIC's best-known output is its library of model laws and model regulations. The NAIC describes a model law as "a proposed statutory framework developed and adopted by state insurance regulators through the NAIC's process," and is explicit about its force: "Model laws are not federal law or binding on states; each state determines whether and how to adopt them." A model regulation supplies more detailed rules for carrying out a law, and neither "automatically applies in any state." In practice a state legislature may enact a model law, a state insurance department may adopt a model regulation, either may modify the text, and some states do nothing.

Reading a citation. When a page on this site, an insurer or a news story cites an NAIC model, three questions follow. Which version? Models are amended, and the date NAIC adopted one says nothing about when any state enacted it. Has your state adopted it? And in what form? The answers are in your state's own statute or regulation, which is the law that applies.

What else it does. The NAIC describes its work as including "consumer protection and education, data collection and analysis, technology, financial assessments and reporting, and licensing and testing." It sets the statutory accounting principles insurers use for their financial statements to regulators, runs training and accreditation programs for regulators, and maintains shared databases. For consumers, its website offers a glossary of insurance terms, information on filing a complaint with a state insurance department, a Consumer Insurance Search tool and a Life Insurance Policy Locator for finding a deceased person's policies.

How it relates to the federal government. Insurance is regulated mainly by the states, and the NAIC is the forum through which they coordinate. It is not part of the federal government, and its models are not federal regulations, even where a federal program or statute refers to them.

Used in a Sentence

“The agent cited an NAIC model rule, so Leilani checked her state insurance department's website to see whether her state had adopted it.”

How It Works

  1. Regulators identify an issue that would benefit from uniform rules across states.
  2. NAIC committees, task forces and working groups draft a model in what the NAIC describes as an open, public process.
  3. The NAIC's members adopt the model as a recommendation.
  4. Each state decides whether to enact it, adopt it by regulation, change it or ignore it.
  5. State regulators enforce their own version, and the NAIC supports them with data, systems and training.

Take an example of reading a citation: the NAIC's Life Insurance Illustrations Model Regulation is numbered 582 and records its adoption in the fourth quarter of 1995. A buyer in a given state learns what the rule requires there by finding that state's illustration regulation, which may follow the model closely, differ in places, or not exist.

Pros and Cons

Pros

  • Model laws give insurers and consumers a common baseline across states that adopt them.
  • Its consumer resources, including the glossary and the Life Insurance Policy Locator, are free.
  • Shared financial data and accreditation help states supervise insurers that operate nationally.

Cons

  • Its models are not law, so a rule described as "the NAIC standard" may not apply in a reader's state.
  • States adopt models unevenly and may modify them, which makes national statements about insurance rules risky.
  • A consumer with a complaint has to take it to the state insurance department; the NAIC directs complaints there rather than resolving them.

People Also Asked

Answers to the most frequently asked questions.

Is the NAIC a government agency?
No. It is an organization governed by the chief insurance regulators of the states, the District of Columbia and the U.S. territories. Insurance is regulated by each state's insurance department, and the NAIC supports those regulators rather than regulating anyone itself.
Are NAIC model laws binding?
Not by themselves. The NAIC says its model laws "are not federal law or binding on states" and that each state decides whether and how to adopt them. A model has legal force in a state only once that state enacts or adopts it, in whatever form it chooses.
How do I complain about an insurance company?
File the complaint with your state's insurance department, which licenses the insurer and agent. The NAIC's website lists contact information for every state department and explains how to file.
Can the NAIC help me find a life insurance policy?
Yes, for someone who has died. The free Life Insurance Policy Locator takes the deceased's details from the death certificate and makes the request available to participating life insurers and annuity companies. If a policy is found and you are the beneficiary, the company contacts you; otherwise you will not hear back, and the NAIC itself holds no policy information.

Sources

AdviceOnly maintains high editorial standards to improve the quality and accuracy of our educational content. Content is written with the assistance of artificial intelligence tools following a rigorous quality assurance process, and periodically reviewed by credentialed and experienced human financial advisors. References used include government data, academic papers, interviews with industry experts, and reputable primary sources. You can learn more about our efforts to produce accurate content in our editorial policy.

  1. National Association of Insurance Commissioners. "About."
  2. National Association of Insurance Commissioners. "How Model Laws and Model Regulations Work."
  3. National Association of Insurance Commissioners. "Glossary of Insurance Terms."
  4. National Association of Insurance Commissioners. "Life Insurance Illustrations Model Regulation" (Model 582).
  5. National Association of Insurance Commissioners. "Learn How to Use the NAIC Life Insurance Policy Locator."

Related Terms

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