Who is subject to NAIC model regulation?

Editorial team Published on

An NAIC Model Law does not have direct legal force on its own and only applies to insurance companies, agents, or consumers once an individual U.S. state or territory officially adopts it into its own state legislation.

How Applicability Works

  • State Adoption: The National Association of Insurance Commissioners (NAIC) creates these templates, but states choose whether or not to adopt them.
  • Local Variation: Once a state legislature or insurance department passes a model law, it applies legally within that specific state. States often modify the text to fit local needs.
  • Scope Definition: Each specific regulation defines its own scope. For example, some rules apply only to life insurance advertising, while others apply to health data security or producer licensing.

Major Categories of Model Regulations

NAIC models cover almost every part of the insurance market, including:

  • Life and Annuities: Rules for truthful advertising, reserves, and contract terms.
  • Accident and Health: Standards for Medicare supplements, long-term care, and health data security.
  • Property and Casualty: Guidelines for rating, claims settlement, and unfair trade practices.
  • Agents and Brokers: Oversight for producer licensing and market conduct.
  • Solvency and Holding Companies: Financial rules ensuring companies can pay future claims.

Does every company have a NAIC code?

No, not every company has an NAIC code, because NAIC codes apply exclusively to licensed insurance companies.

People often confuse NAIC with NAICS, which causes a lot of mix-ups. Here is how they differ and how they apply to businesses:

1. NAIC Code (Insurance Only)

  • What it is: A unique five-digit identification number.
  • Who gets one: Only authorized or licensed insurance companies (such as health, property, casualty, or life insurers) regulated by the National Association of Insurance Commissioners.
  • Does every company have one? No. If your business is not an insurance carrier (e.g., a retail store, tech startup, or restaurant), it will not have an NAIC code.

2. NAICS Code (General Industry Classification)

  • What it is: A six-digit number from the North American Industry Classification System. It describes a company's business activity or industry.
  • Who gets one: Nearly all general business establishments.
  • Does every company have one? Yes, or more accurately, every business can and should select a NAICS code that best describes its primary revenue-producing activity. Unlike insurance codes, businesses usually self-assign or choose their NAICS code for tax, banking, or statistical forms.

Who does the NAIC regulate?

The National Association of Insurance Commissioners (NAIC) does not actually regulate insurance companies directly; instead, it is a support and standard-setting organization that helps individual state insurance regulators oversee the U.S. insurance industry.

How Regulation Works

  • State Authorities: Individual state, District of Columbia, and U.S. territory insurance departments hold the direct legal authority to license, monitor, and regulate insurance companies operating within their borders.
  • Model Laws: The NAIC creates uniform guidelines, data systems, and "model laws" that individual states can choose to adopt to keep regulations consistent across different states.
  • Solvency and Standards: It assists state officials by tracking financial data and setting standards to ensure insurers remain financially stable.

Which of the following entities may not be an insurer?

The correct answer option is B. The Commissioner.

Explanation

  • ✅ B. The Commissioner: The Insurance Commissioner is a government official or regulatory authority responsible for overseeing, regulating, and enforcing laws within the insurance industry. Because their role is strictly public governance, they act as a regulator rather than a commercial entity that underwrites risks or issues insurance policies.
  • ❌ A. A natural person: In many jurisdictions, an individual or natural person can legally act as an underwriter or insurer (such as individual underwriters at Lloyd's of London) provided they meet regulatory licensing requirements.
  • ❌ C. A business trust: A business trust is a recognized legal entity structure that can be formed and authorized to carry out insurance operations and issue policies.
  • ❌ D. A limited liability company (LLC): An LLC is a standard corporate structure that can be licensed by a state insurance department to operate as an insurance provider.

Who are members of the NAIC?

Members of the National Association of Insurance Commissioners (NAIC) are the chief insurance regulators from the 50 U.S. states, the District of Columbia, and five U.S. territories.

Leadership and Officers

The organization is led by elected officers from state departments:

  • President: Scott A. White (Virginia)
  • President-Elect: Elizabeth Kelleher Dwyer (Rhode Island)
  • Vice President: Jon Pike (Utah)
  • Secretary-Treasurer: Michael Wise (South Carolina)
  • Most Recent Past President: Jon Godfread (North Dakota)

Member Jurisdictions

The NAIC divides its members into four regional zones:

  • Northeast Zone: Regulators from states including New Jersey, New Hampshire, and Maryland.
  • Southeast Zone: Regulators from states including Mississippi, Georgia, Florida, and Puerto Rico.
  • Midwest Zone: Regulators from states including Nebraska, South Dakota, Illinois, and Wisconsin.
  • Western Zone: Regulators from states and territories including California, Washington, Nevada, and Wyoming.

You can view the full roster on the NAIC 2026 Membership List.

2015 NAIC IIF: Global Perspectives on Operationalizing Group Supervision

9 related questions found

How do I know if my company has a NAICS code?

Yes, your business likely has a NAICS Code if it is registered or files taxes in the United States, because these six-digit numbers are self-assigned or designated when you set up your business.

How to Find Your Existing Code

  • Tax Returns: Check your business tax filings (such as Form 1120, 1120-S, or Schedule C on Form 1040), where the code usually appears near the top of the first page.
  • EIN Application: Review the confirmation letter or application you submitted to the IRS when you obtained your Employer Identification Number (EIN).
  • State Filings: Look at your state LLC or corporation registration documents and annual reports.
  • Company Lookup: Search for your business name using the NAICS US Company Lookup Tool.

What to Do If You Don't Have One

  • Self-Assign: NAICS is a self-assigned system; you can choose the code that best matches the primary activity generating the most revenue for your establishment.
  • Search Official Lists: Look up your industry keywords using the U.S. Census Bureau NAICS Search.

Is the NAICS code mandatory?

A NAICS code is mandatory only for specific government filings, taxes, and federal contracting, but it is not required for general business operations or entity formation in most states.

When a NAICS Code is Mandatory

  • Federal Contracting: Required when registering on SAM.gov or bidding on federal procurement contracts.
  • Business Tax Filings: Often requested on federal tax returns (like IRS Form 1040 Schedule C or corporate returns) to classify your business activity.
  • State Filings: Required by certain state and local agencies during annual reporting or specific industry licensing. Only a handful of states (such as Alaska, Arkansas, and Connecticut) ask for it during initial LLC formation.

How NAICS Codes Work

  • Self-Assigned: There is no central agency that assigns your code; you choose the code that best matches your primary revenue-generating activity.
  • Lookup: You can find your industry's code using the U.S. Census Bureau NAICS tool.

Who does NAIC model regulation apply to?

NAIC model regulations apply directly to state legislatures and insurance regulators, serving as templates that individual states can voluntarily adopt or adapt into binding local laws.

How NAIC Models Work

  • No Direct Authority: The National Association of Insurance Commissioners is an organization of state regulators, not a federal or governing body; its model laws and regulations carry no binding legal force on their own.
  • State Adoption: A model regulation only applies to insurance companies, producers, and consumers after an individual state’s legislature or insurance department officially enacts it into state law.
  • Target Audience Within States: Once a state adopts a model, it regulates specific entities depending on the topic—such as insurance companies, health maintenance organizations (HMOs), third-party administrators, or insurance agents and brokers.
  • Accreditation Mandate: The NAIC requires states to adopt specific parts of core model laws to maintain financial regulation accreditation, which indirectly pressures states to apply them.

What is NAIC used for?

The National Association of Insurance Commissioners (NAIC) is used by state officials to set regulatory standards, oversee insurance company financial solvency, and protect consumers in the United States.

(Note: If you are looking for business economic classification codes instead, see the North American Industry Classification System (NAICS).)

What the NAIC Organization Does

  • Creates Model Laws: Drafts uniform rules and guidelines that state legislatures can adopt.
  • Tracks Financial Solvency: Monitors insurance companies to ensure they have enough money to pay out claims.
  • Supports Regulators: Provides data, databases, and training programs for state insurance departments.

What an NAIC Number is Used For

For everyday consumers, the NAIC number is a unique five-digit code assigned to an insurance company. You use it to:

  • File Insurance Claims: Identify your exact insurance carrier on official paperwork.
  • Register a Vehicle: Provide required proof of insurance at the Department of Motor Vehicles (DMV).
  • Check Company Backgrounds: Research an insurer's financial stability, history of fraud, or customer complaint index through the NAIC Official Site.

Who is primarily responsible for regulating the insurance industry?

Individual state governments are primarily responsible for regulating the insurance industry in the United States.

State Regulation

  • Authority: State-level regulation is established and protected by the McCarran-Ferguson Act of 1945.
  • State Departments: Each state has its own insurance department or division headed by a commissioner, director, or superintendent.
  • Core Duties: Regulators monitor company financial solvency, license agents, approve rates and policy forms, and protect consumer interests.
  • Coordination: The National Association of Insurance Commissioners (NAIC) helps state officials coordinate standards and regulations across different states.

Federal Role

  • Limited Oversight: The federal government handles broad financial system stability and macro-level oversight.
  • Federal Insurance Office (FIO): Established by the Dodd-Frank Act, the FIO monitors the insurance sector and coordinates international agreements, but it does not directly regulate or supervise insurance companies.
  • Shared Areas: Certain aspects, like specific consumer protections or federal health care standards, involve shared or dual federal-state involvement.