What Does the NAIC Do?
The NAIC is a member-driven organization that sets the standards in the insurance industry and supports state insurance commissioners. Its main regulatory goals are to protect the public interest, create healthy and competitive markets, facilitate equality, promote reliability and improve state regulation.
Key Facts About the NAIC
- The NAIC represents all 50 states, the District of Columbia and five U.S. territories, working to act in the best interests of insurance consumers.
- The NAIC provides a complaint index score for insurers. It indicates whether a company has an above- or below-average number of consumer complaints.
- The NAIC provides lists of the leading insurers by product line to help consumers select the best companies from which to purchase financial products.
The NAIC achieves its mission through peer reviews, analytics, market data and collaboration among task forces, working groups and state insurance commissioners.
There are several committee meetings throughout the year, which are generally open to the public. The NAIC also offers education and training courses for insurance regulators.
- State Insurance Regulation
- The NAIC’s state-based system brings regulators together to act in the best interests of the people in their designated states. The NAIC instituted the Insurance Regulatory Information System (IRIS) to evaluate the financial condition of insurance providers.
- Market Conduct Examinations
- Market conduct examinations are used to monitor insurers across seven main functions, including operations and management, complaint handling, marketing and sales, licensing, policyholder services, underwriting and claims.
The NAIC annually publishes a Market Regulation Handbook that provides guidance for regulators and encourages uniform practices for conducting market analyses and examinations. The handbook is a resource for state insurance departments implementing state-specific processes and regulations. - Solvency Regulation and Financial Stability
- The NAIC’s Financial Stability (E) Task Force oversees issues concerning domestic or global financial stability and analyzes how they impact state insurance regulators.
- Consumer Complaint Handling
- The NAIC tracks complaints within the insurance industry. One popular way to check a company’s reliability is by reviewing its NAIC complaint index score, which indicates if it has a below or above-average level of complaints.
A score above 1.0 signifies that the insurer received more complaints than expected, while a score below this threshold indicates a lower-than-expected complaint rate. - Insurance Industry Best Practices
- The NAIC provides a Company Licensing Best Practices Handbook to issuers. The handbook helps improve communication between states and streamline licensing procedures, which is an essential component of insurance regulation.
Licensing “encompasses virtually all areas of regulatory oversight, from solvency surveillance to market conduct, to rates and forms and producers’ licensing,” according to the NAIC. By allowing an insurer to conduct business, a regulator is recognizing its potential for success.
The most recent version of the Company Licensing Best Practices is currently available.
Responsibilities of the NAIC
- Climate Risks/National Catastrophes and Resilience
- NAIC members will work to close climate-risk-related protection gaps by pushing for pre-disaster mitigation efforts and creating new tools and resources for regulators.
- Use of AI by Insurers and Cyber Risk
- To ensure regulation keeps pace with new technologies and privacy concerns, the NAIC’s agenda includes facilitating educational forums, resources and materials, researching and monitoring trends tied to cyber-related model laws and developing regulatory guidance and standards for AI, data privacy and other cyber risks.
- Insurer Financial Oversight and Transparency
- The NAIC will continue to create tools to monitor how the insurance industry is navigating current market conditions. It also plans to develop new policies and procedures under a Macroprudential Risk Assessment system to improve how regulators analyze industry trends.
- Race and Insurance, Financial Inclusion and Protection Gaps
- The NAIC will work to close the protection gap for underrepresented groups and communities, addressing barriers and expanding opportunities.
- Marketing of Insurance Products
- To combat misleading health insurance marketing practices, the NAIC will review lead generators, identify models that need updating and guide enforcement policies.
2025 NAIC Regulatory Priorities
Source: NAIC
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The NAIC’s Top 10 Annuity Issuers
Based on data filings received by March 18, 2024, the NAIC released its annual market share data report, identifying leading insurance writers in several key lines of business.
The data categorizes the top groups and companies by direct written premiums as reported on their annual financial statement. The list is only comprised of companies that report to the NAIC.
NAIC’s Top 10 Annuity Issuers of 2023
- Apollo Global Management Group
- Mass Mutual Life Insurance Group
- American International Group
- Prudential
- Nationwide
- Equitable Holdings Inc.
- Lincoln National Group
- New York Life Group
- Allianz Insurance Group
- TIAA Family Group
Source: NAIC
Model Laws and Accreditation
The National Association of Insurance Commissioners serves to provide standardization and consistency within the insurance industry, while accounting for the differences among the states’ legislatures and regulations.
Because of these differences, state insurance departments require flexibility to operate efficiently and adhere to industry best practices.
This is where model laws and accreditation come into play.
According to the NAIC, model laws must satisfy a two-pronged test. They must first establish a “minimum national standard.” Then, the members must agree to dedicate the resources needed to support the law.
If the measure doesn’t meet these criteria, the working group or task force can submit it as a guideline instead.
Model laws and guidelines, along with accreditation — which is the NAIC certification affirming that a state’s insurance department follows industry standards — allow the NAIC to assess and verify each state’s ability to oversee the financial status of insurance companies.
Compliance and regulations in the insurance industry makes consumers feel safer buying a financial product. I share with my clients how NAIC operates, and give them the product brochures and carrier books, which allow clients to read the rules and the consumer protection they get. It also allows clients to know more about the carrier’s business practices. There is a lot of information on companies online, so sharing the regulatory authority information helps the clients feel better. Recently in a sale, a client was talking about a company that was not that known, and after some research I was able to share with my client that the company had many complaints and business practice violations. Sharing that helped them change their mind.
Aamir M. Chalisa, MBA, LUTCF, MDRTGeneral Manager at Futurity First Insurance GroupAamir M. Chalisa is the GM at Futurity First, leading Oak Brook’s top branch. With 30+ years’ expertise, chairs GAMA Global, driving diversity worldwide.
How the NAIC Protects Annuity Owners
Because annuities are insurance products, the National Association of Insurance Commissioners regulates these financial contracts. In addition to the NAIC’s oversight, variable annuities are regulated by the Securities and Exchange Commission and the Financial Industry Regulatory Authority. This is because variable annuities, unlike fixed annuities, are classified as securities.
The NAIC created and regularly updates the Suitability in Annuity Transactions Model Regulation (Model 275), which outlines standards and procedures for insurers and brokers recommending annuity products to consumers.
Protecting annuity and life insurance consumers is a fundamental responsibility of the NAIC. The association developed the Insurance Regulatory Information System (IRIS), a collection of databases and analytical tools, to provide state insurance departments with data on each company’s financial strength.
By alerting state commissioners to financially unstable insurers, the NAIC strives to prevent consumers from purchasing annuities from insolvent companies.
NAIC Committees and Working Groups
The NAIC released its 2025 Committee Structure, which breaks down who overlooks the different regulatory priorities. The A committee and its subgroups manage annuities and life insurance issues and goals.
- Life Insurance and Annuities (A) Committee
- The Life Insurance and Annuities (A) Committee is a subgroup of the NAIC that handles issues with life insurance and annuity products. The committee comprises several working groups, including the Annuity Suitability (A) Working Group, the Life and Annuity Illustration (A) Subgroup and the Variable Annuities Capital and Reserve (E/A) Subgroup.
Collectively, these subgroups review and revise life insurance and annuity model regulations and make recommendations in alignment with the NAIC’s mission and initiatives. - Variable Annuities Capital and Reserve (E/A) Subgroup
- The Variable Annuities Capital and Reserve (E/A) Subgroup works cross-functionally with the Life Insurance and Annuities (A) Committee and the Financial Condition (E) Committee. It handles revisions to the framework for variable annuity reserve and risk-based capital (RBC) requirements.
Regulators set minimum amounts of capital based on insurer size and risk levels to verify they can cover claims, operating expenses and other financial obligations. This helps carriers avoid insolvency and, therefore, protects consumers.
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Frequently Asked Questions About the NAIC
Birny Birnbaum, a former consumer representative at the NAIC and member of the U.S. Department of the Treasury’s Federal Advisory Committee on Insurance, answered Annuity.org’s frequently asked questions about the NAIC.
The NAIC is not a regulator but an association of U.S. insurance regulators that provides a variety of assistance to the states — including data collection and technical analysis — as well as providing a forum for the regulators to develop a national policy in the form of model laws, regulations and guidelines.
While state insurance departments do not offer legal advice to consumers, the departments have staff to assist consumers with policy questions and complaints.
If you feel like you have been treated unfairly, contact your state insurance department and file a complaint. In most cases, consumers can file complaints electronically via state-specific department of insurance websites.
Editor Tori Roughley contributed to this article.
