Category: Global regulation · Reviewed by Chrissie Anderson, Client Executive · Last reviewed 2026-06-05
United States insurance regulation is principally a matter of state law rather than federal law. Each of the fifty states, the District of Columbia and the US territories operates its own insurance department under its own insurance code, with federal pre-emption expressly disclaimed by the McCarran-Ferguson Act of 1945 (15 USC §§1011-1015). Coordination between states is delivered through the National Association of Insurance Commissioners (NAIC), a private standard-setting body whose model laws are adopted in varying form across the country.
Category: Global insurance regulation Also known as: United States insurance regulation, US state insurance regulation Jurisdiction: United States of America (state-based) Founding statute / instrument: McCarran-Ferguson Act 1945 (15 USC §§1011-1015) Related concepts: NAIC, McCarran-Ferguson Act, NY DFS, California Department of Insurance, FCA, PRA
US insurance regulation is the body of state statutes, administrative rules and supervisory practice governing the licensing, prudential supervision and market conduct of insurers, reinsurers and intermediaries operating in the United States. Each state has its own insurance code (for example New York Insurance Law, California Insurance Code), its own insurance commissioner or superintendent, and its own subordinate regulations.
Insurers must hold an admitted licence in each state in which they write business directly, although non-admitted surplus lines markets exist for risks that cannot be placed in the admitted market. Federal involvement is limited and arises principally through the Federal Insurance Office (FIO) within the Treasury Department, the systemic-risk powers of the Financial Stability Oversight Council (FSOC), the Affordable Care Act framework for health insurance, and the Terrorism Risk Insurance Act (TRIA) backstop.
The constitutional framework is the McCarran-Ferguson Act of 1945, 15 USC §§1011-1015, which declares that “continued regulation and taxation by the several States of the business of insurance is in the public interest” and that no Act of Congress shall be construed to invalidate, impair or supersede state insurance law unless it specifically relates to the business of insurance. The Act was passed in response to the Supreme Court’s decision in United States v South-Eastern Underwriters Association (1944), which had held that insurance was interstate commerce within federal reach.
Each state legislates its own insurance code. Significant cross-state coordination is achieved through the NAIC’s model laws and the NAIC accreditation programme, which conditions a state’s standing to license multi-state insurers on adoption of core solvency standards.
State insurance departments licence insurers and intermediaries, approve policy forms and rates for personal lines and certain commercial lines, examine insurers’ financial condition through periodic statutory examinations, supervise market conduct, administer guaranty associations that pay claims of insolvent insurers, and handle consumer complaints. Statutory accounting principles (SAP), distinct from US GAAP, govern insurer financial reporting and are codified in the NAIC Accounting Practices and Procedures Manual.
Solvency supervision uses a Risk-Based Capital (RBC) framework with action levels triggering regulatory intervention. Group supervision is conducted through the lead state in coordination with the Own Risk and Solvency Assessment (ORSA) summary reports required of larger groups.
The US regime differs structurally from the UK twin-peaks model. The UK concentrates prudential supervision of insurers in the PRA and conduct supervision in the FCA, both UK-wide and operating under a single statutory framework (the Financial Services and Markets Act 2000). The US instead disperses both prudential and conduct supervision across fifty state regulators, with no federal counterpart to the PRA or FCA for traditional insurance. The closest US analogue to the FCA’s consumer-protection function is the patchwork of state market-conduct examinations and state-level unfair claim settlement statutes.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote