Category: Global regulation · Reviewed by Taylor Watts, Broker · New Business · Last reviewed 2026-06-05
Insurance in the United States is regulated principally at the state, rather than federal, level. Each of the fifty states, the District of Columbia, and the US territories has its own insurance department and insurance code, regulating licensing, prudential supervision, market conduct, rates, forms, and consumer protection within its jurisdiction. The federal role is limited to specified areas including federal flood insurance, federal crop insurance, ERISA-regulated employee benefits, and the residual federal interest preserved by the McCarran-Ferguson Act 1945.
Category: Global insurance regulation Also known as: US state insurance regulation, State insurance regulation USA Jurisdiction: United States Founding instrument: McCarran-Ferguson Act 1945, 15 USC §§1011-1015 Related concepts: McCarran-Ferguson Act, NAIC, US insurance regulation
Each US state regulates the business of insurance carried on within its territory through a state insurance department headed by an Insurance Commissioner (or, in New York, the Superintendent of Financial Services). The state insurance code addresses the licensing and supervision of insurers domiciled in the state, the admission of foreign (out-of-state) and alien (non-US) insurers, the licensing of producers (agents and brokers), the approval or filing of policy forms and rates, market conduct, consumer protection, financial examination, and insolvency and guaranty fund administration.
The constitutional foundation is Paul v Virginia 75 US 168 (1869), in which the US Supreme Court held that the business of insurance was not “commerce” within the meaning of the Commerce Clause and therefore was subject to state, not federal, regulation. United States v South-Eastern Underwriters Association 322 US 533 (1944) overruled Paul and held that insurance was interstate commerce. Congress responded with the McCarran-Ferguson Act 1945, which expressly preserved state insurance regulation by exempting the business of insurance from most federal antitrust and commerce-based statutes to the extent regulated by state law.
The current statutory framework in each state typically follows the structure of the NAIC Model Acts, including the NAIC Insurance Holding Company System Model Act, the Standard Valuation Law, the Risk-Based Capital for Insurers Model Act, and the Producer Licensing Model Act.
Each insurer must be licensed (or “admitted”) in every state in which it transacts insurance, in addition to being domiciled and primarily supervised in one “domiciliary” state. The licensure typically requires payment of fees, filing of articles of incorporation, demonstration of capital adequacy, certificates of authority, and ongoing compliance with annual statement filing, market conduct examinations, and (for life insurers) actuarial opinions. Surplus lines insurance — placements with non-admitted insurers — is regulated separately under the Nonadmitted and Reinsurance Reform Act of 2010 (Dodd-Frank Title V).
The NAIC operates a system of accreditation under which state insurance departments are reviewed against minimum solvency standards. Accredited states may rely on financial examinations conducted by other accredited states.
In contrast to the FCA/PRA twin-peaks regime, the US lacks a single federal insurance regulator or single prudential standard. The fragmentation creates significant compliance burden for insurers writing nationally, partly mitigated by the NAIC’s coordinating role and the Interstate Compact (the Insurance Compact). Surplus lines and reinsurance reform under Dodd-Frank Title V created limited federal pre-emption to facilitate cross-state placement.
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.
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