Insurance Regulation: The Financial Regulation Standards and Accreditation Program of the National Association of Insurance Commissioners

GAO discussed its assessment of the Financial Regulation Standards and Accreditation Program established by the National Association of Insurance Commissioners (NAIC). GAO noted that the: (1) NAIC program has encouraged wider adoption of NAIC standards, but it can not be demonstrated that those state insurance departments that have been accredited can effectively regulate insurers within their borders; and (2) Accreditation Program continues to suffer because financial regulation standards are weak, the program lacks implementation and regulatory standards for state insurance departments, and review teams' accreditation decisions do not consistently support compliance decisions. GAO also noted that for the NAIC insurance accreditation program to be more promising it needs: (1) rigorously applied standards with clear and meaningful minimum requirements; (2) added focus on implementation of good regulatory practices; and (3) better documentation of the basis for subjective compliance decisions.