National Association of Insurance Commissioners

National Association of Insurance Commissioners

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The National Association of Insurance Commissioners (NAIC) is an Internal Revenue Code Section 501(c)(3) non-profit organization
Non-profit organization
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...

 which seeks to organize the regulatory and supervisory efforts of the various state insurance commissioner
Insurance commissioner
Insurance commissioner is an executive office in many U.S. states, some in the state cabinet. The office differs state by state:...

s from around the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

. The NAIC was formed in 1871. Its current president is West Virginia Insurance Commissioner Jane Cline.

The NAIC acts as a forum for the creation of model laws and regulations. Each state decides whether to pass each NAIC model law or regulation, and each state may make changes in the enactment process, but the models are widely, albeit somewhat irregularly, adopted. The NAIC also acts at the national level to advance laws and policies supported by state insurance regulators. The NAIC also is responsible for creating the statutory accounting principles
Statutory accounting principles
The Statutory Accounting Principles are a set of accounting rules for insurance companies set forth by the National Association of Insurance Commissioners. They are used to prepare the statutory financial statements of insurance companies...

 (SAP) upon which insurance accounting is based. SAP is often contrasted with Generally Accepted Accounting Principles (GAAP) and is notable for its very conservative valuation methods. Additionally the NAIC promulgates the NAIC annual statement which incorporates SAP and must be filed with the department of insurance in every state in which an insurance company writes business.

The NAIC is not a regulator; while its members are the insurance commissioners (i.e., the chief insurance regulators) of each state and territory, the NAIC is a non-governmental organization that concerns itself with insurance regulatory matters but does not actually regulate. The states have not delegated their regulatory authority to the NAIC.

Although the NAIC's mandate is to benefit state regulators and insurance consumers by promoting uniform laws and regulations, by promoting uniformity of regulation among the states, it also makes it easier for insurance companies to comply with the laws and regulations in all states in which they do business.

Its central office is in Kansas City, Missouri
Kansas City, Missouri
Kansas City, Missouri is the largest city in the U.S. state of Missouri and is the anchor city of the Kansas City Metropolitan Area, the second largest metropolitan area in Missouri. It encompasses in parts of Jackson, Clay, Cass, and Platte counties...

 where it is in the Crown Center
Crown Center
Crown Center is a commercial complex and neighborhood located near Downtown Kansas City, Missouri located between Gillham Road and Grand Boulevard to the east and west, and between Pershing Boulevard and Union Hill to the north and south. The shopping center is anchored by Halls, a department store...

 complex but in 2010 announced plans to move to the Town Pavilion
Town Pavilion
Town Pavilion is a 38-story skyscraper located at 1111 Main Street on the northeast corner of 12th and Main Streets in Downtown Kansas City, Missouri, around the corner from Oppenstein Brothers Memorial Park. The tower occupies the former site of several retail buildings--including Kline's...

. Its executive offices are in Washington, DC.


After Paul v. Virginia
Paul v. Virginia
Paul v. Virginia, 75 U.S. 168 , was a historic case in corporate law in which the United States Supreme Court held that a corporation is not a citizen within the meaning of the Privileges and Immunities Clause...

, state insurance commissioners formed the National Insurance Convention in 1871 to coordinate; this became the National Convention of Insurance Commissioners and then the National Association of Insurance Commissioners. During the first session, a uniform annual statement was adopted and life insurance companies but not fire insurance companies were required to make reserve deposits to protect their policyholders. In the second session a model law was passed; many states adopted a standard fire insurance policy known as the New York Standard Fire Policy of 1886. It has been argued that the policy was designed to favor the industry, as it contains various conditions which, if not adhered to, render the policy void.

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