

Insurance in the U.S. is regulated on a state-by-state basis, generally under the jurisdiction of each state’s department of insurance and insurance commissioner. As you might imagine, this leads to some complications and confusion for insurance companies that operate across state lines or even across the country. Who could possibly keep track of over 50 different sets of laws when you count each U.S. state, the District of Columbia, and U.S. territories?
Sidenote: We’ve actually done a pretty good job, if we say so ourselves, of consolidating these complicated state-based compliance rules in our free and open Compliance Library.
Luckily, the National Association of Insurance Commissioners (NAIC) has been working since its inception to standardize insurance industry regulations to help solve the challenges that come out of a piecemeal regulatory landscape. Creating the Financial Regulations Standards and Accreditation Program is one of the NAIC’s long-lasting achievements.
In this article, we’ll answer some frequently asked questions about the program. Don’t worry though, unless you work at a state department of insurance, this isn’t a program that applies to you. Insurance agencies, carriers, MGAs, MGUs, licensed producers, and everyone else: You aren’t eligible to be accredited, but we still hope you’ll learn something new.
What is the NAIC Financial Regulation Standards and Accreditation Program?
The NAIC’s Financial Regulation Standards and Accreditation Program is a certification for state departments of insurance to verify they’re holding insurance companies in their state to a certain standard. In plain English, this means an accredited state meets some baseline levels of what it requires and enforces for insurance companies and producers within the state. While some states may still be stricter in their regulation of the insurance industry, being accredited through this NAIC program ensures the state department of insurance isn’t so lax in its rules that consumers are at risk.
Why did the NAIC create the Financial Regulation Standards and Accreditation Program?
In the mid-to-late 1980s, the insurance industry experienced a wave of insurers facing insolvency. One could argue that these insolvencies happened because the state departments in charge of regulating those insurers didn’t have or enforce strict enough regulations.
To help prevent this kind of widespread issue from happening again, the NAIC began putting together a program that would accredit state departments of insurance to standardize a baseline level of regulation needed to protect consumers.
Who participates in the NAIC Financial Regulation Standards and Accreditation Program?
Unlike many other topics we cover, the NAIC Financial Regulation Standards and Accreditation Program applies to state departments of insurance, not to insurance companies, insurance agencies, or individual insurance agents, brokers, or producers.
Think of this program like training for law enforcement officers. The law enforcement officers themselves are responsible for enforcing the laws of their community, but they still need to be held to baseline standards to ensure they’re enforcing the laws properly. Similarly, state departments of insurance that achieve NAIC accreditation have been endorsed by the national organization as meeting a variety of “legal, financial and organizational standards as determined by a committee of its peers.”
Why should a state DOI pursue accreditation?
Obtaining and maintaining NAIC accreditation gives consumers the assurance that their state department of insurance is holding insurers in their state to an acceptable standard. The good news is that as of 2023, all 50 U.S. states, Washington, D.C., and the U.S. Virgin Islands are accredited. This only leaves a few U.S. territories currently unaccredited.
How long does NAIC accreditation last?
State departments of insurance have to undergo a review every five years to remain accredited. On top of this periodic recertification, which consists of a very thorough and in-person review, each department is subject to an annual “desk audit” and a pre-accreditation review one year before the state’s five-year full review.
Who is responsible for accreditation?
The Financial Regulation Standards and Accreditation (F) Committee is responsible for administrating and enforcing the NAIC Financial Regulation Standards and Accreditation Program. The committee is composed of insurance commissioners from across the U.S. In this way, the program is truly peer-review-based and those responsible for bestowing accreditation are also subject to the same standards.
For more information on the specifics of what goes into NAIC accreditation, see the NAIC’s website on the program.
What does the NAIC Financial Regulation Standards and Accreditation Program mean for you?
If you’re an insurance agency, carrier, MGA, MGU, or other entity doing business in one of the 50 U.S. states, the District of Columbia, or the U.S. Virgin Islands, your state department of insurance is accredited and held to standards about regulation and enforcement.
This means you need to make compliance with those regulations a priority, lest you find yourself on the wrong side of your state DOI – which is, remember, being held accountable for enforcement.
If you want to make compliance simple, streamlined, and automated, see how AgentSync can help.