Insurance 101: All About State Insurance Commissioners 

Disparate state insurance regulation is one of our favorite topics on the AgentSync blog; and the state commissioners of insurance are the absolute czars. Yet, while some of them have broad authority to regulate, others must act within tight bonds of administration and enforcement. Some are partisan, elected officials, while others are appointed by the governor or a board.

As you would expect of the 50-state system, insurance commissioners run the gamut, and they aren’t even all called “insurance commissioner.” So, gather around and let’s spill some tea in a primer on insurance commissioners.

What is a state insurance commissioner?

A state insurance commissioner is the person responsible for regulating insurance, ensuring market sustainability and solvency, and protecting consumers for any given state or jurisdiction. State insurance commissioners are public servants, and may not always be titled in their state as an insurance commissioner. Some are directors. Some are chief officers. And some are in charge of far more than insurance. 

How does one become a state commissioner of insurance?

State insurance commissioners are made, not born.

More specifically, depending on the state, an insurance commissioner assumes their position after winning a statewide election or after being appointed by a governor or deciding body. For elected commissioners, this is fairly straightforward: The position is explicitly partisan, the commissioner runs on their party ticket, and is elected in the statewide election, typically on a four-year cycle.

For appointed commissioners, there are more variations:

• The insurance commissioner position may be non-partisan, appointed by the governor
• The insurance commissioner may also need to be confirmed by the state senate or a legislative body
• The insurance commissioner may be an explicitly partisan role and appointed by the governor as part of their cabinet
• The insurance commissioner may be appointed by a special board or committee

Some of the nuances for commissioners of insurance also depend on where the position resides in state government. While many commissioners serve as the out-and-out lead of a fully independent insurance department, other commissioners have both insurance and securities under their purview, or insurance functions as a subdivision of a larger finance department. 

For instance, Florida’s (vacant as of January 2023) Commissioner of Insurance Regulation is a position tucked under the state’s Chief Financial Officer, and is appointed by the Florida Financial Services Commission, which includes the governor, the CFO, and others. And let’s not forget Georgia, whose commissioner is officially styled the Insurance and Safety Fire Commissioner. Georgia is actually not alone in having its insurance commissioner also serve as the chief fire safety officer: North Carolina’s position is the Commissioner of Insurance and State Fire Marshal.

What does a state insurance commissioner do? 

Regardless of the depth or breadth of a commissioner’s power, the essential form and function of the office is to protect consumers while retaining a competitive market for insurers. Yet, perhaps the combination of insurance with the fire marshal’s office in some states tipped you off: The actual execution of the commissioners’ roles in insurance are far from uniform.

Depending on where they serve in the pecking order of their state government, an insurance commissioner may be responsible for regulating insurance, but may also have other industries’ regulatory responsibilities on their shoulders, as well. That could mean securities regulation, or banking regulation, or fire safety. 

It isn’t just the industry responsibility that varies between states. It’s also the degree to which a commissioner can effect change. For instance, Wyoming Insurance Commissioner Jeff Rude, wrote for this blog about his office’s restrictions on rate setting. It was only with an act of the state legislature that his office was granted rate-setting authority for long-term care insurance policies. Yet, his office still doesn’t set rates for other types of insurance.

Meanwhile, in 2022, Connecticut Insurance Commissioner Andrew Mais set a policy that limits the profit margin of health insurance companies operating in his state. Connecticut’s actuarial and data science functions also have the right to review insurance companies’ data collection, underwriting, and other technology use during rate reviews.

And Washington Insurance Commissioner Mike Kreidler faced pushback after issuing a bulletin that forbade insurance companies from using credit reports to make any underwriting decisions. Ultimately, a court ruled Kreidler had overstepped his authority, saying the state legislature would need to make that decision.

As these state-specific examples suggest, the role of insurance commissioner varies greatly from state to state, and is very much subject to each state’s specific regulatory culture. . States that take an active position on regulation (any kind of regulation, really), are more likely to extend wider latitude to their departments of insurance as extended branches of executive power for independent rule-making. Conversely, states that relegate  rulemaking rights to their legislative branches and take a narrow view of executive power will likely rein in their DOIs. 

That initial question of whether a commissioner is appointed or elected has its place in the discussion of DOI rulemaking, too. Elected commissioners are directly responsible to the electorate, whereas appointed commissioners, while less likely to be openly partisan, may be seen as subordinate to their appointing governor, which some may view as being to the detriment of public accountability.

How long can a state commissioner of insurance serve?

Most states don’t have term limits for their insurance commissioners. Many commissioners “serve at the pleasure of the governor,” which often means their cycle of service coincides with the gubernatorial election of their state, and they retain or lose their position based on the controlling governor or party. 

For elected commissioners, their term is more straightforward: four years, subject to re-election. Yet, some states stipulate that the commissioner can only serve two terms (California), or eight years (Oklahoma), or two terms in any given 16-year cycle (Montana). Other states put no limit on elected terms, such as Washington, where Kreidler has served six consecutive elected terms since 2000.

Insurance commissioners and the National Association of Insurance Commissioners

Every state insurance commissioner and other jurisdictional commissioners are members of the NAIC (you know, it’s in the name). Together, they are like the Wonder Twins of insurance regulation. If there were 56 twins. And they often disagreed.

The NAIC has done a lot to bring the commissioners together and give them a forum to discuss trends in regulation, spot possible areas of standardization, and, perhaps most importantly, craft regulatory models that states can adopt as-is, or modify to some degree based on their specific needs. By bringing the commissioners all to the table, the NAIC results in a more cohesive regulatory model for an otherwise disparate industry.

The NAIC also allows the commissioners ample opportunity to guide and direct areas they’re most concerned with or interested in, from regional collaborations to executive committees, task forces, and working groups aimed at particular areas of rulemaking. The NAIC also has a trove of educational resources, helping commissioners navigate areas of the industry that may be foreign to them, depending on their experience.

For more perspectives on insurance commissioners, check out some of our previous perspectives in the Commissioners Corner:

• Wyoming Commissioner: Long-Term Care Insurance Concerns Warrant Regulatory Scrutiny
• Washington Commissioner: Washington State Insurance Market Snapshot
• Tennessee Commissioner: Tennessee Embraces Innovation in Addressing Insurance Licensing Concerns
• West Virginia Commissioner: The Transition of Workers Compensation from a Monopolistic State Fund to a Competitive Open Insurance Market
• Virginia Commissioner: Pharmacy Benefits Management the Latest Front in Controlling Healthcare Costs

For more information on each state’s insurance commissioner position, check out the Compliance Library.

And for more on how your producer licensing and appointment compliance could be easier, automatic, and integrated into everything you do, schedule a demo for AgentSync.